♪ this week on "moyers & co." >> we have this kind of community of rich people who genuinely believe that they are th wealth create evers and that they should get everth advantag and break, whereas everybody else is a parasite and they're living off of them. >> how dare they have the gall to actually argue that too much regulation ofamerican financial services is what is killing the economy. >> funding is provided by carnegie corporation of new york. celebrating 100 years of philanthropy and committed to doing real and permanent good in the world. the kohlberg fundation.

independent production firm with support from the part religion foundation. a john and pauley guff charitable fund. the clement foundation. park foundation, dedicated to heghtenii public awareness of critical issues. the herb albert foundation, supporting organizations whose mission is to promote compassion and creativity in our society. dthe bernard and addry rapport foundation. the john d. and katherine t. mcarthur foundation. committed to building a more just, verdant and peaceful world. more information at t mackfound.org. the bessie and jesse sync foundation. the hkh foundation. barbara j. fleischmann, and by our sole corporate sponsor, mutual of america, designing customized individual and group retirement products. that's why we're your retirement company. welcome. the new gilded age is rring down on us. an uncaged tiger on a rampage.

walk out to the street in front of our office and turn ririt, and you can see the symbol of it. a fancy new skyscraper, going up two blocks away. when finished, this high rise among high rises wi tower 1,000 feet. the tallest residential building in the city. "the new york times" has dubbed it the global billionaire's club, and for good reason. at least two of the apartments are under contract for more than $90 million each. others, more modest, range in price from $45 million to more than $50 million. simultaneously, the powers that be have just awarded donal hd trump, yes, that donald trump, the right to run a golf course in the bronx which taxpayers are spending at least $97 million to build. what amounts to a public subsidy, says the indignant city comptroller for a luxus, golf course. good grief. a handout to the pollute contracts. this is a city where economic

inequality rivals that of a third world counuy. of america's 25 largest cities new york is now the most unequal. the median income for the bottom 20% last year was less than $9,000. while the top 1% of new yorkers has an average income of ou$2.2 million across america this divide between the super rich and everyone else has become a yawning chasm.ac at no time in modern history has the top 100th of 1% owned more of o wealth or paid so low a tax rate. but in neither of the two presidential debates so far has the vastness of this astounding inequality gap been discussed. not by mitt romney. who is the embodiment of the predatory world of financial capitalism. and not even by barack obama, whose partyonce fought for working men and women against

the economic loyalists. so just in ontime, if not too late, comes this definitive examination of inequality. pollute contracts, the rise of the newglobal supervich and the fall of yaef one else. the author is chstia freeman, whose journalism is steeped in years of covering robber baron from mexico and india. once deputy editor of the globe and mail in canada and the correspondent for the financial times and the economists she is now the editor of thompson reuters digital. we're joined by matt taibbi who has made the magazine rolling stone a go-to source for understanding the financial scandals in rural america. who can forget his 2009 article on the great american bubble machine. which describes goldman sachs as a great vampire squid wrapped around the face of humanity

relentlessly so jabbing its blood funnel into anything that smells like money. welcome to you both. income inequality hasoared to the highest level since the great depression. with the top 1% taking 93% of the income earned in the f tst year after the recovery. the first full year after the recovery. why are the two candidates not talking about ineqstlity growing at breakneck speed? >> you know, i think because it is still a tab t in american political life. and in american cultural le. one of the economists i talked to who works for the world bank, and he said to me, you know, and he's a specialist in income inequality. he said when you go to think tanks and you say you'd like to do a study about poverty, they say that's fine, that's great. we're happy to fund it. because writing about poverty kes everybody feel good.ke and feel that they're being charitable. but if you say i want to study

income inequality, and even most dangerously, i want to study what's happening at the very top of the distribution, what they said to me is the think tanks immediately pull away. because they say ourb donors won't like it. and that actually challenges the whle economic setup of the united states. ond of western capitalism. it's very, very threatening. and i think that tathy why you've had the billionaire class. you know, the minute barack obama -- i would actually say rather gently suggested that the millionaires and the billionaires should pay a little bit more, you had immediate w cries of class warfare from tar plutocrats, and very emotional. you know, there wasal an activi investor who sent an e-mail to his friends, the subject line is, battered wives. and in the e-mail, he compares himself and his fellow multimillionaires to battered wives who are being beaten by the president. he actually uses those rds.

