>> the cold war that president reagan did so much to and brought them together. in 1950, the name nancy davis said. on a of communist sympathizers. what the hollywood like listers know that this is a different person and not the young actress? she took her problem to her union boss, the president of the screen actors guild, ronald reagan. they met at a hollywood restaurant. the dinner would be briefed they agreed because each had an early casting call. in fact, neither had an early casting call. in early casting call was the standard hollywood excuse to put a quick end to unpleasant dinners. but when i opened the door she

wrote later, i knew he was the man i wanted to marry. >> do you think that ronald reagan could've been elected president without nancy reagan? [laughter] >> all my. well, i think i may have helped the little baby. i hope so. [applause]

>> that evening. i'm bruce jones, vice president and director of the foreign policy program here at bookings and it's my pleasure to welcome you to this third and annual lecture. tonight's discussion will operate transatlantic perspective on making growth more inclusive. you can look at growth has been at the heart of the post-cold war period, an astonishing. in human history when we reflect on it. we know the broad picture against the backdrop of the abroad powers between 1990 and

2013 over a billion people are moved out of extreme poverty in roughly the same moved into the middle class, especially in asia. and the west, zero and a quarter benefited tremendously from this growth in international economic order that underpin it. the globalization's resort over the past 25 years has certainly raised questions about it impact on american and european societies and we face increased evidence that the gains have not been for all. in the wake of the global financial crisis, related discontent has enabled nationalist and populist movement that advanced in both europe and the united states. and to my eye, even in this moment admit growing tensions between the united states and china is strategic and economic bears, russian aggression in eastern europe, this crisis, the political crisis of globalization is the greatest

challenge we confront in the international order. the transatlantic community is the heart of that order. if we turn our back on a system that is kept as prosperous and safe for the past quarter century and beyond, it will slip away. was left out that before in history told us how it unfolds. international cooperation has it been in measures five and the other becomes the enemy. the depot blaze in moments of history are precarious and they are dangerous. we are on the cusp of such a moment although we are not there yet. through positive dialogs, we can hopefully push back against that front. the lesson in history we should reflect on tonight is that those who believe in the merits of an up an international border should fight for it when it under challenge. in my mind we are debating this and related issues tonight and we are delighted to present the lecture on the longest-running

event series in our policy program. it's become a leading forum for debating topics in the transatlantic relationship in the way the transatlantic relationship tackle broader issues like globalization. it's a special honor to add another cab to the series to pay tribute to a legacy had to post to notable economic scholars and authors to address the question economy growth more equitable in the current context. philippe aghion and heather boushey. i'd like to mention how fortunate we are to have our brookings colleague david wessel to join us on trade policy to moderate the discussion. to conclude, i would like to thank those who contribute to making the event a success and make it possible. we are indebted to france for their tremendous collaboration and i want to particularly recognize ambassador powell

today. so now i'm going to turn the floor over philippe le corre to do a more formal introduction of artiste beakers. >> thank you very much, bruce. welcome, everybody. i'm delighted to be introducing professor aghion who had the pleasure to introduce four years ago. it then as usual french academic who spent most of his career on the side of the atlantic obtaining his phd in economics at harvard in 1987, at m.i.t. before becoming professor and then at harvard book of economics. he used to analyze and design the group's policies. much of the work is summarized

in the books co-authored a 1998. indigenous growth theory and economics of growth in 2006. competition and growth was a fellow at the economic society in 1991 and fell at american academy of arts society. but since this is the 13th lecture, we will try to find a link with the great 20th century was everything we like, a philosopher, prolific writer and journalist, but also when engaged intellectual who should during world war ii and the man who was never afraid to go to when expressing his views. remember his major works such as the intellectuals. that missile on the french intelligentsia. the critical essay he wrote on the u.s. compare the republic denies a

the words may take 45-1973. also a sociology professor where he himself became a professor in september 2015. i want to use this opportunity to say a few words about this extraordinary organized institution funded 1513 under king francis at first. it is still in paris and one particular aspect they want to underline here is that it does not grant degrees. everyone can attend mike shares some of of the worst best professors. professors i like good. french it teaches everything. if you don't live in paris which i suspect is the case for most of you, i had a wreck and then

you go online and watch some of the hundred podcasts available on itunes and french, english and chinese. you can watch at home. you can watch -- just across the atlantic to address the subjects of inclusiveness in the united states and europe. the subjects that we at the center on the united states and europe part of foreign policy run by bruce here is highly relevant at this very critical moment. let me also say that we are very fortunate to have with us, dr. heather boushey, chief economist at the teen center. have they received her phd in economics from the new school for social research and became an economist with the center for economic and policy research and the economic policy institute

but the economic committee. her research focuses on economic inequality specifically employment, social policy and family economic well-being. her latest book, finding time, the economics of word like conflicts published by harvard press earlier this year. that may now well come professor aghion for his lecture. [applause] >> it's great to be here. thanks so much for inviting me. way too generous in the introductory world. thank you. i would like to start with a following quote. so here i have like me now.

so, in french, it is only -- audio mac i tried to translate it. i translated something like this. i don't know which history they are writing. the economic history we did not participate the financial crisis, that we did not anticipate either via fax to the revolution and we will not let it prepared to deal with some negative secondary effects increasing equality and populism we see now. so the question, how can you make growth and innovation that

growth more inclusive? i would try to also say a few things on what can europe learn from the u.s. and vice versa? what can we learn from each other's experience on how to make gross moral includes as and divide the staff, you know, the rise of populism that we see now. so i of course i would never dare to compare myself to him. we are told french jewish. another we have in common is i discovered -- that i didn't know that. shame on me. i also studied marx allowed. in fact, we would have made the following court which is to say

marx is too good to be left to the mark says. but in fact not by myself, who we are here. in fact, if you do that, you find it's true we can see how he initiated a lot from volume three, the fourth part. i could go on and on, but i won't do that. okay, so what i died over the past years with my colleague but of course to develop his theory on some ideas. it was due -- a model with only

two equations to describe everything. but it was to say you cannot just relay on capital accumulation to grow forever. you ran out of steam. so to explain to us that we could not have long-run growth if we don't have our grass. the model would not explain where technical progress comes from. so you need to find something else, that there is no such model. in fact, it would be very interesting ideas, but it is no novel and no empirical analysis. so we took some ideas and say to be the model around those ideas and see how we can dialogue to learn something about the growth

process. so the model now people call -- it revolves around three ideas. it is driven by innovation. so the second idea is innovation research from entrepreneurial activity motivated by the prospect of innovation, but they are not the institutions and policy impact on growth because they are a fact game the enemy tonight committees. if i am in a country where i am expropriated, i will not do innovation because i know from innovation expropriated, i will not engage because i ago will be expropriated, so the policies

and institutions save the growth process because they impact the fantastic renovated. the second sense in that the institutions of growth and the institution -- the third center is structured, new innovation. they displace technologies. that's a very important sentence because it means growth is a process between the old and the new. so you can talk about the political growth. that would be very important when i talk about inclusiveness. the innovators of yesterday 10 to be a common set today to try to prevent new innovators from coming in. so you need to have a system that at the same time but not to

the extent the animator could use their right to prevent sequence innovation and that is the kind of second problem with innovation. some countries are better than others at dealing with this dilemma. the political economy of growth. it is entirely based on these here they are countries that do well with it. they are inclusive. so that's the introduction. that's the remark reviews. with the framework, we can talk about any amount of growth. i will go into europe and learn from each other. so it is the growth in the back. i do not e-mail of course i talk

about middle income trap, he looked at m.i.t., which is not aired. but we don't see anybody -- okay. so they are friends and competitors. so you have to understand, and this is the per capita gdp of argentina with that of the u.s. you can see between 1870 and team 30, argentina was 0.4 as the gdp of the u.s. after 1930, they grow less than the u.s. so that the country that starts doing well. when they are middle income, they stopped doing that well.

