good evening from los angeles. i'm tavis smiley. it's make or break week for the gop's $1.4 trillion tax cut plan, mostly for the wealthiest americans. the senate could pass its version of the plan as early as thursday despite democratic opposition and a razor-thin republican majority. tonight former labor secretary robert reich joins us to talk about the numbers and the politics. we're glad you've joined us, a conversation with former labor secretary robert reich coming up in just a moment. ♪

♪ and by contributions to your pbs station from viewers like you. thank you. ♪ welcome back robert reich to this program. the former labor secretary from the clinton years is now a public policy professor at berkeley. his most recent text, "saving capitalism," is the basis for a documentary on netflix with the same name. >> we're on the way to becoming

a two-tiered society, composed of a few winners and a larger group of americans left behind, whose anger and whose disillusionment is easily manipulated. once unbottled, mass resentments can poison the very fabric of society, the moral integrity of a society. replacing ambition with envy, replacing tolerance with hate. >> secretary reich, great to have you on the program. let me ask you to tell me more about saving capitalism. >> tavis, the real point of the film and also of the book is that you've got huge amounts of money coming from big corporations, wall street, and wealthy individuals flooding our political system and getting a lot of benefits in terms of legislation that helps big money do even better. the most recent example is the tax bill that's now winding its way through congress. and because of all of those

favors, and it's not just tax bills, it's also the wall street bailout, it's also special subsidies, corporate welfare, all of that means that wealth becomes even greater at the top. it's a self-fulfilling kind of philosophy, a perpetual motion machine that gets worse and worse over time. the interesting point, i went out in 2015, before the -- a full year and a half before the election of 2016, and talked to people who described themselves as democrats, republicans, poor, rich, all races, all creeds, all ethnicities. and one common thread i heard from everyone is that the system is corrupt. it's rigged against me and i want somebody who is going to really shake it up and make it work. and that i thought at the time was very encouraging. but it became very evident to me during the course of the film that there were really only two ways that could go, that anger,

that sense of indignation. it could either go to fundamental reform, and that would be a good thing, or it could go toward a kind of demagogic strongman who would say basically the hell with democracy, we are just going to do what i think is best and also blame a lot of scapegoats. and unfortunately it went in the latter direction. >> i get it, the system is rigged against me and i'm going to vote for a billionaire to get in and fix it because this guy is looking out for me. i digress on that point. let me go back to the title of the book and the netflix special, "saving capitalism." i know that this will be heresy to some, perhaps treasonous to others, but there are a number of fellow citizens that the answer is not to save capitalism, secretary reich, but indeed to blow it up and start over with something new. >> well, i understand that.

and i certainly found people like that in my travels across america. but almost everybody else felt that -- and understood that there is no other system in history or even in the world right now other than capitalism. china is really basically a capitalist society. they call themselves communist but their economy is based primarily on private ownership of property and free exchange of goods and services. the big question is who influences the rules of the game. capitalism can come in almost any flavor. capitalism in scandinavia, for example, looks a lot different from capitalism in the united states, which looks a lot different than capitalism in japan. why is it we have so much inequality of america, why is it the wealthiest 1% own 45% of all the assets in america? why is it a handful of very

wealthy americans, the top 1/10th of 1%, have more wealth than the bottom 90% of americans? it's not that way in scandinavia, it's not that way in capitalism in france. it's not that way in capitalism in japan. what is it that deficiency us? it has to do with big money. big money that is flooding our political system and we can get that out of our political system if we understand what big money has wrought. and that really is the purpose of the film. >> i'll come back to the big money in a second. but tell me now how we decouple, how do we uncouple capitalism from income inequality and economic immobility. because there are some who think those things, it's a trifecta, that you can't have capitalism without some income inequality and some economic immobility. >> again, travis, i think that's

probably right, you have some wealth inequality with capitalism. but why does it have to be so much? the united states is an outlier, we're the most unequal of all advanced countries. it's also racism mixed in with economic inequality and you get that toxic mixture here. one important thing we do about it is to decouple, as you suggested, money from our democracy. louis brandeis once said we can either have in this country great wealth in the hands of a few or we can have a democracy but we can't have both. and he understood even in the 1920s when he said that, the essentially truth. we've got to get big money out. if we get big money out, we can then begin to work on everything else. the environment, the militarization of our police, and health care, everything else

