several other large cities were absolutely on the radar screen. for me to name them would not have been constructive in any way. so was i surprised by it? when you involve the government things sometimes take longer than you expect but the math was very straightforward with detroit. they did not have enough revenue to cover their expenses and so what mass a lot of this in a lot of this has been a decade in the making. what mast a lot of this was the american recovery act which gave states nearly $500 million basically to plug their budget holes and that our time. that doesn't change the structural problems in some of these cities.

so you have an issue whereby there is a 24226% unemployment rate in detroit. there are not enough taxpayers to support social services and what i said that was so radically different in 2010 that had so many people in the municipal bond market angry with me was that the whole notion that you no, history would not be a good indicator of the future to the extent that legally states give constitutional backing to their pensioners and their general obligation bonds but they don't give constitutional backing to anything else of discretionary spending like education or public safety or any of those things that as a taxpayer you feel like you pay money and you should get those services. so that something would give and

taxpayers who were taking the first phase of the law for the default if you will would finally say enough is enough. i'm leaving so the tax revenues don't support the expenses or they say why his attention are getting 100 cents on the dollar when i'm getting 50 cents on the dollar in terms of services or why did the bondholder get -- it when i'm getting 50 cents worth of services? something would have to give and something gave in detroit's case. i think it sets a very important precedent for other cities across the country and one investor describes it as a fuse that lights the system because it creates important precedent. >> my book is about suburbs not to put here but my book is called the end of the suburbs and there is a source in my book who has this theory that the

suburban development specifically the suburban tax structure is a ponzi scheme. in other words to pick up on what you were saying the cost to wire him put sewers and all this infrastructure and at low densities isn't covered by the tax revenue. it falls way short so the only way to cover it is with more growth. this person who is in minnesota is a huge fan of yours. he couldn't believe when he said i knew you. you are his personal hero so my question is, are these issues exactly the same in cities as they are in suburbs? obviously suburbs and smaller municipality's don't have pensions that many of them do. are these consistent or are they slightly different? >> here is where it gets so dangerous for the suburbs and localities. the states are effectively the house, the casino. they control everything. 35 plus% of local money comes

from state distribution and what has been so effective for the states to back it particularly this past fiscal year was cutting off localities. localities don't have the money to meet the social services that are rick wired so what they have to do, they have to collapse social services so close libraries come to close schools, change the busing routes. close the parks and that is happened throughout the country. so the localities rely on taxes when the housing market just blasted so many parts of the u.s. economy. home prices were you now crippled and you couldn't generate the same amount of tax revenues. the natural reaction they'd raise property taxes but it was a one time fix.

now they are all going back to the same issue whereby social services are worse so property values have suffered. you are going to pay more for a house in the neighborhood that has better social services and again it's a dangerous negative feedback loop. >> speaking of housing, now that we are evening out this housing recovery now are we going to get it right this time? are we going to end up in a situation like we did before? what is the future of the past out of the housing crisis and do you think we need some policy changes to prevent the rushing into mortgages and really homeownership as the end-all be-all for everyone and policies that push people into owning homes? >> one thing that you and i discussed at length as this whole idea of the american dream being distorted really in the beginning of the 20th century as a way to promote

homeownership and the american dream, my immigrant relatives came here was opportunity, to try to have a better life and get a job, of religious freedom and that was really distorted throughout the 20th century. as i said everybody was in on it so politicians were in on it. obviously the financial system was in on it. a lot of corporate america was in on it as 70% of the u.s. gdp is driven by consumer spend so i think it was probably the u.s. and you say this in your book, one of the greatest promotions of the u.s. government and that entire environment. i think the post-2008 housing policy has been an unmitigated disaster, that they're a real structural problems in the new mortgage market that have not been addressed.

