♪ > this week on "moyers & co." >> we have this kind of community of rich people who genuinely believe that they are the wealth t create evers and tt they should get every advantage 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 of american nancial services is what is killing the economy.al >> funding i provided by carnegie corporation of new york. celebratin 100 esar ofs 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 andauley guff charitable fund. the clement foundation. park foundation, dedicated to heightening public awareness of critical issues.un the her albert foundion, supporting organizations whose mission is to promote compassion and creativity in our society. the bernard and addryat rapportt foundation. the john d. and katherine t. mcarthur foundation. committed to building a more just, verdant and peaceful world. more information at 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 a group retirement products. that's why we're your retirement company. welcome.al the new gilded age is roaring down on us. an uncaged tiger on a rampage.

walk out to the street in front of our office and turn right, and you can see the symbol of it. a fancy new skyscraper, goingp two blocks away. when finished, this high rise among high rises will tower 1,000 feet. the tallest residential building in the city. "the new york times" has dubbed it the globalhi 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 ice from $45 million to more than $50 ommillion. simultaneously, the powers that be have just awarded donald trump yes, that donald trump, the right u 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 luxury golf course. good grief. a handout to the pollute

contracts. this i a city where economic inequality rivals that of a third world country. of america's 25 5rgest cities new york is now the most rg 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 $2.2 this across america divide beticen the super rich and everyone else has become a yawning chasm. b at no time in modern history has the top 100th of 1% owned more of our 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 back obam whose party once fought for working men and women against

the economic loyalists. so just inmtime, if not too late, comes this definitive examination of inequality. pollute contracts, the rise of the new global supervich and the fall of yaef one else. the author is rystia freeman, whose journalism is steeped in years of covering robber barons from mexico and india. once deputy editor of t o globe and mailn 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 fget 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. elcome to you both.el income inequality has soared to the highest level since the great depression. with the top 1% taking 93% of the income earned in the first year after the recovery. the first full year after the recovery. why are the two candidates not talking about inequality growing at breakneck speed? >> you know, i think because it is still a taboo in american political life. and in american cultural life. one of the economists i talked to who worksn for the world ban, 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. bec se writing about poverty makes everybody feel good.be 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 our donors won't like it. and that actually challenges the whod economic setup of the united states. and of western capitalism. it's very, verywh threatening. and i think that that's why you'vead the billionaire class. you' know, the minute barack bama -- i would actually say rather gently suggested that th millionaires and the billionaires should pay a little bit more, you had immediate cries of class warfare from the plutocrats, and very emotional. you know, there was an activist 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 words. >> and i thought it was really interesting, in your book, how you pointed out that bill responded to f obama's criticism by saying, you know, i would ha done it a little bit differently. i think, you know, you can't attack these people for their succe ds. and i think that's very relevant, because if you go back in time it wasn't always this way, but i think the shift really began with clinton and the new democrats. i think after, you know, walter mondale lost in 84, the democrats decided, you know, we're never going to lose the funding battle again. and they began this sort of84 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 andit more wit the very rich, and they've, a i think we've now reached the point where neither party really represents the very poor in the way that the democratse,maybe used mato. and so that's why you don't see it in thee debates because neither party is really an

advocate for that kind of left behind class anymor >> it is the people at the bottom. but it's also the people in the middle. you know the middle class is yming hammered. those jobs are hollowed out. and where are the people pulling back and saying, okay, technology revolution, we love it. globalization. i love that, o. and i think it's great people areo.eing raised upe in india ad china and now africa. but let's think about how our society and our politics need o change tod accommodate his. and no one is doing that. meanwhile the guys at the top who are making -- who are doing so, so well, actually are saying, we need to slant the political system even mo in our own favor. >> why are we so passive about this? >> well, i think first of all, the poor in this country have been incredibly demoralized. whether it's the relentless attention of, youknow, 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 r poor is yo own fault and people who a rich deserve to be rich. a lot of americans are disillusioned about their situation. level that on some if they're poor they deserve to be that way. so they're reluctant to go out and revolt the way maybe europeans in the last century, early in the lybt century would have. >> left unanswered. left unanswered, where does this vast inequality take america? >> well, i think to a very>> ba place. and i see two real and present dangers. one is, that you see an increase of the political capture. >> of what? >> of the political capture.

so the people at the very, very 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 okay, tocrats, this guy, 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. is argument was that part of the reason the financial crisis happened is the entire intellectual establishment, not ust people inside investment banks, but 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 tre is a broader cognitive capture of, you know, you might call it the intellectual class.