china is now obsessed by the same problem. they say we grew fast. and now we don't know if we could go through innovating so much. they want to make sure the argentina scenario. so the way to explain that is to say you have two ways to generate productivity growth. one is to get with the leading match, catch a with the technology front and another one is to innovate upon yourselves. and i had country like china was in the late 70s, you want to catch a good that's the main source of growth. you need mostly innovative than yourself. and it turns out that what makes you catch up our different policies than those they use innovating from sierra.

it is no big deal to have limited competition on the product market. you have a big firm and may catch up with security. it's no big deal not to labor market activity because you are not the same people. it is no big deal because you've made primary, secondary. it's no big enough to pick up a financing. you cannot expect government. bennett's importance of competition. you need also a fixable market because he need to be able to higher quickly and you need to have good graduate schools. 128 is close to m.i.t. and harvard. so an equity finance being committed venture capital, private equity to find out anything about takings.

the policies are not just bad enhance innovation. as i said, if you want to enhance productivity growth, you want to invest in higher education. this represents the effect on growth of higher entry raised on u.k. firms. abu affirms that the firms on bam, more competition induces them to innovate to escape the competition. but when you are a bad firm, you are like even the sector. you are already discouraged by the leader and more competition. so we can see right away that competition to enhance innovation for those already doing what tends to discourage innovation and they get behind. of course the more advanced the country is, the more you have blue firms compared to bathrooms

hit the market in the country as, the more likely it is to liberalize the market, to have more that less competition. that's an example for the labor market and for higher education. so if you are an emerging market economy, what she wants is essentially like china did, they relocated fact reproduction with management practices. here is a diagram to my grand that sure is the management where they have very good management skills in germany, sweden. and then you see latin america and then you see management and

the idea is when you are a country, you can improve to your management is. the important thing is that we explain the middle income trap in a very simple way. countries that started to grow because they were catching a bit of the problem is at the moment they should have switched to policies that favor the innovation, but they didn't because you have taken, and interests. you have the big firms that grew during the catching up. of korea. those who tend to say no, we don't want more competition because we are there. and japan you have these grow very big during the catching up. and they somehow slow down the transition to clear immigration.

so that is something you'd explain to middle income and high in him. that mixing the transition from imitation-based innovation based their data center that the eye. france is facing the same problem. we were very good, catch a nap. we have institutions, but now the problem of francis to have institution and a more innovation-based economy and we are dragging it out and making the transition. the second enigma is on tech nation. so in accordance via this to say about, in fact -- [inaudible] b.c. at the labor policy in the

u.s. and then you have the second way of a good chemistry and then you have a way of -- [inaudible] and meca gets smaller. so rather you think that the innovations, which we call the securities are fruit on the tree. and then you climb higher to try to get other fruit in the first to get her not so good. you see what they mean? you believe that innovation are like for it. the best ones are the ones you get first and then they become worse and worse. so in 1920 with an english revolution and essentially now if thomas finished we have to agree that if it did then can we be no more.

i disagree with the issue for several reasons that the oneness the idea that the revolution not only changed the technology to produce goods and services, and also change the technology to produce ideas. .. >> we know that on the last scale we do all we can.

we would like to see the day where maybe i can do three different things and then i realized i can reduce mine with a new one or whatever . but obviously that's something that as i say it would be part of a revolution on housing and part of the revolution and how can we believe this is it for innovation? the thing is when the new big innovation will happen but it will happen. you can't know exactly when it would happen. the second objection is the growth and doing some work with economies and thinking again of leadingempirical growth . so i make a big adjustment with this and what we do is to say the point is we don't knowhow to measure rule . you see the problem is that

we know the value in dollars, you can compare dollars to dollars but the problem is that inflation and real growth and we don't know how much inflation and how much real growth, do you see what i mean? when we see growth, it's worth more than yesterday, we don't know how much was due to inflation and how much was adjustment so yesterday and today we know inflation and that it's slightly improved, we know by how much it's improved but when you have a product, you have a new product that replaces an old product, you don't know. and once again what that does, most of the time you see two inflations. and when you infuse the growth and you say, i think

it was done by the english people, the chinese and you put this into extrapolation in the euro for the us but one or the other you essentially use existing to infer what the new would bring to the old, do you see what i mean? because of that, we distinctly know that you are missing one such point of productivity growth. they say gdp growth is 1.5 in the us, it grows to 2.5 so i don't call that stagnation. in france, economists consider that good news in france. zero percent , they mean that they believe you can arrive half way but i would not call that stagnation . there's a third argument with his europe, europe we have

the advantages of all these drawbacks, we are far beyond these many countries in europe have not got their act together and look at sweden. sweden was growing at zero percent for a year, that's just the gdp of sweden and after the revolt in the early 90s, the measure grew so japan's growth is slowing down. that's a mirror of sweden, do you see that? and the netherlands, they did big reforms in the early 80s, they multiplied by three the gdp growth. canada, i know that's not in europe but they multiplied by almost for that year of gdp growth. almost 5 gdp growth rates by reforming, i see what you

mean by reforms. by doing structural reforms you can freeze growth. one thing we see is that they didit by preserving the social model . you see how you havegrowth , in sweden you have to do this but then you bring education sometimes free and you have activities of active policy and productivity rates are very low and mobility has not gone down in sweden so that's a very good thing but if you manage to do that, by not reducing social mobility and preserving, you have access to publicservices so that's what i call growth . so that is my second enigma. my third enigma is innovation, inequality and social mobility. that's where my friends, i see the gdp says and that shows the evolution of the share of income earned by the top one percent in the us and what you see is that since

the early 1990s it has gone up and rising sharply. the top 0.1 economy. then we go to greece and in the evolution of this country it's sharply. the question is why are you inflating and that's where we are not in agreement. one thing i want to talk about is this figure. this is joining the share of income so again i show the direction, the equal share of income, you see an acceleration in the increase of the shared income but the breaker is the fourth income. that side as i said the rate is no proof of community.

