>> the demonization of the one percent. after that, discussion about the situation in somalia. on the next "washington journal," is page talks politics and the supreme court ruling.

former fbi and cia deputy director philip mudd talks about the recent drone strikes that killed dozens of al qaeda .embers we will be looking for your calls and you can join the conversation of facebook and twitter. "washington journal," live at 7:00 a.m. on c-span. i remember the first conversation i had wasn't about where you're from or what your school is like but it was about ukraine. it was about politics and our believes on education and religion. that, i was like, wow, this week will be intense. it was cool to see the evolution of all our friendships and our bonds just from talking about politics. ribbon talking about our experiences and what we have learned in who we have met.

this is an experience i will never forget. i can never really go that far in politics and politics is such a caustic environment. but throughout the week different speakers and people i've met have chipped away at that opinion. i thought maybe i do want to make a difference and run for something local and state local , because likey president obama said yesterday, he said don't get cynical. this nation doesn't need any more cynical people. things that gets brought up his social media. ourre able to express opinions very easily. we can send a tweet about what we think and i think that starts conversations, and we like to talk a lot. outike to get our opinions there. >> i think this whole week has been about learning.

i come from a small town with homogenous views. there's not a lot of chance for people who do not think the same to get there opinion out without being ridiculed. being here with other delicates has given me an opportunity to learn other viewpoints and get my ideas out without the fear of being shunned for thinking differently. school students from across the country discussed a participation in the u.s. senate youth program. sunday night at 8:00 on c-span's q&a. >> coming up, venture capitalist tom perkins talks about income inequality and the wealthy.

mr. perkins spoke with fortune magazine's senior editor about what he calls the demonization of the one percent. this is from san francisco. it is about an hour. >> good evening and welcome. .ou can find in form online i am senior editor at large for fortune and your editor for the evening. tom perkins, seated next to me is cofounder of venture capital firm.

an alumnus of harvard and m.i.t.. this room knows, an outspoken capitalist. in january of this year, shortly , her his 82nd birthday wrote a controversial letter to the editor which was published in the wall street journal. gainedter has since notoriety for the parallels it makes between jews in nazi germany and the current one percent. here in the bay area, tom's comments on income inequality feel particularly relevant given the current tensions ruling among san franciscans and what is known as the techie community. without any further introduction, please join me in welcoming tom perkins. [applause] i want to start at the very top which is to ask you what the catalyst was for your writing this short letter to the wall street journal.

frustrations had been building up for along time about what i see as the demonization of the rich. it was particularly nasty attack triggeredife, which my response. i thought being a norwegian night i should write to her defense. i spilled a little more blood than i had planned, but i'm not sorry didn't. >> i should point out that your wife is in the front row of editorial this evening. you refer to an attack on her. explain. whose attack was at? spend a lot of time on this. over the years, the seven cisco francisco-- the san chronicle has had a series of attacks on her. , she'sof these attacks

number one bestseller on every book. obviously, her books are being read in san francisco, but there never reported in the chronicle, ever. anyway, that is what started it all. >> so you decided to write a letter -- you are angry about an attack in the seven cisco the sane -- in francisco chronicle. the mostned out to be widely read letter in the history of the wall street journal, which, of course, is surprising. i used a forbidden word. which shouldn't be used ever. you shouldn't compare anything to the holocaust, because it is

incomparable. i said, is there progressive war on the one percent that could be and that got everybody's attention. i made the point that one percent of the population in germany was jewish and that fiendish dictator used his incredible political skills to percenttred on that one and use it as a stepping stone for power. i sigh parallel between our one percent here in america and that one percent. drew.s a parallel i >> he subsequently apologized for having used the not see reference and you quickly followed up by saying you're not apologizing for suggesting that victimizing a small minority is , period, and that

was your point. onthe wall street journal february 4 had a rather long op-ed piece by a professor at , ruth weiss, she's a professor of yiddish and comparative languages and she has written a couple of books about the not seas and the holocaust. the headline is, the dark side of the war on the one percent. anti-semitism and the american class conflict. is there any connection between them? tom perkins called attention to certain parallels that he saw between out to germany and jews and americans, progressives and the one percent. for comparing two historically --parate societies, tom was

there is something to be said for his comparison of the two situations. youyou among -- are unemployed? that the jews have your jobs. is your family mired in poverty? the rothschilds have your money. the parallel the tom perkins to sallies against wall street and the one percent. the ranks of those -- anyone seeking to understand the inner workings of such a campaign to find much food for thought in perkins letter. >> our overall goal for the evening is to spores much as we can the subject of inequality and why inequality is such a hot what an issue. academicbject of her

point, you must see the a smallce between was essentially powerless being persecuted by majority and on the other hand a small minority that is extremely powerful, that has all the resources of modern society and wealth being persecuted, i'll grant you, by a majority, namely the other 99%, although the group you are referring to is at various times several hundred protesters who are angry. >> i think the parallel holds. typical german that never met a jew, but some of the jews were extremely well for me. they were very prominent. i think is a very good parallel.