the public intellectuals. around, maybe the p inevitabili of plutocracy. as matt was saying this motion that if you're poor it's your own fault. you're part o this dependent rt 47%. unions are very bad. all of that sort of stuff. i think that that cognitive capture increases and ihink what you see increasingly is, you know, elites like to thint of themselves as acting in the collective interest, even as l ey act in their perso vested interest. and so what i think you end up seeing is social mobility, which is already decreasing in the united states. increasiny squeezed. you see particulary powerful sectorsy , finance, oil. i would say the 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 that middle class and the poor ne. that's why you have this, you know, full bore attack on entitlements.

right? why is the plutocracy so enthusiastic about cutting entitlement spending. because they don't need it -- >> where was the outrage when the $5 trillion or $6 trillion in bailouts was coming their way. >> i really worry about that. the other thing that ihe 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. >>ou both cut your teeth in journalism covering russia. what do you take away from that that is relevantto what's happening in thistocountry? >> that experience completely shaped the way i look at the present situation in the america. in the mid '90s, suddenly when russia became a quote/unquotot capitalist society, you suddenly

had this instant division of the entire society, into this 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 think people 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 e people ndustry by in the yetten government. there were companies that were put in charge of their own auctions, so they -- >> they were all in chargeof thr own 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 ar tion

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 orkers 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 they wanted to do was t take meo 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 ers.r wo that to me perfectly expressed the divide in modern russian society. you have these people who are living off nothing on the one hand. and then you had these superer wealthy people who had been enabled who just kept the money for themselves. that's, ithink, you know, it's a caricature of what wth'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 wit a

insight, but with empathy. that is you've got to talk to a lot of them. you have moved among tem as aem financial journalist, been to ces like other p that. and i'm wondering, how did you crack what is clearly a tight-lipped world? >> well, ic 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 interested 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 1950s i wouldn't do it. partly because'm a woman and things were not that great foau us then. it's important, i think a mistake that the, left can lmake, inak criticizing in inequality is to behave as if this is entirely a political confection, it's entirely about political capture, there are no genuine, legitimate and a tualy

benign economic forces driving it. because i think there are. i think the winner take all yonomic dynamicic is something thatis existing separate from the politics. the politics in the united states are exacerbating that division.th rather than mitigating it. but i do think when you pull ba and look at the global picture that was something important for me to do in the book it becomes a little bit harder to say this particular amecan tax break, or even this american financial reform is thx only thing driving income inequality. because the ngreally remarkable thing is the extent to which this is a global phenomenon. it's happening across the western industrialized world. i'm canadian. so ily practically born a socialist in the view of many americans. but even in canada, income inequality is increasing. it's even, you knw, for awhile economic literature the one outlyer was france, so far as economists make jokes, they would say oh, the french they have to be exceptional even in this area. now you're seeing it increase in

france, too. and you're seeing it increase in emerging market econo ees.es 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'o 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, ou 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 people at 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 is writing about but you do with complete irremeer advance. do you still gain access to them? or have all the doors been slammed in your face? >> well, theva very, very top people won't tal tto me. you know, i don't have access to the same people that chrystia may be talking to. bu i do talk to a lot of people who work on wall street. in fact, i got started down the road of thiswo 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 about the direction that the financial services industry was taking. so i'm hearing a lot from people sort of from the middle 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 lose anymore.

i think the people who get really upset are smalmhedge funds, small banks, and they see companies like, you know, citigroup and goldman sachs and jpmorgan chase make mistaked 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 the people, and i think, you know, i think chrystia and i agree about a lot of things about particularly about the growing divide, and how extreme it's become. my analysis,hich 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 oforce and state power to people the divide where it is and increase it. >> you both had pointed out that we tend to talk as if wall street and the plutocracy were a monolith. but it's not. do youo think there isth a civi war within the 1%? >> there is

absolutely a schism developing in this community. think aolut it just on one level on the level of bankinut all right? you have these too big to fail banks. everybody in the world knows that nobody is going to allow the very biggest commercl banks to gomeut of business. it will never. 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 hey're always going to set paid off. in the worst case scenario they're going to get paid off. this gives them an inherent financial advantage ov the small, regional commercial t ba. which does not have that implied government guarantee. so those people are furious. they're furious that they have to compete agafust these gigantic monolithses that have e the u.s. acking of government. then there's the other problem corruption. i hear all the time from hedge funds, you know, these smaller guys who believe that some of the big investment banks are

