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tv   U.S. Senate  CSPAN  October 11, 2024 8:30am-9:01am EDT

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depressed even though at the superficial level things appear fine? that's the connection of try to make in this book. so to again put it here in a summary, which is that first i have to make people aware of what is the problem. otherwise you want to keep doubling down and keep doing the same thing that is got us into this feeling of economic -- >> we are going to break away here to keep her over 45 year commitment to congressional coverage. the u.s. senate is about to gavel in for what we expect to be a brief pro forma session. no votes are expected. live coverage on c-span2.
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the presiding officer: the senate will come to order. the clerk will read a communication to the senate. the clerk: washington, d.c., october 11, 2024. to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable kirsten gillibrand, a senator from the state of new york, to perform the duties of the chair. signed: patty murray, the presiding officer: under the previous order, the senate stands adjourned until 1:30 p.m., on tuesday 1:30 p.m., on tuesday
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>> and the u.s. senate returned for votes on tuesday, november 12. and now back to our booktv programming. we in progress. >> well, , unfortunately, the history of nations is that unless and until a country hits a crisis point which means the government lily runs out of money, to spend more, there is very rarely a course direction. and the bouquet they give examples of countries like greece or even sweden which many liberals cite as their paragon of economic virtue, that those countries also got into big trouble because the government spending increased too much i got out of control. sweden in the 1990s was forced to reform and government spending out of control, its deficit and debt were too large
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and then they were forced to prune back. in fact, sweden is such an interesting case that the liberals hold up, but i think this sort of miss this important detail in history, which is sweden has been cutting back its government spending in its share of gdp and becoming much more fiscally responsible after getting to crisis in the 1990s. and, in fact, it entered the 2008 financial crisis with a pretty significant government surplus. so that's a big change that happened there. but the unfortunate examples from history is that a less until you get to a right point or a a crisis point, governmes do not of course correct. as far as americans concern because it is the world's biggest superpower and the doll is still the world's reserve currency, it has a very long rope in a way to hang itself, that they can keep on running these debt and deficits for much longer than other ordinary nations can. having said that i think we're getting to a point where this is, you know, getting quite
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scary because as i say that to date america's deficit as a share of gdp is 6%. it's much i any developed country. similarly, america's debt as a share of its gdp today has gone above 100% as it's lacking -- liking that of only japan and italy and will cost even the italian levels as a share of the economy by thet end of the stae it given the current path we are on. i think we're getting to a point now where these very large debt and deficits could become a real problem because even, you know, like america with all its resources may run out that people are willing to fund it and they hired high rates to pay for. that becomes a negative feedback loop because if we are increasing share of theme governments revenue is going to just paying interest on its debt, then it begins to compromise the government's ability to spend on anything else including on welfare.
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so that's the fear i have that so far we have not had any crisis and we have said that, you know, like all these people have been fearr mongering and their evolving wrong for long time. now though we've taken this argument to a different level the way they're saying it doesn't matter how much debt and deficits we run. could be 60%. if ever downturn, loss of revenues will mean our deficit gets 29tt or 10%. it doesn't matter. it's americana.us because everye has been wrong about these fears before this can continue that that's exactly what sows the seeds for the next crisis. that's what worries me about the future. as a say inn the book, my focus is to first point out that what is over happened, what's the damage that is artie been caused, because at least let's raise awareness of what's happened right there waiting for the crisis to come and then starting the course correction. >> yes. we're set right now to get even higher levels of debt and gdp
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and spinning sorbonne automatic, on autopilot. historically, right? at the end of world war ii the debt to gdp ratio was about the same as it is now, a little bit higher. but the spending in the because the war ended. the government could run from surpluses, it could reduce spending, it could cut taxes a little bit and still maintain the ability to pay off the debt incurred during world war ii. now were at this phase where the baby boomers are retiring in verybe large numbers. they are starting to draw down significantlyan of social secury and medicare to the extent where the congressional budget office projects that the social security trust fund, which usually a phantom fun anyway, but that on paper will be exhausted in the early '20s 30s and medicare trust fund aid will bee exhausted even earlier. i don't think any serious person looking at this thinks congress is going to sit around and do