>> and i thought it was really interesting, in your book, how you pointed out that bill clinton himself responded to obama's criticism by saying, yod know, i would have done it a little bit differently. i think, you know, you can't attackuthese people for their success. and i think that's very relevant, because if you goth bk in time it wasn't always this way, but i think the shift really beganiith clintoni and the new democrats. i think after, you know, walter mondale lost in 1984, the democrats decided, you know, we're never going to lose the funding battle again. and they began this sort of imperceptible shift where they continued to campaign on social issues, the same way they had before. they retained their liberalism in that sense. but economically, they began to side more and more with wall street, and more and more with the very rich, and they've, i think we've now reached the point where neither party really represents the very poor in the way that the democrats maybe used to. andot'hat's why you don't see it in the debates because neither party is really an

advocate for that kind of lefth behind class anymore. >> it is the people at the bottom. but it's aeso the people in the middle. you know the middle class is being hammered. those jobs are hollowed 'sout. and where are the people pulling back and sing, okay, technology revolution, we loveu it. globalization. i love that, too. and i think it's greateople are being raised up india and china d now africa. but let's think dout how our society and our politics need to change to accommodate this. and no one is doing that. meanwhile the guys at the top who are making -- who are doing so, so well,so actually are saying, w need to slant the political system even more in our own favor. sive about we so p th p? >> well, i think first of all, the poor in this country have been incredibly demoralized. whether it's the relentless attention of, you know, bill collectors, or if you go to poor neighborhoods. i was out in queens last night interviewing a kid who's been stopped and frisked 70 times

already. he's 22 years old. you have this constant interference by the police, if you live in a bad neighborhood. there are all these obstacles to getting up, and rising up, and having your own voice. and also, i think, in the media we get these res all rightless messages that being poor is your own fault and people who are rich deserve to be rich. a lot of americans are disillusioned about their situation. they believe on some leel that if they're poor they deserve to be that way.el so they're reluctant to go out and revolt the way maybe europeans in the last century, early in the last century would have. >> left unanswered. left unanswered,here does this vast inequality take america? >> well, i think to a very bad place. and i see two real d present dangers. one is, that you see an increase of the political capture. >> of what? >> of the political capture. so the people at theen very, ve

top capturing the political system, and most usually, i think, something that an economist who i call william boyter, he calls it cognitive capture, where he says look, it's not like this vast conspiracy. it's not as if, you know, everyone is on the payroll of the plutocrats, this guy, okay, he's now the chief economist of citigroup. he wrote this when he was an academic economists, so he's hardly, you know, some kind of markist on a barricade. his argument was that part of ase reason the financial crisis happened is the entire intellectual establishment, not just people inside investment banks, b regulators, academic economists, financial journalists, had all been captured by the financial sector's vision of how the economy should work. and in particular light touch regulation. and i think there is a broader cognitive capture of, you know, you might call it the intellectual class. the public intellectuals.

around, maybe the inevitability of plutocracy. as matt was saying this motion that if you're poor it's your own fault. you're part of this dependent 47%. unions are very bad. all of that sort of stuff. i think that that cognitive capture increases and i think what you see increaorngly is, you know, elites like tocr thin of themselves as acting in the collective interest, even as they act in their personal vested interest. and so what isthink you end up ineing is social mobility, which is already decreasing in t united states. increasingly squeezed. you see particularly po erful sectors, finance, oil. i would say ter technology sector is going to be next in line getting lots of government subsidies. and meanwhile i think you see much less money spent on the things thatiddle class and the poor need. that's why you have this, you know, full bore attack on entitlements. right? c

why is the plutracy so oenthusiastic about cutting entitlement spending. because they don't need it -- >> where was outrage when the $5 trillion or $6 trillion in bailouts was coming their way. >> i really worry about that. the other thing that i worry about is you do start actually stifling economic growth. so you know, if you want my dystopia scenario of the united states is america is moving into a more latin america style economy. a few incredibly rich having just great lives,and then people at the bottom really struggling. >> we both lived that. we saw that in russia, it happened in the mid '90s. >> you both cut your teeth in journalism covering russia. what do you take away from that that is relevant to what's happening in this country? >> that experience completely shaped the way ian look at the present situation in the america. in the mid '90s, suddenly m whe russia became a quote/unquote capitalist society, you suddenly

had this instant dision of the entire society, into this t ve, very tiny group of people at the top who had more money than anybody in the world. and then there was everybody else who had nothing. >> and they got it through privatization. the government sold off the resources. >> sold in quotation marks. >> that's the key part that i thinkeople don't understand. what happened in russia was really a merger of state and private power that empowered this one tinely nil cls. there was this moment in russia's history called loans for shares. where a few people, a lot of them were ex-kgb types, were essentially handed the jewels of russian industry by the people in the yetten government. there were companies that were put inharge of their own auctions, so they -- >> they were all in charge of theiown auctions. >> all in charge of their own auctions. so you would have an auction for an oil company, and a bank would be put in charge of that auction, and the bank magically you know, would win the auction for the oil company.