sellinghem out to even bigger hedge funds that are giving away information about their positions to even bigger clienth 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 the smaller guy, the medium size financial player, and the very, very big too big to fail companies that are perceived as getting a break, tting -- and getting the backing of the government, and also are perceived as getting away with stuff that they wouldn't get away with. >> i agree with matt and i think what you're really seeg, actually, in terms of the battle of the millionaires versus theg billionaires. because it's wier take all dynamic.s is n just between, you know, the 10% and the 90%. or the 1% and the 99%.is what's quite interesting, and leads me to really belie that there's some deep economic

forces involved, is 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 recovery going to the top 1%. 37% of the recovery went to the top 0.01%. so even in there, there's, you know, even more of a p, and the people can be very, veryth aggrieved precisely because, you prknow, they see what's going ot they see that unfairness, and i. makes them really, really mad. you know one of the things that i found as i was writing my bo and talking to plutocrats, as mat says, these are very, very smart people. and many of them, not all -- >> they work very hard. >> this is not downton 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 very supportive of that but they built it. ey're hardworking. they have to be thoughtful about the world because they're making investments. what i found was very interestingey was they were ver 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 felt that they themselves in their prticular 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 arwas, of course, income inequality is a problem. of course there has been state capture. by those bad guys in new york. we, however, are the innovators, we created value ourselves. ew are completely pure and good, and these issues 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 lieve that they have not done anything wron thand, you know, when you bring up things like the mass sale of fraudulent mortgage backed securities, itwr just like you say, it's always somebody else who made that mistake. iu know, we didn't know at the time that we were selling dollars and billions of 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 e sort of point of view where they genuinely believe that they are the wealth creators and that they should get every advantage a o break, whereas everybody

else is a parasite, and they're living akf off 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 consequence has gone to jail after that? they always, you know, they always argue against mor regulation, and more enforcem mt because they say we need room, we net air to breathe, room to create jobs, and this is just counterproductive to put people in jail. his very lly, though, sincere, absolutely, absolutely sincere self-justification, i think is one of the most dangerous things that's happening. because in our society, and i would say this is articularly parerful 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 s been a view that the businee person, what he thinks, and by the way, all of my plutocrats are men.

but you know, what he thinks about how society should be ordered, we should all listen to, because he, after all, is thein hero of our time. is the hero of our capilist narrative. and i think it's so important for us to really understand that what is good for an individual business, particularly in this age of very high ince inequality, and the ways of thinking, the i ideas that no doubt absolutely the right ones for this particular business, may very wll not be good for society as a n whole. >> both of you write in different ways that with irony aat they threaten the system that created them. >> well, this is another thing, 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 countryside and you had all illages and people walkedil around in the villages, and then suddenly in the mid to

te '90s in russia you drove through the russian countryside and suddenly there were big, brickte houses that had these huge walls on the outside. these big, brick walls with guards on the outside. of as the rich had court built this wall that insulated them from the rest of society. there was one society on one side of those walls and one society on the other side of it. and i thin that's where we're headed now. we have this kind of cmunity muof rich people who sort of li, hop from place to place, and chey never have any sort of intercourse with the rest of the world. >> disconnected. >> they're completely disconnected. so they've built thisin kind of nation where 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 story about this

was 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 ofered to share a ride to the rent-a-car. the technology guy said to me, when you lve our life you are surrounded by suchve 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 amelon. 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 sa was, you know, what swas amazing to me, he's talking about himself, is when i re-entered mywhreal life that i was kind of a jerk. because i real -- i expected to live a life where i was re

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 when we had been in the airport waiting f the car, he was on the phone, screaming at someone about where is my car, et cetera, et cetera. so this is morning in heathr, middle of the night , san ancisco, and he's yelling at someone there, because he hasn't organized his car and he had to wait for five minutes. 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 ofan your minds is there, that they tilt the rules in their favor through their influence and power over the politicians? >> no. absolutely. >> i mean ourown government relaxed the regulatis, upended thelarules, leveled the laws, t make way for them. >> they have the power and

influence over the government to -- and they've been continually regulating the atmosphere to legalize whatever it is that they want to do. whether it's mergers ofr insurance companies, investment banks and commercial banks. derivatives, the commodities futures modernization 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 e greater gs for good. and this is where i think another big problem in americae 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 greatontrasts for me in the past decade has been looking at what happened in bank regulation in the united states, and looking at what da.cans in ca 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 operate on a global scale, canada will be left behind. we'll be a prudential backwater and the government just said no. and that decision, i think, flows directly into the canadian government's ability to regulate the financial sector, leverage ate 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 idn'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 amera because we didn't do the same thing. >> but government can act. i think it's important not tose have a council of despair. that you can have a sophisticated, industrialized 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.er >> they resent any credit 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 people being dependent on government. more've heard that attitude than once. and notust from mitt romney. i think it's, again, it's consistent with this mind-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 from the real world in order to do things like sell fraudulent mortgages to a state pension fund. if you' actually thinking about that, you're taking somebody's life savings away when you do that. but you can't think about 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 bpeieve that allle of civilization depends on their