we need as a country. but as long as big money is dominating our democracy, we can't even begin to tackle these other problems. >> the problems, secretary reich, to use your word, to my mind at least, washington is bought and bossed by big money and big money, that's true for republicans and democrats. we might side one way or the other but they all take this money. moreover, they're the ones who would have to decouple it, they're the ones who have to pass legislation to get the money out of politics and i don't see that happening. even when we tried to do that to some degree with mccain/feingold, we see a retrenchment on that. how do you make that happen? >> historically we've done it for periods of time. teddy roosevelt, the great kind of progressive republican in the first decade of the 20th century, did decouple money from politics. there was a great progressive wave of reform. we did it again, as you said, with mccain/feingold in periods

of great reform. and we have had at least three in the united states. we do tackle money and politics. we can't give up on that. we can't just simply say there's no way of doing it because that's self defeating. then we lose our democracy. i think that one of the best things maybe to come out of the current trump administration and what we have seen leading up to it is a new appreciation, and i see this across the country, of people saying we want our democracy back, we are going to fight for it. that kind of pro democracy movement, and i think it really is a movement, it's a grassroots movement, that is taking hold. that's catching fire across the country. and so candidates for office that take a lot of money from the wealthy, they are going to be penalized. people who -- and this is not just liberal/conservative. i talked to a fellow named david

brack, one of the two most conservative members of congress, a republican. he was the one who actually displaced majority leader kantor, because he said that eric kantor, a republican, majority leader of the house, was taking too much money from wall street. eric kantor was taking a lot of money from wall street, and people rose up and they elected david bratt. that's happening more and more around the country. we're seeing the beginning of something extraordinarily important. >> you quoted louis brandeis. let me quote tip o'neill who once said that all politics is local. that might be the answer to the question i want to ask now. i still want to ask it to get your take. why is it when we see things like a fight for 15, it catches fire at the local level but we can't seem to get any traction on that at the federal level. >> first of all, at the federal level right now, we have all -- basically -- certainly two elected branches of government under the republicans and that

means even more under the thumb of big business and wall street. and it looks like a majority of the supreme court, i hate to say this, but they are republican appointees, the majority. but that's not always been the case. occasionally we do get these grou groundswells of progressivism, usually in the democratic party, but not always, teddy roosevelt was a progressive. it's possible to get a $15 minimum wage across the board. when i was in government, tavis, the minimum wage, people told me there was no way of getting a minimum wage increase. the republicans are in charge of th house and the senate in the mid-1990s. but it turned out that polls showed that 85% of americans thought that there should be an ce increase in the minimum wage. it was not only good for the economy but good for a simple

sense of decency, and we got a minimum wage increase in 1996. i believe we can do it. i believe that people understand if somebody is working full-time in this country, they should not be poor. and more and more minimum wage workers are the major bread winners for their families. there's no way you can avoid being poor on the federal minimum wage. >> is this tax plan that's winding its way through congress right now, is it fair? >> no. this is just the most unfair tax plan i could ever conceive of. and don't just take my word for it. i mean, all of these expert groups, these pollicy analytic groups, the tax policy center, the tax foundation, even congress's own office of management and budget, and congress' own joint tax committee, all of them find that the biggest beneficiaries of these tax bills, above the the

senate and the house tax bills, are people who are already very well off. and the middle class is going to get hit with a tax increase. >> what's your sense of what's going to happen to that ultimately? we know what happened in the house. what's going to happen in the senate? >> well, there's going to be a vote this week in the senate. i think it all comes down just like that vote on health care, on replacing and -- or repealing and maybe replacing obamacare, it's going to come down to three senators. if three senators, republican senators, decide not to go along with the rest of the republican party, that's the end of tax reform. but there's going to be a huge amount of pressure on those three republican senators. >> there's a lot of talk in washington and beyond for that matter about whether or not the republicans can use this vote to punish donald trump for a number of things, not the least of which would be, for example, his coming out for roy moore. there's been so much commentary,