which was worth billions or even hundreds of billions of dollars. and that's how they instantly created this super wealthy class of people, and everybody else had nothing. this one story for me, this image that i'll never forget. i went to a coal mine up in the russian arctic north, where workers hadn't been paid their salaries for nine, ten months at a time. and when i went to the mine, the mine owners, the first thing theyanted to do was theke me to their bright, shiny new lounge that they had built for themselves and show off their brand-new slate pool table that they had built with the money that they weren't paying to their workers. that to me perfectly expressed the divide in modern russian society. youave these people who are living off nothing on the one hand. and then you had these super wealthy peophe who had been enabled who just kept the money for themselves. that's, i think, you know, it's ape caricature of what we're experiencing here in america but i think that's where the world is drifting toward now. >> you write about some of these super rich, not only with nsight, but with empathy.

that is you've got to talk to a lot of them. you have moved among them as a financial journalist, beeninto davos and other places like that. and i'm wondering, how did you crack what is clearly a tight-lipped world? >> well, i guess the way journalists do it. just by talking to people, writing about them. i think you write stories that show people that actually you're tointerested in what they're doing. and what i would also say is, you know, i believe in capitalism. and i also actually believe in globalization and technology ref lulgs. if you gave me the option of turning the clock back to the 19 s i wouldn't do it. partly because i'm a woman and things were not that great for us then. you know, it's important, i i think a t,mistake that the left can make, in criticizing income inequality isinto behave as if this is entirely ato political confection, it's entirely about political capture, there are no genuine, legitimate and actually benign economic forces driving p

it. because i think there are. i think the winner take all economic dynamic is something that is existing separate from the politics. the politics in the united states are exacerbang that division. rather thanngitigating it. but i do think when you pull back and look at the global picture that was something important for me to do inhahe book it becomes a little bit harder to say this particular american tax break, or even this american financhel reform is the only thing driving income inequality. because the really remarkable thlg is the extent to whh this is a globalphenomenon. it's happening across the western industrialized world. i'm canadian. so i'm practically born a socialist in ten view of many americans. t even in canada,en income inequality isd increasing. it's even, you know, for awhile in economic literature the one outlyer was france, so far as economists make jokes, they would say oh, the french they eptional even in this area. now you're seeing it increase in france, too.

and you're seeing it increase il emerging market economies. so i think we do have to accept that there are some economic drivers. those economic drivers are partly put in place by the politics. it was politics that allowed globalization to happen. and in the united states really crucially, and i think you can'y emphasize this too much, look at what happened with the tax code. in the 1950s, this era when america felt itself to be a very conservative society, and it was. the top marginal tax rate was above 90%. >> 91%. i believe. >> just think about that. imagine if barack obama had said, in the debate, this week, you know what governor romney, i think america in the fiftys was a wonderful place. they, too, faced a real budget deficit they had to pay off and the peoplet the very top were willing to pay a 90% top marginal tax rate. would you be willing to do that

governor? imagine if he had said that. >> you cover some of the same crowd chrystia isp writing abou but you do with complete irremember advance. do you still gain access t them? or have all the doors been slammed your face? >> well, the very, very top people won't talk to me. you know, i don't have access to the same people that chrystia may be talking to. but i do talk to a lot of people who work on wall street. in fact, i got started down the road of this whole topic, you know, after i wrote a couple of articles and suddenly there was this outpouring of people from wall street who suddenly wanted to talk to me because they were upset ahut the direction that the financial services industry was taking. so i'm hearing a lot from peoplt sort of from the mile on down. and on wall street, and what they're really upset about is corruption, is this -- this merging of state and private power where the losers don't lole anymore. i think the people who get

really upset are small hedge funds, small a banks, and they e companies like, you know, citigroup and goldman sachs and jpmorgan chase make mistake after mistake, and they get rewarded for it, but with bailouts, and even greater market shares than they had before. and so you know, my analysis is informed by those people, and i think, you know, i think chrystia and i age about a lot a of things about particularly about the growing divide, and how extreme it's become. my analysis, which might be a little bit angrier, just because, you know, from the point of view that i'm particularly looking at is the corruption, and the use of force and state power to people the divide where it is and increase it. >> you both hadointed out that tend to talk as if wall street and the plutocracy were a monolith. but it's not. do you think there is a civil war within the t1%? >> there is absolutely a schism

developing this community. think about it just on one level on the level of banking. all right? you have these too big to fail anks. everybody in the world knows that evbody is going to allow the very biggest commercial banks to go out of business. it will never.bo 2008 proved it. that if they ever get in trouble the government will come in and rescue them. what does that mean for those banks? it means it allows them to borrow money more cheaply. anybody who lends them money knows they're always going to get paid off. in the worst case scenario they're going to get paid off. this gives them an inherent financial advantage over the small, regional commercial bank. which does not have that implied government guantee. so those people are furious. they're furious that they have to compete against t gese gigantic monoliths that have the implicit backing of the u.s. government. then there's the other problem of corruption. i hear all the time from hedge funds, you know, these smaller guys who believe that some of the big investment banks are