health and their well-being, so when they were threatened, in 2008, when they were all about to collapse, it made absolutely sense to them that they should -that the government should immediately intervene and give them as much money as they needed not on to get back on their feet but to restore 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 o wer absolweely essential. i think that had there not been a bailout, bsich by the way, t, let's remember, voices on the right as well as the left were objecting to the bailoutt the time. i think had there not been a bailout you would have lod a much more severe crisis. you would have had a full financial collapse,adan 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 theow regulatory failure

beforehand. i think second of all, you know, where were the string attached? and actually, charlie myunger's great business parer p warren buffett drove a much harder bargain with goldman sachs than the u.s. treasury did. you know, 2008 is not so long ago. and already the anti-regulation chorus is so strong, you know, i think the reregulation was 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. just to be clear, i actually agree that the bailos were necessary.ai 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 haveny conditions at all. they didn't sweeav in and chang any rules. you know, after the s&l decree sis for instance. there were massive criminal investigations. we put 1,000 people in jail. there were no such investigations thitime around. so this was just making every tdy well again and restoring everybody to the status quo, which i think was a major mistake because it produced 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 elass. every it seems almost 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 of that? >> if you really see yourself s a job acreator, 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 sincerely believe that barack obama is a bad guy,

then you feel you have to help your workers to understand this. you know, you have to let them know that ,you, the job cryotor believe that this job creation, of which they are the fortunate beneficiary, you know, that engine isto going to slow down, it's going to grind to a halt. >> d you see this as different from what unions do in urging their voters to go out and vote for the candidates of their choice? do you see it differently? >> i think it's a littlee? tl different, just because they're -- there's an implied thre threat, it's very, very vague. but if the ceo of your company suggests to you that you have to vote for mitt romney, or you hae 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 it grows that as companies andt corrations are notra democracies. they're authoritarian structures and the people who work in those

companies they start to adopt those attitudes after awhile. especially the people at the very top. i think they've beguno actually believe that their authority extends beyond that,g and 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. exactly how do they work the tax system? >> the plainest example is mitt romney. f 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. >> in the 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 r$2ney andn like, yo 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 thato world. >> so they r lly do consider tax reform a threat? >> absolutely. i mean, every timell that there been any discussion about rolling back the carried interest tax break in particular, there's suddenly been this intense hurricane of lobbying, and it never seems to get rolledicback. barack obama promised to repeal that tax break, and didn't do it. >> give us a working definition in the vernacular of carried interest. >> so basically what this means 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 bit of your own money. and the gains that you make on that investment would be treated

under any definition as a capital gain taxed at 15%. ut you also earn money, because you areut investing on behalf o all of your investors. that money that you a earn, it' 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, b,rack obama is president, he is opposed to this. he says he's opposedo it. even mike bloomberg is opposed to it. so there'so body of wall street opinion who thinks it shouldo away. it's still there. >> when there was an effort, when the obama woute house and others made an effort to revoke

carried interest, the fight was led by people like democrat senator chuck schumer representing wall street. >> new yorkers. >> new yorkers, of course. that's their constituency, they would say if they were sitting here. but the democratic party didn't seme to the aid and relief of working people at that time. >> well, right. because, again, but it's becaust you have a small, very, very concentrated lobby that is very, very noisy, and is very, very ants and in what it 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 interest tax break is disbursed, it sort of random. it's notf focused. whereas the advocacy for it is incredibly organed, it's disciplined, and it has a ton of money. >> and it is bipartisan. >> who's looking out for the rest of us? >> well, there definitely are good people in washinrgon. 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 congss, that -- >> raising money for their campaigns? >> raising money for their campaigns. it's so central to their daily l ves, really, and especially in the house, where you have to essentially start raising money the instant you get elected. because the election -- re-election c paign is only a couple years away, thaton 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 toto be lack fdr taking on the economic loyalists or lik theodore roosevelt, fighting the guys he says are taking the country down. how do you explain obama's l 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 plutocracy. 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 something 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 rsevelt? i just think barack obam has surrounded himself with people like larry summers, le bob rubber and he's accepted a lot of justificatn and arguments that come from wall street and the business community. so i don't think he 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'shi this rang socialist, and lennon ready to break out and put them all upng against the wall in a firing squad. that guy just isn't there. he really is more one of them than they think. >> you don't think he's fighting class warfare in the right sense here? >> definitely not. no. i think he's very emotionally ande culturally much closer to those people than he is to the rest of us. >> no, but he is movist -- he is, d i don't think he says this as directly as perhaps, you know, some of his supporters would like, he isd challenging this notion of the successful businessman as the ero and the driver of the american narrative.