i show the two together because it does not show convergence but this man was heading the institute of studies in england, in london and he's one of the leading microeconomic researchers in the world . he is a winner of the nobel prize so he knows what economy is about so in joint work with him we showed innovation in the two top economies, why it is innovation should increase because you make friends when you innovate, with that data i just showed that we are looking and following income innovation. and you whether you go to europe in the hq, you are moving into the top income bracket. but that's the thing, the

recent skype did not in exist 20 years ago and that's what happened. facebook also raises income inequality but it is different from other sources so it's different in france to believe that innovation does not exist and that the only result of income is you have to be imaginary booze day, you have a hoteland equality and income coverage . that's not true and because why is innovation different from other sorts of income inequality? income generates growth area second, we can show and that's what we do in this paper, we show that innovation, the increase of any quality, we show the increase from innovation into incomeequality but we show

that innovation , i told you that the new replaces the old and innovation, increases social mobility and the third thing is the social mobility, innovation does not increase innovation and we show that on us data so we look for our state of the us for some years and we look either by any quality or challenges from other measures of inequality, that's measured by the total volume of that state and we showed that because i asked. [inaudible] there and then there on that scale and then when you have here, you have a real innovation flow and

friends is the corresponding share in these states and what you can show is that using these instrumental varieties you show the more innovationyou are , they will either close that gap between innovation and share of the stock, okay? but on the other hand the breaker shows the key 99, the gdp of low inequality. that shows how far you are from perfect inequality. and you see that there is no effect of innovation on the growth so it's true that innovation increases income inequality but it does not increase any quality at home. this is data from chicago they've done that on this data and they found on each

of these it's a very robust finding. so that's the thing. now mobility, i have innovation on the original text that says social mobility which i measure, that's reaches the income of the children is not correlated with income of the parents by is a measure of social mobility that the child may lead on that other side but you have measures of income mobility and to do that they look at social mobility and i do the analysis on this and i saw the community with more innovation are also the communities of social mobility and that is mainly driven by innovation by new products,not my old . so that's the thing i think because that's what i call slim, in mexico we might have

an innovator in his youth but i know i was married with a mexican, in mexico it was supposed to be 10 times more, that's the reason why. but no, i promise you, that's the source of topincome . value has the honor of life regulation or not regulated, and by the monopoly, that's the way to make money. but it's not the same thing and so we look in the same data at the effect of lobbying on income inequality and we saw that lobbying is used by productivity because you can erect these barriers, that's what you do. that's not true. but also we showed that

lobbying increases income inequality,but the decreasing inequality , it reduces so that those are two sources of top income blocking on the one hand and innovation on the other hand, both being used for the top income but they don't have the same effect on community and brought inequality so that system does not reduce the same way. that's my difference with ed and others, in your world you only have that and it does not exist for them. so when they think of taxation, taxation does not exist so you need to, in friedman, in the early 90s they used to have a tech in france that you have today that you don't have and what you have , they remained distributive and it allowed them to finance station heads

and everything but at the same time they were more conducive of innovation and that you see, that's where i think the very problem is. now i come to conclusions and it's a little bit worried but still you do it in a very subtle way. you don't even blush. so inclusive groups, what can the us and europe do to start? what can europe learn from the us? the first thing we do is that we know europe and the economy, following the crisis us market was europe not. so europe has not recovered growth . the first type of reason was given by my friend and he

said it's true that these qualities following the crisis in the us was not great because what they did in europe was, what they did in the us is true, but at the same time they did it in a way with accommodating military and they did not go back on growth for recession so a bigger recession, but they did arise in a way that the united states system was for vigorous improvement but later on they reduced it and now they only say something about interest rates whereas europe, this was very different. very early they didn't deal right away with the banking problem and what they did, they very quickly said no, we have a crisis and we have to deal with the budget issue so

they imposed in 2011 a very tough budgetary rule which in france, to already increase tax dollars and allow the tax server, i can tell you that it was already started in 2011 with a knife at their throats, they had to do it and later they dealt with the backdoor problem with the subset of banks and all that so europe, consequently was as protected as the us but i will get back to that. also there are the reasons that the us was the top economy, you had labor and markets than we have in france and in american countries and the third thing is you had economic policies. europe dries into it later.

the us is much more, the american economy has to accommodate and so somehow they are flexible markets in europe and we don't have decal and monetary policy as you have in the us. and we know that in fact i'm doing work now showing the very complementary immunity between on the one hand structural reforms at the labor market and on the other hand macro policies in terms of that we have spoken this way but if you look at the growth of monetary policy what you learn is the trade following the recession is at these levels and you look at the effect it has on the growth of ours, you can see the growth of facts are much bigger in systems that are more liberalized. this very thing, france over

the past year we had low interest rates. we had low euro and we had low price per volume. we have grown very fast and you can have very rigid markets. you can have all the macroeconomic policy you want . in that respect, it's the price that where the solution is to have a more macroeconomic policy in europe and it's a different structure, utilizing a different structure or whatever and both are complementary and you have those in the us much more than you have ineurope and it's interesting to understand , i think it's a product of trust. the germans don't trust the french are right in any significant reform. but we do get germany, you

remain strong from macroeconomic policy and the labor market and we are now standing on both in for growth and you have new growth in germany and europe saying we do these securities in the economy but because we do that, europe is far more innovative and economic policy. i think this way, both together or good. what can the us learn from northern europe to mark versus that trade is good, don't go against nafta. don't try to restrict trade because we know single or markets are good for innovation. we've learned that at all, we saw the enormous effect that the market had to break this thing. if you only knew that in all these prospects, in the uk but for any european economy, it stubs innovation because

it's not trade, trade is the labormarket for innovation because the market , they trade in competition and that reprocessing section for innovation and for that reason trade is good for innovation so that a place of concern , don't try to break up the multilateral agreements against trade. trade is good for growth and it's true thattrade and inequality, they go through the same quarters . that growth and deal with any quality that creates and have systems to deal with that but don't pronounce your growth and trade just because of inequality. that brings us to the community, we know from the speaker we you need education, who will vote, i vote for france.

beyond education, you need to educate people. very important. have them be part of the innovation process. it's also important that in france they should know that you should not only reimburse the people first but you should also reimburse that but you have critical bronchitis so you have productivity go down. it's not productive if you have a whole range of things that make you have imagined innovation. we are investing in human capital as much as you invest in education. it's very important . and it's very important in the labormarkets . the economists have understood that if you take someone who becomes unemployed, you will have general unemployment and that's bad over all training and we will help you find a

new job. not only does it create a good safety net that people feel it's not drama to become unemployed and they can manage the structure it makes a great construction process much more addition so it's good for both including this because everybody sees and feels part of the economy, they don't get out of the system. you know that people retrain and rebalance at jobs and that's very good, it makes the person much more efficient so just to think, that's based on the work on social mobility. they looked at social mobility across the zones in the us and on the original access, you have this cause and on the vertical access you have a problem the extent to which the side of income on both sides, we have more education, greater test, that makes you for mobility but it's interesting this way that shows here i have an

investmentmeasure . i have the different growth between the size of the region and the size of the poor and on the original access, i have job creation and destruction. it's a measure of market forces in economics and community and again, showing the data of the last few years you can see that whereas you have more market turnover, you also have more social mobility so there's more social mobility for income provided the hope of income growth because we know that innovation growth is education, you have higher education, both labor and product markets. who has more social mobility, if you do the labor market flexibility the way they do, we have serious retraining, general unemployment and

deport find a job so there is more job markets to improve , and everybody can feel part of the process and nobody is let down, then you can reconcile and people will not be afraid of globalization, they will not be afraid of miniaturization and they will go into the 21st century because they know they are not left out area in conclusion is that inclusive growth is the best indication of populism, europe should innovate the us and structure and reform with corporation, that's a french german fact at work. the us can contribute in northern europe in making more growth, learned your lesson from exit and, for the way to say it's good to push innovation does not discourage innovation but make growth more inclusive. and nearly 200 years ago in

his book on democracy in america , i cannot help feeling that men may reach a point where they look on every new theory as a venture , on any new innovation as a system from trouble, on any social advancement as a subset to revolution and that they may refuse to move at all for fear of being carried off theirfeet . i hope the lessons in the us can learn from each other's experience will contribute to the first adventure by showing the way and sustainable growth, thank you very much. [applause] okay.