see what you think is the biggest problem? >> the government crowding out of the mortgage market. so the perpetuation of fannie, freddie and government agencies that are not creating a healthy mortgage market. so the housing market has rebounded from extremely low levels based on a couple of things. we have had strong refi waves because of government policies zero interest rates and asset purchase programs from the fed. it has motivated more people to go out and buy homes. there are rich people going out and buying homes and it has done nothing for households formation and for young people going out and buying homes. the lynchpin is to get young people new information to go out and buy homes. that is not an address that also in the last week there was a startling statistic, startling to me anyway. 301% of people between the ages

of 18 and 31 are living at their homes. the highest on record. if you feed that into an look at the and bolts of the housing industry the amount does not work. moderate and discretionary spending. it also explains the low savings rates. it goes so much into the system that i think they are so many structural problems that have not been dealt with that has been papering over a really bad situation. the silver lining here is that now 26% of the u.s. economy is not housing dependent and 26% of the economy is growing like a merging market type growth you seen the rest of the world hedged with a u.s. low rate -- low interest-rate policy. if you look at the last two and a half months while the fed is talked about pulling back from

its purchase programs or raising rates or whatnot it hasn't been the u.s. economy that has been crashed. it's been emerging markets that have been crashed. you have the same phenomenal growth in certain parts of the united states with an inflation hedge that i have never seen before in my career. there is enough good stuff going on in the country to be excited about the u.s. economy but you have to know what to expect and where to expect it. parts of the country that are acting like nothing has changed and there is a rally in the home market, homebuilders are -- in the last four months so it's another gimmick. i am a fundamental gal so i want to see the structural problems first which probably -- i have had more political support from this book and i thought that i would be really in trouble with this book.

i have had actually the opposite response from elected officials. now it's eliminating political wheels. that happened in 2010 as well. >> i will say meredith you are a fundamentalist gal. i have to be honest sometimes when i'm talking about the stuff it's hard for me to understand when we talk about so many numbers and facts and details. so getting back to homeownership , it's interesting that stat about the millennial people is fascinating and i talk about young people not leaving their parents homes. it's delayed launching which is impacting the whole housing market. homebuilders are starting to build homes with extra suites in them precisely so young adult children can live at home and what used to be called an in law suite is being built for these children. this is a problem that's going to be with us for quite some time time and has many causes.

the homeownership rate in the 2005 report i remember when i first started to report this was in 2006 and 2007. look at the homeowners rate. it's gone from 64% to 69%. that was crazy and no one said it was crazy at the time. here we are in 2013 and it is floated down to i think it's 64. where do you think it's going and he think it will hit a permanent new normal that is lower than 64 or do you think it will bounce around to where it used to be? >> just one point on that. what was so uncontroversial about housing in 2007 was if you looked at the correlation between home prices and any other variable it was with the homeownership rate. just a simple supply demand dynamic. and it was close to 70% at one point in 2006.

it's covering on 65%. you always think it's going to you know overshoot to the downside and it's just taking time. foreclosures are down but we still have a high foreclosuforeclosu reinventory. the mortgage market that is not working and you have basically a 360 legal risk for lenders outside of government agencies that want to make mortgage loans. how can it possibly go up? i think directionally it can only go down and you are seeing more renters. a false indicator i've always believed is affordability index which got a lot of people excited about the housing market way to early and i don't think it really tells you much. >> i want to talk a little bit about process. meredith and i were writing our books around the same time. meredith was a couple of months ahead of me so every couple of months we look would get on the phone together. she would give me advice and say

when you get here you will notice that and sure enough i got there and i noticed it. it was really great to have you as a sounding board. it was great just to hear you. meredith is an analyst, a researcher in the data person. to see you go through this process of suddenly turning all this information into a story and a narrative and a book. so tell us about that kind of view no, topically was that a challenge for you or did you look at all this? i that two years worth of data and this report and more on top of that. how did you meet the challenge of turning that into a book lacks. >> i dramatically under a mistake -- underestimate the whole bookwriting process and how emotional it is because it's so iterative and it's really hard to write an interesting book. i am sure that i would be accused of writing really dense

knots of adjusting research reports that try to put that into a book. the whole point of me writing a book was to try to empower people who don't read my research, people who are smart about a ton of things but have never thought about this issue before. i had never thought about this issue before until 2008. i wanted something like this it didn't exist so i would call lee and gripe could fetch or whatever you want to collect and have steam coming out of my ears and beso avalos and you were so calm and gracious. please listen to me and get me therapy but you went through to the same time so it kind of worked. it's really really hard and it's incredibly lonely process because for me i have a day job so i would do this on the weekend and night. it's never good enough, never ever good enough. you find things that you you