selling them out to even bigger hedge funds that are giving away information about their positions to even bigger clients so that somebody else can trade against them. or maybe the banks themselves are front running their positions. and trading against their own clients. there's this schism developing between them smaller guy, the medium sized financl player, and the very, very big too big to fail companies that are perceived as getting a break, getting -- and getting the backing of the government, and also are rceivedar as getting away with stuff that they wouldn't get away with. >> i agree with matt and i think what you're really seeing, actually, in terms of the battle of the millionaires versus the billionaires. because it's winner take all dynamic. is not just between, you know, the 10% and the 90%. or the 1% and the 99%. what's quite interesting, and leads meo really believe that there's some deep economic forces involved, ime it's

happening just as much within the top 1%. we saw it in the recovery. we cited those statistics, bill, about 93% of the recoveryoingy to the top 1%. 37% of the recovery went to the top 0.01%.o so even in there, there's, you know, even more of a gap, and the people can be very, very agieved precisely iebecause, you know, they see what's going on. they see that unfairness, and it makes them really, really mad. ecyou know one of the things th i found as i was writing my book and talking to plutocrats, as matt says, these are knvery, ve smart people. and many ov them, not all -- >> they work very hard. >> this is not downtonth abbey. this is not a landed gentry. these are people who even -- and even if they're sort of mitt romney or bill gates who grew up very affluent, their actual business, they did build it themselves. they built in a society that was

vy supportive of that but they built it. they're hardworking. they have to be thoughtful about the world because they're makinr investments. what i found was very interesting was they were very keen to divide the world into the good plutocrats and the bad plutocrats. and what was very funny was everyone was happy to make that division. but, everyone felthat they themselves in their particular type of business belonged to good plutocrats, and somebody else belonged to bad ones. so you talk to the silicon valley guys. they love talking about this, especially after the financial crisis. because their view was, of course, income inequality is a problem. of course there has been state capture. by those bad guysn new york. wgu however, are the innovators, we created value ourselves. we are completely pure and good, and these ievues really have nothing to do with us. >> do you think they think they're really defending honest capitalism? >> oh, absolutely. you know, the one thing that's consistent in my exposure to the

financial services industry is that the people who work within it, and particularly the people at the very, very top, sincerely believe that they have not done anything wrong. thand, you know, when you bring up things like the mass sale of fraudulent mortgage backed securities, it's just like you say, it's always somebod else who made that mistake. you know, we didn't know e at t time that we were selling billions and billions of dollars of junk and we were dumping this on pension funds and foreign trade unions. it was always somebody else who was doing that. and they also have built up this very, very powerful insulating psychological justification for their lifestyle. they've adopted the sort of point of view where they genuinely believe that they are the wealth creators and that they should get every advantage and break, whereas everybody else is a parasite, and they're

living off of them. so when you bring up to them, for instance, how is it that nobody, despite this mass epidemic of fraud that appears to have happened before the 2008 crash, how come nobody of consequenceas gone to jail after that? they always, you know, they always argue against more regulation, and more enforcemenn because they say we ed room, we need air to breathe, room to create jobs, and this is just counterproductive toedput peopl in jail. >> initially, though, this very sincere, absolutely, absolutely sincere self-justification, i puink is one of the most dangerous things that's happening. because in our society, and i would say this is particularly i powerful in america, really since the reagan era, there has been this vision of the successful business person as really a leader for the whole society. and there has been a view that the business person, what heol thinks, and by the way, all of my plutocrats are men. bu you know, what he thinks

about how society should be ordered, we should all list to, because he, after all, is the hero of our time. is the hero of our capitalist narrative. and i think it'si so important for us to really understand that what is good for an individual business, particularly in this age of very high income inequality, and the ways of thinking, the ideas that no doubt absolutely the right ones for this particular business, may very well not be good for society as a whole. >> both of you write in different ways that with irony that they threaten the system that created them. >> well, this is another thg, another image from russia that always stuck in my mind. and i studied in russia when it was still communist. i remember going through the couryside and you had all thesec villages and people walkd ar und in the villages, and then sud tnly in the mid to late '90s

nl russia you drove through the russian countryside and suddenly there were big, brick houses the had these huge walls on outside. these big, brick walls with guards on the outside. it was the rich had court of built this wall that insulated them from the rest of societ t there was one society on one side of those wcils and one society on the other side of it. and think that's where we're headed now. we have this kind of community of rich people who styrt of liv, hop from place to place, and they never have any sort of intercourse with the rest of the world. >> disconnected. >> there completely disconnected. so they've built this kind of nation wherere inside it, it's all, you know, nice and everything works logically, and it makes sense to them. but they never really see what goes on on the outside. >> do they feel entitled? >> yes, absolutely. and -- >> for what reason? >> because they are treated so well. so my favorite storyor abt this

