to kill a 17 year-old white young man we know that there would have been and arrest without going through all of these loopholes and there would have been an arrest that night the kid would have went to the morgue and he would have went to prison . we know that for sure. that is how the justice system works. when it comes to minorities then give the benefit of the doubt to the killer who is a victim when it comes to the others killing minorities.

[inaudible conversations] good evening will come to to dates even to. we will talk about the book and for those of you who may not know whether then grabbing a catch phrase from donald trump that was my one joke. so now i will let dean take the stage. [applause] >> i do like my dog. a doberman and dependable -- a pit bull and maybe shawn. >> so talking about a couple

of decades of the economics and just to put it simply as possible, the main theme of the book to have an upward redistribution of income but that is not arguable that this point. and it talks more about wealth but in any case we have had a number of good reports and solid data documenting one of my favorites but it shows if you look at the united states and the bottom half of the and come into it -- distribution for i will not stand by and nothing to say if you count this or that you have had for decades of substantial economic growth and innovation in the large

share of the public has almost nothing to show for it. that is not in arguable point right now but the question is why? the conventional view among the economists and policy people is that was globalization, a technology we might feel bad on the one hand behalf of liberals who feel bad and the conservatives say we want more. but they see as being something that happened. but it is something we did. i will go through those stream major areas of globalization of workers in the united states, the second is the federal reserve board. but the basic point it is hugely important to affect

the number of jobs in the economy and the third is a patent. that is a huge amount of money that a lot of people and economists type of people don't seem to know that is incredible that is enormous feeling of the economic gap succession. so now polities people in the developing world are working for very low wages and are very pour they undercut the steelworkers and autoworkers that is the way of the world. get used to it if you don't have a college degree or vans to education you cannot compete in the world economy. the do feel bad about those two lost their jobs but then they say too bad. but that story is fundamentally wrong because

the place where i start the book i picked up on the theme we saw in the primaries in march. and they said bernie sanders is the enemy. the basic story is that he said i want to protect jobs in the argument was that has been the story of development for places like china that they got the jobs that led to them getting none of extreme poverty and we should be happy about that and bernie sanders is their enemy. first, the idea that we have displaced workers in pennsylvania to accommodate the developing world there is something wrong. first the basic economic theory that i went to grad school you're supposed to

have money going for rich countries to poor countries through capital from the united states to china to malaysia and other countries. that means we would run a trade surplus they would be using the money to build their infrastructure and capital stock and at the same time the standards for population. this was the 1990's. we actually saw the rich countries as a whole with a large trade surplus if you add japan and europe and the countries of the region like vietnam is a very large trade deficit. if they continue that rate of growth in fact, have a graph in my book that shows you have to have a situation

south korea and malaysia are richard if they continue that rate of growth. the with the financial crisis 19907 and they began to run large surpluses that they had accumulated a large amount of reserves but those like greenspan has very harsh truth in did not want to deal after that. that was the lesson they learned in latin america. if they did so after 1997. sold instead of running trade deficits we let the lenders and that is a perverse stories of the people who argue for the current system would be

enemies. not bernie sanders. that is true in theory and the period of 1997. you can ignore it but that is not reality. people of the developing word -- world competing with factory workers in michigan and ohio is true but there is a lot of smart people who were happy to trade as doctors are lawyers and in the ninth states it is very difficult to do because we have protectionism doctors want to know best to you get arrested for crisis medicine without completing a residency program? the one to assure the standards but a few have competent doctors in place

for but that is called protectionism and. end as a result there paid more than negative $50,000 per year per. we paid huge price for that the difference is $100 billion per year that is real money. mattis $300 per person. that is real money and protectionism. and it isn't even on the agenda. the big part of the trade deals listed be at odds with free trade.

and i and stand mattis protectionism in the use that distortion in the market. but you have situations found one that has been in the news with a three month course of treatment is $84,000 in the united states view of high-quality generic in india is to hundred dollars. it is the same drug equivalent to a 40,000 percent tariff. does it is a patent that is not a tariff you can call that would berrylike. but to give you an idea of the impact in the united states, we will come back to

that but it made port people in the developing world lot of money. frieda's let them buy drugs and the free-market and software they save large amounts of money. into be 100 percent opposed of the key tpp bet requires them to have passed protected prices at the free-market prices. again i raise this with people to talk about the federal reserve it matters a huge steel how many notice the fed raises interest rates in december?

