>> my best friend was actually unemployed and knowing through the process of unemployment and everything at the time, so i thought he would be a good subject to follow. so i kind of followed his leg. >> at the time i had an introduction to law course and i was learning there is a double standard for those under 18 of those rare. so i was sorted into children's rights if you will. i realize we don't have a say in the creation of the debt, but we have to pay it off. >> at first for me originally picked our topic --

>> which is what quite >> infrastructure or need for transportation in this country. so banal in a mark perry -- how can i say it, excited about the topic. after i explain it, they caught on. while researching, we decided to have high-speed rail because it's very important to the topic in our country as well. >> in his book, the double at our doorstep, the founder but exceeded management services writes about the power of labor unions in the united states in his fight against union tends to work at macy's employees. for the heritage foundation, this is an hour. [applause] >> thank you, john. union membership had a 97 year

low last year. only 11.2% of americans thought to a labor union. president the president is above the national labor relations act, the private sector is even our dire. only six-point x%. one in 15 belong to a union. in large part of the economy changed demonically, unions have not. however, unions don't see it that way. union see a product perfectly fine and the only problem is in please employers and die in it. the labor movement has attempted to reverse the decline, not a union membership or are relevant to 21st century workers, then make it difficult for employees and employers to decline their services.

in michigan. and a public indication, the labor research review. he said who do we need to convince the advantage of being union? employees? or employers? organizing with the national lay costing them enough time,

energy, and money to either eliminate them or get them to surrounder to the union. this is what they call a pressure campaign. i don't believe we have luxury of sitting around hoping employees trapped in a union trained environment come knocking on the door. if organizing is the light blood of the labor movement. we have to create our own reality by making our own breaks. that means focusing on monounion employers. might turn employers again the union. if you have massive employees support, you probably would be conducting a traditional organizing campaign. besides, the advantages of pressure campaign in today's environment overwhelm whatever problems you might think of. for example, dupont need a measure 30% among the employees. people inside and outside are all that is necessary.

the way to organize workers is put enough pressure on the company to force the company to vunder and take the employees out of the decision making process. here today to discuss what it looks like not in theory but in real life is dave. who is the president of executive management services. a company that employs over 5,000 workers across 38 different states. since 2006, his company has been locked in a battle attempting to persuade not dave's employees, but dave to -- surrounder and become unionized. we have here with us to discuss the issue diana. and vice president of the labor

relations. dave. >> thank you, james for having me here. i thank you for being here today. i want you to know that this isn't something i ever envisioned happening. or something i ever wanted to do is to be traveling around the country talking about a topic like this. quite candidly, i was put in this position, i was put in this position by the fciu, and i was put in the position because of the attack on my company, employees, customers, and family. i'm going to tell you a little bit about the story. i'm going tell you about a background. i think the background is important to hear this. and understand what transpired and what the unions call the corporate campaign death by a thousand cuts.

when i came out of school, i was going to be a doctor. wento work for acompany and ran plants around the country for them for about ten years. the reason it's important, i became a turn around specialist for them. i would go to the plants and take plants failing and make them successful. the way i did it was by peel together employees and taking care of the employees and getting the management to understand that employees were our biggest asset. i did that for almost ten years. i left because i was tired of traveling around the country. i went to work for a cleaning company. became the general manager in indiana. and i left that guy after three and a half years. he was antithesis what i thought good management should be. he treated people poorly. quite honestly, they deserve to be unionized. and why left that company, it

was about three and a half years after i left my previous job and my wife silting over here, who was scared to death about our future, i decided i was going to start ems executive management services. i do get a little emotional at time. bear with me. when we started it, i was committed to the fact we were going take care of our employees, we were going make sure they were safe, and do the right things. we were going to be a company with business with integrity. and that's how we built the company. we started in 1989, we started cleaning small buildings, myself, barb went back to work as a legal secretary. as we grew the business we offered our people benefits including health care. which doesn't happen a lot in our industry. we wanted to do the right thing. as we don't grow across the

country, by the year 2006, we were about 33 states and had about 4,000 employees at this time. we were doing the right things. we had one. lowest turnover rate in the industry. all of a sudden, the fciu appeared. they sent me a letter saying we want to help your employees. so i sat down and talked with them. what they wanted me to do was sign what is called a neutrality agreement. it will be something outside you can pick up after the meeting. in in the agreement, if i signed it, i would have to give up my employee's right to a secret ballot election, and not only that i would have to give them a list of all of my employees and home addresses. because card check would be in

place. they would use the name and addresses to go to my employees' home and intimidate them in to signing union cards. all they had to do is get the majority of fifty percent. my last meeting, i said i can't sign that. they looked at me and said, we enjoy conversation. we embrace confrontation. we're going to attack you, your employees, your customers and everybody related to you. i said i'm not going to sign it. it's morally wrong. they started their corporate campaign against my company immediately. death by a thousand cut. they distributed fliers, they were intimidating my employees as they came out of work at night. quick story a gal in indianapolis came out they would try to support the union and try

to give her money to bribe her. intimidated her. held her car door shut. they did it for a month. she said i'm happy. finally one night one went to her and said you're going like it whether you like it or not. we know it to be true, we have her aiferred from an appeals hearing we won. we finally beat the fciu. it went on all over the place. they used clergy people against us. they had clergy people shut down buildings by block candidating the -- blockading the doors during the day. they sent letters to customers telling them how bad we were. how we treated our employees bad. made them use hazard use chemicals. they wrote letters and gave them to the press that were published.

they used united states senator to call one of or largest customers and ask to have the contract canceled. unless i signed the agreement. day after day the attacks occurred. and you don't hear about this in the press even today. i'm here to tell you it's true. it's happening in companies across this country every day. it's sad, it needs to be stopped. the unions have realized they are dinosaurs, and don't want to compete in the free market. they don't want to understand that's what they have to do. instead they want to go to intimidation tactics. and pushing for card check and this administration is helping them through the national labor relations board as james was talking about. you know, posting new posting rule they want. quickie elections, and many, many other regulations and all

designed to allow the unions to implement these corporate campaigns and be successful in a short period of time. that's what they're trying to do. that's the end game, that's the goal. and i was going through this. i realized it and i was looking at my office window one day and i said to myself, it has to stop. we can't let these bullies win. they can't continue to abuse my employees and my customers and my family. we are going to punch the bully in the face. and we did. before they had a few more tricks up their sleeves, i want to show you a couple of them. this is a flier they distributed

in my neighborhood in halloween of 2007. they used little kids to go around and get candy, trick or treat, the little kids got the candy, they would hand the fliers to my neighbors. then they had union thugs driving up and down the street in cars, our friends, our neighbors were terrified. these are the things they do. a i don't know if you remember rallies in wisconsin, when they had a recall elections there, but this is downtown indianapolis against my company. against my company. it's sad they have to do these things. it's wrong. if they had something to sell,

the people would listen to them. on that day sitting in my office, i decided it was time to go out and talk to my people, it was time to go on the offensive. we did. i went to every building being attacked and sat down and talked to my people about what was going on. here is the amazing thing when you sit down and talk to people, and i don't care about their background or ethic origination is. i wanted them to know i cared. i was? gnatty talking to a group of about forty employees. i i said i want to talk to you about what is going on. the intimidation, the promises double the wages and not work as hard and all of these things. before i got it out of my mouth, there was a black lady about mid 50s in back of the room and she waved her hand. she said, can i speak? i had no idea what she was going

to say. i said, sure. she got up and looked around the room and she said, you need to listen to man. we might get double the wages in some places like new york. but the cost of living is twice as much. the people treat us right. we have the right chemicals and equipment to make sure we are safe. they treat us right. you need to thereon mr. bego. everybody in the room got up and applauded her. they understood. they understood. the problem is, they're like most people. they can't stand up against the intimidation factor when people are following do you the car doors, or following them home and push their way to your house. i had to do more than that. and we did. we started take the same attack. we published the half paid app

in the "indianapolis star" said basically what we told them you're so good at what you do. let's have an election and i'll dot results. i'm not antiunion. i forgot to tell you something, all the plants i turned around, they were all union plants. every one of them. in the day we did this, we also started filing unfair labor practice is against the fciu. one day in november of 2008, we filed 33 unfair labor practices in one day. they didn't know what to do. nobody had ever challenged them before. nobody stood up. you know the sad thing? there's a lot of businessmen and businesses that won't yet do it today. i them talk to me and say we

agree with you and your book, we don't know that we can withstand the onslaught you were under. we don't want our name out there. i'm here today to tell you we need to. what is happening, and what is happening in washington with the national labor relations board could not only destroy people's right to a secret ballot election. it can destroy our economy because if businesses have to go through this, we are going to see loss of jobs and productivity. we're not going to be competitive in the world marketplace. all because people want to force their will on somebody else. this is the article, they got a copy of that too. the day we filed 33 unfair labor practices geb the fciu, they didn't know what hit them. the great thing about this, is

that national labor relations board upheld three major ones. and went to appeals hearing in indianapolis for the administrative law judge. in his decision, two days after it was other, he said ems was right. the testimony by the union and witnesses was unbelievable and contrived. we won the decision and all unfair labor practices they filed against us. they filed fifty against us were thrown out. two dais after that, this a decision was appealed not if by the fciu, but the united states government. you have to understand the link. the unions, money -- it's a money pit. it supports certain politicians

to get to office and thigh use it to pay back the union. that is what is happening with the national union labor relations board. that's why they appealed our decision. it took almost a year but it finally went to the board of the national labor relations board. and we won the decision 3-0. our people were happy. the sad thing is there are people all over the midwest with other companies that didn't stand up like we did. the people are subjected to this and paying union dues and not making any more money. i'm here today because i want to -- i truly want to help you. the union said they want to, but their goal is survival. and the american public needs to know what is going on. i hope you will listen, i hope you'll spread the word. this is wrong.

we need to do what is right for the american people. thank you very much. [applause] dave, that was just a heart warming presentation. i read the book, and the book conveys a lot of what you said. everybody should buy the "devil at our doorstep." dave, what you said makes it so much more personal. and i am just -- i'm just an economist. i look at these things just through the prism of data. i can see what most americans are concerned about right now is economic growth and jobs.

the problem is that unions unions are slowing down the economic growth and slowing down job creation. if you look at labor force parings. at beginning of the decade millions of women moved to the work force. and many jobs were created due to the reagan revolution. we have 3.2 million fewer jobs than at the start of the recession. in december 2007. in president obama's time, he created 1.2 million jobs, a total of 1.2 million net jobs. that's about 300,000 a year. that's not enough to keep america going. gdp in the fourth quarter, after the stimulus spending was slightly negative. probably going to be slightly positive after the news trade figures figures are

incorporated. what is interesting is that we basically have a -- when we look at the right state and the unionization states. the state are people don't have to join a union as a condition of working. we know that over the past twenty five years, not just over the past four years. but over the past twenty five years, the right to work states, the 22 right to work states have created 1.5 times many jobs as the fourth unionization states. even over the past four years, there have been more union jobs created in right to work states than in the fourth unionization states. if the union were truly invested in the own best interest as well as the economy and america's best interest, they would have everything be right to work state. because they probably get a lot more increase in union

membership. the problem is that an antibusiness agenda such as president obama's lower the job creation of union members and nonunion members alike. the union membership rate declined by 1.1 percentage points in the eight years of president bush. it decline bid the same amount in the four years of president obama. president obama's policies are leading to a faster rate in the decline of union memberships man president bush. and james mentioned the day before. total 11.8% overall to 11.2% private sector, 6.9% union membership. 6.6 in 2012. government even declined 3.