wa a i was at heathrow airport about to go to a fancy conference, and i ran into someone else going to a fancy conference. a silicon valley. i didn't have a car. he had a car and offered to share a ride to the nt-a-car. the technology guy saidcao me, idwhen you live our life you ar surrounded by such power and such entitlement you lose touch with reality. and his very personal example was, he said i was recently staying at this lovely four seasons hotel and i was beside the pool, i was eating a melon. and my skin fell to the ground. and he said before i could someone anyone, someone rushed up to me, with three spoons of different sides on a linen napkin, so that god forbid, you know, i shouldn't have the wrong size spoon. and what he said was, you know, what was amazi toame, he's talking about himself, is when i re-entered my real life that i was kind of a jerk. because i real -- i expected to live a life where i was constantly being presented with

three spoons of different sizes. and i just couldn't deal with the frustrations of everyday life. what makes this a totally ironic story is here he's telling this kind of self-aware story about the plutocracy. but whenead been in the airport waiting for the car, he was on the adphone, screaming a someon about where is my car, et cetera, et cetera. so this is morning in heathrow, middle of the night in san francisco, and he's yelling at someone there, because he hasn't organized his car and he had to wait for five inutes. and then he tells me this story about how entitlement can make you not an ideal person. that kind of says it all, right? >> the political behavior is another thing and there's no doubt in either of your minds, is there, that they tilt the rules in their favor through their influence and power over the politicians? >> no. absolutely. >> i mean our own government relaxed the regulations, upended the rules, leveled thegu laws, make way for them. >> they have the power and

influence over the government to -- and they've been continlly deregulating the atmosphereo legalize whatever it is that they want to do. whether it's mergers of insurance ecompanies, investmen banks and commercial banks. derivatives, the commodities futures modernition act of 2000. they lobbied to create a completely deregulated atmosphere with that and we saw what happened in 2008 with the collapse of apps like aig. they've been incredibly successful in creating their own landscape where they get to do business the way they want to do business. >> and what i think is crucial is this is not framed as i want government to do this, so i can get rich. and my company can prosper. this is framed as, we need to do these things for the greater good. and this is where i think another big s problem in americ today is a disempowering and a devaluing of the role of government, and of its authority

as an independent, respected arbitrating body in the center of the ring. and one of the great contrasts decade has e past been looking at what happened in bank regulation in the united states, and looking at what happens in canada. matt has just spoken about bank mergers. with mind sight one of the great grave decisions taken by the canadian government was to not allow the canadian banks to merge. they wanted to. huge lobbying effort and they made the same arguments about oh, if we can't merge we'll never operte on a global scale, canada will be left behind. we'll be a prudential backwater and the government just said noa and that decision, i think, flows directly into the canadian government's ability to regulate the financial sector, leverage u.s. levels was not allowed. and the consequence was canada didn't have a financial crisis. it's the only g-7 country that

didn't have to bail out its banks. so government can actually -- >> not if it's captured. >> not if it's captured. >> and it is captured. >> now we're completely captured with the banking example now we have these banks that are literally too big to fail in america because we didn't do the same thing. >> but government can act. i think it's important not to have a council of despair. that you can have a liphisticated, industrialize western economy. people can live, you know, civilized lives. they can have bankers, they're bankers, maybe they're not going to earn $25 million. but they can earn $5 million and $6 million, they can be perfectly affluent and government can actually stand up to its banks and stand up to other secretaries of industry and say you know what, i'm sure that would be great for you guys. my judgment is, it's wrong for the country, and you're not going to do it. ent any cred civil, despite all the advantages and entitlements they have. they also exhibit disdain as

mitt romney made clear in that infamous or famous 47% video. when he talked about other peoplerbeing dependent on government. >> i've heard thatbe attitude me than once. and not just from mitt romney. i think it's, again, it'sat consistent with thismind-set, there's an intellectual atmosphere that these people have to work within in order to justify a lot of what they do. because you have to be completely disconnected fm theth real world in order to do things like sell fraudulent mortgages to a state pension fund. if you're actuallye thinking about that, you're taking somebody's life savings away when you that. but you can't think aboou that. >> matt, you quoted the billionaire charlie myunger of berkshire hathaway who said anyone who wants to complain about the wall street bailout should realize they were, quote, absolutely required to save your civilization. what did he mean by that? >> well, again, this group of people believe that all of civilization depends on their health and their ewell-being, s

when they were threatened, in 2008, when they were all about to collapse, it made absolutely ense to them that they should -- that the government should immediately intervene and give them as much money as they needed not only to get back on the feet but to restore b their lifestyles, to the level that they had been accustomed to. >> so i'm going to hear step in as a voice in favor of the bailout. i think myunger was right, i do actually -- >> saving civilization? >> i think it was. i think that the bailouts were absolutely essential. i think that had there not been a bailou which by the way, let's remember, voices on the rht as well as the left were objecting to the bailout at the time. i think had there not been a bailout y would have had a much more severe crisis. you would have had a full financial collapse, and much, much deeper economic recession. now i think where you can and should criticize is first of all, why was the crisis allowed to happen in the first place? and the regulatory failure beforehand.