i was struck by this to slow the economy. it's not like i am reading their mind. they are worried the job market is getting too tight. clearly the direction is an ambiguous it is a ballpark number but at the end of the year that is around $150,000 so now think about the show in indiana with carrier. we have to under thousand times less small interest-rate rate hike at the fed good things for

those people that is a huge amount of attention they have enormous control if you look at that period since 1918 they are much more concerned about constraining inflation and one of the measures is the gap of will on a planet level with the non accelerating rate of unemployment to say this is the unbiased measure if you look at that period of 1947 through 1980 if you look at

that period through 2012 was a full percentage point and was still two-thirds of the upper scented point higher. higher rates of unemployment they are concerned about inflation that it takes much more effort now the additional point that this then you just downsize the economy whoopi and employ a rate it isn't just said they are will smaller there is that we analyze this as a

strong racial component to get that rate down by two percentage points from but it is a very strong relationship to of one percentage point higher than this. so guess who we put out of work with hispanics relative to whites the talked-about less educated workers and those who are losing jobs. so it isn't the manager is the wait staff those of the people who lose their jobs if you look at patterns of

wage growth the only time those during the of late nineties was low unemployment. . . >> that wasn't the market. that wasn't god. that was the federal reserve board. they have an argument from a their policy but that is a very much a policy choice. to act like that is something that just happened that is not true. it is something we did. i make this point they do this, and not that they are evil

people, but we don't want the economy to overheat. well, i don't want the economy to overheat but they are throwing people out of work and few people realize it. we often hear this argument about automation eliminating jobs and we will see there is not going to be any jobs for less educated people because of automation. that may not be true and we don't know the future. but for the present day that is clearly not the case. automation is productivity growth. it is not new or exotic. it was more rapid in the '50s and '60s. periods of low unemployment and up and down wage growth.

the idea of seeing productivity growth and workers at the bottom getting screwed -- nothing chose that. the other thing is we are worried about auto magsz destroying the jobs -- automation -- at the same time the fed's think they have to raise interest rates to destroy jobs. sorry, that doesn't make sense. either one of those could be true but they can't both make sense. obviously the fed's don't think automation is going along so rapidly it will destroy interest rates. they want fewer people working so there is not the wage pressure to not have inflation. the third area is anti-policy. i raise this and they look at me like what are you talking about. well, a focus on prescription drugs, that is the area where there is a huge amount of money.

we spend $430 billion a year on pharmaceutical drugs. a measure of comparison what we spend on food stamps. i know a lot of conservatives like to beat up on food stamps talking about obama's food stamp nation and this and that. we spend a bit over $70 billion a year. what we are spending on prescription drugs is six times what we spend on food stamps. if we snap our fingers and got rid of patent related protections? the drugs we are getting are cheap to produce. it is very rare you have a drug that actually costs a lot of money to manufacture. i gave you the ratio of 400-1. that is extreme. but ratios 50-1, 100-1 are not

uncommon. or 10:1. that is an incredible waste. the way i talk about this is the same way economists talk about played protection. i want a 20% tariff on imported steel and people would say that is creating a gap from the free market price and protective price and giving steel companies incentive to play off legislatures and they will hire lawyers to extend it all of which is true except when you have patents that raise the price by 1,000% or 10,000%. drug companies have enormous incentive to go to congress and say they want stronger and longer patents, they

misrepresent, they push drugs where it may not be appropriate. if you turn on the tv you see drug ads. i watch the news as the older audience and you see there drug ads. what are they telling me? at least i have some idea what i am getting with a car. i see drug ads. dorthy hamel, the figure stater was advertising arthritis drugs. i don't know if she takes the drug herself. who knows? who cares? that is giving me zero information. but the drug company did marketing research and what they are betting is that is going to get me or someone suffering from arthritis to go to their doctor and say why don't you give me this drug? that is not a good way to get medicine but we see that. they sometimes conceal evidence

