government spending cannot help but be highly's progressive in his distributional effects and you get the benefits because spending is so inherently progressive how we raise the money is much less important than how we spending it from the.of view of addressing inequality. that turns out to be the secret of northern european countries. take germany. germany has the same market before tax before government intervention, roughly the same market inequality as the united states. but it is a much more equal society and yet at the same time it is a more progressive tax system. our tax system is more progressive and the reason is it is just plain bigger. and the bigger government tax collections funds more government interventions, explains why university in germany is free and why

there students are graduating without mountains of debt and because they have a larger government that is investing in ways that help all citizens they end up with a substantially more equal society. so if you take a step back you can say about what the book is trying to do is address the question what should fiscal policy, taxing and spending what should our fiscal policy be in an age of inequality? what the book answers is it has to be a larger pace because we are the smallest government of any large economy. it needs to be a larger based more tax. does not have to be super high rates on the rich. we need to collect more revenue and we need to spend those remedies wisely by investing and ensuring an all caps. >> so start with the

spending, then come spending, then come up with the tax system's. >> the tax system is not that difficult. i have done this for decades. we can argue like all academics are policy wonks can about this feature that feature but in the end it is just not that difficult. we are such a low tax country relative to others. if you look at all taxes taxes, federal state local, income tax payroll tax bill put them all together. it is not difficult to find ways to raise the revenues. i give specific plan in the book but i don't want to dwell on it too much because it is just too easy. what is hard is convincing people that government in fact can be and is useful. it can be an instrument for making ourselves not just by leveling down but through investment throwing out positive returns and makes us all healthier wealthier, and wiser for generations from now. >> as you well know the

budget process on capitol hill is on automatic pilot the last several sessions. >> yes. you know if i were to write a sequel i have decided the book should be called when congress. congress is the problem. it really is. and we spend so long defecating government we forget that the reason that government does the government does not work is because congress doesn't work. congress does not fulfill its own mandates that it has given itself on the budget process. they don't revisit important spending programs that are baked into the tax code so that they are invisible to ordinary people. at every turn you see at best a marginally functional 's enterprise that is really letting us all down and the down command the solution is for us to elect a better class of legislative.

the practical people who want to get things done whether they are conservatives or liberals can find common ground and lead us to much more productive economies in which we all participate. but that requires a better class of legislative than we have today. >> a a balanced-budget important? >> not at all. a balanced budget is clearly wrongheaded a wrongheaded and perverse thing. there are a few things you can say about economics with great certainty, but this is one of them. a budget to have a balanced-budget is wrong headed for several reasons. one is that the economy keeps growing. so what we should care about is how much debt we have relative to our income. that is, after all how are private firm would think of things. it is not i have x million in debt.

$100 million in debt is that is a great deal for you or me to carry but not a great deal for apple a company that would be our 1st trillion dollar corporation in the world. so everything is relative. the right question about national debt is not how many dollars as it but how it compares to our incomes. in fact because our national income grows if we have -- if we want deficits on the order of 2 percent of gdp to hear at a time when our economy grows at 3 percent per year, well it means that we end up with the national debt of about two thirds or annual income which is perfectly sustainable. a little bit lower. those numbers by way of example. and the other point, of course is course is that sometimes once in a great while things go horribly wrong's as they did in 2007 to 2009 and the bottom to spas out. at that time government deficit spending leads to

better economic outcomes. we can see the difference between the success that the united states is at coming out of the great recession compared to europe which tighten its belt out of the misguided idea that deficits were the 1st priority rather than growth. so a. so a balanced-budget would've led to a great depression. is just that simple. spending would have collapsed because revenues collapsed. revenues collapsed because that is what it means to be in economic freefall. and when revenues are on 7/2% but we were down 14 1/2's. balanced-budget would've meant we half's. balanced-budget would've meant we were chasing her own tail cutting, cutting, cutting and in doing so reducing incomes and