think registering but then to get it together -- look, my book is only 300 pages. it changed my view about the whole writing process. i'm i am really glad i did it. i think i'm not going to be in a rush to get into it again anytime soon but i'm really glad i did. i did at number one because i thought it was such an incredibly important issue and number two from a competitive standpoint i couldn't believe that i was the only one who is thinking this way and writing this way again about such a powerful subject in just the span of five years. i feel -- i felt very alone during the states issue which those scenarios people thought the calls that i was making were so controversial. a few years later there was nothing controversial about it. interesting that detroit files for bankruptcy and all of a sudden it's not that controversial of the topic

anymore. what this does to the country and what this does to social divide, class divide, race divide, it's enormously important for people to learn about and do something about it. >> we are going to go to q&a in just a minute so just a minnesota anyone have some questions get them ready. when did you do your best writing? i am obsessed with the writing process so running your firm which you are the ceo of and which has many employees in cranks out other stuff not related to your book all the time, when did you fit that in? you you you said we can send was that morning's? was at 4:00 to 7:00? >> i thought the process was going to be easy that i would work with ghostwriters and turn my research over to them.

it would all work out well. that did not work. what i can get up doing is just, just kind of like bombing on critical mass and shaping that critical mass and calling it and calling it and calling it. just getting all the volumes down into the themes that i wanted to work with. many of these themes are not commercial themes that are very important in terms of how the analysis we have done on poverty. i had all the research done. it was getting it into a story that worked. another mutual friend of ours john berger who had written a story, the story about me on fortune, came in and helped me up and and was so enormously helpful and fun to work with. then i could have -- it's always easier to edit someone else's work so he would edit my work and i would edit his.

sort of the blend that created this book. >> got it indoctrination into journalism. every time you called me and said i don't know what what to i said welcome to journalism. it's not easy. this is why the stereotype of the writer is so fraught. you really experienced it because you did write the book yourself. and with john's help again but you really did a lot of the work yourself and i commend you for that. >> the hardest part -- the easiest parts were getting the interesting stuff about the states down. the hardest part was writing anything about myself. that was entirely and comfortable so i had gotten a number of offers to write a book after the financial crisis and i have no interest in doing that. but i really believed in this topic so i wanted to write about it. john forced me to put some stuff

in it about myself which i was very uncomfortable with. >> we had the exact opposite. i wrote a lot about my childhood in the suburbs. maybe i'm more the narcissist. i don't know. i think we have a question over here. >> in your research, did you come to some kind of a conclusion on what transpired with the savings and loans collapse in the 1970s? maybe you were at the end of your personal experience but did you discover why it happened? >> by the savings and loan -- the savings and loan crisis was called by regulatory reform which allow them to open up into the commercial real estate market and become much more concentrated real estate. the whole point was to promote

homeownership. what came from i think the second or third chapter that goes through an exhaustive analysis of the history of housing in the united states and how the only market in the world with a 30-year mortgage. why do we have a 30-year mortgage? to make monthly payments lowered. does that make any sense collects probably not and it goes through all of that. so you also see how i also go into parts of, from really the mid-90s to 2007 you have so much financial consolidation. savings and loans with regional banks but in the 80s when the interstate banking laws changed to have so much consolidation. so the big banks when financial

services supermarkets were not only originating the product is selling the product and selling product around the world was easier than originating the product so they started buying more and more and more. you look at merrill or ups during that time. it wasn't enough that they were some of the biggest originators of mortgages themselves. the city was the same way. you take a preview of what happened in the late 80s, 90s. the biggest difference between both of those periods were leveraged. you had to two to three times the leverage in the 2000 says you did during the s&l crisis. the snl crisis was short and sweet. not so sweet that short. the housing crisis, we are not out of it. >> i will interject one more question. you think we have done enough to make sure that a crisis does not

