himself out of the governor's office and into prison." a firsthand account of the first female class action lawsuit against her former employer, n "the good girls' revolt." in "i am the change: or barack obama and the crisis of liberalism," charles kessler examines president obama's political thinking and its effect on liberalism. .. finish

>> italian born economist luigi zingales warns that the u.s. economy is becoming a mere of italy's economy under the leadership of silvio berlusconi. he describes a system of crony capitalism in which government supports for big business has overwhelmed by support for a free market. it's a little under an hour. >> i want to thank you all very, very much for coming tonight. my name is brian anderson, i'm the editor of the manhattan institute for "city journal." it is a great pleasure to

introduce luigi zingales, one of our valued and let me add most charming contributing editors who was here tonight to speak about his brand-new book, "a capitalism for the people: recapturing the lost genius of american propserity." now, when he first arrived in this country to study economics back in the 1980s, he enthusiastically embraced the american dream, the idea that what brings you success is hard work, not luck, not who you know, which was too often the case in his native italy as it is in many other democratic countries. this was central to american style capitalism which he recognized has been an extraordinary engine of prosperity making even our poor rich by global standards. yet as luigi once in is extremely important new book, in our new post financial crisis

era of massive taxpayer bailouts, failed banks, of political insiders profiting from their connection to an ever-expanding federal leviathan of a renewed faith in government planners, of a struggling middle class, the genius of american prosperity is that profound risk. there are disturbing signs, he believes, that the u.s. economy is transforming into a berlusconi style crony capitalism system. a development that will prevent us from full economic recovery and will mean a bleaker, more corrupt future. now, how we got into this mess is how a reinvigorated more competitive free market we can escape it, luigi addresses in his book and will talk about tonight. luigi received a ph.d in economics from mit and joined the faculty of the university of chicago's school of business in 1992 where he is now the robert

c. mccormick professor of entrepreneurship and finance. he's written on a host of financial and economic topics including in our pages, ranging from financial regulations to the economic effects of culture. his earlier call all the book was called "saving capitalism from the capitalists," the theme central to his new book just as it was for adam smith at the dawn of american capitalism. in 2003, luigi received the prize for best young european financial economist. is currently the vice president of the american finance association, the lead independent director of telecom italian, and a member of the american academy of arts and science. he also serves on the committee on capital markets regulation, and he has a long list of other appointments. now, "a capitalism for the people" is already generating intense discussion. the economist tyler cowan

recently said on his influential blog, if i had to pick out one book to explain what is going on right now to a popular audience of non-economist, this might well be it. paul ryan described it as a must read that provides a lucid called action for discovering what makes america exceptional. he echoed the point in a recent near times column urging the romney campaign to read it. all that should encourage you to go out and get a copy if you haven't already, but in the meantime let me welcome the man himself, luigi zingales. [applause] >> thank you very much, brian, and thank you all of you to come. and thank you to the institute, not only sort of helps me in the process but motivate also writing this book.

is not sort of easy for academics who have other things to do, to write sort of an attempt to write a more popular book. and i think that the incentives are now they are but i think it is the right thing to do. let me explain sort of like i wrote this book in what i think is valuable and important. as brian was saying, sort of i was born in a country that invented the term nepotism and basically led by edward literally sort of doctors are chosen -- [inaudible] where it's much more important who you know and what you know. and so coming to this country was a big liberation but also make me more aware of how lucky this country was and what are the conditions that make it possible to have a system, a

democratic system, a free market system which has some wide political support. because one thing that is unique of the united states, you go round, the free market system is really supported by a vast majority of the american people. this is not true in europe. it's not true in asia. it's not true and latin america. and my understanding of this, it is because they have experienced a superior form of capitalism. what drives this for a free market systems? because there's a tension between free markets and democracy. democracy was somehow intent for mortgage vision and free markets, equal outcome because it's necessary to provide proper incentives. so why people should support, and the answer is because number one, the system is so

productive, so efficient that they make everybody better off, the engine of growth, brian was talking about. number two is because all this growth gets sort of than a decent enough share so that even the poor are reached, and the third one is because they think that this system is fair. and, of course, it's a bit of a vicious circle that what you think is fair depends on your view, edit your be the sort of the market competition is fair, you do the system fair. but you new to believe that the rules are fair and not week against you to believe in this system. and to my concern all this element that really made america great and made this kind of capitalism different from the one preventing and the rest of the world are weakening. and i think that my only