consumption leading the lower tax revenues intern and we chaser tail all the way down to a a great depression. and it was secretary paulson at the end of the bush administration the knew obama administration, they understood this. they acted appropriately. they recognized that deficit financing is what paul us out -- would have been a great depression in 2,008. >> another common refrain in washington is close loopholes. >> i. >> am all in favor of closing loopholes. >> what does that mean? >> it means that the tax code is filled that are not germane to collecting tax in a fair and orderly way. this is what is called the technical term tax expenditures for but the idea is these are spending programs of one kind or another that congress has chosen to run through the tax system because then they don't show up as a spending program's. they show up as a reduction

in tax revenue. there revenue. there are a handful of just plain hoops. places where the rule is wrong and should be fixed, and those places are there either out of inertia on the part of congress or because of powerful political interests that block fixing them things that carried interest affluent fund managers get tax capitol gains rates rather than ordinary income rates on their annual income. it is a nonsensical, but the fact is it is not that large number in the great scheme of things. it's what it's what i think of loopholes i think beyond the carried interest all the personal i do my seductions that run a train and a half dollars over five years' in reduced revenues in which

we're not accomplishing the purchases we think we are. it helps affluent upper-middle-class families by a five bedroom home and set up a four bedroom home command is a strange kind of government spending program. so we need to look at the personal i demised adduction and a handful of others. these are not •-ellipsis. they are deliberate policies. they just happen to be bad. >> how much money should the federal government be spending? >> and my view the government should be spending on the neighborhood of 44% of gdp. it has been spending around 22%. 22 percent. historically it was lower. one of the reasons spending is going up democrat or republican, nobody can hold back this with a broom.

the number of americans over the age of 65 is skyrocketing. and that means that social security and medicare are going to take larger and larger charts of our national income. that is income. that is just the reality. so government just by virtue of that alone the doubling of the number of americans over the age of 65 between now and 2040 the government has to be bigger in terms of his total spending. so we could pretend that we are in 1965 but we are not. we not. we have to deal with the reality of our aging population. so 24 percent of gdp is about the right number. so what the book advocates, you know, is not that we become france overnight. i'm not a socialist. have a socialist. advocates that we spent about 2 percent of gdp more than we are now. that is a lot of money. $350 billion but it is

completely affordable and it buys a lot. it would buy actual investment in infrastructure positive economic returns to just building bridges and roads, economic returns and time saved and it creates great quality jobs. not everyone in america is going to invent the next great. some people are not interested. so getting back to america where there are good quality jobs in construction well that is a kind of double pay off 's. so we can go from net zero to some significant investment in infrastructure. we can do better 2 percent of gdp is enough to make a meaningful impact's. then we can decide that is the right number. we don't have to do it in one day. 2 percent of gdp would change our lives for the better. >> some would argue our current tax code is harmful

the productivity and that if 's and that if we want to spend 24 percent of gdp estimate to a flat tax. >> well the book considers these issues in detail. it is true that our tax system's for particularly our corporate tax system is inefficient. it inefficient. it wastes money. a wonderful metaphor to imagine the tax system is a bucket's that carries your dollars from your pocket to the government and government out to other individuals. the government is just us acting together. and the book not all the dollars that you put in reach anybody. there is waste. just by virtue of how any tax affects your behavior when you are tax your going to say maybe i'll do less of that activity. i won't work so hard. all taxes have this effect. and the corporate tax in

this country is a very inefficient tax, a high rate with local elections. as the worst of both worlds because of all the structural loopholes in it. so yes we can do better, but fundamentally when you look at the actual academic studies and you look at the data the tax system is not impeding growth. underinvestment by the public sector in us, we are the largest capitol outfit. we are the drivers of the profitability of this enterprise we call the united states of america. we are systematically under investing in ourselves. and only the government can invest in ourselves. >> you write the strand of contemporary american political thought that defines itself through its hatred of taxation is narcissistic self pleading wrapped in the flimsy sheet

of economic -- >> that sounds like something i would write. i confess i wrote that. >> pretty strong. >> it is pretty strong. the world as is it actually operates. you understand it is necessary for me to be rich and you to be poor. there is no alternative. what's more these individuals, these individuals, i call the market trial. people who think that market outcomes are just because they were the outcomes of our recent in the market and the marketplace works efficiently's. well whatever outcomes follow from the market must be the right outcomes. and what it mrs. systematically misses is the idea that luck has an awful lot to do with it.