% unionized to 36%. if you look what president obama has zone, look at, for example, what he did to boeing. when boeing wanted to expand in south carolina. these were union jobs in south carolina. they want to open a second plan. they were having too many orders for dream liners. once they get the batter problem fixed. they'll have the dream liners rolling out again. president obama -- the acting general counsel of the national labor relations board didn't want them to open the second plant in south carolina. once the plant was built, they didn't want them to use the second plant in south carolina. it was thousand of jobs in a relatively poor region of south carolina, north of charleston. they wanted them to open a second plant in washington state. what it means is that any

company wanting to come to the united states, any company thinking of opening is not going to open a plant in a fourth unionization state. they know if they want to move to a right to work state, or if they want to open a second plant in a right to work state, they have problem from the national labor relations board. that worked against creating more union jobs as well as more nonunion jobs. if you look at the keystone pipeline which president obama vetoed. they would have created tens of thousands of union jobs in construction. but the president vetoed it. it would have created more jobs in the gulf of mexico ff -- for our refinery. we have the most efficient refibro i are in the world. oil supplies from venezuela and new mexico are dwindling. we need the oil from canada to be shipped down through the pipeline to the refinery in the gulf so our workers who are

working the long, dangerous jobs with long hours in the gulf of mexico have more oil to refine. which, by the way, some of which we can export instead. the oil from dan is going to go west to china. west going to be shipped to china. the chinese are going to be able to use it. we're not going to be able to use it. a couple of more examples. i know, it's -- [inaudible] if you look what the epa has done to the coal regulation. those are costing union job in the coal industry. the new regulation means that over 100 coil plants have closed down since january 2010. and in an evaluation of major carbon rule, epa has no costs to the carbon role on the coal industry. why? because they are fumed in the cost-benefit analysis that no new coal fire plant would ever

be built. none every built. no cost to coal. right. simple but epa for not simple for the coal miners who are losing their jobs. if we look at taking over gm and chrysler which president obama did and gave the asset to the auto work and legitimate -- this doesn't help for the condition of the united. if people know that laws will be overturned, investments will be exappropriated, they don't invest in the united states they will invest somewhere else such as singapore or other countries where they think that credit is going to be preserved. i wanted to end by saying george or well would have loved the term that president obama and unions use. so dpaif talked about the

neutrality agreement. it wasn't neutrality agreement. it gave the information to the unions. it fobbing away the right to a secret ballot. the employee free choice act. it's not free choice. that would have taken away the right to a secret ballot and imposed mandatory arbitration, mandatory arbitration on our unions and firms. finally official time i wrote an article about official time in today's clear market.com. official time is time that government workers spend not working for the government, but working for their union. there are 35 people at the department of transportation when spend all their days, not doing anything for the federal government but only working for the union. 17 much these are air traffic controllers. 16 of these air traffic

controllers are being paid six figure salvation army. for some reason, it's called official time. george would have loved it. he would have loved dave's book. which you should buy. thank you for inviting me. [applause] >> let me start off, dave, ynt tell you how important it is, as you chronicle the atrocious events taking place in your life. outside the -- for business to make it is hard enough. and american businessmen going against these type of odds is unbelievable. you went toe to toe with the thugs. you fared very well. the battle goes on. dave and i have very similar

backgrounds. two different businesses two circht part of the country. i too, was a businessman with many -- quite a few employees and the union came after me. instead of chronicling and writing a great book to spread the word, when i left that business, i went to work taking on union oses on individual bases. which is what i do today in working on policy itself. i see every day the play book that is used by other unions to force businesses in to unionization with or without an election. we know about the play book. it came out not that long ago in the is a dicks -- it talks about the death by thousand cuts. it's unbelievable that something

like that can be allowed to exist without anyone taking any action on it. now, i want to talk about some of the social justice groups that are out there. that are really nothing but unions by any other name. there's job with justice which is a multiunion coalition. justice for janitors, which is a -- they go on and on. now the neutrality agreement, and let me say this. their mission on the groups is simple. it's name and shame. truth and justice has absolutely nothing to do with it. they work hard laws and soft

laws to basically -- what's the word i'm looking for? defame an employer that goes against them. their mission, like i said, name and shame, it doesn't have anything to do with justice. i want to give you an example of neutrality agreement and actually out there. if you look on page 3, of that neutrality agreement who said employers will not be employer will not file a petition the national labor relations board for an election circumstance with any demand for recognition by the union. in other words you can't challenge them. you have to take their word for it. the employer is left completely out of the loop. forget freedom of association. that's out the window.

the neutrality agreements are actually taking further in. they are going across the pond with the neutrality agreement which is called international framework agreements. i'll give you an example of the company. i think most people heard of a company called g4s, a security company. the olympics in london, they were the company responsible for providing most of the security from the event. they have sib side area here in the united states called wacken hunt. and there are legendary cases with them taking on the union of coal burning. they didn't get a lot of ground at the time. g4s, what they did is work a triangular situation. g4s is own bade company out of london. what took place was g4 is had a contract working for them in south africa, they started doing

protest claiming racism and poverty wages in south africa. started pushing pressure on the corporate headquarter in london, got language in international framework agreement that went down to neutrality here until the u.s. and in 2009 they recognized the fciu through a card check agreement. a will the of companies in the u.s. had the international agreements. we know of telecom and t-mobile had the similar situation. we talk about awhile ago. h and m the retailer. and ups happened in reverse where the teamsters leveraged 99 relationship here in the united states to force recognition in turkey for a contractor. what we have to do on a policy level we have to make sure that we allow the employee to always

have that election. you can't force an employer to go to a campaign against the union. that would be unreal. we can always make sure the employee at least has a say so somewhere in the situation. anyway. so that's all i've got on this. [applause] >> thank you. we'll open it to questions from the audience in just a minute. i'm going to take my moderator's prerogative to ask the first question. and it's going to be for you, dave, if russ and anna want to chime in. in going through the article from the ufcw it was written in the '90s when they were trying to pioneer the pressure of the campaign. he was writing, again, i'm quoting. my local scribes to the policy, the policy he's talking about is

by passing. by defining successful organizes in one of two ways either a rad fied sign previously nonunion employer or a significant curtailment of the nonunion operators business. either of these outcomes will -- so the union quite explicit and go on to describe a successful wage family foods. shut down nonunion operator businesses. if they can't persuade them to go on with neutrality and card check. in the 1990s, they were convinced the national labor relations board wasn't going to be the entity that would help them do that. i wonder, dave, if you have any thought on the national labor relations board proposes and attempt to change the rule and how the impact businesses like you? and employees who height not be

persuaded of the need? >> well, it's actually pretty simple. during the corporate campaign, the death by thousands cuts is get the employer to cave and sign the neutrality agreement. right now they need more tools to get employers to cave. especially after we won against the fciu. some people have learned, and people like russ' organization and others national right to work have the representative in the back of the room here, don, they're helping people fight through the situations. but here is the key. one of the things that probably don't know about in the original free employee act card check in there was a third provision. the first was eliminating the secret ballot election. the second was mandatory arbitrary. the third was employer fines.

if you as -- fine to that. if you were a businessman and start throw the unfair labor practices throughout. they do like spit ball on a wall. and some of them will stick. how many could you afford? that would have been one of the pieces of leverage to go to the owner of the business and say, you know, if you just sign this neutrality agreement, we'll withdrawal all of the unfair labor practices and the fines will go away. these are the type of things that national labor relations board, through regulation changes and overturning previous decisions is trying to accomplish. like the posting rule with the elections, you know, many units, microunits. this is all designed to give the unions an upper hand in the

corporate campaigns. >> if you don't have any comments . >> i have one comment. i think that people don't know we know the policy rule is. we know with the election. we know specialty. [inaudible] the persuader rule through the department of labor. what that is, and we're going there right now. we have another campaign with another union. if you use outside consult assistant or attorneys to help you win an election, you have to disclose that information who and how much and all that have. on the flip side of that, the unions don't have to do that. it's designed to put pressure on you. okay, posting rules. they want to post in application resumes and businesses across the country that employees have the right to be unionized or form a union.

personally nothing about you the right not to be unionized. >> that was [inaudible conversations] that's right. that was overturned. then you have the quick elections where today by law within 42 days. union want to get down to seven to ten days. the reason is they gone out and intimidated the people to signing union cards. and say that know they can petition and do seven to ten days. the company won't have enough time to sit down and say, look, just because you sign the union cards doesn't mean that's the way you have to vote. i'll give you a case in point. we had one election, and that was in southern ohio at the steel mill, it was with a different union. and they petitioned, we said fine. we're going to do it 22 days just like the law demands. here is the interesting point. each week i went down and sat and talked to the employs. in my first talk i said please

understand something. just because you signed the card to agree to an election. the union only needs 30%. just because you sign a card doesn't mean you have to vote that way. is when i made the comment, you could see it was like a weight taken off the employee's shoulder in the room. after wards, half of them said thank you for telling us that. we county know that. the only reason we signed the election cards was because the union thugs were following us around the plant and intimidating us. we gave up and signed them. that's why all of this is so important that we expose this and make sure people are protected. it's amazing the two recess appointed member of the national relations bureau recess points were nullified by the u.s. court

of appeals. so if they -- no longer on the national labor relations board, that means one person. and it has to be closed down until people can be properly appointed. that means also that all of these rules that they promulgated last year are not legal either. because the recess appointee were not legal. >> comment on one other thing. you also mentioned -- this is another thing by the union. traditionally when the union approach a company. they have to get a collection of employees a common interest. and with microunits, they are going against what is traditionally considered common interest and carving out different section of employees. if you cut in term of department

store, where every department store has the same title, same pay wage, same benefits share the same lunchroom and all of that, in the microunion they may take the people in the shoe cannot and the sporting goods department leaving everybody else out and only having elections for those. giving them a toe hold and working on the rest of the group as they go. so it's really carving up companies as well for these situations. i want to go back to the quickie election. this is so important about this one. we had 26 people working at the particular facility. if it was seven to ten days and had the chance to talk to people about number one, they had a right to secret balloted election. they could vote their conscious. we probably would have lost. the 42 days we had continuing

meetings with them. we won the election 2-1. people understood their rights. that's despite the fact that one of the employees stood up one day and said, we appreciate you talking to us. i wish you could do debate the union. i said i don't think that's going to happen. they don't like it that i gate chance to talk to you anyway. he said what? that's no big deal. they pizza, wing, and beer for us two nights a the the local pub. i wish i could do that for you. i can't. [laughter] >> that would be an unfair labor practice. >> against us. >> yes. unfair labor practice? >> you can't give the employees anything of value to -- and the only employer who did something like that would have faced a $10,000 fine which would have disappeared from the employer agreed to shutup. are there any questions in the audience?