their drugs are harmful. biox, an arthritis drug turned out to be bad for people with heart conditions and a lot of people are arthritis have heart conditions. people die because of that. if they were selling it at the same price of a bottle of aspirin they would not have incentive to conceal the evidence. new competitors coming out say don't talk about the 81,000. that is not useful. but they go there is drugs in the pipeline that will be competing and bring down the price of too $40,000 or whatever. that is actually not a good story. it is a good story when you have a monopoly on the drugs but free market wouldn't make sense. you have what seem to be a very

effective drug for hepatitis c. does it make sense to go out and spend a whole lot of money developing a second, third and fourth treatment for the same condition which you have an effe effective treatment for? i am not saying there is zero reason but i respect if we are sitting down saying where can the research be best spent and it would be for developing a drug for where we don't have a treatment. this is bad research. my preferred research is direct funding. and they go have you heard of the national institute of health that gets roughly $32 billion a year from the federal government and they do great work. the biggest lobbyist for obama. they get the outputs and put the

patent on it. if you doubled or tripled the budget the research would be in the public domain. both in the sense the results are public so they would post to a website and others could benefit. but the finish product when you have a drug that is in the public domain and can be produced as a generic. my argument would be we would be way better off doing a system like that than the current patent system. back to the underlying issue. if you look at drug patents alone you are looking at 350 billion extra spending. i checked the against the wage income of the bottom half of the income distribution, social security administration data and that is about 1.2 trillion. if we snapped our fingers and

got rid of this and gave the money to the bottom of the distribution that would be the same as increasing their wages by a third. that would make a big difference. when i talk about patents, drugs are front and center. we see the same issues arriving in other areas. an mri, why is it expensive? is it actually costing dollar 12,000-14,000? you need the electricity and someone to read the mri. 100-200 bucks. it is because of the patent. and same things like the i-phone. i think they stopped it but samsung and apple every time one of them came out with a few phone the other immediately rushed into court with a whole range of patent suits and eventually they agreed to stop doing this. it is not a good use of resourc

resources our patent system is out of control and he made patents longer and stronger over the 40 years and benefited the people at the top. there are no homeless people getting patent rights. it is benefiting people like bill gates and other very wealthy people. okay. i go on and beat up on wall street on this because i don't want you to think i left out wall street. i beat up on the system of compensation saying ceo's run the country in their own interest and rip off shareholders. that is why you get the ceo of wells fargo who walked away a millions. we could feel for steve jobs perhaps. but most of these ceo's walk

away with tens of million and you are hard to see their great contribution to their own business. i am not even talking about being good people. did john stump do a lot for wells fargo getting them called before congress and facing charges? probably not but he walked away with a hundred million. we could look back over the last four decades and there is a massive distrubution of income. it is well documented. i would say it is not something that just happened. it is something we did and the main point is week undo it. one last thing that i think it is front and center. i spent a huge amount of my life yelling about social security and why it should not be cut. i am fine with that and think they are good things. but the more important thing is having upper redistribution in the market to begin with. we need divent rules for the

market so it doesn't leave to the same inequality today. that is where i think the biggest dividends are and i will stop with that and take questions. [applause] >> hi, always great to hear you speak. i wanted to touch on the point of tpt and some of the other intellectual property policies. you previously mentioned a lot of these free trade deals are protectionists because they have all these -- beyond the glamour of the building up growing markets and tearing down barriers there are chapters about protecting intellectual

property. could you talk a little bit more about why is there that disconnect? who do you have people like barack obama to still sell these bills overall but underestimate or just overlook those chapters that are more protectionist and set-up more barriers? what is driving that decision? >> well, i can't speak for any particular individual. i know jason and i like and appreciate the work he has done. jason ferment is probably the head of the council of economic ad visors for the next three days. he has done a lot of good work in this time there and i don't know his motives exactly. but it is hardly a secret who is behind negotiating the tpt in particular. the washington post did analysis

of the working group and they were overwhelming from the industry. you had pfizer, merk, and microsoft and i don't know people from those specific companies but the big drug company and software industry. what do we think they are going to do? design something with how can we best disperse technology to the developing world? are they going to design the trade deal that makes them richer? i think that is what went on. why do economist defend that and i think a lot of economists don't look into this. can't you just call it trade deal? use a neutral term. they are in the view that the mindset this is about expanding word markets, that is a good thing, i have support it.