>> you're saying that the average occupy wall street protester has never met a rich writes a somebody who google buzz, is that your point? >> probably. i think so. point -- concede the you have chosen to speak for the one percent. i admire you. not only do you have the courage of your convictions. repeatedly.m ca the one percent has certain advantages and ways of defending an ethnic group that is being persecuted that is small does not. >> i think i have answered that already. lawsrmany had american gun , there never would have been a hitler. now that is controversial. >> if nazi germany had gun laws

-- >> if germany had america's hadlaws -- >> if germany made firearms available to the public -- >> then hitler never would've happened, exactly. >> you are a fan of our current gun laws. >> no, not particularly, but it is in our constitution. i am a fan of that. ok -- [laughter] will notgree that we illuminate your thinking anymore on the comparison of the rich one percent with the jews in nazi germany. to talk aboute the nature of the persecution of the one percent. i would like to start with some

facts, which are always useful. >> and may or may not be useful, but go ahead very >> well, we will see. thinkof all, i don't anybody has any idea what the one percent is actually contributing to america. let me just get into that very quickly. i have it here somewhere. bit aboutk a little the persecution of the rich. ochould like to take the k brothers. contributors to charities and so forth. koch was on the board of the new york presbyterian hospital. the hospital is going bankrupt and so david gave $100 million

to the hospital. as hims interpreted buying the hospital for the purpose of firing the nurses and disturbing the nurses union areas there is a big rally and all kinds of important people showed up. kochurses said that the brothers have a plantation mentality. letitia james, who is head of the union, said right-wing antiunion profiteers like david meddling witht be health care in new york city. all have to stand together against the koch brothers coming to new york city. click so far these are facts. you wanted to talk about the contribution of rich people, which i think is an interesting line of discussion.

>> let's start with simple arithmetic. let's say you are a successful author and your at a little over 50% if you live in california. beyour death, there will roughly another 50% tax. so out of the dollars you .riginally made, you kept 25% you give 75% of your lifetime's work in the form of taxes, not including property and other taxes. that is on an individual basis. i have just learned something today that i suspect nobody in the audience is familiar with, maybe you are. home andou sell your you are making more than $250,000 as a family and you sell your home and there's a

,apital gain on the home obamacare has added a 3.8% tax on your gain. how many of you knew that? , ok. a few i didn't know. want to get to the actual statistics. ok, i'll make this brief. i got this from the tax foundation heard these are facts. the top one percent of taxpayers pay a greater share of the income tax burden than the bottom 90% combined, which totals more than 120 million taxpayers. in 2010, the top one percent of taxpayers, which totals roughly 1.4 million taxpayers, paid .bout 37% of all income taxes

this is a big jump from 1985, when the top one percent a quarter of all income taxes. burden on the tax , and the% is dropped bottom 50% pays only 2.4% of the total taxes. the top 10% of taxpayers, the top 10%, pays 70.6%. so the argument of the rich are not paying their share, as obama likes to say, and they -- >> more and so forth, let's be clear about what were talking about. the argument is that there's a war against the rich and that the rich are being persecuted. we are not having a conversation about whether the rich are doing enough. your argument is at the rich are being persecuted. that is your point.

what is a persecution you're referring to? >> of course. taxation is a former persecution, but extreme progressivity of the tax rate is a former persecution. , firsteme progressivity of all, is not new. getting worse, to use your terminology. thrived on and withstood high taxes before. i'm trying to put this in scope of history to ask you where is the persecution in that? um, i think if you pay 75% of your lives earning so the government, you have been persecuted. meanwhile, let's get back to the 99% for a minute and talk about

them. they are not doing very well. they're doing extremely badly. 1985, the average family making $250,000 a year paid 40% income tax. 47% income tax. about half of that increase is obamacare. so nobody is having a wonderful time with taxes. >> i think everyone in the room , and part of the reason they came to hear this 99% --ation, is that the which is an in elegant measure of those were not super wealthy -- but the 99% are hurting. there is income inequality. you are agreeing with that.