if you can stand up. we have the microphone coming. it you can say your name and affiliation. [inaudible] time and money, just an attorney fee we spent around $1 billion. in attorney fees. how much in personal time and management time is we never sat down and calculated. i'm sure you can coble it or more. [inaudible] >> if you could stand up, sir. and identify yourself. [inaudible] [inaudible] approach by labor union. usually the first thing is don't

do anything until you consult with an attorney. only because there are so many pitfalls associated with unfair labor practices. a lot of people say i'm going to talk to the employees and sort it out. it's simple. i'm curious, you personally took on a lot of the tasks with talking with your employs. you employ lawyers to do this. did you run in to pitfalls what you could say and how you couldn't avoid integration and avoiding a variety of other potential unfair labor practice charges. do you think it factors -- your choice to do it personally or overwhelm the potential risk of doing it without employing oh people? we did use the attorneys and they were present when i met with the employer. i thought it was poshtd that my employees knew how i felt. i told them all the time. if they want election and have

an election. if you decide you want to be union. that's fibro. i don't believe in people being intimidated in something they don't want to do. i talk to them and the realty of the situation. i have to tell you, i came away from zero meetings feeling like we failed the message. and it didn't hurt us with more unfair labor practices. anyway, i had a question -- [inaudible] two recess appointee refuse to step down. they continue to operate. >> they probably don't have any legal significance. i guess i shouldn't say that. it if the strategy is to get around the labor relations board

with the agreements, how exactly do the process effect each other? i don't understand how to interplays. i'll start. if other people want to chime in. there's two aspecteds to it. one, the national labor relations board has a lot of school -- tools. things you think ought to be common sense. just mentioned integration. if you go to the employers and say i think i've been a good boss. what is wrong with the workplace. you think it would be a common sense question and the employer ask. it's not it's unfair labor practice. or things like, you know, i'm sorry i didn't realize you didn't like the health benefits plan. we'll overhaul to make sure we are covering the condition you want covered. you can't do that. it's promisings. there's all these sorts of things. you would assume be okay that

you're not allowed to do. and so employers john they go there and, you know, and trip over them unless you have good counsel and hire a good lawyer. the union come up and throw everything against them. employer x yz is committed unfair labor practice. and no one should trust him or listen to what he has to say. they are good at using the national labor relations board as it now stands. what they conclude that it's not enough. the board is now stands insufficient. what they've been trying to cois extend the power of forward do more thing. like shorten the election time frame. seven to ten days and the initial rule they propose allow them to shorten it to somewhere around 18 cays and get it below that. or the microunit, there's actually a department store in new york, the union are organizing not simply all of them.

they could organize all the our hourly clerks. they're not doing that. they could organize the clerks in the shoe department. they are not doing that. the woman's shoes department. they're not doing that. they are try forming a union of the clerks in the women's shoe department on the second and fifth floors. well, you know, is that -- the best interest of the workers or simply trying to form a unit of the you think you can form. and the other workers of the union might not be the best thing for the store. try to expand the rule to do things like that. about current organizing process doesn't allow them to go that. there's right to overhaul it to make it more conducive. is which why they push for illegal recess appointment. they knew it was going to be a legal fight but they knew the senate was likely to -- one being named a defendant in a rei -- riko violation.

just been named a defendant allegedly he was helping a cover up mismannedding of money of union trust fund and supposed to be going to workers job training and allegedly being misspent. that's why you have seen the pressure. put the guys on the board anyway. the guys who know what the agenda is recraft the rules to benefit the organizers. i don't know if you had anything to add. >> he's exactly right. it's designed to give the union leverage. >> confused. you were talking about try to sign an agreement that bypassed the labor relations board all together. well. so much on the site anyway what is the purpose? [inaudible] right now it's hard for them to get some people like me to sign the agreement. there's not enough leverage for

them do it. a lot of people will do it. now, having said that there's a lot of businesses that will. what their goal is, we want to force unionize every business. and to do that, they need more leverage. for people like me, and other companies that said no. they tonight able to go out and fire these unfair labor practices out there or face all the fines or things like that. they go to the quickie election things like that. they can win quickly and can send out a neutrality agreement and say are you going sign it? and pull the fines back. it's all about leverage. that's what they're trying to go. they know there's businesses that won't sign the agreement up front. >> what is interesting how little success they have had. how the number of union members every year has been declining. >> and you also have to remember

as far as elections union know the best day of support is the bay petition is filed. they traditionally lose support from that day on. >> can you describe what the petition is? >> in this kind of -- it goes to talking about what i was going to talk about next. you were talking about the neutrality agreement and gaining recognition through what is called cardship. a card, usually a three by five index card. it has legal language on it. basically the language said i hear by authorize this union to represent me for the purpose of collective bargaining, wages, benefits and other work conditions. print name, sign date. usually asks for information. it's a legally -- binning document you are turning the right to represent yourself over to the union. they now represent you. their interests are very much different than yours.

they don't talk about that sort of thing. anyway to bring in election, they have to get a minimum of 30% of the cards from what is called the appropriating bargaining union. as we talk about, there's dividing those up any away that is beneficial to them at this point in time. once they have 30% or more of those cards signed, they turn them to the national labor relations board, and that creates a petition for an election. and the election is to take place at this time in point -- point in time 42 days, no more than 42 days from the date the pee fission is filed. traditionally right now they file the petition on a friday at k58 and gets faxed to the employer on that date. so they go home for the weekend and come and find it sitting on the inure my the fax machine. they pick it up and already three days down. they lost friday, saturday, and sunday. 39 days at that point.

>> when the actual election comes, they don't have to vote yes for the union. the date of the petition is filed is the union's best day. not all the petitions result in a vote in favor of union representation. most of them do not. or about -- [inaudible] right now? >> about 50 to 60% somewhere in the region. >> we have time for one last question. >> question for the panel. on the legislative policy side, the things that state lawmakers can do to address the kinds of problems. which is protection clause, clause protecting employee's private information, not accepting unions from antistalking laws. so -- [inaudible] comment on how effective do you think these can be? is there anything else that states can do to prevent these?

>> other than than right to work? [laughter] >> right work is the biggest thing. but, you know, indiana went right to work last year. i'm from indiana. michigan went this year. the past year also. but you look to states like wisconsin that severely handicap some of the collective bargaining that unions can do and give people a chance to opt out. they are heading toward a right to work. i think you'll see more states where that happens. what we need to do is help get the message out. all americans understand what is going on behind the scenes. the unions. i don't say the union. it's not the rank and file. it's the big labor bosses. they are heading toward extinction and trying to survive. and what we have to do is educate americans to the intimidation factor that is going on and expose this stuff.

so that the governments on the state level and the national right to work would be great to have. understand what is going on, you know, both parties and they come together and protect the rights of everyday americans, not people giving them money to get reelected. >> we can see when we have difficult state. we're so' the right to work states are doing better. we can see the legislation that you're talking about is extremely effective. we can disoarve the americans on moving from fourth unionization states to right to work states. americans are most concerned with having job and economic growth. steve documented this in his serious of books rich states poor state. resort in the last census. right work states gain congressional seats lost from fourth unionization states. the process is going on we can

observe it. for a lot of our audience here today. i know, it's an elementary thing. i work with companies and their employees during the campaigns and there's wildly different views about what right to work actually is. forked audience out there, right to work is -- you do not have to be a member of the union as a condition of employment. thus meaning you do not have to pay union dues. there's a little more to it. that's the basis. it's that simple. >> and union dues can be very substantial. i was talking to one checkout cash year at safeway in the direct. he was wearing a united food commercial worker button. i asked how did you like the union? he said they take about as much of my paycheck as taxes.

very well paid presidents of union and these all available online. the how much the union bosses work.

there's another rico violation being prosecuted in upstate new york in the syracuse area, where you had basically the building and constructions trades department were doing things like pouring sand into the gas tanks of the operating equipment. >> and telling the guys you have to hire union workers. and so a rico violation right now but the unions basically -- but we have an exemption from the federal antiextortion laws and you can't prosecute us for doing this, and the kicker is they're right. they may be prosecuted under the state antiextortion statutes it but you can clarify being involved in a union dispute does not exempt group the extortion laws. so i think you're toughening up

the antiblackmail and antiextortion laws that would protect a lot of employees and employers from these sorts of abuse. but with that, thank a. for coming. thank you, dave, for sharing your story with us, and david will be outside signing the book,. >> a great berthday present. >> can i say one last thing about the devil at our door step. this isn't just about my story. i felt compelled to be an author to help everyday americans. my first book, devil at my doorstep, and this is -- people wrote me about their stories and talks about employees in california who are intimidated by the union worker monday

michigan and other states and i'm tickled to death the story is getting out finely, and the grassroots movement coming from people who are union workers who are tired of being abuseds' intimidated by their labor bosses and their money being used for politics they don't afree with. so i'm prejudice it because it's my book but i think everyone american should read the book. thank you. [applause]

>> if we believe in opening up the gates of our memory, we are bringing people closer to together, towards the realization of what a human being, a person, an individual, can do, and i think of those who saved lives. all these christians who saved lives by risking their own. every one of them is a hero. >> on the 20th anniversary i ask you to re-commit to replace the direct memories of those who are still with us, thank god. with the records of this museum so that no one can ever forget these stories and these lessons. and i ask you to think about how the historic slaughter and

suffering of the holocaust reflects a human disease that takes different forms. the idea that our differences are more important than our common humanity. >> this weekend, bill clinton marked the 20th anniversary of the holocaust museum in washington, dc. saturday, at 1:30 p.m. eastern. then --

>> now a discussion with eric larsen, author of "the people are pension," the struggle to protect social security since reagan. from the tucson festival of books. this is an hour. >> welcome to the fifth annual tucson philosophy of books. i'm the senior writer for the tucson weekly and hoster of the show airing each friday night. it's my great honor to be here today with eric larson, author of "the people's pension: the struggle to defend social security since reagan." we're also here with c-span on booktv, so hello from tucson, arizona, america. i'd like to also thank the city of tucson for sponsoring the stage, and a big thanks to everyone who helps the tucson festival of books come together.

we'll talk for an hour here and the fir 40-first 40 munches will be q & a, and then we'll good to questions from the audience. and then mr. larson will go to tent b, south and west of the student union so he can meet you and autograph copies of his book, and of course if you can turn off your cell phones now, that would be great. so let's get introductions out of the way. eric larson is an activist and commentator, in addition to writing the people's pension, he has cowritten the crash and has written for a wide variety of publications, including the nation, the village voice, and the huffington post. so please welcome eric larson to the festival of books! [applause] >> very good to be here again. >> let's start with the question

raised by the title of our session here, and that is: is social security a manufactured crisis? >> the short answer is, yes, there is no existential crisis that social security faces in the sense it will not exist in x number of years if something drastic isn't done. but there's two crieses we talk about. number one is a fiscal crisis. will it we have enough income or revenues to support nit future years, and the second crisis is a political crisis, and i define that as a crisis in terms of whether the, for lack of a bert term, the governing class in this country wants to support social security anymore, and the degree to which there is sufficient popular support, mobilized popular support for it, that it has to continue. so i'll address the fiscal

crisis first because that's the one that is in the media all the time. to define this agent more closely, social security deps on two sources of income. payroll taxes and then interest income on the trust fund that it builds up. i can good into that in a little more detail but i'm not sure you would want me to. the point is that the current projections by the social security administration and the congressional budget office -- and this is what you see all the time -- niksch in 2033, the latest estimate they have -- social security will run of our money in the trust fun and all it will have to pay benefits the current payroll taxes and what that means irif the proresques are correct, and these are only projections -- is that social security would only have enough to pay 75% of benefits in 2033. now, that means is that congress

would either have to -- congress would have to do something to balance the books because social security is not legally able to draw from other sources. it has to use the income that it gets from those two sources i mentioned. congress would have to cut benefits, to match the money coming in, or it would have to raise payroll taxes or figure out another source of income to add in to make up the difference. so that's what we're talking about when we talk about a fiscal crisis. a few things to keep in mind to put this in don text. some of you may have heard me explain some of this yesterday morning in the panel i was on so i hope i'm not repeating myself too much. social security could -- what the congress could is it raise the cap on income subject to payroll tax -- raise the cap, the idea some of you may have heard. what that really means is

currently only the first $113,000 of a person's income is subject to payroll tax. okay? what we can do is raise that cap to, let's say, 200,000, or 250,000, or even -- this is an idea that senator bernie sanders put out, we could have a doughnut hole and tax and only subject incomes over $250,000 to payroll tax. a number of ways to do this. the point is that people who are making that kind of money, more of their income should be exposed to payroll tax, okay. that's one -- that would by some estimates if the cap was completely eliminated, that would eliminate the problem all together for the year 2033. we would have 75 years at least of healthy social security. if it was simply -- if it was simply raised, to let's say, $250,000, we could eliminate close to half of the shortfall. there's other things that can we done, too one idea that has come

forward is to raise the estate tax back to where it was and devote that revenue to social security. another idea that has come up is simply to raise the payroll tax across the board a little bit gradually over 20 years, slowly enough so it wouldn't affect anybody's purchasing power, and that would do the trick. we would be talking about a dollar 50 a week or something like that. so, the key point. there are three solutions to social security that are being discussed all the time in washington by the economic and mitt cal -- political elite, i guess, what paul klugman calls the elite people. one of them is to raise the retirement aim, which would be a cut in benefits, especially for people who live a long life span.