>> so thank you for your engaging discussion. i will not even attempt to be as witty or wave my hands around as much as you did. maybe i will because i've been inspired, i've got to admit so thank you. i also fear that i may be a little less optimistic. i've been trying to get out of my dour mood for likeeight weeks now . and i think that a lot of my talk today reflects that. my sense is what we are seeing from the united states is not a country or a population that is involved in a creative destructive process because people feel like they'rebeing left behind and their communities are part of what's being destroyed . so not to started off on a downer but i think that's a

lot of, as i was listening i was realizing that my remarks were moving in quite a different direction . there's one statistic that i come back to time and time again since the election that's sticking with me. i'm struggling and a lot of us should be thinking about it but i'm thinking about it a lot which is that hillary clinton one in the communities that, remember what the eunice of analysis was but in placeswhere economic, where the economy was growing and donald trump one in places where it was not . and when we think about the economy and what we are supposed to be doing as economists and in terms of economic policy, the biggest most important thing to most people out there in that state is that the economy provides them with a good job and a job that allows them to have affordable housing care. this is a part of the american dream, right? the idea that you're going to leave your children better than you do and all of this

is incumbent on that good job . for too many people in the united states even though we have fairly strong growth, even though we have low employment, as many people where willing to meet those objectives and those who are poor, i know there's been a lot of discussion that they voted for trump were poor but there is this sense that part of what is happening in terms of our economy and why we need inclusive growth is that we are not doing as well as we need to be doing good. i'm going to lay out a few comments and hopefully a dialogue and hopefully we can have an interesting conversation. let's feel like we can bump up the energy in the room, i will do that just every hour so i have two things that i want to start my remarks with , the first, and were going to put a lot of rush in the first comes from roche eddie from research that was released last week where

we've been looking at absolute income mobility, the probability that your child does better than you or better than your parents and what they found looking back in 1940 is that there's been a sharp decline in economic mobility. it's been a downward slope in the unitedstates postwar era. let me give you two numbers. in 1940, 92 percent earned more than their parents . for children born in 1880, only half, 60 percent actually earned more than their parents. that is a remarkable decline in what most think is a fundamental tenet is america which is that we are going to be better generation after generation, it's simply not true and it's limited in some being more not true than others, people in the middle class, living in the rust belt are the ones who've experienced the largest

decline in the likelihood of their children were earning more than their parents so that seems like an important thing that we need to be thinking about as we try to have an inclusive economy. what's behind this mobility? the estimate, they find that what's behind the lower mobility is the prior inequality and the unequal distribution of economic growth. theyfind that higher growth alone is not going to solve the problem . and that the bigger issue is actually today's high inequality. even if some of those i waited people are earning are because they are extremely talented and innovation did, there's something pernicious going on in terms of level of the inequality in the united states affecting overall mobility. this connection between how well the economy delivers for families and economic growth is i think at the heart of economics or should be and it's of course one that's been reverberating through

our politics and for a long time, economists and policymakers that we advise have believed that if the economy grows, the gains will be distributed across society and what we now know is that's really not going to happen. we used believe the research that was done in the middle of the 20th century who postulated that as the economy grew, there would be this series where you have tightened inequality but then that would dissipate and after reaching a certain level of development and things are unequal, we didn't really need to worry about inequality and perhaps inequality was for a good cause, that's one thing i take from your lecture in some ways. yet we know that i think this data causes us to bring into question, we need to rethink the dynamics between inequality and growth. there's one science i want to elevate from a week or two ago.

this is by thomas emanuel and his colleague gabriel sussman who combined data from a variety of sources . to build a new series on the distribution of national income . so picture gdp growth data that comes out every quarter, we know what's going on with the economy. they've done that information, the information on what's happening across the board so you can account for all the incomes. their data shows that the bottom half of the income fusion in the united states has been completely, completely shut out from economic growth. it is spiking. from 1980 to 2014, average national income in the united states went up by 60 percent, the average income of the bottom 50 percent after we adjust for inflation grew by one percent. in contrast, income skyrocket in the top 20 percent for the top 10 percent 205 percent

from the top one percent, 636 for the top .001 percent. it sounds like a lot of numbers so i hope you remember all that but income is rising very much at the top. odp are doing similar analysis and this way of looking at growth is one thing that i hope policymakers start considering in a few years, adding this to our national economic statistics. it makes me concerned that we are moving in the opposite direction when you talk about election data . one thing that president-elect trump has talked about on twitter is his need for the work that does and so i have a lot of concern about the measurements we are going to be having for these kind of issues today so if we move in a different direction, adding information on income distribution to our national income data would be a good place to start. so these two new findings i think require that we focus

new attention on what we know about the optimal growth path and thinking about, looking deeper at the purpose and goal of inequality in our economy's society. a key question i think we have to answer is do we need inequality for an economy to grow? including why there might be some good things about inequality, or focus at the top or innovation. a lot of us have mechanisms that we can pinpoint economic research that show the story isn't that simple. that the kind of skyrocketing inequality we have in the united states is curtailing the ability of families to have their children do better than they do and it killing our ability to have strong economic growth. but the one thing i think about is the mechanism through which inequality can affect an economy in our society and there's a big question. consumption, human capital, entrepreneurship can affect all this and i'll pause on it

at the end so let me take you through the first phase, starting with the macro view. you'll have to pardon me, i'm getting over a bit of a cold. let's deal with the macro view. many economists believe the united states is experiencing secular stagnation, the new research by matthew rodney find that the increase of inequality plays a role in this macro story, presenting an aggregate economic growth in the short term and eventually the long run. in the short run, its risk assumption, economic output and in the long run it can lead to stagnation because investments never rise to that desired saving. but there's another story in terms of distribution of debt. so one of the books that i think is so important in the past few years is one by anomie or sufi whose shows that a rapid increase in debt is responsible for the financial process in the early off but the distribution of household

debt amplified the collapse consumption flowing from the bursting of the housing bubble and that exacerbated and extended the great recession to slow the eventual recovery so inequality and wealth inequality added to the kinds of credit that family finances do and it had a direct effect on economic stability. a couple of microeconomic factors along the lines of how wealth inequality is viewed to economic growth, geologist sean riordan showed that the children in the middle class has exploded for the past 30 years, he exhibited that to rising income inequality and a stronger income in educational outcomes with each trend about equally responsible. that's really important. it's how much your parents make matters just as much as what you actually learn in school, that says something

about the effect of inequality on our society. that effect has potential for people who grew up to become entrepreneurs, what do they feel about the united states is traditionally most of ours have come from a class, they haven't been poor and they haven't been very rich and maybe there's a little bit of that, if you're in the middle class you have that with a house that you could start a business in the garage or you have health insurance, you have that economic ability to do something that you got that desire to make something of yourself and you don't have everything handed on a platter. one of the things we know is that rising inequality is the potential for young people to grow up and be entrepreneurs has been declining. the rush brothers did interesting research showing a trace school children, look at their test scores when they were little kids in school and looked at the probability that they got later on in life and the children under those high scores were from low income families and maybe i'm saying this slightly wrong, that it

wasn't the test scores of the children in third grade that predicted whether or not they got, it was also the income of their parents read the smart kids from poor families not growing up to be those innovators don't have the same opportunities. there's an enormous cost of wealth and talent in our society. so let me move along here. finally, most important i think to our conversation today, is what we are thinking about in terms of inclusive growth with the united states moving forward is the effect of inequality in our institutions. i think as economists lofton we tend to forget about the importance of institutions and norms and think about the messy reality of some. we've been looking a lot at the political side at scientists who are looking at the implications of inequality on democratic accountability. for example, work by bartel and marty gallons, say if the