advantages i can see these things more clearly because i've seen them before. and one of the elements that makes the system more at risk, to some extent after world war ii in america week, or you, depending on the point of view, had it easy. why? because america ended world war ii world war ii with a gigantic supermajoritarian technological point of view. and also gigantic majority in terms of institutions. and if you were an american firm and you wanted to invest, there was not really a safe place to invest. the vast majority of the war was run by dictators, quite unstable, commoners -- communism was taking over parts of the country and even western europe is not a secure place to do business. so business in america would invest in america, and the typical american worker was

getting rent, getting some extra benefits because of this factor. the institutions of america were sorted unique to america, and every citizen was getting sort of extra benefit out of those. now, america led by example. the rest of the world as pretty much copy what america did. and as a result of this institution is not so unique, and now the american workers are competing with the rest of the world and this makes me understand -- makes more difficult. it is this competition taking worldwide, and why the top of the sort of distribution of talents and education in the united states is probably the best in the world are so that really creates sort of

attention, the feeling of people being left behind. but this has been made worse by the lack of sense of fairness that i think was prevailing in the united states before. there was a sense you can -- [inaudible] acting in the interest of the country. and this disappeared. i remember as an italian arriving in boston, the first time there was a tornado watch and there was a city ordinance, everybody had to stay at home and take their windows. my reaction was, first of all, it must be -- [inaudible] and second a new the exactly the opposite because what i learned in italy is if you do the opposite of what government says, you are always find. and so i was shocked to see that all my fellow bostonians were

following those directions very closely. why? because there was a trust that the government was acting somewhat in the interest of the people. i think we've lost that trust. i did a survey shortly after the financial bailout asking people whether they thought that secretary paulson acted in the interest of the country, or in the interest of goldman sachs? and 50% said that they thought was acting in the interests of government. and whether this was true or not is irrelevant because in politics, perception is very important, sometimes more important than reality. and once people feel this sort of other interest driving policy, that the country is not run in their interest, that the rules are not the same for

everybody, they tend to revolt against the system. all the results we've seen, movement, i clip from tea party to occupy wall street, are an expression of the sort of feelings. and historically, this is sort of a very dangerous combination of shrinking class, increasing the quality, sense of unfairness. it is really a perfect combination, a perfect storm to have a massive form of populism that might destroy the free market system. and the problem is that when institutions are in that situation, they are trying to protect themselves by distributing favorite, privileges here and there. and this creates the system more and more corrupt, and create more and more resentment for the

system. so it's basically a vicious circle from which it is very difficult to exit. that's the reason why i wrote this book, and i try something to be sort of risky. and i say why don't we try to channel this national sense of revolt against the system. you can see it is unfair. in the direction not of destroying the market but restoring it better market, a more sort of equal level playing field that will lead to sort of a more effective form of capitalism. and the aim of the book is really to say how can we do it. you know, the reaction when you see issues like income inequality, let's to massive redistribution. and massive redistribution doesn't work. you know, in europe they have

statistics about income inequalities are much better than the united states because the richest people move to monte carlo or to the united states, and their that's the reason why the statistics are better. we don't want that here as well. and you're probably not fan osaka. you're probably more than a football. some economists look at soccer teams and they have shown that in sweden the soccer teams are terrible. why? because all the best players go to spain. and spain may be bankrupt that they treat their soccer players with a special tax treatment of 20% marginal tax rates, and surprise, surprise, they are the best soccer players in the world. so that's not -- so what is the solution? i think i focus on three main things. the first one is we actually need to have more competition in a lot of sectors that today are

protected either by government regulation or by -- including the sector of which i operate which is education. if you look at the statistics, the reason why most americans feel they are falling behind is because their wages don't grow fast enough to cover the cost of health care and those are two sectors that are heavily regulated and subsidized. and most of us don't see directly the cost of health care because it's embedded in our sort of paycheck. it's taken away from the paycheck before you even see the paycheck. so we don't exercise enough pressure to contain cost because we don't bear the full cost of that choice. and this is a very distorted position that should be changed if we want to contain costs, which is the primary thing we want to do. and the same is true with

college. college costs has gone up to minnesota and even if you account for the fact that the elite school, you have a fellowship that has come down, the real path they take, the cost of us got quite a bit, and there's been massive subsidies in the form of basically subsidized loans that most people don't pay attention to because when you go to college, the first thing they say is now prices prices. that's not true because they charge a price for it. and, two, you should worry about because you always make enough money to pay this back. why they say you shouldn't worry about it? because the government is making up for the difference for every time someone defaults the lender is not paying the cost of that sort of mistake. and these have really pushed the cost of education much higher.