number two, is to means test social security, which is essentially reduce or eliminate benefits for upper income people. two problems with that. first of all, you would have to means test down to a pretty low level by some estimates to the point of cutting benefits for people whose lifetime -- let's say, their highest income in their working years was $60,000. those aren't exactly affluent people. also, you wouldn't really be able to raise that much money. the other thing is that would undermine social security, which i think is the most important element of social security, which is the social solidarity aspect. the fact that people of all income levels get something from it, participate in it, and therefore feel a sense of loyalty or ownership over it. it would undermine that. the third idea they come up with that is repeated over and over again, is the chain cpi, which

essentially, to be quick and dirty, means adjusting the formula that is used to compute benefits so they go down. now, that's sold as a technical correction, but it would actually be a pretty serious change. it would start to affect people pretty materially within the next decade, and more and more after that. now, the common denominator of these three ideas for fixing social security is that they would all of them strangely enough would exempt the most affluent people. they would say a little bit of reduction in their benefits but that's not a big deal to them. if they live longer, they would see a reduction in benefits, but they've got plenty of other money. it would be a very small hit to them. now, if the cap was raised, as one of the more progressive idea, that would be a fairly significant cut in their annual

income. so, what we have is a political crisis, number one. it's a crisis in terms of which -- what adjustments do we make? social security is not threatened in any ex-step shall way. there's an argument to be made maybe we should wait until we're closer to the time when theoretically the projections would start to take hold, but if we're going to put that aside for a second, the question is, too we want to do this in a progressive way or nonprogressive way? and the problem is there's a bit of a disconnect between the public and the sort of -- loose lie call them the gloverring class, economic and political governing class. consistently in polls the public supports raising the cap, raising payroll taxes modestly

if it would secure social security. people value social security in was that's not the question in washington it's more a question of which constituency are we harming and how will that affect our ability to raise funds. >> how important is social security to the american security of america's elderly and people who do depend on it. >> i will just throw out a couple of figures. 45% of people who receive social security depend on it for 75% of -- i'm sorry -- 90% of their income. when you get into two-thirds of the people who receive social security depend on it for perhaps 90% of their income. tide i get that right? thank you. and what you need to keep in mine is social security is not an overly generous system. the least generous national

retirement system in the industrialized world. people on social security are not getting rich. the largest benefit you get per month is around $2,000. the average is more like $1,300. so it's not getting anybody rich. at the same time -- as a result, an awful lot of people on social security, one more number. social security keeps to million people every year out of poverty. 20 million people. that's something like 7% of the entire u.s. population. if you start making changes, if you implement the changed cpi, for example, an awful lot of people are living just this side of the poverty line as the percentages indicate. the result is that literally you make these what are advertised as small technical corrections to social security, or, gee, people are living longer, shouldn't they keep working

longer? you're actually going to throw a lot of people into poverty. there's a material human cost to doing that which i don't think the public wants to pay. >> you do take a deep dive into the ore gyps of this debate over social security. what led you into this project? >> a couple of things. i got started researching social security in me mid-'90s when i was editing a magazine called "plan sponsor." a monthly magazine for people who run public and private pension funds, still going strong. i got interested in it because right around the time that i was running planned sponsor, was when privatization of social security became a hot topic, 18995-96. suddenly the -- the stock market was going great. thates when everybody was talking about as a solution to the social security problem. and so privatization -- it intrigued me that people would entertain ideas like that, about

a system that was so popular and was the underpinning for private pensions all across the country. it just seemed kind of staggering to me. so i got interested in the issue. started looking around, as i usually do, isn't there some book i can read that gives me the history of this? this ideological tug of war over social security, and i couldn't find one so i kind of knuckled under and said i guess i have to write it myself. so that what i gap to -- began o do. there a couple of other things here. as i started delving into the history of social security -- the book begins in 1980, but i gap to look into the early history of sore security. i want it to understand why it's different from other government programs and i traced its origins back to a number of things, but among other things, to mutual aid societies that were set up in the mid-19th

mid-19th century by working people, the early days of the industrial revolution, who had no social protections at all, and created everything from the masons to the elks to all kinds of groups, which some of them are still around today. back then their purpose was for people to contribute membership fees which would good to pay for health care, for survivors benefits, for burial benefits, all kinds of things. so there was a social solidarity element. and realized that when social insurance programs like social security began to be instituted in the late 19th, early 20th 20th century, they were kind of taking this idea of mutual aid and institutionalizing it, and i thought that's very powerful. that's different from something like welfare. this is not something that you're given because congress feels like they want to be nice to you. this is something that you get because you paid for it, because it belongs to you, and that something that really gets lost in the debate sometimes.

i'll get back to that in a second. i have an interesting anecdote from the 2000 electionment but the other thing that got me going in this, and more committed to it, was because i began to realize that i was very directly affected by this. i'm a free lance writer, been doing this about a dozen years. i have an ira, it took a hit with the dot come bust. took a hit in the financial crash in 2008, my home equity is very hard to say. it's a tough react, free lance writing, and i realized when i received those statements they used to send you on paper but now you have to look online to see what your social security about woo be if you retire at 65 or 70. that's incredibly fortunate me. i was considering thank god or whatever that there is going to

be at least that, so all of a sudden i realize this is a very vital piece of history and it's very vital issue for me, too, just as an individual. now that the anecdote from the 2000 election. there was a little exchange that happened between bush and gore. they weren't in the same room together, but gore -- bush said at one point, al gore wants you to think that social security is a government program. and it's not. it belongs to you. and al gore had some fun with this. he said, ha-ha, george w. bush doesn't understand that social security is not a government program. but actually bush was right. he was right. social security is not like any other government program. it's something that we paid for, it belongs to us, it's managed as a trust by the federal government but really is ours in a legal sense, and i think bush's intentions were quite different. he wanted to encourage people to think of their payroll tacks as

something they should be able to put into a private account instead of letting it be managed by the social security administration. but i think there's a profound truth that got really turned around and shows you that people on the progressive side as well as the conservative side can getter confused about this, and that the reality, the more fundamental reality of social security as a form of mutual aid, really kind of gets lost sometimes. >> you've talked about how you have seen the three stages in this effort to undermine social security, and who do you see as people behind it? what are their motives and what was the first stage during the reagan administration? >> to be really quick, it's all in the book to read the book. there's four stages to the history that i tell in this book. the first is in the very early '8s social security did face a serious funding crisis. had to do with a lot of things, including rampant inflation, which caused benefits to boost

more than they should have. but that was an actual crisis. it was in 1983 by the greenspan commission and the social security amendments that were passed, some adjustments made. right after there there were a group of inflew enshall and wealth anymore, one of them pete peterson, an investment banker, who were furious that more drastic exchanges were not made to social security in 1983, so they launched a multipronged movement to cut social security, and they were able to pull in center-right democrats democratp republicans. a group called americans for generational equity that was unlawful the '8s that began putting out research and pulling together influence enshall people behind the idea we have to cut social security. little known fact, every president, from jimmy carter on, has attempted at some point or other to cut so-security,

including barack obama, bill clinton, republicans and democrats, and these groups in the 80s managed to -- they didn't manage to sell the public on the idea of cutting social security, but they really built up a very strong constituency among the elite in this country that his has to be done. in the mid-089s the privatizization movement began. wall street got behind the movement to privatize social security, and suddenly all the proposals you heard for ten years after that included carving private accounts out of social security, orcrafting them on the -- creating them on the side and reducing benefits, which is the same thing. stage three ended in 2005 when george w. bush got on the campaign trail again, after his election, and attempted to sell this idea to the public. it was such a disaster it became political poison. and as a result, the movement

against social security shifted back to the states that were still in right now, which is the stage of saying, let's cut it. it has to be cut. and the politics since then has been a mating dance between the republican right and the democratic center right, how to do this. how can we make the politically acceptable enough we can cut social security. so that's the arc of the story in the book. the evolution in this movement, and then i have to ask you to repeat the first half of your question. >> actually i was thinking about the bush efforts, and i remember attending one of those town halls, as he billed them, when he came through tucson, and really seemed more like an infomercial set than a town hall. you had bush and then some people from the community with very scripted lines, and it was all focused on this whole idea of how wonderful private accounts would be, and that

didn't go very well for him, as you point out in now book. >> there was an interesting incident that happened during that rigmarole. that is the one time in the whole period i've covered it that the national media actually turned against cutting social security. generally national media has been very supportive of the idea. they tend to be very center right, as a general saying. there are studies. they turned against it because bush's ideas -- he presented them in such an inept way, it was so skewed and such a dog and pony show they got tired of it and started editorializing against him. one interesting thing happened during that campaign of his. he called it 60 cities in 60 days. i want to highlight in denver, there were a group of three college students who attempted to get into one of those town halls. they had tickets and they had t-shirts that it said, don't cut social security, and they were stopped at the doctor, turned away, and they went to court and

said their rights had been violated. turned out it was secret service people who did it. secret service people were being idea on the tour illegally. there was a congressional investigation about it. those three northwest my became known as the inevitably became known as the denver three. the interesting thing is they were not retirees. they were not older workers. they were not union members. they were college students. they were people who you didn't think of typically as being concerned about social security, and that's one thing i want to get -- digress a little bit, is that most of the proposal is outline to cut social security means testing and change cpi, raising the retirement age, most of them would affect -- they would affect retirees consider my in the next couple of decades but the people most affected are people in theirs 20s 30s, and 40s today.