happen again in the banking system? >> absolutely not. you have one up setting trend on the consumer side whereby over 32% of americans have either no access or limited access to the banking system. 20% of americans who once had inking relationships, mortgage relationships have been kicked out of the system. you have had imagined 20% of the people kicked out of the system. that slows down the system to a snails pace. what has caught up for that are made up for that is the commercial lending market the junk bond market which is out of control right now. and i don't think the impact is going to be as prolific as the housing. if you look at a severity issue

or the housing industry. you have bubbles all over the place in certain lending markets and the u.s. bond market that are going to be problematic. i think the single biggest problem is how we ourselves -- wean ourselves from a low interest rate environment that has gone on for far too long. >> yes, right here, could a question in? >> hi. i don't know if you were offered an opportunity to follow up on the "60 minutes" peace but if you were given such an opportunity without editing what would you like to say he? >> i mean my "60 minutes" article or "60 minutes" review was 90 minutes and i think it aired three minutes of it. i said what i wanted to say. i don't have control over their

editing process or the focus of it. hopefully i have given some sense of what is important which is so much bigger than one specific market, right? so much of the american economy that taxpayers experience and homeowners experience, children, people on depending on retiring retiring -- retirement benefits is a factor in that. so you know i didn't ask lead for the question she was going to ask me before this interview. you know, i think it's an important narrative to say it happened. if people actually watched the interview i think they would get a sense of what i said as opposed to something that was said about me saying something in the interview.

>> in your book you may much of the states and the central portion of no debts and no taxes and no spending but i'm not quite sure we are growing faster in the future. you need to foster education innovation and infrastructure, immigration. the states back in the 1870also had low deaths and low taxes and didn't go anywhere. they were more like angola. >> okay so i would just give you some numbers that would disprove that. if you look at from 2008 to 2009 to two date the texas economy has grown over 14%. north dakota has grown 44%. all the central regions have grown at exponents of other parts of the country. what you also see is the first

move which is companies moving into these areas. if you think about 60 years ago and by the way this shouldn't freak anybody out because every 60 years the u.s. economy goes through this economic transformation which is a great testament to how resilient the u.s. economy and americans are. but the u.s. economy has never been more mobile. you can choose to live -- you don't need to be on a riverboat system as you did in the 16 and 1700's -- i'm sorry 1700's and 1800's. you don't need to be by a coal producer. it's much more mobile. we talk about a lot of the influence at the energy evolution but think about california tech companies. so many of them have the new facilities around austin not because of energy but because it's easier to dupe business in texas.

california has become so prohibited to do business and so states are competing more aggressively than they ever have against each other. businesses, what i originally thought back in 2010 i was creating with no idea i was going to write a book. prospectively at desk reference for businesses to see compare and contrast where they would want to invest and build new facilities. it's absolutely happening. there is more and more evidentiary support that the fact that the growth is absolutely you know over way too to the central states versus the coastal states. the point about education is spot on. you have areas of the country that have low high school graduation rates combat don't have the infrastructure you would want for businesses but

they also have some of the highest revenue surpluses that are directly going into investing in those specific projects. if i were to track my state is wyoming and i'm going there tomorrow for a meeting. they are going to attract your business because i'm not going to charge your income taxes. i have a state-of-the-art airport and state-of-the-art schools. it spoils riches because of all my natural gas exposure. it's kind of a redistribution of opportunity for the u.s. which is pretty romantic if you want to look at it that way. >> we will have two more questions. the woman ride in the back there. >> i have a question about the glass-steagall. they took it out. why won't they put it back in? >> the question was about

glass-steagall. >> poker is an advocate of referring glass-steagall. i don't think it's happening in that kind of sort of black-and-white fashion where you redirect laws that separate commercial banking and commercial banking. what is happening in a very different way it is happening before a very eyes. one of my favorite people is that president of kansas city tom connick who is a big advocate of having having financial institution specialized institutions and when they were specialized institutions we have the best financial system in the world. the financial capital has been one of our greatest export. not everyone may agree with that but what is happening now is to have capital requirements that are keeping certain banks out of

businesses so you are effectively doing it the hard way and the banks are fighting with the regulators tooth and nail. i don't know that it's the best possible situation that we are going in that direction where the banks like it or not. they don't like it. what you don't have on the flipside is regulators are successful about getting the big banks to become smaller. what they are preventing is the small banks from becoming bigger. what we need is equilibrium and we need as many americans to have access to fair credit and the banking system as possible because that is what lubricates the system. >> one more question right over here in the middle. >> meredith, do you find lately financial institutions are finding it more difficult to price for consumer risk than how they can enforce their rights against consumers