and that actually is a big -- if you think it through to its logical conclusion, that is a big challenge. and i think thatha accounts for this hurt, this seemingly completely disproportionate emotional reaction. >> he's made a rhetorical way he'say he occasionally described this community. that's what's inspiring this whole reaction against him, this feeling that we are like battered wives, because they' occasionally been described as rich. >> so it's easy to laugh about this, and weo should. but this hurt feelings, the fact 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. i think it's hard for us civilians to get it because it seems to absurd. you know. really? that would hurt your feelings? are you so thin-skinned?ca but it is real.

and i think that it's real for a reason. which is i think that barack obama, the democratic party, but also the political discourse more generally is posing an existential threat, certainly an existential 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 that he sounded ke -- for free enterprise. >> and i for free enterprise too. but what he has -- >> didn'tsound 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 americn' 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 bts that wets are seeing the people at the very top take eof. 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 heny ford's stuhf, that that hass broken dwn and we could argue a lot and we should about the reasons but the facts are that it has. nd so say that, tond actually state that, is profoundly threatening. because, it starts to break down this equation of 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 saying, you know what? i don't think that that equation works and is automatic. and actually, in saying that, the plutocrats are not wrong to detect there a very powerful ideological challenge. >> if the plutocrats keep on winning, if they manage to avoid tax reform, if they keep low

regulation, if they get a president who is sympathetic to es them, even ena what's aheadesor us? >> well, i mean, i fear that what's aheador 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 really issue a clarion call to ogressives. because i think this sort of -- the progressive public intellectuals are to blame, as well. i think a big reaso people ren't protesting isreo 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 economic circumstances. what i think is the challenge for everyone who was worried about this, and i think all of us should be worried about it. we should be terrified, but i think we need to start taking the next step, and we 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 addressingthis issue at all and ith see the le 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 throw in there is that any time youft propose anything that has any kind o government, you know, component to it there's utomatic criticism that it's communist and socialist. when you come up with a solution, theu boundaries are let's come up with a solution that doesn't ndve, the -- that can't be criticized as being communist or social t. and that is incredibly difficult for people to work around. >> okay. but let's at least see the new i ideas. >> sure. >> my argument is, we are living through equally profound eco mic transformations and we're just trying to rehash and retinker with the 20th century institutions. i don't think it's enough. >> matt taibbi,iahrtys c freeland, thank you very mu for being with me. >> thank you. >> pleasure, bill.

here's our significant revelation of which you may not be aware. the plutocratknow it and they love it. and the rest of us should be forewarned.kn when the supreme court made its infamous citizens united decision, liberating plutocrats to buy elections fair and square the justices may have efftively overturned rules that kept bosses from ordering employees to do political work on company time. trevor that n corporations argue that it is a constitutionallyti protected us of corporate resources to oer employees to do political work o attend campaign events, even if the employee opposes the candidate or is threatened with being fired for failure toordo what the corporation asks. reporter in n 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 illegal y abt you talking to your employees ab ut what you believe is best for the business. because i think that will figuro into their election decision. eheir 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 a 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,ne without pay, was mandatory. murray energy is notorious for violating safety regulations. sometimessoesulting in injuries and deaths and the company has paid millions in fines. the ceo, bob 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 onee letter, uncovered by th new republic gazine, murray wrote, quote, we have been insulted byv evy salaried employee who does n support our efforts. s so much for voting rights and murray et ballot at 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 from the company cress. if we elect the wrong people, he writes, many of more than our 50,000 u.s. employees may suffer the consequencesncluding

higher gasolig prices, runaway inflation and other ills. other ills? like losing your job? 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 to make the right choiceoyn o 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 marched them to vote as a bloc. as we said,n the beginning of this broadcast, theid gilded ag is back with a vengeance. welcome to the plutocracy, the remains of the olplusa. 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 thougs. then let's ha a lively conversation. that's at billmoyers.com. i'll see you there. and i'll see you here, next time. 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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