in most sectors innovation startup the bottom, not at the top, and start when firms can not survive in the market place in the defined new way to operate. and we need more of that information in education. the second theme that i invade sort of focus on is to try to rethink the way we do economic policy. the typical way the government intervenes today is either to regulate or to subsidize an industry or sector because it deems that sector or industry is important the political economy of this game is such that there are few people to benefit the most and the rest of us who pay. so it's an unfair game and the subsidy or the particulars of the regulation prevent entry always win. so how can we convert the dynamic? first of all, the regulation is

needed. glass-steagall was 23 pages, and the dodd-frank act is 1400 pages. mandate 67 more regulation. so it is really difficult for anybody to keep up with that, except if they are paid lobbyists. and that is not a way to run a democratic country, because the legislation is basically -- [inaudible] so my claim is number one, we want regulation simple enough that even a congressman can understand it. [laughter] and the second point is we know from an economist point of view, that is, basically the same if you want to subsidize something, that you tax the subsidy. so if you want to subsidize

because you think is about to homeownership, tax renters to imagine a congressman, how easy it is for me to go to congress and said i want to tax renters to make the american dream more likely. not very good. why? because the political economic dynamics is a taxi concentrated interest and you benefit. so this bias would be in the reduction of any of these statutes which on the one hand is good because we're going to less government intervention on the other hand we now make it impossible because there are factors what if you explain to people they might be convinced that a tax is a good thing so let me make an example. why not a tax on lobby? we know that lobbying is excessive. we know that lobbying has become the most profitable activities in this country it and i don't

sage's legal activity. illegal activity, because dealing in cocaine i don't think issue the same return. [inaudible] a legislation that will inform congress to act because the sides defrauding investors, not to be any taxes. so as a republican senator proposing in the senate, lott to subject this kind of cooperation the average corporation. so fico called jack adam off. we know that this is now gone to jail, called jack abramoff and said i need a team to do a special job. so for the modern price of $150,000 amount, the 18th started to work. they work to front the unwanted

creating fake grassroots organization saying that it was a taliban. and on the other hand, giving money to the campaign fund of that republican senator. it was obvious that in less than a few months, i think, maybe a year, they were able to defeat this fall for the modest price of $4 million. so fico saved $4 million. there is no activity in the world that has this kind of returns. so in front of this i think one solution is reduce the size of the government. the of the solution is to tax. i don't think we should go through complicated legal arguments, simply nice taxation will do the trick. the third point which is really bringing close to home, is we need to rethink the social norms about -- [inaudible] in particular business school should think seriously about

that. because while we learn from adam smith that self-interest probably sort of framed under good set of laws, believe it, the best outcome for everybody. we never learned that greed is good. it has gone past the norm of sort of -- [inaudible] in the end is destroying the consensus for the free market system. and so while sort of individual businessmen might have a different interests or agenda in mind, business school at large they really thrive on the success of free markets. so they should have in their interest to teach their students not only skills but also some social norms of behavior.

so how do you do that? first of all you do it in class. but also when you sort of celebrate alone by you want to celebrate alumni that sort of made their money in a decent way. it is an example of a former ph.d from mit who was in the business of gambling and his claim to fame is have imported the modern marketing techniques to gambling. as result of that he basically targeted people who are addicted to gambling, to maximize his revenues. now, this is clearly a legal behavior, i have nothing against that but i don't consider it could behavior. and economists who doubt that destroyed the image of capitalists and makes sort of the enemy of capitalist target. so as a business school we should not endorse someone like that, should not be great --