united states, the likelihood that legislation becomes law is highly correlated with the wealthiest support of that legislation. so a policy preference that those at the top aligned with the rest of society but if it doesn't in their findings, it doesn't happen. that's a problem because it means that that poses enormous challenges both for our democracy and for the ideas bubbling up at the top because it's conversations we have here are broken in how they are being influenced. this inequality in our institutions goes far beyond the extent of retail politics. we need to think about how one of the things we've seen over the past month is that we've known for decades that americans have had a decreasing stock in government. we've seen how this is played out this election cycle and i have a lot of questions about how this is going to look moving forward in the next

administration and scholars have concerns about the high levels of inequality to erode social bonds and norms. so these challenges through which inequality affects economic instability not only is rowing and equally distributed but that in itself could be the depressing future growth and depressing middle and working-class lives even further so what do you do? what might be possible in the current political climate? we have a few ideas. i think on the whole, we've tended as economists, we tended to think about post market gaps, addressing after , using the tax and transpacific distribution rather than thinking about what we do or we did to those market incomes but i want to give a few ideas that what i might call pre-distribution, focusing on the free-market outcome.

so i want to focus on three areas, thinking about how we look at inequality and growth not just at the bottom or the top but looking at all three, what are things we could do at the bottom and middle mark and each of them i'll make a few comments on what i think about the politics. first, i thinkit's important that we start by thinking about talking about raising the bargaining power of labor , increasing access to bargaining and it's something that we've lost in this country and i know it's something that bruce has written about in his writing as well. labor weather by increasing it or by mandating worker representation, is decision-making in some way would help to ensure that people have a voice at the table. i'm under no delusion that this congress is a huge fan of labor rights but i do think that we see that at the forefront of our thinking, especially thinking about the implications of this labor law and what it means for people to be able to learn a decent wage is an important thing to keep on our minds.

people at the bottom tend to be very focused on things we can do to increase wages, the minimum wage has not been increased in hundreds of years and the pacific powers of course are in decline. but even in the 2016 election had four states, all arizona, colorado and washington path about measures that would raise the minimum wage by 2020, this is not the first election in recent years you saw at the federal ticket level the election going to a republican that had a ballot admission on people of the state voting for raising the minimum wage, there's an important message there for how people in this community are thinking about what's good for their economy. we also need to think about how we can make sure that there are policies that help people get to work and stay at work. we need policies that help caregivers manage their responsibilities, things like

paid sick days. during the presidential campaign, donald trump's daughter encouraged her father to focus on paid maternity leave which was quite exciting for those who had been thinking about this for some time and i've heard through the grapevine that she wants to make this one of the president-elect's top 100 day priorities. i'm not sure if that's going to happen, i don't know how much power she will have, i don't know if we will see that but knowing what we know about family instability, injuring those of us that care for a loved one are included in that policy as a top priority also is an important ground map and the evidence of what we know for the states that have this policy and what we can learn from the evidence. these are the top, we need to talk about tax policy in the united states that encourages investment and discourages rent seeking. conventional logic in the united states is that higher taxes on the wealthy will discourage them from investment. however researchers have been finding things very different

area i point to work by thomas beckett and this time with their calling stephanie sanchez find that a large share of the top in the united states is not about productivity enhancing, meaning those actions for the very rich are discouraging growth. encouraging people to engage in tax avoidance like wanting their money overseas or paying a lot of lawyers which is a lot of creative destruction, growth enhancing thing . the pay lawyers encourage you to figure out ways to avoid taxes but they are using their high earnings to pay themselves more and electing structures of the us corporate boards. i'm under no delusion that this current congress and administration are moving in this direction, in fact they said one of their priorities is not only to not raise taxes but to further lower taxes enormously for the top of the income spectrum and do things like eliminate the estate gets tax but if they actually care about the

economy, i strongly encourage people on both sides of the aisle to take a look at the research and try to understand what it is that low taxes at the very top are actually doing for our economy, investments and our economy. so i wanted to just close with a couple more remarks and then i will stop. so as an economist, i think we tend to be heavily invested in models of how the economy works, that's what we do for a living and the messiness of the real world and how economic incomes reshape institutions that set the rules for our market works, how government works and low institutions, community work, that's not what our discipline does, it's not always how it's defined so it's exciting to study about that and i point also to why nations fail and james robinson's book that tries to do this. but i think in many of the economic trends that i highlighted and this recent

election should push us as economists to get a better understanding of the role of institutions and how this affects how inequality affects themand how that in turn affects economic growth and instability . one thing is that while our model, we can compensate losers in the economy. we can say that we have a trade deal that is good overall for the economy and promotes growth and are candidates going to be good for the united states but some communities are devastated by it, we think you can compensate those folks. you can give them money or get them retraining but the hard part is that that doesn't actually happen in the real world. those families are compensated to the extent of what they've lost. i was at an event in north carolina a number of years ago where this man stood up and talked about how his job had been lost in his community made something or

other and he got some retraining and he was psyched about that but whatever he had gotten retrained for, that job was also leaving his community and what he was worried about was not just himself because he could move but he was more worried about the community that he lived in and all the other people that were there. and i think we have nearly enough time understanding the massive dislocation that millions of people in america feel from the kind of economic growth that we've seen. it's one thing to say we can give people a couple thousand dollars in trade adjustments and give them unemployment insurance but that doesn't rebuild their communities, it just creates economic vitality so the only alternative i just moved and that's what a lot of the best and brightest and young people do in those communities and that leaves a lot of people without that talent and vitality and super frustrated. i think we have to take more seriously what does inclusive growth mean aftermarket what

does inequality mean and how do we actually in the real world, not in our imaginations, not in our model but how are we going to deal with the consequences of some communities benefiting from economic growth and others not. [applause] >> philly? i think we've learned a number of things. first of all, it is apparently possible to get an aerobic exercise with while doing an economic lecture and there's a lot of talk about how think tank people are getting obese because we don't get enough exercise and so philly, i want to commend you, you've been a role model for all of us. i'm reminded that you can

always building these things down to a few simple observation is that we in america want all the good parts of the european economy and none of the bad parts and europeans similarly like all the good parts of the american economy and none of the bad parts. the third thing is which i'm curious, i have to be in all of the work that brad jenny has done but phillipe, were going to havea short discussion . and i'll leave time for a few questions at the end but phillipe, i want to start with something heather said which is basically, she argued that the amount of inequality we have in the united states is now an impediment to the kind of growth that you wouldlike to see . quite absolutely. i think the problem is i think france for example and the us don't have the same starting point. you probably should relate the minimum-wage problem, you should raise buying power and

communication and probably you should raise the tax rate, do you see what i mean? in france we have a similar situation because europe, people have 104 people contacted in income. and maximal marginal tax rates together can become extremely high. and that prevented the growth and you get more social mobility in france than you have in neighboring countries and the minimum-wage is another thing you mentioned, i'm sure you need to raise the minimum wage. in france the minimum wage has gone up faster and the problem is that if you were to draw the curve, where you have access to minimum wage and on the other end social mobility, you would get au

because on the seventh level of the minimum-wage it discourages hiring in a much more durable labor market and to renew social mobility so you need other instruments as well other than minimum wage. minimum income, you have other instruments to complete the minimum-wage when it reaches a certain level so we have seen all those things. i agree that you mentioned education, of course that would compareto freedom and economy , but you didn't mention how we did very interesting work that the gap has gone up, the unaffordable attrition, that has exacerbated the increase in wage inequality in the us, of course we have that where education is frequent so you have it inequality and you