>> the next question is what to do about it. there's a perception that you want to address. there is a perception in the country and san francisco particularly that the people who make this great wealth essentially don't give a dam. dam, and i'mve a concerned about what is happening to the one percent. but san francisco doesn't like the experience of becoming a suburb of silicon valley, and that is what is happening. >> i feel like san francisco, relatively speaking, is thriving as a center of job creation. how is it becoming a suburb? >> because the people in silicon valley are living in seven cisco more and more and more. this is a trend that will continue. why not? it is a great city.

been for culture and a beautiful bay. the economic fact is to drive up rents about ernie percent. 30%.out there's not much you can do about that. it is inevitable. a silicon valley thrives, more and more people will want to live in san francisco. so then we have the phenomenon which i findes, almost incomprehensible to get but webout google buses, started google and if they wanted buses is fine with me. up isugh people preposterous. boats.have google will they be out there shooting at the boats? thate specific issue is

boorish behavior is boorish behavior. raking windows of buses is a bad idea. should the city specifically be reimbursed handsomely for use of its facilities, namely the bus stops. number two, if we encourage companies like google, and google is the only one, if we encourage them and their employees to opt out of the public transit system, is it only going to make the public transit system worse? do we care? do you care about the public do have antem? opinion on the use of city resources, and you agree with the phils -- with the philosophical point -- for example, public infrastructure is a good thing. >> of course it is. and it is available for everybody. google is paying a fee for using the bus stops.

>> belatedly. >> well, but they're paying. is google responsible for the rising rents and seven cisco? indirectly, yes. what can they do about it? nothing. >> now, we started down the path of what can be done about income inequality. >> i'd like to get on to that point, actually. i think that income inequality has been with us for a while and it's caused by policy failures. i think there's been a huge failure of social policy, fiscal policy, and monetary policy. i hope i don't put you all asleep as i touch on those points. let's start with social policy. fifty years ago, lyndon johnson did two major things.

he did the civil rights act, which is marvelous, magnificent, and i think without criticism. he also did the war on poverty, which had wonderful aspirations, but which has been an absolute and total failure. it has caused all kinds of problems. first of all, there's more poverty more now than there ever has been. when johnson started out, the government was spending roughly 1% of its gross domestic product taking care of the poor. now, that's closer to 5%. that's a huge increase. there's 77 million americans on food stamps. i think the biggest problem that johnson unknowingly created was the destruction of the lower end of families in america. now, back in the 1960's and early 1970's, the divorce between whites, blacks and hispanics was about equal. it was about 12% across all those sectors.

the war on poverty made it possible to have single mothers supporting their children without a working man in the household. the numbers have just changed radically. the divorce rates have skyrocketed. to use a victorian term, the birthrate out of wedlock has gone from 12%, which is pretty much uniform across all races in america, to 40% now for whites and over 70% for blacks. >> so i'm clear, you're drawing a straight line between the failed war on poverty and income inequality today. >> i'm drawing a straight line

between the failed war on poverty and the increase of poverty, yes. >> you started by talking about social spending. i think, as i've read and listened to comments that you've made, you generally would subscribe to the theory that we have more government than we need, that we spend too much on government. first of all, that government spends too much generally, is that a fair point? >> well, government is a giant beast that has to be fed and the only way to feed it is with taxes. taxes will just go up, and up, and up. i think obamacare is probably -- >> the question i asked is, in your opinion, does the government generally spend too much? >> yes, it spends more than it takes in. it takes in $3 trillion a year in taxes and it spends closer to $4 trillion. >> don't forget, we were talking about a tax policy earlier. you're against higher taxes. other people are for higher taxes. presumably, we could raise taxes to pay for these things, which

gets me back to the question of do we spend too much? >> well, we do spend too much. there are so many examples of that. i don't think i need to -- taxes will rise. now, there's been discussion by nancy pelosi. you're familiar with her? >> our congresswoman. >> our congresswoman. >> your congresswoman. >> of a wealth tax, it would be 2% per year on your wealth. somebody said, "well, let's say you're retired and your wealth is in your house and it's worth a million dollars." she said, "well that's no problem, the government will just take a 2% mortgage per year and that's how we'll get the money." she has also talked about a value-added tax and much higher taxes on the wealthy. the beast will be fed and taxes will go up.