post-foreclosure crisis or post credit card crisis and if so is that going to replay with states where you have financial institutions who have relationships with states who are now going to be competing with pension airs to get a discount on what is owed. [inaudible question] he think that is going to play out? >> i think that's going to be really messy. i have written extensively about how the regulators have been with consumer credit. in 2009 in 2009 and 2010 the c.a.r.d. act just completely eliminated a lender's ability to price for risk. if you are not a public institution you are not going to take the risk. you have seen $2 trillion of available credit lines taken out of the system and that is not it.

that is not the 7 trillion that has been charged off. there has to be some type of happy medium. what has happened is the worst unintended consequences whereby the shadow wending industry outside of financials and under state regulations not cfpb or the acc or the fed is emerging. i believe the theory of displacement. if you close one door someone is going to open another door and charged very differently. you have actually more regulation which is driving consumer lending to a less regulated market and it's dangerous and unfortunate. it drives me nuts. in terms of what's happening with the states i think so, the municipal bond industry is the sleaziest industry i have ever seen in my life.

i have covered tanks for a long time. it's dirty and opaque. there is corruption. it's associated with it -- with it all the time. what is happening is the big banks have the smaller players and then you have big players in this industry and what ends up happening is the banks now are well capitalized enough that the states and municipalities are going to see the banks. if you remember five years ago, 45 strong -- years ago milano italy suited spankers. we didn't know what we were doing. we weren't sophisticated. jefferson county just sued and won a 1 billion-dollar suit. that is probably have true but if you have such a tightly controlled market with very little transparency, is a bees

nest or a hornets nest for i think some really messy lawsuits. the states are going to go where there is money. >> thanks everybody. i want to ask one more question. it's a one word answer. there's a lot of question about who will run the federal banking when ben bernanke steps down? >> my advice would be tom connick but i think it will be summers. >> there we have the final word, the final word for word. thanks, nick is. >> thank you meredith and lee it was such an excellent presentation. the books are for sale and we are going to have the author signed books in the center so come up through the middle. we will see you next week.

>> host: "the new york times" book review is getting a redesign and it is debuting this weekend. pamela paul is the editor of "the new york times" book review. ms. paul what are some of the redesign's? >> guest: well we really gave the whole issue a new look. the goal was to maintain what we fundamentally are which is a book review so if you look at the number of book reviews and they're the number of book reviews. while i think the design looks more open and a bit more accessible they are shorter. it is a section for reading but there are some new features which i think will make the issue overall more accessible, a little bit more relevant and

hopefully more exciting. >> host: what are those issues issues -- features clinics. >> guest: there are two major features. one is called short list. these are brief reviews which the new york times book review has always loved but the change here is that they are grouped according to genre and subject to theme so that it kind of takes the short review from something that feels like a bit of a second thoughts to something that says if you are interested in horror or are interested in science fiction or essay anthologies these are books of interest and it enables us to find a reviewer who has the experience and the expertise and interest in that area thinking give those books a strong and coherent review. that is one feature. the other major thing we are launching this week is we have traditionally had an essay there from outside contributors paid

the new feature is called bookends. we have 10 regular columnists who are going to rotate. they are going to take on a question that is out there in the literary world for the first issue. the question is are novelists to wary of criticizing other novelists? spares a lot of debate about whether twitter is too fearful of offending and whether the book world is so small and in such desperate need of sustenance that it's not right to criticize and take another author's book down. that's the future we are taking on this week and each week it'll be a topic whether it's related to fiction or nonfiction or the wayward breed or poetry or translation or pop culture. these 10 writers will always be paired up in different combinations looking at the issue and trying to address it. what it is not it is not a he