agree that an impediment? >> i think it is. i think because you make even the quick obstruction, it comes to a point where mobility is there. >> let me ask you, you've made a pretty compelling case between focusing too much on reducing inequality, we may have a more equal society but we will lose some of the growth that we have more goods and services to share. but you also said pretty much thethings we ought to do to reduce inequality, are you concerned , wouldn't we be better off if we had both more inclusive and moregrowth ? and are we going to get more growth if that is our only priority? >> yes, i think it would be great to have both and i think, it's a matter of degrees, right? you need a little bit it inequality but if you have too much inequality, it's

very much a bad thing in here in the united states, we seem to have tipped over the edge where you have less economic stability and you have this high inequality and a lot of the high incomes are about more seeking than they are about innovation. >> wouldn't we be better off with a fractured interest rate even if we didn't have less inequality? >> i take very seriously the new data that was just released, i do not think is it it is acceptable that the united states growing per capita at 61 percent between 1980 and 2014 and the bottom 50 percent getting one percent of that. why do we have growth then? what's the point? isn't the point this kind of economy so that people can ... >> when we talk about economy we need to be clear what we talk about. there are measures of inequality and again we

mentioned ray france, michael en and i, thank you very much. this is a top measure of inequality, one is growth inequality. the ratio of the 90th percentile or the seventh. in a world inequality, broad-spectrum inequality but this is a share of income of the governors. and then you have a small dynamic measure of the quality which is social mobility. they have relationships between them. we know that if it's not enough social mobility, you tend to have brought any quality. you can find it on cross-country immigration. what's less surprising is the area in the us where there is most social mobility and less productivity, you have a higher share of income of the top one percent. it's an interesting example from sonia or the rest

compared to social mobility. more social mobility in these areas, but also the share of the top income is higher. so when you talk about any quality i think we need to be clear which one am i concerned about? am i concerned about the very rich? i've only got this as i say in france, they are not the problem. there's a problem of reform means post growth and it's not reducing social mobility. i think this might be reduce income inequality, the only worry i have with income inequality is the guy who has the income may use it to prevent social innovation and then we are going to that and you see the progress in taxation, that competition of inequality and other things for example they decided the supreme court in the us that finance companies have no limits.

this of course gets the head of the court. >> you made a very appealing point in your presentation that didn't penalize these jobs or other innovators but it penalized from ca's that would make it less likely to have incomes on people who are capitalizing so how does that work? >> you can do it. first of all you contacts real estate for example and that's what you would have four other things. >> i'm saying your ability and inability in a trunk ... >> trump would not like it. this is designing of thehuman system . >> this huge volume in the review and i would not pretend to do a modest review in one section but i would say there are ways in which you can, or you have income

tax credit. you may have ways that you can distinguish policy from steve jobs. by the way, i worked with stephanie and we do a lot of work on tax innovation but she worked with me as well. they did a paper that you may know on mobility of research and it came out recently maybe a year , and they showed that the maximum tax rates as an effect on mobility so be careful but beware for example, when in sweden, the maximum amount we show that 90 percent lowered it to 57 and they couldn't get seven income tax at the rate. innovation pushed it and they did it in a way that made it

a social model so i think you see, i want to look at that study because there's a new narrative matter there. the us increases with the marginal tax rates, on innovation but if you go directly from where you are to where a person was before 1990, and that you would have the effect there. >> you want to respond to any of the things he said? >>yes, just one. >> please don't respond to all of them . >> i think that yes, i've seen that study. where we are in the united states but lower marginal take away and cost, i think you always have a balance in the reality of where we are now which yes, do you say that it's 40 percent per capitaand if you go that high , does that mean you would not want to go from where we

are to hear but that doesn't change the fact that you could increase the cycle at the top and you could all be so be speaking to your question stephenabout how you could conceive of a tax code rewarding innovation . there are a lot of tax codes that don't reward innovation so you can start by trying to give back, thinking about property, thinking about estate taxes which are really about social mobility. there's something that the united states did first in the developed world of putting together those parts of the early part of the 20th century and it was completely reverse that they are called now to eliminate state estate tax altogether, that is not a recipe for innovation, that's a recipe for allowing a smaller number of american families to have wealth in perpetuity.>> let me ask you a question, so it seems to me asking economists to talk about politics is always somewhere between dangerous

and foolish but if you had a wonderful line that you said that inclusive growth is a great effect against hospitality but another way to look at it is that it's a recipe for more redistribution and more innovation and less rate, more competition, all that seems to be very unseemly but creative destruction is not very welcome if you are the one who's being destroyed. it does not seem to be politically popular in a democracy . in any of these forms are of you are talking about. no one could be against more innovation and a greater distribution of the prosperity that innovation brings. >>

these are things that americans want. they voted, there was one candidate who had an increase in growth policy agenda and it was donald trump, and americans, most people voted for her but donald trump one. i think your question is apt and don't think all of us are not thinking about that. i don't have a good answer but i do think, yeah spin a i think, i won't say germany or but but ik there have various things. everybody goes to very good

school. in finland, again, interesting work. on the quality of teacher, in finland to be a teacher primary, secondary, whatever. you. you need to go to high school. then five years at university anand in 18 months of training s a teacher. anybody, they invest enormous amounts and very well in education. you have very good allocation for everybody, high education. then have labor market whether e return. you have a retraining system that works. you have this security system but you have this basic education where you learn how to learn. on top of that you put a very good system where when you lose your job, you get 90% of of your salary.

you get very well retrained. you have a good retraining system. you are always in contract with someone. then you leave the thing for differently. >> you've had a conservative government and yet that a socialist government and -- >> and france. don't listen to anything they've said. they screwed up. [laughter] >> you think that -- >> no, no. they didn't do it. they didn't try to do it. but why they did it, has to be said an active market policies. spirit you say you can sell those two voters? >> my hope is we can sell those two voters spirit one final question and then i want to go to the audience. neither of you mentioned the word immigration once. is immigration a good way to get innovation to and monopolies? is it a good way to spread, to

move the production possibility frontiers to spread productivity from one country to another? is that a good way to reduce inequality, or is it not? >> at all depends on how you do it. i think it can be both. it depends on come in this country of a lot of people who are here who don't have the right to work which then makes it impossible for them to have good jobs or that they are not secure in the right as workers. labor laws are not necessar necy enforced in those cases. so that then does then pull apart inequality, but we know when communities have influxes of immigrants, it's growth enhancing. they bring a lot of new ideas and i can be a really good think we know there are a lot of people with talent all over the world who would like to go to different places. it's how you dea do with the dislocation and it's how you do the rules of whether someone can actually work. if you're going to let them work and it seems like a growth announcing thing but if you're not, slow things down. >> ivory much agree.

you say no immigration, a simple example, japan. one big problem they have is to have an aging population. when you have an aging population it makes it less top to innovate. immigration brings you new blood, new ideas. if you, you look in france, for example, the big syllabus of friends, many of of them came from other countries. my own parents, of course i'm biased, but my mother created -- they had ideas from abroad. she was in egypt. and many people came from big names in french history. many people, you know, many people came from, that brings, the whole thing is to manage it. you need to have a policy to manage, to say how many, the working immigration, the human

rights immigration. you have to have a policy to manage it or make sure you integrate that policy and you treat them properly. spirit i take that as a yes. do we have a mic summer? i'm going to take three questions and they better be short and the the answers are gg to be short. a gentleman writer on the aisle. there's a gentleman here. tell us a you are. >> doctor sam hancock of emerald planet tv. a number of topics we haven't talked about is innovation and renewable energy the whole energy phenomena. and also green agriculture. that's where many of the jobs are and that's usually at the middle and lower middle class person. >> thank you. we have a gentleman over here. >> on rick with just economics.