one of the themes of the book is that -- and this is hard for all of us to accept those of us who work hard she will live it is it is hard to step back and say, i was also lucky. you know i did not choose to be home with a smart and it here i am. i i did not choose the parents i had. there is an awful lot. the teachers who help me. an awful lot that happened in my life over which i had no control that enables me to be successful and to think that market outcomes are the signpost some kind of cosmic grace, some that grace some karma that has been bestowed upon us really is deeply offensive because it underestimates the central importance of luck in the outcomes that we all achieve and the market triumphalist denied the existence of luck and they further conflate the marketplace

freedoms with political liberty. they think any constraint on private market means that you have destroyed our political liberties. the two are not in fact, joined at joined at the hip. you can see extremes at every end. nordics have a lot of political freedoms. but they also have a much much higher total tax collection. a much more pervasive state than we do 's. at the other end china is an authoritarian state but nonetheless runs within the limits of free market economy's. it is not the case that there is a necessary connection between free markets on the one hand and political liberties on the other. free markets other. free markets are important. government does not replace market. government complements market and places the markets reach like investing in ourselves. and the market triumphalist

overestimate the completeness of the markets, the perfection of markets. they ignore the role of luck in our lives and they conflate two different themes of marketplace freedoms and political liberties as if they were the same thing. >> we are better than this

money and how is history is shaped us. he talked about the book with historian douglas brinkley in an event in austin, texas. this is 45 minutes.

>> applause. appmack welcome to both people and thank you for coming out this on this beautiful saturday afternoon to celebrate literature with us at your local independent bookstore. it should go without saying, but i will say it anyway only through your participation and we are able to houston. thank you for perpetuating the cycle of creativity and helping us to bring fascinating and innovative authors like mr. sehgal to our community. we are thrilled to have him

with us this evening and conversation with longtime favorite douglas brinkley. both of these authors have independently revealed astonishing truths about the world we live in so it should be mind blowing the revelatory to have a near together. a very impressive resume having both serve as a speechwriter on a presidential campaign and performed with grammy-winning musician's as a jazz bassist, a distinction he presumably shares with no one, though one, though i have done no research. the author of three previous works jazz accuracy, walk in my shoes in the bucket of blessings with his mother, i'm sorry. is that even close? all right. he serves as an officer in the us marine reserves's. reserves'. douglas brinkley of course, a professor of history at rice university cbs news historian and contributing editor. several of the books have been selected as noble books of the year. america's knew pass master. please help me welcome douglas brinkley.

>> hello, ladies and gentlemen. i would like to welcome my dad. i would like everybody to honor him for his new book. [applause] 's. >> thank you, everybody. we are all friends, and i have been a professor of history for a long time. i have never been more proud of someone i have gotten to know who has worked so incredibly hard in so many different areas not just on wall street in the financial world but as a writer someone who worked with civil rights hero andrew young on a book's cover somebody who is put the idea of jazz and the policy together someone who just won a grammy award trying to

foster jazz diplomacy with cuba. and for doing that this year won a grammy for latin jazz. he is an amazingly talented guy's. guy's. you will hear more from him in different books but tonight -- i mean he will write a lot more have a feeling, but tonight we will talk about a coin which is becoming a new york times bestseller. it is just right out of the gate. and it is an unbelievably great read. read. people have compared it to have the new york times has compared it. if you like elizabeth gilbert's eat pray love this is the book for you. i hope he gets the sales numbers going. but it was a great writeup he had in the times. the book is really taking all of the country right now. his wonderful now. his wonderful to have you here. i wanted to start by asking you you know, why did you

ever decide to work on wall street? >> first of all grades of the year, great to be at book people. thank you for being here. i started working on wall street in 2008 just a few months before the credit crisis began. i began. i reluctantly worked at wall street and started working on wall street because i found myself working on the kerry campaign. he lost and i needed the job i took one on wall street. you know, when i arrived it was falling apart. people are losing their houses. the stock market was going down. i focus on emerging market investments. what was happening in america was effecting what was happening in the emerging world. i kept asking this question. what is it about money that makes us act so irrationally, so bizarrely and foolishly to mecca started writing and researching this topic and