should not be something that we bring as an example. and when we teach you sort of skills at the same time we should also teach basic social norms, not more norm. at not philosopher and a deeply religious person's home not well qualified to talk about sort of those but i do have education to talk about what general norms work well and help make the market work and what norms built. and i think it's incumbent upon us to push those norms. why? because the distraction of capitalists or massive regulation. i prefer to have social norms that are naturally born from below and it can only be enforced with the consensus of the majority of people. because the beauty of the social

norms that unlike a piece of legislation that goes in congress and has lobbied upon is a social norm does not go to any committee and congress. must be approved by the majority of the people in order to be viable. only if there's consensus then that normally be applied. and so i think that we, discovering the moral dimension of the free market system is crucial to preserve it and defied the generation that unfortunately is sort of reaching this country. and i think we should act before it's too late. thank you. [applause] >> we have time for some questions. i'll feel them, but if you can wait for the microphone to arrive and just introducers off briefly. and please keep the questions to

the point. no statements, just questions. thank you very much. right down here. >> [inaudible] >> you mentioned the idea of lobbying tax spent tax on lobbying. >> okay. and i was curious if there was any big policy proposals to do something like that? and if so, how much stuff it given to the fact that lobbying is essentially just communications between individuals. so i was curious if there is policy and how it deals with that problem. >> you know, that's a big question. my book is not, is detailed

policy book. so it's more like i do that is written to try to change sort of the conversation. so i would work out all the details if you want of how this could be but when you talk about lobbying there's a vast range of activities. and, of course, some of them, me writing this book is a form of lobbying for free market. site think that that's one level. there is the lobbying done in congress which at this point is register. so that is paid as a tax. i think we can discuss where we want to impose the tax. the important principle is that when you have an activity, which is not a zero-sum activity, is a negative some activity, destroying value, we need to find a way to address it. and the simplest way to address it is with a tax rather than complicated relations. besides, the nature is so --

trying to regulate it would be impossible. and then there is sort of conundrum which is how do you get congress which is addicted to lobbying to report a tax on lobbying. and this is where i do believe that pressure can achieve a lot on very targeted and simple objective. my favorite example is, you know, there was a proposal of law against insider trading by member of congress. and that law was law for years until a book came out that exposed how much they were doing. and in three days that law passed both the house and the senate and became law. and this clearly was limiting the power of congress, but they felt the need to do it.

i think that my goal is to start asking the question that lead to that pressure to change the system. >> luigi, you discuss the effects that come from lobbying on behalf of corporate institutions and other now interests. but the most costly policies of that nature of course have wide public import, like mortgage tax deductions, like medicare, like the employer tax solution which should help these particular programs or policies, trillions of dollars a year. so is it really true we can have it say that democracy and public opinion will eliminate the ranking effect seems quite the opposite. >> i'm not saying it is always the case of eliminates red sinking.

but i think we need to try to channel the debate that we can. in that i do believe that the only defensible line in terms of for example, tax reduction is another even if you of your favorite tax deduction may be a terrible one as for import. the moment he opened the floodgates is impossible to assist. so the only line of defense is to say we want none of it. and i think that if we make it clear to the american people that that's sort of ago, i think you'll have support behind it come into if you start saying but we have an exception for x., then every will have an exception. not only that but you will have gigantic amount of lobby because to make the point that x. is really, really valuable. and that's the reason why i say we should eliminate all this. and if you really think a goal is so valuable, to with a tax amnesty whether that path is

from consensus. i agree with you the most dangerous lobbying ideas are sort of items, otherwise nice ideas. and i mentioned homeownership because it was against homeownership? it's like being against -- so if you can cover up your naked interests with a grand idea like that, you become -- that's what i would try to avoid by saying that wanted to economic policy, you have to convince me that a tax is good, that's much higher than the past. >> professor, you just told us that lobbying is the highest profit margin business that there is. they're only going to pass a law on the tax those lobbyists who

pass along their tax, or whether it is advocacy antismoking groups, israel advocacy. lobbying takes on many, many, many different shapes. why is it that a tax policy which has almost never worked -- i would be interested in the example where tax has inhibited or undermined a fundamental policy that you believe we should be deterring, should be opposed to. where is that tax policy that has produced that where the vendor can pass it along to the buyer? >> first of all it's not obvious it's always taxpayer, translated completely to buyer. depends on sort of market system. but more importantly we know