the people who are most at risk from cutting social security, who are most at risk from the sort of retirement crisis that i think we have coming quickly, is not people who are retired today. people over 55 are facing it. but people who are younger people now, younger workers, the ones who are really going to be hit. the reason is because their other sources of income are disappearing. home equity, ability to save privately, on the other side of the balance sheet, student debt, consumer debt. employer-based pensions are disappearing. people who are in their 20s, 30s, and 40s today are going to rely more than ever on social security, and this is why i think there's a certain amount of craziness in was they would consider cutting this thing, which will only become more vital. so one of the things i want to sort of stress here is the need for younger workers and younger people to become more aware of what is going on with social security, because they're really

the ones the most at risk here. >> we have heard that the famous ufo factoid, moe people believe they will be visited by a ufo than believe they will get social security. but you're skeptical of that, and i think that's part of the basis of people saying, we should be able to use the money in private accounts. >> i'll tell you the story real request quick about the ufo fact oid. it was in a poll put together for third millenia, an astro turf young people who are passionate about cutting the deficit group, put out in the mid-90s. and what happened -- what they did is they asked, do you believe in ufos? and then a couple of pages later, five minutes later they've we were on the phone, do you think social security will be there? so there was no direct

comparison made between do you think one is more likely to happen than the other? but it was treated like that in their press release. a couple of years ago, more responsible group, called the employee benefit research institute, did a poll where they actually did put those two together, and overwhelmingly people said, think social security will be the rather than the ufo will land. so, okay. -- but the ufo factoid was repeat endlessly in the press, in the late '90s and the early part of the last decade to the point where itit became ingrained that was all over the place, and you still hear it. >> i'm sure there are other panels that will dig deeper into the ufo phenomenon. let's get back to the private accounts question. the whole idea of devoting some of social security's money into private accounts. the winners and the losers. >> i have to apologize. there are some people on the

panel i was on yesterday, which is specifically about that, burt i'll give a quick abc to the question. the quick answer is that it's very simple. private accounts carved out of social security would be a modest boost for people who are affluent, who are already able to save. for people who are not affluent, who can't afford to save, they wouldn't do very much good. they would put money at risk, which shouldn't be at risk. if you're a person -- and their increasing number office people in this position in our economy who spent their entire careers, or almost their entire careers, working in low wage or close to minimum wage jobs. they will not be able to save enough. the only way to help them save enough would be to actually -- for the government to actually contribute money physically to that account, to actually boost that account by giving them money, and that's something that is not in the cards politically, and even then it wouldn't work very well. it is very difficult -- anybody who has a 401k or ira knows it's

very difficult to time an investment pool like that. so that you gradually reduce the riskiness of your positions to the point , where when you reach retirement age, you're in a safer set of investments. people in their late 50s, early 60s right now are fining. thes in the position where, their 401s cozy iras tanked and we're having stories crop up over and over again about people in that age group who have resorted to much riskier investments in order to quickly boost their retirement nest egg. it backfires on them. they find their lower down, and we ref crises. this is what would happen on a much larger scale if social security were privatizees. social security privatization as -- when practical proposals are put together for doing it, it always includes reducing the

benefit -- reducing the core benefit, the current benefit so you get a little bit less there but you'll make a fortune on your private account. so we're talking about people who would be in an even worse position because their social security would have been reduced. so this is a very bad idea. the only way to make it palatable would be to guarantee somebody a minimum benefit at retirement. now, that, again, turns social security into a more of a welfare type system. that's the kind of thing that gets -- that in the kind of political dynamic we have today, gets cut. and so i do not see private -- i see private accounts as leading to a further crisis or deeper retirement crisis than even the one we're facing now. >> i suppose it would be something for the folks on wall street can the money manager is if such a thing were to occur. >> this is the other thing, is that it would really be what i call a form of welfare for wall street.

private accounts -- the one thing they would do is they would guarantee a steady stream of income from management fees, to wall street. which i think was a pernicious thing in that it would encourage wall street firms -- give. the a cushion on which they could continue to make more of the sort of reckless investments and -- but sugar more of the reckless trading strategy that got them in trouble over the last 25 to 30 years. suddenly you have this extreme of income they can depend on from these private accounts, essentially being funneled to them by the federal government out of people's payroll taxes and only encourages them to go even more more gonzo. >> and might overinflate assets in a very curious way. you had some curious incentives towards investing in things that

are perhaps not worth as much as you thing they would be, like perhaps aol or something like that. >> it's a very simple concept. called good money chasing after bad. we have seen it repeatedly in the last few years. the reason the bubble in mortgage-backed securities existed to begin with was because wealthin vestors, hedge funds, wall street, had so much money floating around so much money anywhere covers, a lot of it due to tax breaks and bailouts and et cetera, they needed some place to put it. so you have serial bubbles developing around the globe and this has been happening for 30 years you think about the latin mesh beens in the early 80s, this has been going on over and over again, repeatedly. privatize social security, and the funds flowing into wall street as a result i would aggravate the problem. >> one of the things you talk in the your book is there's a complexity to how social security works that the average person is not aware of, and that also complicates the effort to

reform it or to make it work in the future. >> right. that is an issue. social security is a little like wall street. it is arcane to some extent. the formula that is used to compute benefits is complicated. the way it's funded through the trust fund, through treasury bonds and how that accumulates, is a somewhat complicated economic concept that is -- that people aren't educated on. there's no civics 2 course that teaches you how this works. or that teaches you what the federal reserve is for that matter. and so social security seems like something that we don't understand. that the average working person doesn't understand, and so you hear somebody like alice, the former head of the put office in the white house, who is funded by pete peterson, and she comes

out and says social security is going bankrupt. we need to stop it or it will cap size to the ship of state. people toned believe it. they hear people who look authoritative and they don't always get the message about what is really going on. and so this sort of element of complexity, and lack of sort of good information out there about social security, is a real issue. >> still have tremendous political support among voters in general. >> it does. i did a study of polling on social security going back 35 years. i found it consistently if people are presented with the option of paying a little bit more in payroll tax in order to secure social security, people always say yes regardless of party or political persuasion. the earliest behind i found that asked this question was in 1977, and it is consistent. it's consistent. what has changed is the views of the elite in this country.

not the views of working people. >> talk about what needs to be done politically to strengthen the social security system. >> there's three things that need to be done politically. we're talking belt the political crisis, not the fiscal crisis. the supposed fiscal crisis. number one is -- the may sound a little out of left field but we need to revise the union movement in this country. the up nonmovement has been a very, very strong supporter of social security. maybe its strongest supporter in the political realm, and the really disturbing move against the union movement, the right to work laws in a number of states, these directly impact social security. another thing is that much more activism needs to spring up among younger people. they're the ones who face the biggest risk, and they're the ones who are not really part of the equation politically because it's not something they think about as a general habitual thing. and so that needs to change.

we have to have much more awareness on the part of younger people. finally, and this is something that is a much bigger problem -- social security depends on payroll taxes for a good -- the bulk of its income. payroll taxes depend on wages. wages going up, high wages, good-paying jobs, is really a prerequisite for a healthy social security system over time. it strikes me as very perverse that people look at the economic landscape we have now where wages are stagnating, where good jobs are few and far between, and the impulse among critic office social security is to say, okay that's correct always the way it's going to be so let just cut social security because we can't afford it anymore because we will never, ever again have a prosperous work fours in this country. well, if we don't have -- if --

to back up a second. wages in this country, real wages, stagnated for the bert part of the last 40 years and we have seen what has happened to jobs. sooner or nateer we need to dress the problem in the country of giving people decent jobs. starting to boost the minimum wage again is just one small step in that direction. the best thing we can do to keep social security healthy is to give american workers a raise. now, what do we need to do politically to give american workers a raise? we need a strong labor movement. we need workers who are prepared to organize in their work places, and push for -- push their politicians for higher wages or, for an industrial policy that would achieve this. so those are the things i think we need to get social security on track. >> and there's skepticism about the reliability of the treasurery bonds that social

security has invested in. address that. >> the ious. a brief summary. social security is biased on payroll taxes, payroll taxes come in every year. most of that is used to pay current benefits. the rest of it goes into the trust fund which is set up to make sure that social security has the money to pay ben benefits if payroll taxes fall to a certain level. the treasurery bond-the-trust fun is invested in u.s. treasurery bonds, the same kind of treasury bonds you buy on open market that the federal reserve owns, the bank of china owns, goldman sachs or anybody else. but in tornado purchase the treasury bonds the social security trust fund uses the money from payroll taxes. so that money is ven available

to the federal government to use for whatever other purposes it wants to use them for, from fighting wars in the middle east to funding national highways. okay. so, that is thor inof this idea -- the origin of this idea that the trust fund has been raided, all there is are iious. i think that social security, to the extent it's a secure and safe retirement system, is based on the united states economy, on the health of the united states economy. a good economy means good wages. good wages mean plenty of money coming into social security. those treasurery bonds are essentially a bet that investors take -- any investor who buys treasurery bonds is making a belt that the united states can run an economy that is good enough to generate high wages and, therefore to generate taxes that can pay for the cost of government.

so, essentially the treasury bonds and in the trust fund are a wager that we, the people who pay into social security, are making on the united states economy. now, that sounds a little complicated but i think that's a fundamental thing about any retirement system anywhere. if you have a healthy economy, you can have a healthy retirement system. you don't necessarily have to have a trust fund. the countries in europe have southerly security systems. they don't have a separate payroll tax generally. but the same thing is true. they're betting that the economy in that country will be successful, tax revenues will be racing and it will cover these costs. so that gets me back know point about wages and the need to give americans a raise. if we don't give americans a raise, we have problems with social security, and big problems about everything else and i don't have to tell you what those are. so i think that's what we ought to be concentrating on right now, instead of worrying about projections 20, 30, 40 years

into the future. what can we do for american work today? that will determine how prosperous american workers are able to be tomorrow in terms of where they start out. >> and we're going to go to a questions from the audience here in just a moment, so folks want to line up at either microphone to ask a few questions of mr. larsen took be great. i was intrigued by what you said about the mutual aid societies and the origin of social security. so speak briefly to that. >> i became fascinated by this. there's actually a very good book that talks bit, called poor law to welfare state. i'll -- related to that --...

one of the less known benefits of social security could use the burial benefit. the mac is back a 19th century when i was one of the things workers that is demanded from eight societies was workers

wanted to be able to have a decent burial. it is very important for families that were corporate respectable stability things like that. so that benefit is like an artifact of social security's origins in a way, which strikes me as very interesting. of course what's important about the concept of mutual aid is that's where the loyalty of the public to social security comes from the society we are all in it together. the social solidarity at ultimate. that would disappear if you start to means test social security. i'll stop babbling and let people asked questions. >> over here at the microphone. >> i wonder if you'd speak about why the income cap on social security was implemented in the first place. >> is implemented for good reason. the idea was social security is not just to be something that made you rich.

it was something that is a base income you could build on. other countries have national retirement system where people didn't have employer-based pensions or where it is likely to be homeowners. there is an assumption in the united states under roosevelt that what was needed was not a system that basically pay your hallway and provide your pc could build on. set a cap came in the early 80s the greenspan commission was a result of that. the basic idea was you don't want to tax beyond a certain point because people shouldn't expect benefits beyond a certain point. you wouldn't want someone who's a million or to get a percentage of $1 million a year as their social security benefit. you have to cut it off and say okay if you make $113,000 a year you'll at.