if you can can point out this is increasing patent and copy write protections. that is a small side bar some say but if you look at the ttp it is 180 degrees the other way because there is not much to eliminate in terms of tariff and quotas. we have trade deals with 6-11 countries and everyone is in the wto so there are limits to how high the tariffs can be. the impact of reducing these barriers is fairly low but the increase of increasing the barriers and patent right and protections could be quite large. more of that aspect and if you can put their nose in and say this is the chapter and it is like that is not big deal. i think there is a real strong prejudice to overcome.

why do we negotiate things like that? people with power and money want the deals and that is why it takes the form it does. yes, behind you. >> hithank you so much for being here. you were talking about protectionistm in certain types of employment, med n and law, where was wondering what your thoughts were on interest rates, policy student loan debt policies and how that helped justify these sort of increased wages for these type of professions when you look at medicine, doctors are coming out with over $200,000 in debt and they say that is what justifies these really increased wages in comparison to other nations. >> that is a good question. i say a couple things. first off, there is a lot of garbage in the sense of these for-profit schools. that is something i would love to see us crack down on. the obama administration has

done some of this but we can go further without letting people get into government debt. this isn't a question of regulating the market because the for-profit places want to charge people $20,000 go ahead and nobody is going to do it. it is a question about subsidizing. the taxpayer money and at the end of the day you have someone with a worthless degree and $40-$50,000 they can never pay off. when you talk about doctors, we have a poorly designed higher education system. it is a bad story. i would not say it goes that far in justifying the sorts of hey these people get. you say $250,000 a year is the

average a year. you have $200,000 in debt and pay it off over 10 years that is 120,000 a year. compare that to 120,000 in germany and france you are still better off. i would like to say reform the education system. we know that is going to discourage more low income people. it is scary coming from the background where no one has that kind of money and you acquire that kind of debt. that is a big problem but it doesn't justify the sorts of salaries we see. >> thank you for coming and discussing your book this evening. i have a question of what do you think of phillip's idea in books like sign mart and never let a good crisis go it waste and talks about the neo liberal process of profitizing and

leading to innovation and change. thank you. >> you know, i have read some of the stuff years ago. i am not sure if i read his latest work but the general point is taken. when you have the privateization of research they are there to maximize profits so with their research they are trying to figure out how to get as much money as possible. when i am arguing prescriptions drugs i have a different opinion. i think the idea of trying to promote more public research -- what i propose for other

industries instead of having a patent by 20 years, you can still have that but you can have someone voluntarily give up the patent after five years. it could be four or six or a shorter period with the condition that with the provision that you have access to all this other research in the public domain. you may have heard of the idea of copy left where you copy left this idea where you say okay, something is freely available, it is developed by the free software but could be applied more generically. the idea is we are developing this software and anyone who wants to use it as long as that is freely available. if you want a patent and want to privatize it you have it talk to about. i would like to see the government responsible and you don't want to arrest people if they do stuff on their own.

you know, for other areas, you know what i propose is you would have a short patent period and the reward for having a shortened patent period is you have access to the material in the public domain that you could use. i take seriously the idea you get bad research and slow research. heidi williams professor at mitt looked at uncoding the human genome and found genes done in the public domain the patents on those since public domain turned out to be much more useful than the ones that were done privately. and again these were open and anyone could work on them.

as an economist we all think if we have better research that is open as opposed to doing this in a cramped corner no one things that would be a good way for economics to advance and i think that is true of science in general. yes? >> back in your student days on the way to your phd you must have been beat over the head with there ain't no such things as a free lunch. and listening you talk about the drugs and making pills you are forgetting the famous west wing scene i think it is explained the cost of the second pen may

be pennies but the first drug is million to get licensed and approved and for the ones that failed. patents are like licenses like regulations and all these kind of things. that is what our current president-elect is coming in and the discussion of draining the swamp. so the point to you it is certainly true we can do things on the patents you are talking about but the question is you certainly unleash -- wouldn't have to have licenses to be a doctor and you name it until uber was a broker you had to have a license to puck up a people and take them somewhere. the ideaing you are talking about is top down inside.