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nothing when these happen. they will fund benefits out of general revenues and they will borrow a lot of money going forward and we're going to get more and more close to this example where all of a sudden it's going to be prohibitively expensive to borrow or people just won't lend money to the federal government because they don't think they'll get their act together. at that point knowing what you know about political incentives in the united states about what voters think, what you dealt to in this book and what voters think and what politicians think and what others think do you think americans are going to choose higher taxes and less growth to shore up these benefits or are they going to choose a cut these benefits and get a little bit of dynamism back? >> i still some optimism about america in the unit. what's the famous churchill quote that america does the right thing after having tried every other option. i think once we get to that point i'm optimistic the role of
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government will begin to get dialed back and then american will course correct. i think i feel that that's when the b spending cuts will happen, when he becomes a pair to people about what's happened with his runaway growth in spending and that's what even happen in other economies from sweden to greece as well as a site in a book. eventually i feel america will do this right, but, unfortunately, i don't see that now. so for me the immediate focus is to point out as i have in the book that what's the history of capitalism, what's happened and let's come like a definition of insanity is that if you keep sort of doing the same thing and expecting different outcomes,, that's a definition ofin insani. at least let's get to a point wherein we defined okay what's e problem today? wide like is this an issue we need to be looking at? also it's an ode to capitalism which is that yes capitalism can still work if you keep giving
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people economic freedom. i think that's the part american has been straying away from, which is if you look at the economic freedom america would rank in the top five for decades. now it's slipped on the way to number 25. we need to be where the what's getting us there and how that's hurting the averagee american. >> so is one political party to think more to blame than the other was this a bipartisan effort to get us away from economic freedom? >> i i think this is been a bipartisan project. even someone like trump came to power in 2016 talking about like the language of deregulation, talking the language of like doingif something for the averae american. but he's a look at his track record in terms of even on things like deregulation, he did move the needle much. he spoke about that but by the end of history he had put in so many newew regulations that like the regulatory picture in america did not change that
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much. similarly, , when it comes to dt and deficits he ran the largest deficit by cutting taxes during a peacetime effort. and in terms of the fact that with no matching spending cuts pics of this has really been a bipartisan project but yes, the biden administration ine the lat three years has taken this to a totally different level in magnitude. it's double down on everything. this has been a progression where even the icons of so-called free market capitalism such as reagann and thatcher did not do much to reverse the role of government if you just look at metrics such as government spending or regulation that was done under their era. but here under trump and and then now hunter biden in particular we've taken this to a totally new level and that's the kind of awareness i'mis trying o raise through this book. >> and you really do raise it consistently and thoughtfully
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throughout the entire book. i'm glad you brought up the statements by trump about deregulation and have statements have really fed into this perception that trump was this radical free-market president expanding capitalism. where are the opposite was i mean spending as a percent of gdp went up, trade barriers, numbers of new regulations, emigration restrictions on flow of laborju across borders, justn enormous amount of increase in that. then you have on the other side, as in trump also the recess about american carnage and a bad americans have it and how terrible it is. democrats will say the same thing, how awful it is in the united states, how americans have terribly in this country. you explain how this perception feeds into this idea, these statements leading to perception that capitalism is crushing peoples economic opportunity
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when really it's the government doing this in most areas. i am kind of concern i guess interested in the book because have that as half of the, the perception and how the perception is that capitalism is ruining people when it's the government. and then on the other hand, you also get a little bit of credence to some of the ideas on the other side. the idea that inequality is increasing and this is a bad thing. are you, and a note you struggle with this in the book about whether giving too much credit to the people who are skeptical of capitalism on these areas like economic equality, or inequality, can like undermine capitalism a little bit, canada point and push for a lot of these policies you propose. how do you reconcile this about equality and inequality and what the government is doing? >> yeah, no, as a say in the book iex don't expect capitalism
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to produce income equalityri necessarily. because as i said capitalism is about equality of opportunity. it's not about equality of outcomes. because in a capitalist society should reward meritocracy more. what i see in the book is the fact that the kind of policies has followed has fueled inequality and fueled the sense that there is an inequality of opportunity as well because of declining economic and social mobility. even the billionaires are getting the feeling that they can survive much longer because yes, there will be billionaires producedun under any capitalist society, but there should be feeling of turn that the top billionaires keep changing over time. now the average billionaire stays on that list of billionaires for much longer than in the past.