i don't know which, maybe perhaps all of these things will happen. the irony is if you took 100 % of the 1%'s income and wealth, we're only talking about a 1.4 million people. that total would run the government for about a month. >> other than social spending, where would you cut? >> i think that we're getting into an area where my bona fides are stretched very thin. we really should have a panel of experts but of course, they wouldn't agree with each other. you might as well go with what i have to say. [laughter] >> well, you are the man of the hour. we have no alternative. >> i don't know, i think entitlements are the obvious place that the cuts have to be made, but they're built into the law so that's extremely

difficult. i'd like to skip on. >> excuse me, before you do, i ask this line of questioning to try to flesh out a point. which is, for example, one of your greatest successes in your illustrious venture capitalist career was genentech. genentech was one of the first and most successful biotech companies. did genentech, and does genentech benefit from basic medical research that the national institutes of health does? >> yes, more at the university research, but yes. >> this is good use of the federal government? >> i'm all for the federal government funding basic research. i'm for a strong military, and so on and so on. we could go down the list. entitlements are what is eating up the budget. >> so to be clear, companies like tandem and compaq, which you invested in and made a lot of money in, and helped and

create a lot of jobs, also benefited from military and other basic research by the united states government into the internet. without which, none of this industry, none of the silicon valley today would exist. >> you're wrong on that. tandem did no military business, at all. >> no, not directly, but the infrastructure that was established by computing. >> adam, you're barking up the wrong tree. i'm not going to go there. the squirrel is in a different tree. [laughter] >> i want to get back to the policy problems. it's the social policy, number one problem. fiscal policy, let's talk about that. >> well, we spend too much. [laughter] >> yes, we spend too much. the numbers are just incredible

and our debt is astronomical. the official debt is $17.2 trillion today. that includes social security. that's roughly 105% of our gross national product. now, if you were an individual and you were earning $100,000 a year and you were spending $105,000, you had no other assets, you'd obviously be in trouble. it's worse than that. the unfunded liabilities of medicare, medicaid, fannie and freddie, and so forth, adds up to $68 trillion, on top of the $17 trillion. we really have a debt-to-gdp ratio of pretty close to 400%. now, many european countries have that, but many countries in the world don't have that at all. australia has a ratio of 20%.

norway has zero. norway has the largest sovereign wealth fund in the world of over $1 trillion. policy matters, fiscal policy matters. it seems to me that the debt will not be paid back. there's no way to pay the debt -- wait. let me finish. wait, adam. >> i want to ask you, briefly, how those factors that you're discussing contribute to income inequality? >> well, it contributes to being so far in debt that you can't spend in things you should spend on because you're so hopelessly committed. inevitably, the taxes will just rise, and rise, and rise, which i don't think does anybody any good, 99%, or 1% or whatever. my point is, we're, i think, on a knife-edge, with this incredible debt, which can't be paid back. i mean it just can't be.

it's supported by faith in the dollar. now, churchill took the uk off the gold standard in his second administration. do you know who took us off the gold standard? >> nixon, i assume. >> yes, nixon. after that, it was just print money. if you have a recession, print money. stimulate the economy. have inflation? print money. devalue the dollar. $1 in 1970 was worth $1. today, it's worth 17 cents. >> let me make an observation as a way of moving on to other subjects, which is -- >> i don't want to move on. >> i have a few more we need to cover before we go to the audience. is there a dissonance here? this horrible situation you describe is coexisting with this great period of wealth creation and job creation, and the formation of great new companies like twitter, facebook,

linkedin, and google, that are in turn causing the consternation that we've come here to talk about tonight. >> yes, and that gets me -- thank you -- directly to monetary policy. >> you're welcome, but briefly on monetary policy, because it's the evening time and nobody wants to hear about monetary policy. >> all right, let's hear about it for a minute. we've had low interest rates for a couple of decades, a little more. very low. historically low for a long, long time. now, investors with capital are seeking return on their capital. these low interest rates, the rate on a 10-year treasury is 2.3%, i think, today. very low, so investors are seeking returns of 7%, 8%, 10%. an incredible amount of money, to get directly to your point, has flowed into venture capital. now, when eugene kleiner and i, the late eugene kleiner, my dear

friend -- >> your co-founder of kleiner perkins. >> co-founder. when we started kleiner perkins, we tried to raise $10 million and we couldn't. we raised $8 million, and that was the largest venture capital fund in the world. everybody said, "what are you going to do with it?" well, it turned out, we had to start our own companies and so forth to make it work, but that's a different story. now, we have, i don't think anybody knows how many hundreds of billions of dollars in venture capital. the amount is immense, and that is causing the boom in san francisco. within a mile of here, there are probably 1,000 startups. >> in your opinion, these are good things. >> no, not necessarily. >> why not? >> why not? because these startups -- students are dropping out of mit in their junior year to go to san francisco and do a startup, but they're not starting companies.