said, she said. it's not a thumbs-up or thumbs down. sometimes the writers might agree but because these are very strong riders with very different backgrounds and approaches they look at it and write about it in such different ways that it will make a nice companion to each other. the idea again is that to really promote conversation and to not only respond to the issues that are out there but to generate discussion. so much of reading is about recommendations, about conversation and opinion. >> host: ms. paul who are some of the regular commenters -- columnists going to be. >> guest: we have 10 columnists and they come from all around the world both from fiction and nonfiction and also criticism. so we kill or is paired with adam kirsch. so he is a novelist perhaps best known by her recent novels the

believers and notes from a scandal which has turned into a film. adam kirsch is a columnist for tablet magazine and on line publication and the senior editor at the new republic as well as a published poet. we also have in the coming weeks dana stevens who is a film critic from slate and the homes the founding editor of jezebel which is a popular web site media group. jenna first ally is another columnist and francine prose has written more than 20 books. fiction and nonfiction. >> host: that is a nice selection and we appreciate you naming some of those. pamela paul one of the things you mentioned is that the book world is or may he small. is the book world small? >> guest: well if you know i think you can feel that way

especially if you come from the outside. it may seem like it's a huge impenetrable force that doesn't let outsiders in. but we want to do is open that up. i think people continue to read and the same numbers that they always did. while the number of look reviews in newspapers in general has gone down i think people create stories and it doesn't matter whether they're reading it on their phone or taking a book out from the library. this is a conversation of people still want to have and they still want to know what they should be reading and what is good and worth their time. >> host: what about nonfiction books? how does the new york times book review treat nonfiction? >> guest: we have new nonfiction. we have had refused by the new book unthinkable. five days of memorial. our readers look at nonfiction

as much as they do fiction personally i read probably more nonfiction than fiction. so you know i think we are trying to devote as much space to both. again given the limited number of reviews we can include "the new york times" book review traditionally has only reviewed 1% of the number of books that are out in a given year. it's about finding the best from both genre's. >> host: pamela paul is an author as well as the editor of "new york times" book review. she has written books the future of matrimony. and parenting incorporated. pamela paul what does "the new york times" book review mean to an author? >> guest: it's huge and i think are better or for worse is become more important because we are the last freestanding newspaper or book review out there.

so it is i think different from the daily review where we have reestablished critics. the book review is a place where sometimes reviewers will take a step back and look at context, especially with nonfiction the area that the author is writing about and it's hugely important review for authors. i know both the joy of getting a positive review in the times and getting a very negative review. i take it really seriously and i know what it's like from the other end. >> host: does that affect book sales? >> guest: you know, if people out there knew what really affected book sales everyone with via best-sellbest-sell the a best-selling author. it's hard to know what exactly it is that makes a book jump off the shelves but a strong review from the times certainly helps.

it can often make a book. >> host: a marketing tool that a lot of books if on their cover or their marketing materials is a new york times bestseller splash right across the front. how are your bestseller lists formed? >> guest: that is highly secret. that's like the coca-cola recipe. that is actually done by the news and surveys groups at "the new york times" so we don't have direct involvement with gathering that information. what we do at the book review is really present it and we have columnists and a best-seller columnist who kind of looks at the list in a broad cultural perspective away. but we don't actually make this list. >> host: why is it such a secret? >> guest: you know, what is selling and not selling has

become a lot more transparent in recent years. you can always -- obviously look at things on amazon which years ago you couldn't do or maybe a little bit more than 15 years now. and there is the nielsen bookscan which captures 85% of the market. people who pay for that service can have access to those numbers but you know it's still one of those areas where it's difficult to figure out exactly what is selling because books are sold in so many different ways not only on line but at conferences and in book sales as well as in stores. >> host: booktv is celebrating its 15th year this fall. how has the literary publishing world changed in the last 15 years?