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the entrenched billionaire has become much more of a common feature now. so i think that's the way that i tried to reconcile this which is that yes capitalism will lead to wealth and income inequality. there's no denying on that. but it should lead to it in a reasonable way and it should come from a space that there is equality of opportunity. instead we have today is incredibly easy money policies first by the fed and that all these regulations to bailouts that it kept the billionaires more entrenched. and as i said so earlier, that during periods of very easy money and explosion billionaire wealth without them having to do much. i think that it's that feeling which needs to be corrected for the average american. otherwise the i average american celebrates, in fact, some will still celebrate wealth creation in a way and see many of these billionaires as people they can
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aspire to or look up to. when the feeling is that those billionaires are creating their wealth just because of government help or too much easy money, i think that's what fuels resentment. >> so your concern is the source of the inequality rather than the inequality yourself. letwe me ask a hypothetical. let's say we have the types of free-market policies you support. support. we don't have these bailouts, we don't have crushing of creative destruction but we get a situation were economic inequality is the same as it is never a decent economic inequality as a problem then or is it still just the source that matter? >> yes, i i think the source is more important but i'mov willing to bet if the government was not following those policies we would not have such high levels of wealth inequality. i think the sources, in fact, this is an interesting thing, like i created this index like
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over a decade ago called the billionaires index. and what that did was it used three metrics to measure the wealth of a nation and inequality across the world. those three metrics were, what is the share billionaire wealth of the economy? from where warehouse thatn created? is it in industries which are innovative and don't require much government help, or has the billionaire wealth been created because of industries such as real estate or even commodities which are quite a lot of government help? and a third, how much of this wealth that the i billionaires have created is inherited, and how much of it is something which is self-made? so i created that foreign minister say that whenever, that the countries around the world where there's too much billionaire wealth in the share of the economy and too much of it is being created by the so-called rent seeking industries and a lot of it is just inherited wealth, those are
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countries much more susceptible to populist revolts compared too countries where the wealth is much more created due to innovation and is not so much in your face. so i think since you raise this topic, this billionaire index is something i pay a lot of attention to and that looks at the source as much as the size. but yes, i'm willing to make the argument the government was not playingo this role at the start of capitalism this much. we, would not only have a bettr source problem but even the share would not be as large and disproportion of the economy as it is to. >> one of the things i'm little worried about in i your prescription here and play along with me at him and why i'm wrong about this, is that if we give a lot of credence to the idea that inequality isua getting worse ad this is a bad thing sorted in principle, then we open ourselves up to more of these policies that increase moral
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hazard, two more redistribution, to more bailouts, may be targeted more people in the lower end of the socioeconomic spectrum. and we get more of these problems that we talk about. one of the things i've come to think over the years is that a lot of the sport for redistribution higher taxes on the wealthy and tried to take their resources and give the people less fortunate, some of it comes from the good places you're talking about. people are aghast as inequalities, they are aghast at what you think is a lack of opportunity. but in most cases or lease half of cases it's more like a case like militias in thee come righ? where just a lot of people just really don't like successful people and want to take the money and hurt and even if i hurt themselves in the process. do you think i'm off base without? >> no. i mean, i make it very clear in the book which is the fact that i'm in favor of opportunity. but i totally understand we need
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to appreciate that capitalism does lead to inequality of wealth and inequality of income. so i o think the idea of levelig inequality is misguided on its own peer because then you have socialism and that's what the kind of india i came from where any wealth that was made was taxed away. so people didn't create any wealth. i'm all for wealth creation but as i said it's about the idea you have to have a feeling there is equality of opportunity and a cast that. as i say in the book, right up until three or four decades ago when most americans felt they could be that her off than their parents, when most americans felt they could affordo to buya home, there was no great sort of talk about inequality. this talk of inequality has really surged as we see a surge