got into the field of sort of brain science. what is happening in your mind when you think of money. when i mentioned money to you, it's increasing. they have done brain scans of people i and cocaine and a compared it to people making money. i money. i find that the brain scans are virtually identical. they had taken brain scans of people looking at pictures of naked women dead bodies come money. what get the most activation in the part of the brain is money. i find this fascinating. i researching and researching. my career on wall street took me around the world to over 25 countries exploring this idea of what is money, how does it have such a powerful influence on allies >> and it is such a big topic. were you influenced influenced by any books? what is your early reading you had to do that just got yourself and your. >> well, starting with that

question why are we so irrationally comes to money, i started with the work of behavioral economists who won the nobel prize in psychology. he's the guy that sort of comes up with this idea of cognitive. for example, how many of you guys play lottery? my dad plays the lottery every week. why -- what are you really? almost zero chance of winning. well, i see it on the news. as news. as a personally standing their with a check. maybe i can when it. one time i won -- mastery or four numbers. i get $400. but there's a zero chance you can when's. so this is explained by this and rational -- irrational activity. the more likely you can remember things you start to inflate the probability of it actually happening. so celebrities they have

more -- are slim is more likely to get divorced? you might say yes. is because we see it more often in the news'. we make all these irrational financial decisions which began looking at the book thinking fast thinking slope that was happening in the brain. where did the brain come from? evolutionary economist's. and you know this book is really about the multiple -- multiplicity of money. different perspectives, evolutionary biology and theology. the other books i looked up for the new testament the quran, the religious books. and so i started with an economist and ended up with a spiritual masters. >> what does jesus save that money? >> you know, i was in india. my job takes me around the world. i was in calcutta india. i went to mother teresa's home for the dying in destitute. this is where people don't

the guy's. guy's. it's really a sad an almost moving place. i walked in. maybe 50 lepers surrounding me. and this man quivering on the floor. and seated among the lepers was a teenager maybe 1617 years old my young mick jagger. and his presence was very jarring for me. it was vibrant. i went up to him and him why he was here. the as well as 16 or 17 i not volunteering in calcutta india. i was not serving. he says to me i'm here because of what the gospel teaches. what is the gospel teach? even though everyone here is poor their riches. they are rich and spirits. when you go back and look at

the gospel 80 percent of what jesus says in the book of matthew eight of the ten parables are about money and wealth. and it is set in the new testament you know the sermon on the mount jesus is clear. he says lay up treasures in heaven but not on earth. and then he goes on to say something curious that theologians of an trying to work out for generations. he says essentially you have an eye for the body. the body has an eye and if you darken it you shall not see's. see's. and he goes on to talk about money again. what are we talking about? theologians say that jesus is talking about greed. greed is something you don't see myself. you see another people. and so in and so in researching this book i looked at the work september the color's. he said i've been hearing confessions for 25 years.

no one is ever to me and said father please forgive me i'm too greedy. it just doesn't happen. why is that? greed is something we see in other people, not myself. what jesus says is less is more. more. we're all driven by an economic logic more is better. a bigger car but her house, a better job. across all the faiths there is a more spiritual logic's. less is more. and how we use money according to the different faiths can determine the fate of our souls. whatever religion you subscribed to talk very strict rules about what to do and how spend money. ..