david asked a question about how the tax system could be reformed to discourage when thinking and encourage investment in this country we have a property tax and we think of it as one tax but it is really cute. too. it's a tax on privately created value in buildings and improvements and it's a tax on publicly traded value and land. and some communities have, without changing the total revenue can simply reduce the tax it on privately created building value while increasing the rate on publicly traded land value. without losing revenue they create wonderful incentive for job creation creation, more pore housing. wonder if you need your thought about this? >> the gentleman right here. >> independent consultant. for heather. ex post inclusive growth, meaning how would you evaluate the basic minimum income, say, versus the dollar for training which is much harder to

calibrate specifically to the labor market? >> why don't we take one more? in the back. >> i met the federal reserve. so this question is for felipe. i like how heather mentioned the book. in that book that talk about the construction process when the focus on the time in which during a financial crisis default takes on the entirety of the contract, to find out your thoughts on the index contingent that contract and whether that would allow for better equality in that destructive process? >> okay. why don't we start with the head of the trade-off between universal basic income and spending on social programs like training and education. do you have a view on --

>> i think it's an interesting conversation. i have two initial reactions and time i think about basic energy. one is that firms know better than we do what they want us to know how to do. i find it a sad statistic that firms do less training internally, that there's decreasing amount of returns because too many colleges and have a hard time. if we're going to do something, i'd like to encourage firms to do more training and, of course, that's sort of a different kind of agenda. then around the basic income, i do think the most important thing is that we provide for people who don't have jobs now but we also keep our eyes on the price of most people want to work. they want to have jobs and that we don't get to sort of the enamored with this. there's like so much excitement about it right now, at least they keep reading about and i want to make sure we're focusing on making sure every job is a good job. so we're thinking about policies like the minimum wage or the

earned income tax credit alongside that spirit philippe? >> i agree. i think it's a, i am aware of the work in big fan. i fully agree. i have nothing, i cannot do anything better. someone asked me about renewable energy, that's a whole issue. i been doing some work on that. this is all -- >> very -- ca can you identify e list of people? >> i have not had direct involvement. next week. so we did an interesting study where we showed, clean and dirty

patterns and we showed those that burned -- [inaudible] keep doing what they use to do. you tend to do, to keep doing, that's what we call dependence. you need this day to redirect the program. we didn't talk about it so far but the role of the state, by the way, is very important questionquestion, i come back tn a moment. you need the state to redirect. you can do it with tax. your two externalities. it's a direct and one is -- [inaudible] it was good when you have two externalities to have more than one instrument to deal with them. [inaudible] it's a very important thing because the thing is that when you factor in innovation, even

we debate on this. i don't want to bother people on this, at the bottom line is when you factor in innovation even with discount rate, you want to do what system says. because if you don't act now, not only -- you make their technologies go moorehead of the key technologies and it will become even -- to later on redirected again. if you wait to go to the dentist you have cavity that will become bigger. you want to deal with it. when you factor in innovation you need to act now even with no doubt discount rate because not only did great that externalities that you have no externalities inducing more innovation in the future. so there's a whole research there. but with innovation, when you don't believe in innovation the

only way to avoid pollution is to stop -- whereas when you have innovation in your world can you say no, i can escape but in you to direct innovation to clean innovation which means you need to have a role of the state beyond line order. in france we have a debate. there are those who are attached to the old way estate. there are those who believe you should have only the state in charge of law and order. that just digit example that we need to sit also whenever you have externalities an and in particular to do with the climate externalities. you need to go beyond. >> with that please join me in thanking both philippe and heather. [applause] again, i think of all my colleagues are, brookings was very appreciative of the french government hoping to make this possible. when you leave, if dark coffee

cups or papers atrophied, you would make our maintenance staff happy to reduce inequality of happiness at brookings. [inaudible conversations] >> here's a look at our primetime schedule on the c-span networks.

>> the presidential inauguration of donald trump is friday january 20. c-span will have live coverage of all the days events and ceremonies. watch live on c-span and c-span.org, and listen live on the free c-span radio app. >> the reagan presidential library recently hosted its first ever young women's leadership summit in celebration of the 35th anniversary of the appointment of justice sandra day o'connor to the supreme court. this segment begins with remarks by nancy mace, the first woman to graduate from the citadel. it's in our 10 minutes. -- it's one hour and 10 minutes. >> good morning y'all. good morning. i'm super excited to be here this morning. what you thank rebekah for the goal i got a few weeks ago for

the invitation to be here. i've never visited the reagan library, and to be in the halls of a hero for me when i was a child and growing up in the '80s is a real honor. and i'm excited. it's rare that i am in a room full of women. typically in business meetings, and a client settings are in the boardroom i am the only woman, or one of very few. i typically have been in areas of business that are very few women, ironically i guess. that's just my life story. i suppose so. i'm excited to be with y'all this morning. take notes. you have some great speakers today, have the courage to ask questions when we do our panel to all the women you're going to see it today because i think you have a really exciting time. i'm going to spend a few minutes telling my life story, and because it happened before you guys are born pretty much, back in the '90s.

and hopefully you will clean something from what about leadership -- gleaning. what i think as a woman from the challenges we face in that role. the sum of things that i think are very important. just a handful. first off, courage. having the courage to be the best that you can be without fear, having the courage to do the right thing even when nobody is looking. also i think that it's important to have confidence. you will need more confidence to become a leader in this world than you ever thought imaginable or possible. you also need to have the value of hard work. you don't have to be the smartest person in the room or the smartest person at the table, but it doesn't take a lot of effort to look your best, speak your best, your best, show up on time, and work very hard and diligently to be successful and have others follow you in your leadership journey.

and lastly i would say it takes a drop of honey badger, okay? not a full gallon, that's too much, just a drop. because you need to be able to ignore the riffraff or the negative people that will come up after you. because the further you go up the ladder, whether it's in corporation or in civic engagement or up a pole, the more that you will be exposed. the more people can criticize you, the more they can come after you, the more negativity that there is towards you, the higher up you go and the more people back and then pile on. and i daresay state of social media and don't come when you're getting pummeled don't pay attention to it. i didn't go up in the era of social media and can't imagine what it would've been like at the citadel had we had facebook. i don't know what would've happened. it would've been too much. but so, to tell my story, in the

mid '90s, i will go back to 1995, on my 17th birthday, thereabouts, i was a junior in high school. and i decided for the first time in my life, and for the last time, that i would quit. i quit high school when i was a junior. i walked out one day and said, i was done. i'm the daughter of a retired army general. my mom was a schoolteacher in my high school. to this day i can imagine how disappointed they were in there for quitting at something. at the time i had been bullied for two years by a certain member of the football team at my high school. it was physical bullying. it was emotional. it was mental. and i allowed that experience to control how i felt about myself.