they're writing software applications, which are products. there's a huge difference between a product and a company. their only route to liquidity is to sell it to google, apple, whatever. most of them will fail. that's fine because there's so much money around, they can fail and then fail again. they'll keep getting financed. it's not good for them. they're not getting the education at mit they should have gotten. they dropped out. they're not learning how to be entrepreneurs. they're just writing software and applications. there are so many millions. somebody probably knows how many millions of applications there are already are, but there's no great shortage of them. i see the building boom, the housing boom, and all of this as a result of terrible monetary policy for 20 years.

>> i grant your point on monetary policy. this situation you described of a flood of venture capital, flooding essentially what, to paraphrase you, are a bunch of bad ideas or insufficient ideas, ideas that won't be real companies. isn't this the great capitalist free-for-all? isn't this just the market at work? >> yes, it is. when the interest rate goes back up to 3%, it will stop. or, no, 7%. excuse me, i misspoke. >> it's a fascinating line of argumentation you're making, i think. >> some successes will come out of this. it's like a petri dish. some of them may bloom and blossom. kleiner perkins has been pretty good at picking them. >> wasn't it like that in your days as an active venture capitalist as well, maybe at a smaller scale? you invested in young companies. maybe they had a hair-brained

idea. maybe they had a great idea. maybe they were going to make money. maybe they were going to have to go get a real job. right? >> well, i could give a speech on venture capital in my sleep, which would put you all there, too. [laughter] >> i think that the unique thing about kleiner perkins, and sequoia, and i think the other great venture capital firms is the management skills that they brought to the ventures. typically, they would help the entrepreneur build his team. they wouldn't expect to find a team already built. who's going to become the vice president of marketing of a startup number 780? >> i understand. >> the venture capitalists can fill that role, provide all that help, and get the thing going. that's the difference between an angel investor, who just sprinkles gold over everything, and a venture capital investor. i'm not slamming around conway, because i think he's very good,

but not all are. >> you've referred to, in this conversation, about the 1%. you've referred to this 1% as the most creative part of our society. would you explain that? because the war on the rich as been framed initially as the richest 1%, not the most creative 1%. >> well, there's a high correlation. look, i guess kleiner and i were in the business of creating billionaires. we didn't do so for ourselves. well, we did all right, but 20, 30 billionaires that i could name that we've created. look at google. >> i'm confused. is there a correlation? >> there is a correlation. >> couldn't there be a creative poet or a creative artist who is among the most creative 1% in

the country? why would you correlate creativity with wealth? >> you are jumping into a completely different philosophical universe. you're talking about value, not wealth. i am talking strictly about the wealthiest 1%, not the brightest, not the best poets, etc. >> creative, though, was your word. >> well, yes. the wealthy 1% creates jobs. that's where they come from, not the government. god, the government can't create a job to save its soul. it spends millions and you get nothing. or, i must say, the government is right now the biggest venture capitalist. look at solyndra, which has been beat to death. even kleiner perkins, we have an automobile company that borrowed money from the government.

not on my watch, but -- >> you're talking about fisker? >> i'm talking about fisker. anyway, the government is in the venture capital business. everybody is in the venture capital business. you're bound to get some good out of all that. >> you mentioned to me earlier that you've been involved in controversy, all your career. in your current controversy, you seemed surprised that the current partners of kleiner perkins are not on your side on this debate. >> i don't really want to talk about that. i think basically, they didn't have to say anything. instead, they threw me under the bus, but i'm a big boy. i have had a lot of controversy in my life. for a long time, i was the world's foremost misogynist for firing patty dunn and carly fiorina of hewlett packard. then, when i was involved in genentech, i was going to destroy the world by releasing frankenstein bacteria, as new

forms of life. there was a journalist in the "chronicle" maybe some of you remember, charles mccabe, who just castigated me every day on that. when i started my laser company in the 1960's, the rioters in berkeley thought it was a death ray. [laughter] >> yeah. the year i ran the san francisco valley effectively was a year of extreme controversy. herb caen called me, essentially, an idiot in charge, doing something he has no qualifications whatsoever to do, which was true. [laughter] the guy i hired, helgi tomasson, was still there 27 years later.