>> guest: it's been completely transformed. in the last 15 years it's like ancient history. everything has changed from the number of publishing houses. it was the big six and now it has just become the big five. the launch of tablets of all kinds and the internet has totally transformed not only where people are buying their books but how they are reading them. the coverage obviously in the media and the print media has gone dramatically did down. at the same time a vibrant and exciting on line community of readers whether it's on sites like good reads or any of the on line magazines that regularly run reviews or the on line extension of magazines that have traditionally covered the literary world. that is all basically changed. the only thing i think hasn't changed is readers fundamental

interest in a good story or finding out information from a great nonfiction book and being moved and transported by literature. that's the only thing. >> host: pamela paul what is available on line at "the new york times" book review section? >> guest: everything is on line. increasingly there is more content on line than in the print edition. i personally am a huge print reader and i love to see it in that format. we offer additional content on line. our buy the book interview for example rensin and edited version on buying in print and on line runs in full. this is q. q&a with an author or artist or public figure of some kind about their life through reading. >> panama -- pamela paul the new editor at the near times book

review. it has been redesigned and it is reviewing september eighth. thank you for your time. >> guest: thanks so much. >> good evening and welcome to tonight's meeting of the commonwealth club of california the place where you are in the know. i am for political reporter of jcps radio in san francisco your moderator for the program. find some internet a commonwealth love.org or download our iphone are andrade after program and schedule information and podcasts of past programs who'd you can find me at twitter at sovereign nation. it's now my pleasure to introduce our distinguished speakers george packer is a staff writer for "the new yorker" and author of the new

book "the unwinding" an inner history of the new america. george packer is born in the bay area in santa clara raised in palo alto a child of silicon valley before was called that. he went to yale served in the peace corps in togo and became a journalist and author. his written for "the new york times magazine" dissent "mother jones" "harper's" and became a staff writer for new yorker 10 years ago. he is written to models five books of nonfiction and billboard wedding off-broadway play. he covered the iraq war and wrote the acclaimed book the assassins gate about the conflict. he is reported from africa the middle east and all of america. he was chosen as a guggenheguggenhe i am fellow in 2001 and taught at harvard pennington and columbia. even though he is from the bay area he now lives in brooklyn. please don't hold that against him as we will come george packer. [applause] >> thanks, dead. it was last year when the assassins gate came out so it's

wonderful to be back at the commonwealth club in a special welcome to my extended family here in the front rows. when i'm asked where did this book come from and away the answer is it came from iraq oddly enough even though this is a book very much focused on america. when i was covering iraq and the war for "the new yorker", my initial sense of why everything was in floating there was to blame individual leaders and we know who they are and they were to blame. there were gross failures on the port -- part of almost everyone in the highest positions of responsibility but over time iraq came to see more and more like a failure of american institutions. no matter how much money and how much effort and even how much talent and goodwill we threw at that country, it all seemed to avail nothing and that was

partly because it was an impossible job but also because the institutions that were responsible from the highest government agencies to the military from the intelligence community to the media that were all there in one capacity or another, the nonprofit world, the for-profit world world, they just didn't have whatever had allowed us to rebuild europe after world war ii. something had been lost in recent years. i wondered when did that happen? >> why did that happen? and then i came back from iraq in time to cover the 2008 presidential election and suddenly institutions were collapsing everywhere you looked. wall street banks, lending institutions across the country, could general motors and chrysler. it was then epic up a lot --

apocalyptic sense the pillars that upheld the post-war order in america. it had created the most successful middle-class democracy of history seemed to be coming undone and that struck me as being a very very big story. a story well worth telling. the question was how do you tell a story like that? there are a lot of folks out there, no very good ones about the decline of the middle class about income inequality, about the collapse of our media institutions about political polarization in washington, about the rise of big money and corporate power on capitol hill. i didn't have anything to add to those looks. i didn't want to write another what's wrong with america and how to fix fix it fix it both.

i actually don't know how to fix it so if you asked me that afterwards i will have to admit to you that i don't have the answers. i thought what i could add to this growing sense that something has come undone is a narrative, a book that gives you a picture of a country the way it did novel would give you a picture of the country through the stories of individuals. it's the way i think about how to describe the world. i began to go around the country and find those individuals and find those stories to tell this larger story to what i thought of as the end of the deal that used to exist among americans come to a deal that says if you do your part and work hard there's a place for you and maybe even a better place for your children.