as you know, secretary reich, but mitch mcconnell calling the white house, the majority leader, repeatedly trying to get donald trump to stay out of that race in alabama, to not come out and support roy moore. most of the republican establishment is on the record against mr. moore. so the president does what you expect this guy to do, if not to tweak them, he comes out and endorses roy moore anyway. and so there are a number of persons who were writing pieces now, suggesting that if you want to punish donald trump for doing what the establishment doesn't want him to do, then don't give him the tax plan. is that possible to happen? >> it's possible. i think that a lot of republicans, particularly in the senate, have bought into the notion that they didn't repeal and replace the affordable care act, and so they've got to show voters that they've at least done something, and something, even though it's a big tax break for the rich, and even though the president wants it and he's

insulted a lot of republicans including mitch mcconnell, they -- and he's gone along with roy moore, they may still feel they need to do this. but, you know, hopefully cooler heads will prevail. hopefully there are enough people there, republicans with enough integrity that they look at this mondastrous tax bill, w haven't even talked about that this is going to increase the federal debt by at least $1.5 trillion, at a time when the debt is already huge. why in the world would you want to give a tax break to the rich when they are already richer relative to anybody else in this country than they've ever been? and why would you want to give a big tax break to corporations and big corporations have so much money, they don't even know what to do with these days. it's a completely upside down idea that's going to result, unfortunately, if the tax bill in the senate goes forward, with some real, real problems for people with regard to poor people and health care. it's going to mean that 13%,

that's the finding of the office of management and budget, 13 million people are going to lose their health care. we're not even talking about taxes. they're going to lose their health care under the affordable care act because the tax bill takes $300 billion from them, from the poor and vulnerable, and gives $300 billion to the wealthy who are not poor and not vulnerable. i mean, this makes no sense. and hopefully, tavis, people with integrity who understand their responsibility not to their party but to the people of the united states and to their states and to all the people in their states, will understand what's really at stake here. >> so you write about the fact, mr. secretary, that it only makes sense if you buy the argument that since they've gotten nothing else done, as we approach the end of the year, they've got to get some points on the scoreboard and so passing this is better than doing nothing. that's the point you made earlier. it does make sense if you buy that argument. here is the problem i have with

that. theoretically it makes sense if you buy that argument. here's the problem, though. if you're donald trump, how do you then turn around and explain to all those persons who voted for you because they knew the system was rigged against them and they wanted somebody to go in, as you said earlier, and shake things up, how do you then turn around and explain to them the numbers that you just laid out for us which is to say that the tax bill you just passed demonizes further the persons who supported you? >> well, i think you tell lies. >> okay. >> you tell lies and lies and lies. i'm not being -- i'm not being jocular here or facetious. this is exactly the technique that demagogues use. they just disregard facts and they tell people what they want those people to know. and they at the same time denigrate the legitimate sources of facts, whether they be the congressional budget office or the joint tax committee or newspapers, you know, cnn, pbs.

it doesn't matter. you have forces in this country that refuse to actually deal with the truth. and the truth is essential to a democracy. >> how do people get the truth when it comes to numbers, when it comes to numbers that are bigger than most of us can count up to, and when it comes to a tax plan that is so convoluted and complex that many members of congress don't even read the thing from the first page to the last page before they vote for it? how do the american people have agency when it comes to matters that are this behemoth in size? >> it's an important question, tavis. the only thing we can hope the american people will get is the biggest picture, that is, who benefits and who loses, and when do they benefit and when do they lose. if they look and ask those fundamental questions, don't even get in the details, don't even get in the weeds, just who benefits and who loses,

overwhelmingly people will see that the biggest beneficiaries are big corporations, wall street and the rich, and the biggest losers are the middle class and the poor particularly with regard to health care, if that senate version of that bill goes through. that's the big picture. if you tell the truth, now, i may be overly optimistic, but my belief is that if you tell the truth over and over and over again, the truth will win out over lies that are told over and over again. >> if you were giving a state of the union speech specifically about the economic health of our union, look out a year or two from now, and tell me where you think the country is headed economically. >> well, if we stay on the -- in the direction we're going, i would say the people who own a lot of shares of stock, and the richest 1%, has about 40% of all the shares of stock, the richest 10% have about 80% of the stock market, the stock market is going to do pretty well if the