that taxing in activity would reduce the activity. when you tax income people work less. so that's a pretty good example of a tax working in the wrong direction but working. so what i'm saying is i want to tax bad that it is. taxing pollution, for example, is a much more effective way to solve problems than regulating pollution. why do we see a lack of regulation? i was told that recently bloomberg had passed a regulation of soda pops in new york. now, if you really think that soda pops are bad because of externalities, then it is much simpler. now let's discuss it. some people might agree, some people might disagree but it's something that is easy for people to understand. so think about the same is true for large financial

institutions. one way to sort of solve the problem is to increase the capital requirement which is basically posting a tax on them. and if you do that, at which chafee 22004 pages of legislation, and i don't know how many people working and trying to -- [inaudible] so i think the good taxes are what economics called -- fiber effective alternative, so effective that the reason why we don't see because people prefer anything about that. if we tie our hands and say the only way you can -- [inaudible] >> professor, it would seem that to advance your ideas it would

behoove you to advance want a more advocates to persuade others of the benefits of not subjugating us to crony capitalism. went with the advocate or advocate come from? where they come from academia? with a come from other parts of society? would they come from the business community? and so, whom? steve jobs this day. he had a lot of credibility with the average citizen. not sure he would actually advocate this idea. however, good it would be. what would you say advocates should come from? >> i think that's an excellent question. and first of all, the reason why i wrote this book is really to make people understand that

defending free markets does not mean all the time defending business interest. and i think all too often, especially we free marketeers feel obliged to defend business in whatever they do without understanding it has a gigantic cost in terms of our public opinion. so if people understand my logic, i think that there are two ways in which crony capitalism -- one, and i have a chapter on this, by increasing the level of accountability with larger diffusion of data. in today's world it's more difficult to destroy data into collective. because they are automatically sort of collective. however, there is a lot of resistance to change them. because once you share them they

present evidence that is too hard to pass up. and i was discussing with some manager of an italian bank that did an intimate study, and they found that not only women in the bank were severely underpaid with respect to the man, with the same job, but they were much more productive. so they were paid less but they would produce more. and, of course, they don't want this study to be released at large, because it will undermine the men who are in power at that bank. i have a colleague who is teaming up with some people of the federal reserve wrote a fascinating paper showing that the state regulator are terrib terrible. and banks state regulator are basically to bias in the direction of banks.

and the federal reserve has no interest because it's competing with federal regulators, but they are all the same people, tried to not have this study released, and block any further use of data. and for no reason. i can understand that the so-called counter ratings which are federal reserve our state the gators rating a bank minot be -- might not be released immediately. there is no justification for not having them release with delay. so waiting for it for years. who cares? but we academics actually can go back and look at them and find out whether the wages were done or not. whether you are useful or not. i do believe in data-driven policy, and i think that the

reason interests more indie media world and academic world, because if i want to write a more exciting paper, i want to sort of show some problems. so i'm going to dig out the data in order to show those problems. so the best way to get this information out is a combination of competition in the media and academic market, and their ability. >> down here in the corner. >> luigi, why is it is by the crony capitalism that you talk about in italy, some industries are designed to fascism, managed to become world leaders despite of this? and i wonder if there's any lessons in that about overcoming the restrictions of the state? >> if you allow me a joke, and i

respond. the joke is because the human capital is so great they overcome all the adversities. but i think most seriously, there is a lot of creativity. and in industries that don't require a large infrastructure, you can still operate and be okay. so the fashion industry is basically an industry based on a few individuals with a lot of talent. it's not a large organization that requires efficiencies. and that's where italy has advantage. we are fantastic and producing niche products like ferrari's. but not as good as producing cars or look at fiat. so i think that in a system that is not transparent and not -- is much more difficult to have

larger representation to a system that lacks trust is much more difficult to have larger organizations. that's what italy is deficient and that's where it is falling behind in a world that is becoming more competitive. >> critique has emerged from the left of american capitalism and catholic by the work of -- which as it that inequality has increased, that the increase in inequality has diminished mobility, and that this reveals the fundamental flaw in the system that you're extolling. i wonder if you think one, if you believe those trend lines as identified, have been accurately identified? and number two, whether if that

trend is verifiable, if that's whawhat you because we already strayed from a productive free market system underlined by cronyism or whatever, or whether it's a function of global competition that you discussed earlier. and as a result, and in either case how do we solve this inequality to the american people such that they don't go into populist direction that would concern you? >> i think that that's an excellent question. i think that the income inequality is by and large increasing income quality -- inequality is right but it's clearly a matter of concern for everybody. i think everybody should be concerned about this. and that sort of i discussed extensible what can be done to alleviate the effect of this income inequality.