>> it's almost time for audience questions. you mentioned herb caen. you started your comments by mentioning the "san francisco chronicle." are you surprised that the "san francisco chronicle" has a populist tone in its pages? [laughter] >> i think there's only one newspaper in the united states that doesn't have a populist tone, and it's the only newspaper in the united states that's making any money. that's "the wall street journal." >> point of fact, other newspapers make money. it's not the only one. i believe "usa today" makes money. "the new york times" makes money. >> that's not a newspaper. [laughter] >> and "the new york times" does not make money. >> i'm not sure, but it's a public company, so we could go check afterwards. >> we could go check. >> anyway, the question that i asked is, are you surprised? you've made comments suggesting that you are surprised, shocked, upset, or something by the "chronicle's" tone. >> well, i read the "chronicle" every day. i want to know what's going on in town. i never read the editorial page.

i could predict the editorial page. i don't need to read it. i read "the new york times" every day, and "the wall street journal." i don't get my information off the internet, like everybody else does. i think i know a lot more than people who do get it off the internet, but that's a matter of personal opinion. >> you also mentioned to me earlier that you've noticed a difference in the reaction you've gotten in the last handful of weeks, between people who email you on the one hand and people who comment about you on twitter on the other hand. would you share that with everybody? >> it's very interesting. i've received a huge number of letters and emails, all very supportive of my position, 100%. the twitters are all pretty negative, and it's an age difference. older people use email and younger people twitter.

>> my last question for you tom. you were asked -- >> when they're not playing video games. [laughter] >> you were asked recently in a television interview if you feel you're connected to reality. during that interview, you talked about your expensive watch and the yacht that you used to own. your response to the question of whether or not you're connected to reality was, i'm paraphrasing, "i give a lot of money to charity." >> well, i do give a lot of money to charity, but that has nothing to do with my connection to reality. i think, philosophically, probably no one can prove that they are connected to reality. [laughter] >> i'm in the same boat with everybody else. how about you, adam? [laughter] you're a celebrated interviewer. are you attached to reality? [laughter] >> my guess would be that one of the ways you answered the question was also that, although your immediate family is doing

fine, you have relatives who live in trailer parks. i think the point you were making was you know poor people. >> well, i wasn't born into the 1%. i used to be a paperboy, which is now of course illegal because of child labor and minimum wages. [laughter] >> i used to bag groceries and babysit, etc. that's outlawed, but so it goes. >> we have a wonderful, vibrant audience here with a wonderfully vibrant interview subject tonight. i want to invite you to stand up and go to the microphone to ask questions. i'll remind you that these need to be questions. if they aren't questions, i will apologize in advance for being rude to you, to remind you to ask a question. sir, please, go ahead. >> yeah, thank you for coming tonight. i appreciate you visiting this audience. with socioeconomic disparity or

dis-inclusion, however you want to say it, particularly in cities, being really the civil rights issue of our time, and you being so connected, too, you're a brahmin of financial value creation. you being connected to people like google founders, not to mention the vc community that you run in. would you be willing to be part of, say, a fund in which you give 1% of your money to, and help manage that fund and the use of that fund that harnesses the entrepreneurial talent of san francisco, to address urban poverty issues that the tech economy or the emerging economy at large is exacerbating? >> i think i heard most of that. i'm not part of such of thing, but such a thing is being organized by ron conway and marc benowitz. >> benioff. >> benioff, excuse me. i'm not familiar with the details of it, but they are trying to do exactly what you have said for the benefit of san

francisco. >> i don't know if you caught it. at the very end of it, the tail end of his question, he injected the premise that the tech community is exacerbating the problems of poverty in san francisco specifically. >> well, they're not. they're just making enough to pay higher rents, but i don't see that as exacerbating the problems of poverty. >> thank you. i wanted to say as a reminder to our radio audience, this program is presented by the commonwealth club's inforum "connect your intellect." for more about inforum and its upcoming events, please visit us on facebook or follow us @inforumsf on twitter. tonight, we're hosting tom perkins, "the war on the 1%," and we have another question in the audience. please. >> hi, mr. perkins. i'm a student at stanford law school, and in my free time from playing video games, two of the things i do are -- [laughter]