tax bill goes through because that's where the corporate profits are going to be coming from. i would say that most americans are not going to be doing all that well because wages have been and continue to be stagnant. this is not new. in fact wages have for most people been stagnant for about 35 years. and the growing number of people in poverty, particularly children, i mean, one out of five of our nation's children is in poverty. this is not going to change overnight. it's going to be -- you know, even if we have the most concerned administration in history, we would still have a big problem next year and the year after with children in poverty, with the middle class that was going nowhere. but the problem is, and here is where the vicious cycle sets in, tavis, because if we've got more and more people two years or three years from now who feel that they are not gaining ground, they're actually angry

at the system, then what do they do? they could either possibly in 2020 reelect donald trump, or they could look to a democrat who is a genuine reformer, who has ideas but also conviction and tells it like it is. and maybe there is going to be a democrat like that. but i think that it's so critically important that americans hear the truth and so critically important that they understand what is at stake for them and their families. these are not just abstract economic issues. these are not just -- you know, you talk about the budget and taxes and people's eyes glaze over. these are actually kitchen table issues. they affect every single family in america. >> white men are americans too, even angry white men are americans too. i wonder if you might be candid with me and suggest or share with me anything or things that you have learned about the plight of these angry white men, many of whom voted for trump the

first time around. what have you learned about their station and their situation? you've given some deep analysis tonight about fellow citizens writ large. but let's talk finally here about that particular slice of americans, those white males we've been reading so much about lately who feel that they are under the thumb, they economically are not gaining any ground. what about them in the next couple of years? >> of all groups in america in terms of race and also income, middle class and working class white men have been on the steepest downward escalator over the last 15 or 20 years. you know, as factories have shut, as labor unions have declined, their bargaining power has also declined. and they feel angry. that's why they are so susceptible to a demagogue who comes along and says, your problem has to do not with -- you know, not with what's happening in corporate suites or wall street or the system as a

whole. your problem has to do with them. and the "they" are immigrants. or "they" are muslims. or "they" are latinos. or "they" are black americans. and that scapegoating is attractive, sadly and tragically, to white working american men who have been on a downward escalator. they also blame women. there's a great wave of anger toward women, i think. and some of it has to do with the same sense of displacement, the sense that, oh, 30 years ago when i look at my father, my father was on an upward escalator, he was doing better and better, and what's changed according to the demagoguic view of america, you now have a lot of blacks and women and latinos and immigrants who are taking your jobs and are displacing you. well, that's not true, for one thing. but it's easy for a demagogue to

make that case to a lot of white men who are willing to believe it because nobody else has made any other case to them. >> so in 30 seconds, what makes you hopeful, how do you sustain your hope about the economic future of our nation? >> well, a couple of things make me hopeful, tavis. number one, i look at history. we've been through this kind of thing before. not only the great depression, but before that, in the 1880s, 1890s, we had robber barons, an era where the gilded age, basically, you had huge gaps between the wealth and the poor. we overcame that with major reforms. the other thing that makes me optimistic is that, you know, this era and this administration have generated the biggest groundswell of grassroots political engagement, progressive political engagement i've seen since the anti-vietnam war movement. i teach students not just here at berkeley but all over the country, i do visiting lectures.

even in some conservative so-called institutions. and i find a generation of young people that is more politically engaged and idealistic and active than any generation of young people i've ever come across. all of that makes me enormously optimistic. >> robert reich is the former labor secretary during the clinton years. his latest text is called "saving capitalism." he has a netflix documentary of the same name. robert reich, always good to have you on the program, thanks for your insights, sir. >> thank you, tavis. >> thanks for watching. as always, keep faith. for more information on today's show, visit tavis smiley at pbs.org. hi, i'm tavis smiley. join me next time for a conversation with jaron lanier. see you then. 6

-- captions by vitac -- www.vitac.com and by contributions to your pakistan station fr pbs station from viewers like you. thank you.

good evening from los angeles. i'm tavis smiley. and more than 3 million of them are women. tonight first a conversation with the author maria shriver about her life's mission to one day eradicate the disease. then singer, jazz me a horn makes her national television debut with a conversation and special performance from her album of social call. we've glad you've joined us maria shriver. coming up in just a moment. ♪