a dream of upward mobility across generations and an equal opportunity for all. what we have seen over the past generation, which is the period covered, a. of three decades as the praying of our social contract. until now i can hardly be said to exist any longer and is replaced by something else. a big ambitious subject and big subjects are best eliminated by small drama so i try to find astronomers and i'm going to read you the prologue to give you a sense of the lay of the land of the book and the writing of the book and talk more about it. no one can say when they and winding again. eagan. when the coil that held americans together in a secure and sometimes stifling grip first gave way. like any great change the unwinding began at countless times in countless ways and at some moment that country always

the same country, crossed the line of history and became irretrievably different. if you were born around 1960 or afterward you spent her adult life in the vertigo of that unwinding. you watch structures that have been in place before your birth collapse like killers of salt across the vast visible landscape. the farms of the carolina piedmont, the factories of the mahoney valley florida subdivisions california schools and other things harder to see but no less vital in supporting the order of everyday life changed beyond recognition. ways and means in washington caucus rooms, taboos on new york trading desks manners and morals everywhere. when the norms that made the old institutions useful began to and, and the leaders abandoned their posts the roosevelt republic that it rained for almost half a century came

undone. the void was filled by the default force in american life, organized money. these two pages give you a map of the whole book. i have just introduced all of the characters and the themes of the book in that little overture the ohio girl is a woman named tammy thomas who grew up in youngstown ohio when it was a steel town and watch the steel mills disappear almost overnight , covered place by nothing, a complete void that led to kind of the collapse of the city. it was even faster and more breathtaking than detroit and in this absence of the mainstays of life she had to raise three kids on our own and did it by getting one of the last good factory jobs in an auto parts plant and that were shipped overseas and away so many manufacturing jobs in the rust belt and in midlife

faced with the need to continue to survive she remade herself as a community organizer just in time for the election of barack obama in 2008. the washington guy is a political operative named jeff conning 10 who attached his aspirations and his ambitions to joe biden and worked for biden for years and gradually became disillusioned with biden and also to some extent with government. he became a lobbyist which is just about everyone it goes to washington and to being an made a fortune as a lobbyist. he lost half of it in the financial crisis of 2008 which was like the watershed event for every character in the book. the whole book moves you towards this precipice of 2008. and in the face of that, he reentered government as the chief of staff to biden's successor ted coffman with the single aim of me can wall street

pay and imposing some discipline on the banks and bringing the wrongdoers whose fraud led to the crisis to justice which of course none of which happened but it was for him a matter of self-respect to recognize he had been part of a corrupt system and he wanted to try to make it good. the book also has profiles of a number of well-known american celebrities from newt gingrich in politics to oprah winfrey and entertainment robert rubin in finance, alice waters in food. they represent a sort of the elites in our culture many of whom came from the same really obscure backgrounds as the main characters that i am describing but in most cases they either

were rising up through institutions that no longer were working as they should like colin powell in government and robert rubin on wall street and didn't understand until it was too late that they were part of the problem and their institutions were actually working directly to undermine the ambitions that they thought that they had. others of the celebrities are more institution breakers and i think that is kind of the role that elites play today. they got where they were by breaking the rules. facebook's slogan is moved fast and break things. j. z is one of the subjects of the book. his whole career from drug dealer to empire builder and corporate rap star is the story of don't wait in line. don't simply hold down a job and finish school because that is a game. the way to make it is the way the mafia lords make it is by

being tough and wanting to win. the north carolina lawyer clutching a bible is a guy named dean price who is the son of a fire and brimstone teacher in the bible belt. his family farm tobacco for generations and he grew up with the ambition to be an entrepreneur. is your -- heroes replace people like andrew carnegie and henry ford. he has a deep rooted in us in our history. very evident when you travel to the piedmont region of the carolinas but he printed a chain of truck stops with fast food restaurants. all the while the dash countryside was collapsing. walmart and multinational oil companies were making it almost impossible for him to compete

and in the meanwhile tobacco was dying as an industry and so were textiles the other mainstay of life trade by the time he tried to make a go of it as an entrepreneur the war -- rural south was beginning to look a lot like the core of our cities with rampant drug abuse and multiple generations on public assistance, unemployment and kind of despair settling in. dean price like all the characters in the book, had a vision of how he could resuscitate the collapsing order around him and he had a series of epiphanies. being a man from a religious area although he turned and rebelled against his father's harsher christianity he remained a spiritual man and his vision was a kind of revival of the countryside through what was right at handch