the causes are many. some as i said is the global competition that as america has ruled to say about or do about, the second is more what i think in effective competition. i have a few proposals on the margin. but also i think what is important is to recognize that in order to have a truly competitive system we must make an effort of equalizing the starting point. i think that my perception but also all the studies i've seen is americans don't present -- sent inequality, present the fairest and they don't have a fair shot. and so the decreased social

mobility is an issue important and we need to understand better and to fight. and so how can you fight in april market way this increase in the quality. for example, by improving the level of schooling, not only about you based system but a voucher-based system based on starting point. so today with a lot of programs like affirmative action. that's based on race. may be justified, but today if you are from upper african-american middle class, you don't need any help. and if you are a white, importantly, you do need help. so the white kind of help is not race-based. it is need-based. and so i think it would be easily solved by saying we know

what is the disadvantaged against data when it's very easy to get to what is the advantage to come from certain neighborhood in terms of your performance in schools. so why did we try to have higher vouchers to people come from those areas so that they can get to better schools, and have a shot at competing for the better colleges. because now we have a system in which, if you are good at the high school level you can get a scholarship to college, the best colleges, and succeed very well in life. for many people they don't arrive at the level of competing at that stage. and we need to bring them out. my model, even if i don't play golf, i think that golf is a very free market gain, and one of the things that golf does is

create handicaps to equalize the starting point. they are not redistributing the score at the end of game because that, of course, -- they are trying to equalize the starting .2 of the more competitive game. so that's the direction we should go into. >> down here in front. just wait for the mic back. >> i admire your book, doctor. the concept of the tax on cigarettes really work. that was a big success in the united states. i require -- admire what you are doing in your book. >> right here in the second row. spent isn't taxation really another form of regulation? when you tax cigarettes it makes people not smoke which is fine but it is another form of regulation. >> absolutely, but i, michael is

not deregulation. it is, how do you get that? my view is because the idea of taxation is [inaudible] and very little what we call economics the cause waste, when you have a regulation people go and a lot of what try to go around the regulation. and most other regulation is done far away from the eyes of the borders. and so they have no say on that. and it will inevitably be captured. so the tax, we decided whether we want regulation or not. but in a referendum on tax and cigarettes, the will of the majority will prevail and that we decide how much we tax cigarettes. i think in my view that's the

proper way to do regulation. i agree with you. it is a form of regulation. at the least wasteful. and by the way, the fact that on the side with -- we can reduce the social tax which is the tax on income. if we can raise all of these taxes and less tax and income i think we will all be better off. >> time for a few more questions. >> luigi, to what extent do you think the problem of income inequality -- [inaudible] enormous return to the cognitive elite. first of all, i have to say i'm not qualified enough to talk about genetics because it's not my cup of tea. but from what i understand i

think moving forward this is going to be much more of an issue because of the way the market works today. but at the moment i don't think that this is the biggest problem. iac more you want huge return, especially in areas like softer industry where the marginal cost of the product tends to zero. you tend to have basically the first, not necessarily first stop, but the locking want to get disproportionate returns. there could've been five facebook's created next to each other, but because facebook collected the biggest mass at the beginning, i now a disproportionate return which is completely proportionate

vis-à-vis to everything therefore they make. so i think that is a fix for this aspect. again, the best is to say you have to realize that there is this component. and so part of a good sort of free market system is a system also where the people who make amends amount of wealth, they give it back in the form of sharing because i think they have to recognize that sure, it is steel but it is not just a skill. >> luigi, the obama administration is encouraged europe to pressure spending to use scare sovereign resources to recapitalize its banks, and thereby protecting private creditors to private institutions to lobby. is this a good idea? is a good for capitalism for