$250,000 year to the famous person who made $113,000. when that system was set up, they set it up such that there is a formula used to boost at a little year. when they set it up, they set it up such that 90% of income overall on average would be tax for payroll -- apply to payroll taxes. that would have been in the last 30 years is the end, the 1% or 2% of the population in the country has shot upwards, way out of proportion, shot upwards. right now it's down to 80% of income being subject to payroll tax. the idea would be to get it back up to 90%, which recently he a fair cut off. if et rays that come you have to pay people more benefits, too. the idea is to keep it as a

base, the razorback to the 90% level. >> over on the side. >> what is the trillion dollars plus social security trust fund in treasury debt. that is backed to the full faith and credit of the united states, just like dollar bills for savings bonds. second question, are you aware of any data, and economic projections of where the country would be economically or how deep the recession after the economic collapse of 2008 would have defended had there not been a demand that was created by the tens of millions of dollars of people enabled to receive retirement benefits because of the social security system exists. >> that's a really good point that social security, you know, there's a reason why they call

it a safety net. it played a very, very strong role after the rcession hit in keeping it from getting worse because you have at least one part of the population -- three parts of the population. the elderly, survivors and disabled who had a cushion for their income. so there was a certain amount of consumer spending, normal consumer spending that was interrupted because of this. there aren't any solid figures on how significant it was. i've seen various numbers, some of which are larger than others. i think the overall answer is the safety net worked the way it was supposed to do. survivors benefit comes social security disability. to some extent unemployment

benefits for a solid cushion. we cannot fight after fight in congress to extend for another year, another two years while this -- while the employment continues to not approve or not recover. contrast that with the fact that social security continues to pay out, hasn't been controversial inserted a short-term context that these benefits are being paid. think what would happen if social security was like a welfare system that was enabled to operate the way it does. things would've been quite different over the last several years. >> over on this site. >> you partially answered -- my first question when you raise the income -- the cab. you got to pay out more

benefits. you're getting my money in, but she got to pay more money out. the second question is why do they want to weaken social security? i don't see a weaker social security system benefits anybody. >> the answer to the first question is their studies the numbers have been run on this at the benefits wouldn't go so much they would impact the positive -- that they would stunt the positive impact of the higher cab. the second point is why does the elite want to do this? i can give you a simple answer to this question, but it's very important. this is something i was trying to puzzle out was what is it -- why is their point of view changed so much? the reality of the last 35 years of politics in this country is the 1% have managed to create a very, very favorable tax

situation for themselves in this country. capital gains taxes have been lowered drastically. income taxes to the top margins have been lowered. corporate taxes are so full of holes to say we have a corporate tax isn't reality anymore for a lot of large companies. the something the carter administration, not to make and ration continued off and on for 35 years. the 1% have become very accustomed to this favorable tax situation that they have for themselves and their overriding concern, overriding everything else is to maintain and extend it as best they can. there have been some hiccups. there's a hiccup in january when the fiscal cliff deal eliminated some of the bush tax cuts. only some of them. for the most part, the favorable tax situation has been kept in place.

the reality is we do have an aging population in this country. we will have to pay somewhat more to support them. there's figures on this. social security amounts to 4.5% of gdp these days. that will go up to 6%. we will have to pay more. the overriding concern of the elite 1% is to make sure that burden is upon them. the way to do that is to cut social security so that burden is shifted from this collect system we have, social security, medicare to individual households. so it is not funded by raising taxes anymore and the wealthy. that's where the solutions to social security we see on the right, and means testing, the cpi, et cetera support efforts like that. it's really the desire to keep the tax system in place.

>> on this site. high unemployment and the stock market boom happening at the same time.

and i think we can really trace this. in our history right back to that point. i was the first time we saw something like that happen in this society was where the stock market really kind of -- the investment world delinked themselves from what is happening to the working public. one thing that's worth mentioning is coming in now, dhea used to be what henry ford said is i want to have reasonably high paid workers so they can buy my cars. that's not the case anymore. manufactures in this country to the extent we have manufacturers are people who invest in manufacturing will say we've got a rising middle class in east asia. in malaysia and taiwan, south korea, it better, they can buy our products. americans work in knowledge-based businesses so they can work at 711. we've got no class people who

buy our products, so we make a lot of products over there anyway. a lot less concerned about nurturing a prosperous american working class in this country. what to do about it again, i think if we want to do something about it within the system we have, we have to do the things i was discussing earlier. we need to change the laws that prevent unions from organizing any reasonable way. we need to have industrial policy that would again to create or nurture industries and create good paying jobs here. we need a reasonable trade policy that doesn't give away everything to the business in the form of multilateral trade agreements. revival of the seattle movement would be a very good thing. if we don't see these things happen, if working people in this country have really lost control of the state and of the

governing class, this is a serious possibility that we need to start again about much more drastic things. i could even see looking ahead obviously is going back to the cooperative movement and the mutually movement of 19th century and say we have to do this ourselves as working people. we need to set up institutions not subject to these pressures. that's the kind of thing we might have to see because the pressures on social security are enormous, but the reality is that they complex industrial or postindustrial society, we need something like this. we can't have viable communities without these kinds of social solidarity institutions. at the governing class is sending a clear message that state will no longer do this for us and it's only a matter of time before the implement the changes they want, i hope they

don't, do we have to think about a week to think about ourselves as a community. that's maybe the long-term reality we are facing. >> over here. >> in your comments on whether contributors to social security either lower earners are higher earners get marbach when they contributed. taking into account inflation and passage of time or cost of money. >> you talk about low earners. >> or high earners subject to the cap. >> yeah, there's been a lot of attempts to study this. you get a good or fair benefit or fair return on the money paid to social security payroll taxes? is the number of ways to look at this. one is if you are -- i like to

think of economics is the art of manipulating statistics to tell a story. there are a number of ways you can analyze this, some of which i've seen people run numbers as they now come you're getting terrible return on your social security. but the reality is social security's index to the cost of living. in fact, index to the growth in wages rather than the growth in prices and that's really key. i mean social security literally allows you to maintain a middle-class or comparable standard of living to which you have is the working person. if you try and buy an annuity that is indexed to inflation, even just to price inflation come you have to pay a fortune for it. he could not do that as a working person unless you are very, very wealthy. it's not available at a reasonable price. there's something about social security that is priceless for a working person. the other aspect to it is social

security is not just retirement benefits. if you're working person come you die at the the inhabitants does the makeup located. social security pays survivor benefits. paul ryan admitted a couple years ago when one of his parents died when he was 16, he received survivor benefits. he saved them up and they were instrumental in allowing him to go to college. he of all kinds of ways that is a pervasive benefit. it absolutely essential in all kinds of facet of middle-class living. impossible to replicate that in a private market be spending it with submit at a reasonable price. >> over here. >> yeah, i was a detainee knack for addressing the long-term prognosis for publicly facing. in addressing not among people i

know, there seems to be a lot of hysteria against the government, how evil it is. i'd like to hear more about the distinction between why this is not a government program, but yet there is a payroll tax that people are required to pay taken by the government. so how do i address that argument quite >> we are in the two-minute warning, so you have to make that quake. >> i'll take that one quickly. that is one of the kind of notions we keep hearing about, so glad you brought it up. the argument is why should the government get your payroll tax rather than you invest in any way you want for your retirement. the short answer is we already own it because it belongs to us

collectively. it is run by the government, but two things. number one is that they trust fund and there's a reason it's called a trust fund because it's held in trust for us. it's not something the government can do with as it pleases. it's required to invest rather than put in hedge funds for mortgage-backed securities or something like that because it's supposed to be safe money, and then you can count on. so i think that's really the thing. it was up to the politicians, i would reckon social security would be enough kinds of reckless things. i think that is a strong indication the public regards the dissenting current and wants it to be treated as something different. >> okay, i think we're at a point where we need to wrap up the session here. [applause]

>> eric tommy wanted to mention your book is available at revolutionary grounds in tucson and he has an internet urls. >> i was asked earlier, what are good sources of information that social security that's not disinformation. a wonderful organization called worksite has a website you can google. they have some terrific material that is brief and to the point and addresses the issues. i urge you to go to social security works website and check them out. a couple organizations, policy research in the center for budget and policy priorities put up great research on social security that commerce and that's about it. you can also get that from the national economy of social experience. i will be happy to talk further and send copies of my book. if they ran out of the tent, go

unto the people at revolutionary grounds, booth 313 has copies as well. support them. there's a local anarchist in photoshop and they are run by an incredibly adorable 7-year-old girl. she does a great job. >> terrific coffee as well. >> thanks to erik larson. thanks to all of you for attending the session. >> thanks very much. >> it was a small airport back in the tony's. the military came in established a training race during the second world war and it is the very act of base and quite naturally to yuma until after the second world war ended in a close and everybody laughed. the little town of yuma at 9000 population and it was dwindling because there is no construction going. tourism had not been established

yet on the town had not a very bright future. population 9000 dwindling, the junior chamber of commerce that something has to be done. we have to get the airbase reactivates it. every time the flight would be mentioned, they went to yuma, arizona and get the military interested in reactivating the airbase. so their first attempt failed. in august they tried again and said that several days and then had another major problem. it was hot. people said will go up two or 3000 feet. we'll be where it's cool. so it took a few months to get parts and repairs up for the airplane to get it ready. they took off on the 24th of august and never touch the ground until the 10th of october.

>> mrs. grant was also, you know, they had this extraordinary role. furthest of their lives, ulysses was regarded as a failure, unable to provide his own family. in almost no time at all, suddenly he was the most popular man in the country with the man who saved the union on the battlefield and president of the united states. >> julia loved her time in the white house. he said in her memoirs as a bright beautiful dream.

most wonderful time of my life. so that gives you some idea of how she enjoyed being first lady and how she felt her husband had finally achieved the recognition he deserved. >> next on "after words," john mackey talks about his book, "conscious capitalism: liberating the heroic spirit of business." mr. mackey is interviewed by kim strassel at "the wall street journal." this is an hour. >> it is a delight to see you again. let's set the stage for this.

don't think zero boy, here we go, another guy who doesn't like capitalism, has a lot of criticism and is probably feeling guilty. the fact is you are quite ferocious capitalists and what is interesting to me is you are necessarily born that way any talk in the book by self-described progressive, live in a housing co-op, and i'll just quote you coming to embrace the ideology that business and corporations are essentially evil because they selfishly stifle my profit. then the next thing we know, and then we have whole foods. talk about that conversion, what you learned from your experience and how you are now writing a book that caught capitalism at

work at a price in the. just go first thing is i am very idealistic. of course i'm a great believer in capitalism. businesses heroic. it has listed humanity up out of the dirt. some of the statistics we discovered as we researched the book was a couple hundred years ago, 85% of the people arrive via today's dollars. the literacy rates across the planet where over 90%. today they are down to 14%. the lifespan was only about 30. today it is 68. canadian united states, 80 in japan. humanities make great progress. we are great believers in that business has been able to do. it's actually not the villain in the tale.

it's a good guy. when i was starting out, i was young, went to the university of texas last and that's pretty progressive city. i didn't study business. i studied philosophy and religion and world literature in pretty much the humanities. someone i started the business, i had no background in economics or business or anything. but i knew i would have low prices and pay really well and was going to be a different business like those other businesses. of course once again into the real world, you have to meet a payroll and and pay your bills and your undercapitalized. your philosophy of business can evolve. it was interesting because a lot of my friends from the co-op movement saw me as a traitor, that had come over to the dark

side. and yet the business was struggling. we managed to lose 50% of our capital in the first year. the 23,000 would make him a macro for time, we were living on the third-floor world and making $200 a month each, right below minimum wage even back then. so i just began to move away from a philosophy. as i was trying to figure out this mess, i started to read -- i read hundreds of business books, everything available i read. at the same time i stumbled onto people like friedrich hayek and your honesty and george gilder and dozens and dozens of other anchors. i realized their explanations for how the economy works and how society works makes up our sense that sort of the velocity

of the so-called progressive. it didn't work in the real world was proved to be unsatisfactory. so that is how i got started on it. not so much economics help me become a better business persons don't manage to say just give me a worldview that makes sense of a business is actually doing what i was doing as a business person. >> uganda, to exchange profit to create a businesses and help society from the beginning. what is conscious capitalism and how does it differ from plain old wonderful capitalist. first and understanding as we think business is good and creative good value, but it can be better, has greater potential

than being realized. when you understand and look at the gallup poll, for example -- is big business in the united states has an approval rating of 19%. when you see him in congress is at 17%, which is about the same level, only a couple points below it, you realize people have lost confidence in business. the narrative of capitalism has been controlled by the enemies of business and capitalism. you'll see businesspeople have been held in disdain throughout all history. a lot of business wasn't done by feel the. the elites were above common trade and business is something off in that file on the shoulders of minorities such as in the west jewish and that use

cheney's, who through hard work and enterprise often times made success of their life in money and that memphian persecution. i saw the jews runout because a religion and a big part of it was very economically very successful and that was sustained by the intellectuals. intellectuals have always hated business. we can get into why that might be the case, but the most important thing to realize is intellectuals are not the friends of business and not in the past and certainly not today. so business is painted as fundamentally all about money. selfish, greedy, explicative. it only exists to make money. i think if you go to a party and not somebody randomly, what's the purpose of business, people

will give you an odd look because they'll say what's the purpose of business? to make money. but that cannot answer because if you ask a doctor what their purpose is, they certainly are well compensated and also need to make money, but they won't say my purpose is a doctor is to make money. a doctor heals people. teachers educate, architects designed buildings come engineers constructing. journalists hopefully help to uncover the truths. they potentially have a higher purpose of discovering what's been hidden away in bringing it to lighting getting a a good interesting story that hopefully is a truthful story. >> so the professions refer to some higher purpose that serves other people or creates value for other people. businesses the greatest value creator of the world. it creates goods and services that make her less mr.