but you are unwilling it allow stuff to grow from the bottom up. my last comment is on the federal reserve. you know why the federal reserve raised the interest rate at the end of obama's term not at the beginning of the term. they raised it at the end because he doesn't care about trump. he is happy to crash it. but during his years, he wanted the interest rate as low as possible because it is good for government. you can borrow money and people won't notice it. >> speaking to the second point, the feds indicated long before the december increase when everyone thought including them i would imagine that hillary clinton was going to be president. he didn't want to raise rates at the beginning because the economy was in the toilet. you have more reason to be concerned about inflation in 2017 than you did in 2009.

i think that is a straightforward explanation. i think they are wrong to raise rates but it is straightforward and hard to get away from. no, there is no free lunch in my book. i was talking about having the government pay for research. we are paying $430 for drugs. we will take $60 billion and we have $370 billion to play with. the pharmaceutical industry spends $47 billion a year in research. we have to do what that does. there is reasons to think public funding would be more efficient for two reasons. you don't have the incentive for copy cats. people will not produce the second, third and fourth body and secondly it is in the public domain.

people benefit from other innovations and learn from their mistakes. say we have to spend twice as much and it is $90 billion. we are ahead still by $250 million. i am talking about different mechanisms of financing research and one i would argue is hugely more efficient. at the very least, this is what i want to get it on the jen. this is what economists should be talking about. there are some other economist but it is not a major area of research and i would arg uh- uh-uh -- argue it should be. this is pea's health and people feel that is important. there is a question up here.

>> you talk about trade agreements, the tttp, and what about the existing trade agreements in which we do have decades of data? i am talking about nafta with 25 years of experience. i am curious in your economic research have you reached any conclusions about the net benefits of the opportunity costs of eliminating something like nafta for the three north american economies? and linged to that, if you want to address it, i am curious about wisdom of going for free trade log like the eu, or piece meal country by country specifically the case of brexit and the wisdom of england, for

example, during a free trade with america, as opposed to staying within the eu? i know it is two separate questions. >> a few things, with nafta, one of the striking things was predicted results of nafta was that it put downward pressure on wages of workers without college degree. it wasn't huge. what we saw after 2000 when china was admitted to the nto there was research showing in areas with the most competition industries in mexico there was significant downward pressure on wages in those areas. so, i think that wasn't negative. the story for mexico was not a good story. it disrupted their agricultural and one of the amazing myths and i beat up on the washington post because they literally made up a number on this. i keep trying to pressure them to correct it. in 2007, they were trashing the democratic canada bought they

wanted to renegotiate nafta and they had nafta has been great for mexico and their gdp has quadrupled and the actual number is 83%. any how the myth that nafta has been great for mexico is widespread and mexico's economy has grown more slowly in the years since nafta than the u.s. it hasn't happened. you are pretty heart pressed. maybe their economy would have done worse absent to nafta which you can't rule out but you are high pressed to tell the story the country climbed since nafta. i don't think it has been a big negative. it has put downward pressure on the less educated workers. you had a trade deficit of 60 billion a year with mexico and lost some jobs. there are other factors there. but i think nafta contributed.

and the other issue is nafta was a bargaining tool. there is a professor at the industrial revelation school that documented a number of cases where companied threatened to move to mexico if the countries unionized. i think the effects were negative on the less educated workers. working in the u.s. and europe i look at the ttp and this is about regulation primary. there are formal trade barriers between the u.s. and europe. we have massive trades and the mast majority pass with zero or low tariff. it is about putting in regulations and i worry about the regulations. the law might limit the ability if an area of state want to ban fracking would you be able to do that. in europe the gmo have more restrictions. and you set-up this tribunal and

it is hard to justify. it is a tribune that only investors can bring cases before. european reporters thought i was a nut ball when i started talking about this. they put that in there. having freer trade and zero instead of half a sent is good. but that is not what the ttp is about. if anyone was in the uk i would recommend they go against brexit but they used lies saying they will get more money for the national health services, for example. those were bogus arguments. the other side i think ex

exagurated the case. i know they haven't left yet but the idea you would have this collapse and that is not happening. i think there will be negative reprecussions for the uk. we don't know what barriers we have. on the one hand, you have impulse in europe to be punitive and it is punitive to them there. it is punitive to them also. you are saying let's negotiate something that is painful for both of us and germany seems to be calling the shots on the punitive side and that would be bad news. you will not see second great depre depression but you will see a drop in growth. i will say one thing here. the big concern in the uk is what will this do to our finance industry? it will certainly hurt it. as it stands now you are the