spain to bail out its banks and for europe to bail out spain's we can do that? and does this in the opposite signal that bailouts are still the preferred way of dean with financial crisis is? >> it's clear descending a second. a traitor friend of mine was consume some point when he was trading with a french bank that they were overly exposed to greece cbs's. the french trader told him don't worry, the government is behind us. so i think that the fact that people might discuss whether the too big to fail doctrine caused the crisis. there's no discussion after the crisis, people do perceive that that's a problem. now, in terms of your i think that if you want to have traitors pay their sort of part of costs and part of the blame. in greece, the greeks sort of

cheated and they have their responsibility, but the lenders who did not check the greeks, and the system has been a system where we use public resources basically to ensure the creditors so between 2010 and 2012, most of the credit left. announcer difficult for greece to get out for any form of restructure because there's not enough money that they can restructure with because the, imf would never concede, et cetera. succumbing to spain, i think that you don't want the spanish banks to collapse because that would have dramatic negative effect on europe. but that doesn't mean you have to protect all the creditors and protect the shareholders. there is a way to intervene that does not do that.

and that has always been my favorite way of intervening, seems sort of thoughtful piece on a road -- that i wrote in 2008, that's the way to go. and certainly -- [inaudible] >> time for one last question on europe. >> hello? one of the critiques of our market system is an increase in short-term, and a lack of long-term time horizon on the part of investors. and a rise of certifying as capital and productive capital. would you agree with that? and if so, in the spirit of your remarks would you support a tax on short-term negative transactions? >> i think that i'm concerned about that. i don't have enough hard evidence that that's the case, but i don't have evidence that is not the case i'm definitely

concerned. i think that most of the time it's funny because this criticism comes from government and one sector that a short-term is the government. so the public traded companies might -- now, do i advocate may be a differential capital gains tax rate based on the length of holding? yes, i think that that makes a lot of sense. especially i think there is definitely too much turnover in stocks, especially from pension funds but we don't need to have sort of been turning over their portfolio every six months when we're supposed to hold for the long term. now, there is some value of course injury. now, whether it's all about you, i doubt. >> thank you very, very much, luigi zingales. the book is called "a capitalism

for the people," and it's just out from basic books. wanted to thank you all for coming tonight. >> booktv has over 150,000 twitter followers. follow booktv on twitter to get publishing news, scheduling updates, author information and talk directly with authors during our live programming. twitter.com/booktv. >> i would say that i'm working from nine to three. most writers who say that they write for south to eight hours a day are exaggerating. you just can't. you sort of lose it after a while. you certainly lose it when you're working on a novel. because the edges of your imagination start to blur after a while i was a. best case about three hours.

but even when you're writing a nonfiction book, you know, you may be putting in three good hours of pounding away and the rest of it is research looking at e-mail, making another cup of coffee, that sort of thing. fiction usually begins with a theme for me. you know, identity, retention, art, fame, things like that. but the whole process really picks up steam when i start to ground some of my thoughts in a character who will become the protagonist, and the character becomes sharper and sharper to me. i think all writing is a from really good if only because it leaves a piece of yourself behind. let's say you were blogging alter your 20. and let's almost no one reads your blog. but 20 years from then you will have children and you can show

them what you wrote. and they will understand things about you that they might not understand otherwise. what i always say is writing even in its most basic form a letter, a poem, a note to someone, they can have some sort of immortality. with all of that expense of loving someone, of losing them, of opening a drawer and find a card that they assign, or a letter they have wrote and thinking, still alive, still alive in some way. so i think, i think the more writing the better. >> any regrets on anything you have written? >> you know, i think regrets are things that a good columnist, and i like to think i was a good columnist gets out before she published it. in other words, you spend a fair amount of time at the computer

backstopping or so. when you're writing about your family constantly. and even when you're writing about it then, part of your brain is thinking how with this feeling -- how will this feel in 10 years? how unequivocal do i want to be about certain things. so i think you do a lot of, i wouldn't at all college censoring. it's more taking the long view. and because of that i don't really have any regrets about anything i've written. >> any advice for friends? >> yeah, i mean, don't wait for inspiration. i don't know where she is, but she's not coming. or at least she is not coming here. i never see your. occasionally there's like a fleeting flyby and then she is gone again and then it's all just now all hard work. the hard work part does not largely consist of thinking about it. pe