i think second of all, you know, where were the strings attached? and actually, charlie myunger's great business partner warren bufft drove a much harder bargain with goldman sachs than the u.s. treasury did. you know, 2008 is not so long t ago. and already the anti-regulation chorus is so strong, you know, i reregulationwas not done well at all. but the fact that people are already making a very, you know, powerful and proud argument against government regulation, bankers are making this argument. i mean how dare they? how dare they have the gall to actually argue that too much regulation of american financial services is what is killing the economy. >> right, right. actually e clear, i agree that the bailouts were necessary. what i completely disagree with was the way they were done. they just simply threw a whole bunch of money at this community

and didn't have any conditions at all. they didn't sweep in and change any rules. you know, after the s&l decree sis for instance. there were massi criminal investigations. we put 1,000 people in jail. there were no such investigations this time around. so this was just making everybody well again and restoring eveonbody to the status quo, which i think was a major mistake because it booduced producely the result we're talking about now. it allowed everybody to think that the previous status quo was okay. >> let me talk about the ceo class. because it seems almost every day now there's a new story of some ceo, some boss of a big company who's attempting to tell voters, to vote as they say. what do you make ofthat? >> if you really see yourself as a job creator, someone who is not just pursuing their business interests, and getting richer, but someone who is creating jobs, doing great things for america and for your workers, and you also si ferely believe that barack obama is a bad guy,

then you fel you have to help your workers to understand thisy have to let them know that you, the job creator, believe that this job creation, of whiyo they are the fortunate whneficiary, you know, that engine is going to slow down, it's going to grind to a halt. >> do you see this as different from what unions do in urging theirar voterso go out and vote for the candidates of their choice? do you see it differently? >> i think g it's a little different, just because they're -- there's an implied thre threat, it's very, vry vague. but if the cy, of your company suggests to youhe that you haveo vote for mitt romney, or you have to give money to the romney campaign, i think the tendency to not break ranks is going to be a little bit stronger than maybe it would be in a union. but i think itt grows that asth companies and corporations are not democracies. they're authoritarian structures and the people who work in those companiescr they start to adopt

those attitudes after awhile. especially the people at the very top. i think they've begun to actually believe that their authority extends beyond that, d i just think that people, it's a little bit different when your boss tells you to do something than when, you know, your union brothers tell you. >> matt, you have written a lot about tax code, and the plutocrats. y work th taxo t system? >> the plainest example is mitt romney. if you look at his tax returns, he paid, you know, rates of 14%, 13%. that's 20e9ally normal in this world if you work in a private equity fund. your income -- >> he's not an exception, he's an embodiment. >>9ain thein financial services sector for sure the very, very rich, mostly receive income as capital gains or if they're private equity people as carried interest. and both of those the max rate is 15%.

so people who make $20 million, $30 million, $50 million a year like mitt romney and like, you know, steve shartman or whoever it is they pay half the tax rate of a nurse or a doctor or a fireman or a teacher. and it's considered totally normal in that world. >> so they eally do consider tax reform a threat? >> absolutely. i me n, every time that there's been any discussion aut rolling back the carried interest tax break in particular, there's suddenly been this intense hurricane of lobbying, and it never seems to get rolled back. barack obama promised to repeal that tax break, and didn't do it. us a working definition in the vernacular of ca gied interest. >> soi basically what this mean is that if you're in a -- if you work in a private equity firm, the money that you earn -- so you invest a little b of your own money. and the gains that you make on ofat investment would be treated under any

definition as a capital gain taxed at 15%. but you also earn money, because you are investing on behalf of all of your investors. that money that you earn, it's called carried interest. and it is treated as a capital gain in the same way that the gains to the investors are treated. the economic arguments in favor of the carried interest tax break are so weak. i mean, even mike bloomberg, who is, you know, very -- >> disinterested. >> far from being a socialist, he has come out and said he doesn't support it. and it says something to you about the power of very well-heeled, very focused lobby groups that, you know, barack obama is president, he is opposed to this. he says he's opposed to it. even mike bloomberg is opposed to it. so there's a body of wall street opinion who thinks it should go away. it's still there. >> when there was an effort, when the obama white house and others made an effort to revoke carried interest, the fight was