finance pass port that uk is part of. you could just use the eu and business and that will go away. it will be a big hit to their financial industry. i am not sure it is a bad thing. so that is why, you know, again, i don't want to push that too far. hi, i am adam. i wanted to ask a question about increasing the nih budget. i am certainly a big fan of bumping up the nih and i think they do great work especially for basic research that leads into applied research in the pharmaceutical sector. if we have nih assume the role of the pharma sector and bring down the bureau, these tariffs

as you call them, how we are going to get other countries in the world to contribute to our research? we probably sell 75% of our drugs outside of our borders and wouldn't this dwi forfeiting all of that income? -- be. if we doot thaand other countries copying us maybe we are large enough to absorb the hit and only get 25% of the revenue but what happens to a country like switzerland that has a thriving pharmaceutical community but is only 1% of the world? >> that is a good question. the idea that somehow we have this natural system and i want to replace it with some complex system, no. we have a very, very complex system now and i want to replace it with a different system. what i would envision is

countries contributing research based on their gdp and population. congo makes a token contribution not a real payment, for example. you would have to work it utin depth but you would have a rating system saying here are int intermediate that had good research. here is a seck tier. you contribute a dollar to them at 75 cents. the third tier doesn't have a good record and you contribute a dollar and it counts as 40 cents and below that it doesn't count at all. you would need some sort of international agreement and if we could get international agreements on patent and those

are complex because they go beyond patents. so the idea what we have now is simple and natural and i am talking about something complex earlier complex issues and what we have today is very complex as well. >> income is pushed up and the methods you are suggesting i don't understand is that if brexit doesn't prevent the income from being pushed up much. it shows it down and before retiring it distributeatize. what if we just let it all the way go up and tax it from the top and have the government spend it as it sees right? do you think there are pros and cons? >> we are concerned about

inequality so do we try to prevent parliament from getting so rich to begin with or do we say let e let you get rich and tax it away? i am strongly in favor of going the former route for two reasons. one is if we brought in right wingers here it would be take away incentives. what i emphasize more is you are putting a lot on the table for them to avoid taxes. the tax avoiding industry is very big. the private equity business is a tax avoidance industry and people get rich in private equity. people make hundreds of billions often billions finding clever

ways to avoid taxes. that is one set of concerns. the other is political. it is very hard both because people have this idea that you earned your money and want to take it away and the other is if you have given these people billions they will spend a lot on politicians and tv ads and think tanks saying how horrible it would be to tax it away. it makes much more sense let's not have a system that leads to so much inequality. if you can do that, and not pay a price, i am saying we could finance farpharmaceutical resea in a way that is efficient and not lead to people getting very rich. if someone develops a great new cure for type of cancer give that person $10-$20 million. that is fine. but our pharma bro who got how much money for jacking up generic prices?

that is what you don't want. i left out finance or merely beat up on it but partners in hedge funds where you can make hundreds of millions a year and what their contribution is they developed sophisticated algorithm that let's them get in on trades a hundredth of a second on competition. they see a big move on ge stock and buy in ahead of everyone and sell it back and made a 10th of a percentage point but it was a huge mount of money and you do that many times a day and get very rich. that is not something that contributed to society. >> hi, dean. i wanlt -- i wanted to ask a more general question of you because i have been having a debate with a friend who tends toward the libertarian side.

i think he has a certain point about government inefficiency. i don't want to put words in your mouth but i assume you are more of an advocate for welfare state style government like what we have seen in europe in the past although that is being degraded. maybe i am wrong about that. but i just understand that argument because i have another friend who qualified for medicaid after obamacare was put in. but the inefficiency she had to deal with was absolutely staggering. she was counting and taking notes. she had to contact the agency in washington, d.c. 38 times by telephone or e-mail before they finally granted her medicaid and then a few years later they took

it away because they said she didn't provide the property identification. that is the problems that come up when you are increasing the size of government and introducing government programs. >> that is a very good question. i am sympathetic to those conce concerns. a lot of what i am saying in the book isn't increase thing size but changing the way government acts. one of my pet peeves is that it is a tendency to think of government and government spending. when government gives you a patent monopoly that is an intervention in the economy. i love the debt people and what we are doing to our children. if we give these companies patent monopolies they are charging us 400 billion for drugs that would cost 40 million. that is the same as the government imposing a tax.