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in number ofcr new billionaires which have been created, as those billionaires have become more entrenched. i think that's where bse in this search take place, and sometimes the government solution for these is you know only makes things worse. the one thing t the government s now doing much more is they have to spend at, lot more on the welfare state to protect people and against this anger that's been building up. but in doing that, like in terms of they are only sort of making things a bit worse because you keep spending so much, you are compromising on the fact that you're doing in in a way thal be unsustainable and in the future you will not be able to support even these many people given the amount of spending your f to today. there has to be an appreciation fact equality of opportunity is what the focus needs to be, not in terms of eliminating inequality. that's not what capitalism is about. >> one of the sections of your book that i thought was extraordinary is you explain
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bureaucrats and politicians and other government employees making decisions about regulations and how this basically uniform pushes in one direction, which is more regulation, more control, more bailouts, more protection for firms thatt have these political connections. but then i was surprised in another section you wrote about your support for antitrust laws and more vigorous enforcement of antitrust lawsn and competition policy.y can, you reconcile these things for me? i just a lot of antitrust policy at least historically, and today i think with some work by lina khan at the ftc is like a fairly arbitrary come fairly capriciou capricious, leads to a lot of uncertainty in the markets. so i'm just curious how do you reconcile this seeming contradiction, or is it even a contradiction, am i misreading of? >> no, as is that i think the
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first step is the role of governmentnt has expanded a lot but i'm not in the camp which believes the government should assume a role, which is the reserve role for government when there's a crisis, when there is, there is a role for government in providing some basic welfare like for a society, and the antitrust, i mean i think when things get too far something needs to be done about it, which is a fact something is wrong in america when a handful of companies are earning extraordinary amount of profits and then the using those profits top just keep gobbling up new entrants which slows down the pace of innovation and then using those incredible amount of profits to lobby in washington to get regulations done, like in a way that suits them. also then like concerns in new technology which comes which requires massive spending, only these companies seem too have te
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cash to be able to do that. i do feel capitalism at its true level should naturally work in a way where not just a handful of companies make supernormal profits, but the profits a more distributed.is so all for private sector enterprise making lots of profits, or when you reach a point were just a handful of are making extraordinary profit, then you know something has gone wrong somewhere. we need to recognize that, otherwise that's not going to end. the fact that the same companies dominate the list of the top companies like microsoft or whatever you want to call at the top of the pyramid every decade, there's something which isth gog a bit wrong there. so yes, i greet you can have arbitrary antitrust or this kind of policies, but i think that's when every word you feel we need to closely examine that these big tech companies the way they have come to dominate not only our lives but the entire investment landscape, and this
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is not just about the innovative ability. it's the fact they are producing these extraordinary level of profits which is inconsistent with any capitalist society. because capitalism at its core needs to be pro-capitalism, pro-choice and pro-new companies coming up. that's the concern i have come at the something which we need to do about antitrust which is the fact that in a systematic way with these big companies are not, just sort of gobbling up all the small companies and have disproportionate influence on allies. it happens in many ways which is one of the big frustration of many americans today is a fact many towns in america today are dominated by just one big company. when that one big company dominates that count, they have an incredible amount of bargaining power and it creates this feeling for the average person that to being oppressed because like they're being forced to work for that one big company and they get to set all the t rules.
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so the domination of these handful of very big companies i think is inconsistent with the true capitalist system. so, therefore, i some sympathy with antitrust being like enforce any more systematic way. but we need to recognize that at times when that happens something rugs happen. of course it argue in the origin of that is too much regulation so we need to do something about that. we just can'tis do antitrust and expect that this is going to go away. because if you don't deal with the source of the problem, which is to what regulation, too much easy money, then the problem issues going to come back after you arbitrarily killed off something. so it needs to work all, thoughtfully rather than in a piecemeal basis. you dou with antitrust or you don't deal with the source cause of what's led to this big domination of these companies. >> right. we're about to wrap up y but if you don't mind in 30 seconds, your book gives us a lot to worry about in the united states.

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