>> well, we started electronic arts. that's great. [laughter] >> one of the things i do is work in the community law clinic, mostly with spanish-speaking people from east palo alto. the other thing i do is i teach a class on california's finances. from these different contexts, i've gleaned, first of all -- >> we need to have your question. i'm sorry. this is a question for tom perkins. >> what do i tell the people i work with in east palo alto? if you could speak to them, what would you say? >> thank you. >> i feel very sorry for them. i wish that the war on poverty had not been such a fiasco, and then they wouldn't have the problem that they now have. the solution will take a very long time. it depends a lot on education, which is getting worse because of, frankly, the teacher's union. it's making it impossible to have quality schools in the inner cities, and so on and on. there are no quick answers to these kinds of questions, i'm afraid, at least not from me.

from barack obama, yes, they flow. >> over here, please. >> hi, hello. well, good evening. thank you very much for coming and sharing. you made a lot of statements about pointing fingers, but one of the things you didn't address was the role of financial literacy, the role of access, and the role race plays in a lot of these things. if you could, just highlight maybe your thoughts. how are you bringing financial literacy to a lot of these communities? what are your thoughts on some of the ways you've contributed to that, or just opportunities to do that? >> yeah, i think i got most of that. silicon valley is a meritocracy. it is simply a meritocracy. race has nothing whatsoever to do with it, but blacks are underrepresented in silicon

valley, unfortunately. now, there's a group here in san francisco. they're successful black businessmen of all kinds. they've formed something called wall street wizards. what they're trying to do is teach young blacks about business and how to succeed in that. last year, during nation black awareness week -- that may be the wrong title -- i agreed to speak to that group. all of the mentors showed up, and not a single student, not one. it must come from the individuals. it can't all come from the government or a program.

if the individuals don't want to learn, they won't. >> please? >> yes. you cited johnson's war on poverty as a disaster that led to more poverty and increased the number of children born out of wedlock. what should have been done back then that would have had a different outcome? >> i think the answer to that is very, very long, and i'm not sure i have all those answers. we certainly did the wrong thing. what the right thing would have been, i'm not so sure. >> i would encourage you -- i have learned that you are able to form an opinion on almost anything, tom. it is your opinion that the war on poverty has been a failure, but that is not accepted fact.

>> oh, wait a minute. now, come on. >> no, you don't know that there are not factors, that things would have been even worse without the things that were done. >> that's conceivable, but -- >> i think he's asking a fair question, which is broadly speaking, what would have been the better policy route than the policy route that was taken in the johnson administration? >> well, i think johnson had absolutely no idea that what he was doing was wrong. it looked good and everybody approved it, but it had the result of destroying families. it just did. then that destroyed the education of the children in those families and so forth, so it had a cascading effect. the rate of poverty is higher now than it ever has been in history. there are 77 million americans on food stamps. there's no way -- i don't know how bad it could have gotten. i don't know. >> i'll take a shot for you. instead of the programs that the johnson administration did put into place, if the johnson

administration and the nixon administration instead had focused on deregulation and making government smaller, that we would have less poverty today. >> that's a trap and i'm not going to go into it. i think if money had been spent on improving the educational standards -- let's face it. we are, i don't know, 64th or something among the nations badly educated. we've totally underinvested in education. we've made it very, very hard to get a good education in the united states. if i had to pick a single thing, that's what i would pick that should have been done differently.

>> please? >> could you comment on the fact that your own example of fiscal responsibility, norway, is a social democracy? are you advocating social democracy for the united states? [laughter] >> i'm a knight of norway. i've got to defend it. there are no tall no tall poppies in norway. >> no tall what? >> no tall poppies. well, it's the old adage, the tall poppy gets cut first. everybody is pretty much the same. there's no poverty. there are no rich. they've left norway because they didn't want to pay the taxes. it's not an ideal example. i just threw it in because they've been so extraordinarily well in husbanding their resources, namely their oil. norway has been the number-two oil exporter for decades, next to saudi arabia. they've saved the money.

some day the oil will be gone, but they've got the money. look, if i were 20 years old, of course, i think i'm in my midlife crisis now, anyway. [laughter] >> if i were 20 years old, i'd try to go to with australia. australia is, to me, i've spent a lot of time there, the way california was, when i came here in 1957. it was upbeat, positive, can do, unaware of all kinds of problems. that's the way australia is now, and all we do is worry about our problems. >> when you do go down to mountain view, you don't think of that, or when you walk around market street, you don't think of that as an upbeat, can-do environment? >> well, not seventh and market. that's a good place to -- >> we're getting too local on this conversation.

go ahead. >> hi. i work at genentech. i'd first like to thank you for creating my job. [laughter] >> secondly, knowing a little bit about genentech, i know a huge chunk of our revenue comes from medicare payments. you had mentioned earlier cutting entitlements. that would significantly cut our revenue. that's one example of a public-private revenue partnership or whatever. there's also construction, infrastructure, and education you mentioned. if this revenue that is being spent by the government isn't going to create jobs, what is it doing, if it's not helping keeping people employed at genentech? >> hang on. i think medicare is great. great. >> it's one of the biggest entitlement programs there is. >> it is. it's just underfunded.