led by people like democrat senat chuck schumerck representing wall street. >> new yorkers. >> new yorkers, of course. that's their constituency, ty would say if they were sitting here. but the democratic party didn't come to the aid and relief of working people at that time. >> wely, right. because, again, but it's because you have a small, very, very concentrated lobby that is very, very noisy, and is very, very specific in what it wants and what it needs. and then there's the rest of us who how many people are really thinking about the carried interest tax break? the advocacy against the carried interests tax break is t disbure it's sort of random. it's not focused. whereas the advocacy for it is incredibly organized, it's disciplined, and it has a to of money. >> and it is bipartisan. >> who's looking out for the rest of us? >> well, there definitely are good people in washington. you know, i meet and talk to a lot of them. there are a lot of honest politicians. and who are trying to do the right thing. but, the -- my experience, the

money issue is so overwhelming to people in congress, that -- >> raising money for their campaigns? >> raising money for their campaigns. it's so central to their daily lives, really, and especially in the house, where you have to essentially start raising money the instant y get elected. because the election -- re-election campaign is only a couple years away, that there's -- it's just too overwhelming for most legislators to get past that issue. >> despite how the plutocrats have reacted to barack obama, he does not seem to be lack fdr taking on the economic loyalists or like theodore roosevelt, fighting the guys he says are taking the country down.be how do you explain obama's attitude toward these plutocrats? >> barack obama in many ways is one of them. he is educated the way a plutocrat is educated. he had an opportunity to join

the plutocracy. he could very easily right now be a top corporate lawyer and they know that. he thinks the way they do. he's a technocrat in the accepted matter of the plutocrac t and i think they like that. i think that's why he has such a strong reception in 2008. i think that's one element. another element, though, and i think this is somethi that sort of bothers them is, he isn't over awed by them. and that kind of bugs them, too. because they do think they're pretty great. >> to answer your question about why is he -- why doesn't he take the sort of attitude of an fdr or teddy roosevelt? i just think barack obama has surrounded himself with people like larry summers, like bob rubb and he's accepted a lot of justification and arguments that come from's wall street an the business community. so don't think hedo feels

genuine class-based rage towards this community. i just don't think that's in him. i think if you listen to rush limbaugh and sean hannity and the likes, they really believe that somewhere under there, there is this -- there's this raging socialist, and lennon ready to break out and put them all up against the wall in a firing squad. that guy just isn't there. he really is more one o them than they think. >> you don't think he's fighting classarfare in the rightla sense here? >> definitely not. no. i think he's very emotionally and culturally much closer s to those people thanse he is to th rest of s. >> no, buhe is moving -- he is, and i don't think he says this as directly as perhap you know, some of his supporters would lie, he is challengingd this notion of the successful busthessman as the hero and the driver of the american narrative. and that actually is a big -- f

you think it through to its logical conclusion, that is a big challenge. and i think that accounts for this hurt, this seemingly completely disproportionate emotional reaction. >> he's made rhetorical mistake inhe way he's occasionally dscribed this sc community. that's what's inspiring this whole reaction against him, this feeling that we are like battered wives, because they've occasionally been described as rich. >> so it's easy to laugh about this, and weth should. but this hurt feelings, the fa that this is really playing out in the emotional space, as well as in the balance sheet space, i think is really an important point.in i think it's hard for us civians to get it because it seems to absurd. you know. really?c that would hurt your feelings? are you so thin-skinned? but its real. and i think that it's r l for a reason.a

which is i think that barack obama, the democratic party, but also the political discourse more generally is posg an existential threat, certainly an pistential question to the plutocr plutocrats, which makes them very, very anxious. >> i haven't heard that, chrystia. barack obama said in the debate this week thatry he sounded like -- for free enterprise. >> a i'm for free enterprise too. but what he has -- >> didn't sound very tough on them. >> but there's an >>underlying point that he does make, i think he should make it more explicitly, which is to say that american capitalism is not working the way it was in the '50s. that we are not living in a time when a rising tide is lifting all boats that we are seeing the people at the very top take off. their economic fort rns actually disconnect from those -- >> stratospherically. >> and from everybody else. and they're not dependent. you know, that all of henry ford

model where you needed the model class to be well paid to buy henry ford's stuff, that that has broken down and we could argue a lot and we should about the reasons but the facts are that it has. and so say that, to actually state that, is profoundly threatening. because, it starts to break down this equation o my wealth equals my virtue. the size of my bank account -- it isn't just good for me. it is a manifestation of my civic contribution. and that in some ways is mitt romney's campaign. he's saying, i'm a successful businessman so i will make a good president. and barack obama, he's actually onying, you know what? i don't think that that equation works and is automatic. that, tually, in saying the plutocrats are not wrong to detect there a very powerful ideological challenge. >> if the plutocrats keep on winning, ifhey manage to avoid tax reform, i if they keep low

regulation, if they get a president who is sympathetic to them, or even enables them, what's ahead for us?rm >> well, i mean, i fear that what's ahead is just the continuous worsening of the situation. you know, what we've seen in our lifetime, even since we've come back from russia, is>> this des nation of the middle class in america. if we continue on this path what we'll end up with is, you know, is russia or some other third world country where, again, you have this handful of people who are -- who are protected. and who have expanding wealth, and then there's just this sort of massive population of everybody else, and that's what i worry about. >> i would like to 'sreally iss a clarion call to progressives. because i think thisort of -- the progressive public intellectuals are to blame, as well. i thk a big reason people aren't protesting is no one is offering sufficiently compelling alternatives and solutions.