i think in comparison what they mean by that is 30 years ago you compared yourself to people in your neighborhoods, the person living next to you coming in april. he may be or she may be a little bit more wealthy than you because you live in the same

neighborhood but now you go on social media on the internet facebook and you start comparing yourself to people who are 20 times more wealthy new and there are reports in the german study that shows almost one third of people who use social media and facebook report feeling envy or jealousy so there is definitely in our society when we start comparing ourselves to people who have more it starts to make you feel uncomfortable and insecure in comparison to people who have less. >> you talk about american currency the presidential history regarding -- the faces of presidents on the bills. what has been the role of money in the making of america? >> you know when i travel around the world i will spend a day or

two or an hour with -- because i find it so fascinating learning about the history of the society through money. i spent time with harvey stack who is 85 years old he's one of the oldest coin collectors. his family has been in the coin collecting business for generations and you probably can comment on this. i asked him, i said which coin? many coins have been made in america. which coin's best represent represent america in the these of the 1933 double eagle. the 1933 double eagle. what is back? teddy roosevelt when he came into power and correct me if i'm wrong he was big into brandishing america. it was after the civil war and he wanted to -- america to be part to be proud of itself and he thought american coinage was atrocious hideousness because the coin faces had grecian heads or roman heads. they didn't look like american

figures. he wanted american coinage to represent america so he hired a fundament and bypass the u.s. men's which created its own problems. he went straight to a friend of his who was a sculpture and medalist and he said i want you to make new coins for america. this took a long time to make that essentially he printed what was called the double eagle. he improved the double eagle and he would look at this coin that has victoria kind of striding majestically an eagle in the sunrise and the coins were made, it took eight strikes to make these coins and it had this really nice contrast. when you put your hand over the coin he could feel the shape of it that the bankers did like it because you couldn't stack these coins. the bankers bankers wanted to be able to roll the coins easily so only a few of these coins were made and they sort of went out

of circulation and this coin the 1933 double eagle comes up for auction 2002 and went for over $7 million in auction. it's the most lucrative or expensive wines that have ever gone in auction. the double eagle is one of the most beautiful coins in america. >> t.r. also did the buffalo nickel. i remember when you were traveling all over the world and somebody told me you were going to the galapagos for a book on money and i didn't get it at the time. now that i have read "coined" i do but why do you tell our audience what brought you to the galapagos islands for a research project like this? >> so what is money? the conventional definition of money according to economist is an instrument of exchange. so that's the traditional but you could ask a question where

does exchange began? is really a biological question because not all humans exchange all are in-ism. so i started this book looking at the biological reason for why we exchange. i went to the galapagos islands and i spent time with a couple of marine biologist. why did i do that? it toward me across the different ecosystems. we went snorkeling underwater and the first thing i see, one of the first pictures in this book is a picture of a sea turtle. the sea turtle has it's been exposed and the fish are coming and feeding on the sea turtle and cleaning the sea turtle. they are ingesting nutrients and the sea turtle is being cleaned so it's an example of symbiosis. if you look through different ecosystems through the aquatics ecosystem to the apex predators all organisms are trying to exchange with each other in order to survive. even humans have intestinal

bacteria digesting our food. right now you may not think about it that you are in an exchange. we are an exchange with this plan reaping carbon monoxide -- carbon dioxide. why is this important? the energy of nature the currency of nature's energy. energy transfer. was the first things that humans exchange? energy, food so it's food sharing. that's the first thing the first currencies of this world in 9000 b.c. in jericho israel which is now israel it was salt. salt was one of the first currencies. it was first and meets. so energy becomes this currency and what makes humans differences we start to realize that brain expands and the prefrontal cortex expansively start to realize maybe we can create tools to facilitate energy transfers and create

tools that help us survive. one of these tools is called money. there's an evolutionary aspects so again i think kind of crazy i went to the galapagos for this but when you start to think about it charles darwin tried to come up with a genetic explanation. a genetic explanation for humanity but when you take identical twins, you separate them. studies show they invest in a similar manner. identical twins who share the same genotype. they take people and they have separated them and swap their cheeks and asked them to make investment decisions. there's this one gene and one variant of it the more like it to be risk-averse have fewer credit lines and a higher fico score and you have the opposite. so genetics, there is one study your genes influence about 93 points of your credit score which is a lot.