>> you want to make this entitlement program bigger? >> no, i want to make sure it doesn't go bankrupt. there's a difference. >> i don't understand. >> you don't understand? >> if we need to cut entitlement programs, then we need to cut entitlement programs. >> adam, medicare will go bankrupt. it's inevitable, so taxes have to be spent on medicare. i am for that. >> the entitlements that you're against are? >> i didn't say i was against entitlements. i never said that. >> you said they needed to be cut. >> yes, because that's the bulk of the budget. there's very little discretionary cutting you can do. the military and a handful of this and that, but entitlements represent most of the budget. if you're going to cut the budget, which we have to do because we're so deeply in debt, you've got to start there. there are good ones and there are bad ones. >> the bad ones are? >> i doubt that 77 million people need to be on food stamps. >> food stamps, ok.

next question, please? >> hi. i have a speech impediment, so in case you don't understand, i'll be happy to repeat myself. i'm part of the 99% that aspires to be the 1% some day. i work 70, 90 hours a week to make sure that some day, hopefully, i'll become the 1%. do you think this could be potentially an image problem for the 1%? there are billionaires out there who we love, like steve jobs, musk, bill gates. do you think that instead of calling this "the war on the 1%," if we could actually address it as the race to the 1%, things would be a lot better for everybody? >> i think that's a brilliant re-branding. [laughter] i totally subscribe to it, but my message is the demonization of the 1%. i think that's true, and it's new. it's, frankly, new with the obama administration. we never used to have a demonization of the 1%.

we wanted to be in the 1%. we admired them. i can remember when i was a little kid, john d. rockefeller would go around and give dimes to the little children. i thought, "how wonderful. i'd like to be john d. rockefeller and give dimes." this whole tone has changed in the last very recent years under this administration, i think. >> do you think it's because of obama or is it because of the 1% not being philanthropic enough? >> not being philanthropic enough, is that what you're asking? >> right. >> i've discussed the taxes. the 1% is carrying the government. at least the top 10% is carrying the government. we've talked about that. it's not bad to be in the 1%, obviously. i think people, like yourself, still aspire to it and should. hard work and so on can get you there, plus the right venture capitalist.

>> over here, please? >> the president has proposed a lot of common sense ideas around immigration reform, around infrastructure spending, but at every turn, he's been road blocked by the republicans in congress failing to want to agree with him on moving a policy agenda forward. what are your thoughts on simply the politics of no, as opposed to proposing an alternative agenda? >> i'm neither a republican, nor a democrat. i've gone both ways. i voted for jerry brown, which then he raised my taxes 30%. [laughter] >> president obama made an immense political mistake. he's not a politician. he's a brilliant leader in a certain direction. the mistake was to push through obamacare without a single republican vote.

no other president would have done that, because it just wiped out any hope of cooperation with the other party. in spite of all his talk about reaching across the aisle and so forth, nothing has happened. you can blame it on the republicans, but i blame it on a huge strategic political mistake. >> it's the president's obstinacy in wanting his agenda passed that is to blame for the other party's intransigence? >> i think it's what you get when you elect an amateur president. >> tom, is that really fair? [applause] >> he's a politician who was elected by the people of the united states, not once, but twice, so why the name-calling? >> i've looked at his resume. [laughter] >> you've never met an entrepreneur who had never been an entrepreneur before, or a venture capitalist who had never

made an investment before? >> i wouldn't make him president of the united states. [laughter] >> over here, please? >> hi. you just said that it's not bad being in the 1%, but you're also talking about the demonization of the 1%. we do know exactly what happened to the jews in europe, so i'm actually curious what the fear is. it can't possibly be ghetto-ization, or deportation or extermination. >> i get your question, but we're almost out -- >> i do want to understand what the actual fear is? >> the fear is wealth tax, higher taxes, higher death taxes, just more taxes, until there is no more 1%. then that will creep down to the 5% and then the 10%. the money is in the middle. that's where the money in america is. to pay for this government, it's going to have to come from the 99%, not the 1%, in the form of taxes, value-added taxes. i promise you, higher taxes,