and when you think back to the history of the industrial revolution, the progressive era, the new deal, these were brand-new ideas. and brand-new institutions designed to cope with changed econom circumstances. what i think is theon challenge for everyone who was worried thout this and i think all of us should be worried abo it. we should be terrified, but i think we need to start taking the next step, and wein need to realize the 1950s are not coming back. what angers me sometimes about these debates is people talking about manufacturing jobs coming back. that is just not going to happen. >> right. >> so let's really face the fact of how this economy works and really come up with what needs to be the political and social response. and frankly i see the right not interested in addressing this iire at all and a see the left not offering enough new thinking. and people know that and that's why people aren't on the

barricades. there's no manifesto to be waving. >> one caveat i would like to thatw in there is that any time you propose anything thatth has any kind of government, you know, chponent to it there's this automatic criticism that it's communist and socialist. when you come up with a solution, the boundaries are let's come uppoith a solution that doesn't u have, the -- tha can't be criticized as being communist or socialist. and that is incredibly difficult for people to work around. >> okay. but let's at least see the new ideas. .> sure. >> my argument is, we are living through equally profound economic transformations and we're just trying to rehash and retinker with the 20th century institutions. i don't think it's enough. >> matt taibbi ciatys , freeland, thank you very much for being with me. >> thank you. >> pleasure, bill.

here's our significant revelation of which you may not be aware. the plutocrats know it and they love it. and the rest of us should be forewarned. when the supreme court made its infamous citizens united decision, liberating plutocrats to buy elections fair and square the justices may have effectively overturned rules that kept bosses from ordering employees to do political work on company time. election law expert trevor potter told us that now, corporations argue that it is a constitutionally protected use of corporate resources oer o employees to do political work or attend campaign events, even if the employee opposes the candidate or is threatened with being fired for failure to do what the corporation asks. reporter in new york times magazine came across a recording of governor mitt romney in a conference call in june with some business executives. the government told him there is, quote, nothing illegalfe abt

you talking to your employees about what you believe is best for the business. because i think that will figure into their election decision. egeir voting decision. and, of course, doing that with your family and your kids, as well. and here's governor romney two months later, campaigning at an ohio coal mine. >> this is a time for truth. i listened to an ad on the way here. i'll tell you, you got a great boss. he runs a great operation here. and he -- there he is. >> look at all those miners around him, steadfastly standing in support, right? they work for a company called murray energy. and attendance at the rally, without pay, was mandatory. murray ergy is nsotorious for violating safety regulations. sometimes resulting in injuries and deaths and the company has paid millions in fines. ushe ceo, bobhe b murray, is a well-known climate change denier

and cut throat businessman. he insists that his employees contribute to his favorite anti-regulatory candidate, or else. in one letter, uncovered by the new republic magazine, murray wrote, quote, we have been insulted byv evy salaried employee who does not support our efforts. so much for voting rights and the secret ballot at murray energy. he also discovered that the coke brothers, david and charles, who have pledged to spend multimillions of dollars to defeat president obama, have sent a voter information packet to the employees of georgia pacific, one of their subsidiaries. it includes a list of recommended candidates, pro-romney and anti-obama editorials written by the cokes, and a cover letter fm the company cress. e hwe elect the wrong people, writes, many of more than our 50,000 u.s. employees may suffer the consequencesnecluding higher gasoline prices, runaway

inflation and other ills. other ills? like losing your job?g this is snow balling. time share king david siegel of west gate resort reportedly has threatened to fire employees if brk brk is re-elected. and arthur allen who runs asg soft ware solutions e-mailed his employees if we fail as a nation o make the right choicenn november 6th, and we lose our independence as a company, i don't want to hear any complaints regarding the fallout that will most likely come. back in the first gilded age in the 19th century, bosses in company towns lined up their workers and marchedd them to voe as a bloc. as we sa, the beginning of, this broadcast, the gilded age is back with a vengeofce. welcome to the plutocracy, the receains of the old usa. that's it for this week. on our website, billmoyers.com at your request we're starting a book club.

our first is chrystia freeland's plutocrats. read the book. ask questions. share your thoughts. then let's have a lively conversation. rhei' you there.bm. oue. and i'll see you here, next eetime. don't wait a week to get more moyers. visit billmoyers.com for exclusive blogs, essays, and video features. this episode of "moyers & co." is available on dvd for $19.95. to order, call 1-800-336-1917. or write to the address on your screen. funding is provided by

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