so it goes to show you there's a biological reason to why we exchange and there is genetic influences toward financial decision-making. it's not the only thing. certainly they can take classes and you can try but it's important to realize that genes influence their financial decision-making. >> touch on your relationship with the country of india and what do you think the future of financial relations with the united states and india? what is the state of that bilateral relationship right now? >> might my heritage is my parents are from india and i have been there many times and you see for the longest time there was a note dialogue during the cold war. india was an on line country so america built a relationship with pakistan so in 1991 we see

common 1991 b.c. a liberalization in india and there is more bilateral trade coming in. india has been an incredible success story. the new president modi i'm going to take the question a little bit differently in that in india modi has come up and people are concerned he is to money. and in the research in my book i looked at the relationship of hindus and i found this really fascinating. in hinduism there are four goals to buy. one of the goals is art. what does that mean? you are supposed to go out of make money. it's your duty to make money. it's your obligation to make money. because you have to take care of your family and to take care of your kids and it's only in pursuing money that he will be awakened to the last goal of hinduism which is the detachment

of money. in other words you have to pursue art the to realize their something else in life liberation. so i think there is a conversation in india right now that's like india is growing and is growing really fast. how do we make sure we retain our indian nest and don't become totally westernized. coming back to the hindu scriptures and making sure that we are accumulating money but also we know it's not the end-all be-all. >> tell me about wall street and if you had a magic wand and you could reform the aspects of wall street where do you find the biggest problems on wall street? >> i think if you want to have reform on wall street she loved bear who is the head of the

fdic, she was one of the first persons who said there was going to be a problem with what's happening on wall street with the housing crisis. back in 2006 and 2007 she said we needed to have higher capital standards so when you go to a bank they need to have more buffer and it seems like it's very logical but in 2007 people were talking about ringing that down. and so dodd-frank has come in and there are a lot more rules on regulation but ultimately at the end of the day we simply need more capital buffer. what does that mean? one of bank puts mark capital reserves it means when you loan out money it's not as profitable for a bank who makes its own money. so with wall street is tough right now. there's a public knowledge that wall street had a purported thing that conversation is down. a lot of these bankers are getting hit by funds so there

has been an exodus of talent. it's not exactly this freewheeling culture of the 1980s that michael lewis writes about a 1990s. there has really been a cultural shift on wall street has been happening. if you want further reform it will have to be on capital standards. >> tell me a little bit about, connect for us your jazz and what you learned as an amazing jazz musician. i first encountered when you played with when marcellus and hugely talented. is there any connection that you put from your talent as a musician that you brought into play in writing "coined"? did it help you in anyway? >> a little bit. i write in the book about the no boxes. what does that mean? it means looks at cross so there are a lot of looks on money historical books on money in 4000 b.c. that is happen that is

happened that i tried to approach money from a different angle. one of the angles and i would go down the rabbit hole to each one of them in one of the rabbit hole site on fascinating was this idea of debt. what does that mean? those of you who have taken economics courses there's an economics 101 search with this. there was bartering that led to money. we have all heard this. what would happen if he didn't have something that a person wanted when they created money. aristotle talks about this. the anthropologist go back and they say well wait a second. david graber the anthropologist writes there has never been a society and history of the world that's ever existed that relies on barter. it's really debt debt is the main currency in the world. this is a really important point

because no matter where i go in the world people think of money just as they think of a miles measuring a distance. they think about money as a measurement at debt. so debt gets invented around 4000, 5000 b.c.. coins aren't invented until the seventh century b.c.. in thousands of years of history of debt obligations and then money gets invented. it was in japan recently and this gets back to your jazz question. there's a great place to listen to jazz. i was in japan in tokyo and i brought some grapes for a friend. these grapes were the most expensive fruit i've ever bought bought. it was $40 for one strand of rapes and they are delicious. the texture was like soapy and i gave them to a friend of mine and he said kabir i cannot

accept this fruit from you and i said why not? he said he will be going back to america today then i will never be able to repay you. i said okay, you can have them. in japanese the word thank you loosely translates to this difficult thing. i'm sorry i cannot accept this. when you go a japanese department store they will not let you wrap your own presence because if you do a poor job it reflects poorly on the department store. when you go to a japanese wedding you have to tie that present firmly with ribbon. if you go to wedding and the ribbon is too loose ribbon is to lose omnipresent you may imply that the marriage may not last. even on valentine's day women buy chocolate for