it's not a zero-sum game where everybody wins and some misses. business creates value for customers, employees, suppliers, investors and communities as part of. all of that is done through voluntary exchange. business as fundamentally good and as we point out, has a great potential to be a relic in terms of lifting humanity to a higher level. >> you talk about doing that by having purpose, like you said in terms of the example you gave it a doctor or his greater purpose. what are some aspects of conscious capital? >> guest: we identified four key tenets of conscious capitalism, all four interdependent. they also do work together a synergistic fashion. the first one is business has potential for a hair purpose beyond making money.

it's not that there's anything i was making money. that's one of the thing business does is create value for investors stakeholders. just as my body produces red blood cells, if i stop producing red blood cells, i'm going to die. the purpose of my life is not to produce red cells. similarly, business cannot exist if it's not profitable. it will not have the capital it needs to renew itself, innovate, repair equipment, respond to competition. as a prophet is to business. every business has the potential for a more transcendent purpose beyond that, just as other professions do. first, business has to discover or rediscover a higher purpose. most entrepreneurs who create in the first place are motivated by some higher purpose. they may not be conscious of it. it may not be explicit, but i've got hundreds of entrepreneurs in only few exceptions will tell me

i started my business to get rich. most of their business because they were on fire about something. some idea, some anyone is to create, some difference they wanted to make in the world. it's only later when the business matures that we hear the economists come in and interpret its all about make it money. so first, higher purpose. the second two conscious capitalism as we have the stakeholder system that is not just about creating value for the investors. other stakeholders matter and are independent with one another. the customers monitor, employees matter, suppliers matter. the communities we are part of matter and so do the investors. a simple example i use as a retailer that explains this is

the whole foods market we hire the best people we can find, make sure they are well trained in the management's job is to help them to flourish in the work place, to give them the tools they need and make sure they are happy because they're the ones that serve the customers. happy team members serving create happy customers and happy customers create happy investors because the business flourishes. a company like whole foods market has about 100,000 suppliers we do business with around the world. it is essential that they also flourish. they help create our competitive advantage and create unique products and services can make whole foods market standout in the marketplace. it's important our suppliers also flourish. once you realize the business is creating diagnostically for investors, but that all the

stakeholders are somewhat interdependent. you view it as a system and begin to ask questions such as what strategies allow all other stakeholders to simultaneously flourish and prosper? >> what are the things you do at whole foods? >> the more important question might you what do you do that might not result in creating the win-win scenarios? those might be strategies for one stakeholders aiming and another one is losing, which sometimes you see in, for example, where we need to get profits up. were going to raise prices, cut wages, cut benefits back in the grand suppliers found that will result in higher profits, which indeed it might in the short run. the benefits that make it easy that foods. they began to go to competitors.

wages are low, benefits on a schizo employers jobs away with other companies. suppliers don't have to trade with you in if you cram it down, they eventually face you out other potential customer or deemphasize you as a customer. they are all connected together in the strategy is how do we create value so they are all simultaneously winning? on give you an example at whole foods at often times might be a trade-off. we created a foundation called the whole planet foundation which does microcredit loans around the world and developing countries. we do those projects in the communities we are trading in. we open a project in costa rica, bananas, mangoes, so we'll be looking to locate the microcredit while doing business. some people might say the are being philanthropic with the

investors money. that's a type of theft. you should be philanthropic with your own money. in the narrow sense, you could make that case. if it doesn't create body for investors. what we found is it's creating value for all of our stakeholders. our customers, for example market within her stories and tell customers what they're doing. we do a campaign that they're able to donate change to this process and we gather $5 million last year for pennies and nickels and dimes left over from peoples change and our customers therefore are somehow connected to every american online and receive hundreds and hundreds of letters enthusiastic about what the foundation is doing. our team members participate through payroll reduction if they wish and i'll say volunteer

program for team members can volunteer that we do the microcredit. it's a transformative experience there's nothing our company is done in this race for a higher than the whole planet foundation. in just eight years we've helped over a million people. 93% are women to have better lives. it's quite phenomenal. suppliers are also able to participate in that. they contribute money to the whole planet foundation of the advertised that our stores. so that gives them greater exposure to our customer base. that's a win for suppliers to participate. is it good for investors? absolutely. we've received millions -- 10 similes of dollars of positive publicity and good will and communities that his health whole foods market brand to be

better known and better established throughout the world and as a result the investors in as well. on the stakeholders are winning. it is a win-win strategy. >> some might ask if whole foods is it unique. you didn't mention whole foods, but he laid out and about, which are opposed to give people choices for help your evening. so there's a certain and i don't mean this dismissively, but a missionary field to the idea behind your company. you're the world's largest creator of washington remain. can you have a higher purpose in our intercompany around >> guest: my first point is

grocery of telling us about as a business, said the fact we been able to find a higher purpose if it were shirking from a higher purchase, anybody can. use the example of washing machine part. think about what washing machines do and how washing machine have liberated mostly women from treachery and washing clothes in rivers and streams in beating them against rocks for washing them and sinks by hand is time-consuming and perhaps not the best use of peoples attention to time. so washing machines themselves have been a great technological advance for humanity. if you make parts that come your higher purpose should dovetail. you have to create the best washing machine are the most affordable washing machines they reach the widest market possible. you're contributing to the

advancement of humanity and i think you should see it that way and marketed that way. you can always find exceptional cases where somebody is doing a product that is actually deeply harmful for people. so i am not saying this is applicable to absolutely every business that exists. it's applicable to my for 99.9%. >> let's talk about what this is not because some people will look at the title of this book and if they haven't read it, their first thought is going to be this is an explanation for a case for corporate social responsibility. your clear in the book that is not what this is about. this is corporate social responsibility, this movement to speak of activists using pension funds are taking shares in companies coming using proxies to push companies to change policies, often environmental policies are available policies in ways that are the corporate

socially responsible thing to do. what is different between the movement to what you're advocating here? you do talk about how companies need to do what is right. that is a part of this argument. >> most people who first hear about this -- people don't like to create categories in their mind. they think this is just another version of that and it's not. it's a whole new paradigm for thinking about business. it doesn't do it within the box very well. early on in the book, we make important to differentiate cost of capitalism and the biggest difference is corporate social responsibility is just a traditional business process centric model that grasps on some type of social response ability because they think it is

going to appease the critics. corporate social responsibility departments almost inevitably report through public relations or marketing. they are seen as a way to improve the brand reputation of the company. so they're often times accused of greenwashing. you're doing this for reputation purposes. it's not really -- it's very thin, not really deep. conscious capitalism make the community stakeholder in the environmental stakeholder key major stakeholders in the organization that you create value for an part of why you exist in your higher purpose, part of your mission to do those things. so these are not crafted add-ons to try to make you look better. they are the essence of who you are. to talk about a conscious business for their socially responsible are not is almost a silly question.

inherently they are creating value for customers, value for employees, value for suppliers and investors and almost without exception consciously trying to create value for the communities they're part of. mind you, if they don't trade a consciously create value for their communities per se, the fact they create value for customers, employees, suppliers and investors is inherently socially responsible. business doesn't have to redeem itself is either bad or evil or ethically mutual and do it through good works. to regain itself. business is inherently good if it is creating value for stakeholders. we think you can go beyond that and also consciously create value for communities as part of what your purpose and mission nice. >> when you talk about how business is inherently good and one of the purposes of this book

is interesting because it's partly a story of whole foods, partly an explanation of philosophy, partly a how-to guide for companies that might want to try this. talking about the business being inherently good, you did mention the fact this is more necessary than ever because business has gotten a bad rap in recent years, especially after the two guys in a financial crisis. one of your points in here is business to do a great deal to help us out if they were acting in a way like this and set an example. i'm curious what you think the rule of ceos in talking about capitalism and defending capitalism is. you talk about the role of government sometimes and how it works against business. he ceos have a role in talking about and defending capitalism and explaining it to people? or is it something you.

we do by example? >> i think that we do. one of the most disturbing statistics for me is for the longest period of time come you have to understand the history of the united states. we started out really poor. really as we embrace capitalism in the united states, we attempted nights of immigrants come over here to create a better life because they have more freedom. they have the freedom to enterprise, the freedom to start businesses. for the longest period of time, well over 100 years, the united states was the freest nation in terms of economic freedom. the most capitalistic nation in the world but that exception. a shorter period of time ago, the year 2000 for example, the united states still ranked number three on the economic

freedom index behind hong kong and singapore. we were number one anymore, but who are still number three against pretty dynamic economies in hong kong and singapore. over the last 13 years a drop down of number 18. when people ask what's wrong with the economy, why do we have such high unemployment? y has disposable income per capita basis decline in house of the last 10 years? the answer to me is right there. we are less economically free today than we were 13 years ago. as economic freedom decline and regulations increase, taxes and greece, the engine that is the basis for prosperity, which is business is lessened and our prosperity is therefore declining as well. economic freedom goes down, so does prosperity. so if the capitalist -- as

business people are willing to speak up, we can expect economic freedom to continue to less than an american prosperity would continue to lessen as well. we are far from being a free enterprise capitalism system anymore. we are moved or is a crony capitalistic system, where we've got big government and big business colluding with each other. a great example is the fiscal cliff bill that just passed. we look at me to come out no and what you see is payoffs are well-connected organizations such as hollywood, alternative energy either to the standout for out for me. there's all kinds of special deals being cut and are moving from the system where people think it's fair and this is a system where you can get ahead through hard work and enterprise to one where people think the way to get ahead is the politically well-connected and that's a real problem.