i didn't have the courage to stand up for myself and speak for myself on my behalf. and it lowered my confidence to such low levels, i didn't think i could be successful at anything in life, regardless of school and athletics because i was an athlete and i was an all-star athlete all growing up. but i am not one person to affect my entire life. never again has a bad ever happened. because of that experience. i was very blessed at the time. the principa principle of my hil called me into his office, and there was a special program they had just started for students like myself who dropped out to get their high school diploma. and i went to a tech school to get college credits so that i could get my diploma instead of a ged. and i did a program, but because

i make some some choices in my life, quitting mainly, i i had to take responsibility for my actions. and my parents, alter my life but particularly in this case, stressed the importance of taking responsibility for your actions and teach me the value of hard work. if i wanted to go to college i had to pay for it myself. do you guys have waffle house out here? has anybody heard of waffle house? great waffles and better hash browns by the way. i took a as a waitress at my first job at 17. i waited tables at waffle house. i took a second job as a secretary in an office. i went to a local tech school at night and on weekends in order to get a high school diploma. i did it in six months. in record speed, i graduate from high school actually early, a year ahead of my class. then i had to decide what was i going to do when i grew up. i didn't know what it wanted to do so i continued to go to this

tech school for the next year. in 1996, the citadel, the military college of south carolina, which was founded in 1842 before the civil war, and who had had 154 years as an all-male institution, decided that it would open its doors to women in the summer of 1996. and this decision changed my life forever. my father is a 1963 graduate of the citadel. he is a retired general as i said earlier. he's the most decorated military officer the citadel has ever graduated in the history of its college. he has earned every commendation from the army, except for the medal of honor, that for which he was nominated. he was a stern growing up. he's strong, decisive,

aggressive, and more than a drop of honey badger, but i think you have to have that kind of steps the allure of it as a leader so that the steps the ball you have the confidence in you. i really look up to him. he really is my hero. and my mother was always my best friend in life, because of the further up you go in the ladder, the more of a liturgy become, your family is even more important because your friends will occasionally leave you behind. they will get jealous or they will have disagreements, but your family will always be there for you. i've always had a very close relationship with my mother because she is my best friend. so on a wednesday night in the summer of 1996, the citadel decided that it would admit women. i watched it on the news, and on thursday the next day i took off from work, i bailed, and it went down to the city dels campus because i lived about 25 miles away -- the city dels.

i picked up an application. i don't even know, i did not let talkback since i think i scribbled my application probably in pencil. i didn't have much time because they decided in the summer like june or july school your start in august. it was not a lot of time to apply. so i filled in everything as i possibly could on the application. i went back down on friday morning and i dropped off the application period immediately following on the next monday, the school called me and said that i had been tentatively accepted as one of the first of four women that would enter the citadel that year. and i thought oh, goodness. 11 of the things i had not done up until that point in time was actually tell my parents. that i was going to be one of the first women to go to the citadel. not only that, it was my fathers alma mater. not only that, my parents were

against women at the citadel, until they decided to open their doors to women. so i had a dilemma. and tuesday, the next day, i found my mom and a way to talk to her and that broke the news to her at that i'd been accepted that i was going to go to the citadel, come hell or high water i was going to be there in august. the first thing she told me that i had to do was i had to tell my father. and i will tell you, i was scared to death to tell him, because i knew what he was going to say. it took me one week to actually get up the courage to have this conversation with my dad. because i wasn't ready for what the repercussions may or may not be. when i did, he did what i i thought he was going to do. he told me i shouldn't do it. he told me no. he said that i would want to quit, that it would be hard,

that i would cry, and that i i would want to come home very quickly into it. of course, i was 18 at the time. what do 18-year-olds know now? everything, right? i told him these are all the reasons i want to go to this place. i want to follow in your footsteps, i want a small college. i wanted a challenging environment. i needed discipline. i knew that much, that i needed more self-discipline in my life, and i something to prove to myself. i had something to prove i felt like to my father, and to my parents. and so i went to the citadel having a limit of a chip on my shoulder knowing that i was therefore personal reasons, not for personal gain but because i had something to prove to myself that i could be successful in that environment when i

attended. a few short weeks later after running three to five miles a day to prepare, after learning how to do a real man's push-up. ladies, that means like full plate, no knees on the ground, back and down down, back and fo. i was ready. and the first week at the citadel is called hell week. so your parents drop you off on the campus which looks like a military installation, you double campus. and my mom, when my parents drot me off my mom gave me a hug. she told how much she loved me and how much is going to miss me. my father shook my hand and his final words to me what this. he said, nancy, don't call home if you want to quit. just put on your shoes and start walking. well, i live 25 miles away and i start doing the math, 2 25 mile,

that's about a marathon, length of a marathon. i thought quitting is not an option because i'm not running a marathon to get home. it's not happening. and with that i went into the citadel. hell week is the first week, the very first day they chop all your hair off. my hair is a bit long today. it was a little shorter than this but i had after my first haircut i had an inch on top and my hair was tapered on the site and in the back. it took me a week to look in the near because i looked like the spitting image of my brother, james. very difficult. i didn't have fancy nails, no makeup, no skirts, no dresses. it was hard-core. it was a very intense environment. the third day of hell week we had our first pt test. i felt like i needed to prepare more so than probably anybody else going into that experience because i knew that as a woman that i would have to be twice as good to be seen as half as good

in that all mail in private. there were about 2000 students, and for women that started that year. our first pt test, not only was michael to max out on the female standards but i had to max out on the mail standards. and i did it goes up all the training i done all the running and cardiovascular turn i had done all on my own. but i beat out all the four guys in my battalion on the pt test. and from there on i had started to prove myself that i was thee not for personal gain, but you have and be the best person that i could be coming out of that experience. and it changed minds while i was there. one of the cadets at first but when i was on campus, mr. wiseman. when i got there i knew that he did not want me there. he hated me. every time he started me it was

vitriol. i could move one step over, one foot and is eyes would go to the left. i would move to the right, his eyes come he would just her and meet the entire time. but that did after the pt test and after what the call hell night, i was running back to my room. it was 10:00 at night, dark, and i was coming around the corner and i hear this man shout, halt, mace. and i thought all goodness, i stood at at attention and out of the shadows comes mr. wiseman. and i start to freak out because you're a m, i'm alone, and a dark corner, nobody can nobody can see me. what's going to happen? he steps forward and he says to me, and that mace, i want you to promise me that i will see you get your ring and that i will see you cross the stage at graduation three years later. not only did he do that, but he officiated my wedding several years later. so the relationships i built

their own with many of my male cadets had become lifelong relationships, best friends. i knew that by working hard, by having the courage to do the right thing at every corner and had the confidence to be the best that i could be, i could be successful in that environment. i also learned about good leadership and bad leadership while i was there. in a roomful of women today. i learned in that environment, ironically, that we are so much tougher on each other than we are sometimes with our male friends or colleagues t my first boss out of college was a male. i was a female -- was a female. i thought she was much tougher on our female consultant that our male counterparts. for the women to follow me, i had done the same thing. i took pride in seeing a quickly i could get one of the other female cadets to cry or get them to dislike me because i was so tough.

but i learned in the process i do back off and treat everybody fairly. but it was a very important experience. it changed who i was. two years ago i ran for the u.s. senate in south carolina. you are being generous. i raised an enormous amount of money for a first-time candidate. i didn't win. i came out with 6% of the vote, very little. but i learned in the process also when i look back on it and reflect on it, i didn't have the confidence to be as successful as i could be because i doubted myself. i listen to some of those negative voices. so even now 20 years after going to college i'm still making mistakes and i'm still learning from them. and as you make mistakes throughout life, they are worthless if you cannot learn from those as well. so for me being here today and sharing this with you, when you