any how, what i am concerned about is we have to look at the way government affects the economy more broadly. that is a concern. government expansion is advoc e advocated in fairly narrow ways. social security is more efficient than the private alternatives. i debated a guy from cato and he said old fashion, one-size-fits-all and i said it is old fashion like the wheel. is your basic income so we want it to be one-size-fits-all. i will say i will put more in 401k or private funds and that is fine. the idea of social security is your core retirement income. we want everyone to have it and something simple is a good thing to do. so is having medicare. i am sorry that story but yk

tell you about my wife's bad experience with private insurers. it government doesn't have a monopoly on inefficiency. when i was talking about having the government fund are research i was saying the government would pay industry. you contact out. and you like the analogy. there is the military sector and we do develop very good weapon system. the big advantage you would have with pharmaceutical research there is no argument. with pharmaceutical research what is your argument? we want people to take your

research and use it? i take it seriously governments can be efficient and we don't want government doing things they are not good at. i don't preach a huge expansion of government in this story. two more questions. >> thank you very much for your talk. it was really interesting. you brought up the growth of inequality that you didn't really talk about. the first is the assault on trade unions that starts in the late 1970s and really develops through the 1980s into the present time. it seems to be that is absolutely fundamental for understanding the growth of inequality.

the second was what you talked about a few minutes ago but is taxation. and starting with proposition 13 in the 1970s the tremendous regressive taxation system that developed in comparison to say the post-war years, massive tax cuts for the wealthy. it seems those two factors are really the most important ones. >> taking the second one first. two reasons why i don't spend a lot of time talking about taxes or three. one i am trying to talk about before tax income which is where you see most of the increase in inequality. there is pretty good research on this. we definitely see lower tax rates obviously. 40%, we had 90% top marginal tax

rate in the '50s. that has been largely offset by fewer loop holes. if you look at the share of the 1% it is down but not as near as much as looking at the 90% versus 40% tax rate. thaz not as important as it may seal. the third point i will say is there are a lot of people that will do the work and do good work like the center for budget privacy policy. they do good work on that and i think people know that story. labor unions and you talk about it in the book. that is something that is definitely affected by institutions. there is a story that has a lot of currency. people are not interested in labor unions anymore. if we go back to the late '70 said, unionization rates around 20% and today i am scared to say about 9%. we have seen plummeting in the

share of the workforce represented by unions and more so in the private sector. down around 7% in the private sector. a few years ago we looked at canada and it is a similar country. they speak english and just north of the border and similar economy. there is no decline in the unionization rate. if you go back to the late '70s it is like 35%. today it might be 32%. it is down but nothing like the collapse we have seen in the u.s. whauz the big difference? canada, things like automatic carb check, you can sign up for union by card sign off. they have first contract arbitrati arbitration. we had a lot of changes in rules and norms in the last four decades that have made it

difficult for unions to organize or stay in business. i talk about this in the book and you are absolutely right to bring it up. one more question if there is one. >> a comment on the recent information about the six richest guys in the world equaling the bottom half of the planet? >> yeah, people didn't see this there was a study by ox-fam of the richest eight people with the obvious suspects mike bill gates, warren buffet, mark zuckerberg, eight people and most from the u.s. fl better or worse and they have more wealth by their calculations than the bottom 50% of the population. it speaks volumes of the inequalities. you have a lot of people who are very poor. gates is something like 70 billion and divide that by a

hundred and he is still incredibly rich. it is amazing how much money this guy has. the more dramatic story is how poor so many people are. you know, i would have to check the exact numbers but i suspect i have more wealth than the 25% bottom of the population and it is not because i am a billionaire but the bottom 25% have 0. we have people who are rich but the bigger stow story is somewhere in the order of two billion people that have 0 which is pretty abyssmil. if i don't have to be embarrassed, donald trump will have no one showing up for the inauguration. thank you.

[ [inaudible conversations] >> booktv tapes hundreds of author programs throughout the country all year long. here is a look at event we will be covering this week. monday we will be in durham north carolina where a history professor, a roger ecert recalls how john adams