>> host: this government intrusion get in the way of this philosophy conscious capitalism? to talk about the need for businesses to not only be more holistic, but to be long-term. to be thinking about not hitting quarterly target, but the bigger objectives they have and how they roll out over a longer time horizon. a lot of businesses say it's nice that john mackey says that, but sec rules make us so hard for us to have transparent discussions with our investors and say what we are really thinking and waiting in the wings of the trial lawyers every time i don't hit our numbers every quarter. the argument would be a lot of cultural aspects that are in place that work against thinking this way. >> let me make a couple response is to die. the first one as you have to see

that white we have such regulation in the united states who are they growing so much? people don't trustusiness any longer. we no longer have a white speck and says that businesses could. as i mentioned previously with the 19-cent approval rating, business is not fundamentally trustworthy in our society. i remember seeing it documentary called corporation a few years ago, which were trade business and corporations is fundamentally a bunch of sociopaths. they only look out for themselves and the bottom line and that's how many people's the corporations in the world today. so we've allowed government to increase to such a large-scale people have the government to protect us from sociopaths. the fund is to see corporations as sociopathic and the rationale for government to protect this

is pretty compelling. business itself has got to discover its purpose and act in a different way and improve the overall rating to get it up to 90% rating in the press for regulation to control and protect us from the sociopathic corporation laughing because it will be self-regulating self policing. assertively business could be getting to act in ways that are dutch are not all to the long-term. >> is someone who lived in washington, d. think of 100% they would have introduced us regulation. >> i doubt the president would have been elected. >> interesting thought. i also want to ask in terms of impediments to doing something

like this, you have thought deeply about this for a long time in whole foods has had element of your philosophy from the beginning of its creation. what do you say to companies who would say look, if i were starting out, fabulous. i would love to do something like this. there's simply no way in my business right now with the union that i have in my business, with contracts i have in my business, with the regulation they are to have on my business to reorient myself, root and branch change my purpose in a line on the stakeholders. how do you do that? >> there's no question it's a lot easier to start a conscious business and it is to transition to one if you have a long legacy and a strong culture that's antithetical to it. start me a visionary ceo of leadership to make a transition. but it is my opinion that the

conscious -- conscious companies that are going to dominate the 21st century landscape. for one simple reason, it works a lot better. it's a better way to do business. he just wins marketplace. when you about our research to prove the point, but we started where we talk about how these conscious businesses have outperformed the indices. not by a little bit, but a lot. in the last 15 years, the cost of public companies have outperformed the s&p 500 by 10 x over a pit two year period. >> to the outperformed someone like an oil company? >> oil companies can be conscious as well. again, oil is one of the key energies to get lifted out of the tour. there's nothing inherently bad or evil about an oil company and they need to take their concerns

seriously. they can create die for their customers, employees, suppliers and have a higher purpose. there's nothing that disqualifies them as being conscious business. so what happens in capitalism is whatever works better ultimately went to the marketplace. honestly if this doesn't work better, it doesn't honor but that sounds good or not. it won't spread. while triumph in the marketplace. opc is this is this type of philosophy to begin to transition to a way of being an go out of business in the aja partner countries will be the ones to take their place. many companies we admire now didn't exist 15, 20 years ago are certainly not 30, 40 years ago. these companies have changed our

lives. google didn't exist 15 years ago. face the next this 10 years ago. thought internet phenomenon is less than 25 years of age. said there's no amazon.com. the legacy companies will have to resolve where they will be outcompeted in the marketplace. it's not tomorrow, that in 10 years will be in a very different landscape. certainly 20 years. in fact, they too revisit this conversation and see if i'm correct. >> host: that the deal. there is a think tank of the not-for-profit called conscious capitalism that expanded work some members of the ceos belong to it, designed to help people figure out how to do this? >> conscious capitalism.org is a nonprofit. it is a nonprofit organization.

we have a couple of conferences a year. we do one first the years, so it is more suitable conference. it's a little smaller, only gathering. ledoux sentiments in the cisco april 5th and 6, which we hope to get a couple thousand people for that event where we spread these ideas further not the book is launched. so we're trying to start a movement. look, our society is in decline. unless we reverse it, soon began to rediscover a higher purpose as companies and businesses think about the greater good of the stakeholders, the decline will continue. we'll see more and more government intrusion and be less and less of a free society. i love our country, so i want to do what i can do to reverse that. >> i have to ask you any mention this in the book. a lot of dacey talk about not just aligning stakeholders and having a purpose.

you talk about conscious leadership in a conscious culture within the company. a lot of that was uplifting. tactic is ceos needing more integrity and more trust, transparency. replace the need for love in the workplace and you could get on with this and feel inspired. i have to ask a lot of people will wonder how that meshes with one of the things they may know you for, which was the event a while ago for the sec was looking into you because you were posting a yahoo against a competitor, under anonymous names and critical comments about a competitor. some people might say okay, how do you write about those and reconcile it with that event? since you bring it in the book, i want to ask you about it now. >> i may be the only person in the world that doesn't see this as a contradiction. i don't see it as this big deal. the media sensationalized would

have been. because i was under investigation by the sec, which has dropped, i was able to defend myself. i couldn't write, do interviews, post and i thought coming to videos. i had to remain silent. so the whole thing was sensationalized and was a smear, still dealing that within a sense. so that they respond. first of all, but a set over an eight-year period is on the public record. anybody can go onto yahoo!, do a search and see all -- i'm not ashamed of what i wrote. i'm proud of what i wrote. i wrote very intelligent, full postings there. it's part of the anonymous thing. that's a blown out of proportion because people are familiar with how financial bulletin boards work. a good metaphor like to say, when you go to a masquerade

party apollo wayne county are accosting. so is everybody else. a deceiving people and you do that? are you trying to pretend you are not kim strassel in costume? obviously not your costume. so was everyone else. we need one of financial boat northlake yahoo! and poster me take a screen name on. people don't post under their real names. not trying to deceive anyone. your posting as an anonymous person, which is a good thing that allows the power of the ideas to try and period in terms of running down a competitor, over an eight-year period in 1400 pose, i probably doesn't so critical of wildrose. those are the ones ripped out of context and repeated over and over again. take criticize whole foods from time to time as well. it's hard to understand, but i

was just no diabolical motives was trying to drive us out price down as if a poster could affect markets. nobody paid any attention. how many people read those pose them as a community of a few hundred people at mouse. we are just debating because they like to argue. i like to debate. the apartheid ideas. i defended whole foods market and criticize while those, but not as i was trying to drive down the struck price. that is such nonsense because i had posted on the bulletin board for eight months prior to beginning negotiations. secondly because again an anonymous post is in effect markets. i never heard anybody stock-price, nor did i cannot. so i was having fun. i'm a playful guy and i enjoyed

that debate about the subject i am most passionate about the work, which is whole foods market. usually defending the company against the shortselling lies about the come to me and i take my truth with what i could discloses a public company and basically defends whole foods for the record. it was fun, glad i did it. in hindsight i'd never known anybody was going to care about that, i wouldn't have done it. i'm not embarrassed or ashamed about what i said. i challenge the viewer to go read what i wrote. >> let's debate a little bit about this bigger idea because there's no question there's going to be a debate about this notion. since 2008, you got a lot of different ideas coming out about how business should restore itself. you're not alone in this.

they spend different talks about different forms of company. the triple bottom line, benefit corporations, ideas about how you can improve capitalism. the classical economists say capitalism doesn't need to be improved. it works very well the way it is. you mentioned the book you had a fascinating debate in 2005 with milton friedman of all people. i advocate everyone cooperated. it was incredibly thoughtful exchange. he made the point that the capitalism when it's oriented, the beauty of capitalism around profit maximization is everybody does when. if you're doing your job the right way, customers will pay for them.

suppliers your investors are making a return on their money and employers are happy and there's opportunity for advancement and greater pay and everyone can unite and agree in all the benefits you mention that go to societies decentralized everyone is allowed to use the money they've made to improve society through their own decisions and make your literacy and health and less poverty, this stuff. what's you're saying is that your argument as business needs to do what is right. which you think is right may be different from what i think is right. you've now injected this whole aspect of judgment and all these questions in today's pick is a survey for this was to be and

could in fact get in the way of it. what would be the response to that? >> i have a number of responses. first of all the paradigm you articulated has helped sway for decades now and business reputation is 19%. it's not seen as fundamentally good. it's greedy and selfish and explicated and only caring about money. so simply my first response from a marketing standpoint if you want to promote capitalism, you are going about it with a bad strategy. you are not winning the argument. or losing the argument, plane into the enemies and critics in reinforcing what they believe and i care about is money. you don't care about anything else. that's my first response. my second response is i called the prophet of paradox and i use an analogy to explain it, which is happiness. if you want to be happy in life,

and most people do, what i discovered is that god ordered her mature is the absolute last strategy to achieve happiness in life is to make that your primary goal. if you make happiness what you're striving for, you will not probably achieve it. you'll be narcissistic and self-involved, caring about your own pleasures in your own satisfactions in my agger paramount goal pier one i found is happiness is best thought is a byproduct of other things. it's a byproduct of meaningful work and family and friends in good health and love and care. we get happiness by not aiming directly for it, and be a good person. happiness will be i never in for

happiness, but i'm a happy person that's come as a byproduct of the other things. profits are pretty similar. he said it aligns all the stakeholders. if people think and the shareholders for their own self-interest. there is no higher purpose that unite stakeholders. as to keep everybody from taking their own short-term interest into play? customers are going to look for what is best for them and they don't care about your cassation and if it's in their best interest shoplifting get away with it, then why would they do that? if your employees, why should they work hard? if they can get it was shirking its in their self-interest to do so. if they look out for their own profit, if everybody's looking for their own profit coming out

onto the solidarity for the unity relying that you're talking about. instead, the system of sub optimizes out because everybody simply looking out for their own personal profits. instead, what will unite people is a more transcendent purpose that aligns all the stakeholders around not and of course they are self-interest, but not exclusively self-interested. they failed miserably trying to create strictly on the basis of your own personal self-interest. we are self-interested, but a lot more complex than that. we also love, care, we follow transcendent values advance what leads to the good society and happiness is to go ahead and go after the good, but true, the beautiful and heroic. so yourself into metabolizing those higher values and your businesses will flourish at the same time. you can't get there by putting the cart before the horse.

you try to make profits of thing that unites about coming of sub optimize. i've got to compete against businesses, but not going to be the whole foods market place. >> host: he did say in that debate actually john i agree on 95%. he makes it sound nicer than i do. his argument in that debate was yeah, of course become any wants employees to be happy in and the reason for doing all those things is when you get them while you make more profits. >> at the investor's perspective. if you take the other stakeholders, they see it differently. >> so this isn't just marketing. >> it's not just marketing. friedman was talking about that. part of my response and i think

i might of said something in the debate i had with them is milton didn't say it. if you say it's about creating value for these other stakeholders, did say that, too. don't just say it's strictly creating -- of these misunderstandings that attacks and the enemies and the enemies arms. business is the greatest value creator and the history of the world. capitalism is the greatest harm social capitalism of her. let's tell the story about all the value we create, not just investors, but the stakeholders as well. it's fairly better branding and marketing, but it also is a revolution in the way we think about it. we start thinking about the good of all of the stakeholders and not just our own personal good portrait of the investors. it's just a bigger picture of a business is all about.

of course we had to create die for the investors as well. you shouldn't sub optimize the value creation for investors. i would argue the way we put this forward as a better way to create more value for investors as well. when you put the investors first unlike happiness come you'll probably sub optimize happiness and investor value creation. >> aren't there necessary trade-offs and limits to this? we talked about this in a different form before. so whole foods higher purpose is having people choices to eat better. you talk about what she viewed that is being asked of plant-based diet for instance. you yourself are a beacon separately from the whole foods mission, you've made the point and a lot of people have been livestock around the world takes a toll on the environment, et cetera. and yet come to you so meet in whole foods stores. some people would say okay, here

is john mackey talking about doing the right thing and on the other side is chasing profits. how do you put those two things together? >> perfection is not one of the options we have. i don't think it's so much as trade-offs is often times at to do it for trade-offs, you'll find trade-offs that must be the analytical mind works. it goes in there tries to pick things apart and penetrate us. is just a failure of imagination, a failure of creativity but couldn't find her hasn't yet found that strategy. the example you use, the reality of the fact is we're in business to serve our customers and our customers but when they come into our stores. do ..

you're going fail as a business. that being said, this is an example. when whole foods got started we only sold about 5 percent of the total sales in organic foods. now thirty plus years later close 50%. that's through educating the the customer base over a 35-year period. we i are trying to educate our commerce about healthy diet and

eating. it's not easy. people deal with food addictions. it's not like they can shift overnight. over time we are educating people to make different choices. i would like nothing better than the customers to vote the less healthy stuff out of the store because they stop buying it. until they do that, we're in business to serve them. >> host: let me ask you about that. you talk about food addiction. one thing that struck me in the weak, i'm trying -- dying for you to explain it. you talk about in the book in the beginning when you talk about capitalism, voluntary exchange. the fact it's one of the win-win of capitalism. people want to buy something. everyone benefits in the end. i was struck by the fact later in the book you are yo are critical of some companies who usably do not think are doing the right thing. they exist to provide products to people you think are unhealthy and you talk about cc