06/06/12 06/06/12 [captioning made possible by democracy now!] >> from pacifica, this is "democracy now!" >> tonight we tell wisconsin, we tell our country, and we tell people all across the globe that voters really do want leaders who stand up and make the tough decisions. a >> wisconsin republican governor scott walker wins a historic recall election by 7% after a house and his rival seven to one. the democrats appear to have won control of the wisconsin senate. we will speak with john nichols, author of, "uprising: how wisconsin renewed the politics

of protest, from madison to wall street." then, nobel prize-winning economist joseph stiglitz. >> they got mega bonuses while other companies were making mega losses. as a result of their action, our economy and the global economy went into real tailspin, from which we have still not recovered. their salaries have recovered, but not the rest of esprit de >> joe stiglitz on the price of inequality. of the five heirs of the walmart fortune command more wealth than the entire bottom 30% of americans. all of that and more coming up. this is "democracy now!," democracynow.org, the war and peace report. i'm amy goodman. wisconsin gov. scott walker has survived a historic recall

election more than a year after launching a controversial campaign against the state's public workers. after raking in millions of dollars in outside campaign contributions, walker big milwaukee mayor tom barrett 53% to 46%. high voter turnout was expected. he becomes the first governor in the country to survive a recall election. walker declared victory tuesday night after barrett conceded defeat. >> tonight we tell wisconsin, we tell our country, and we tell people all across the globe that voters really do want leaders who stand up and make the tough decisions. >> from what we have seen over the last 16 months, we have seen this democracy, a live. -- we've seen democracy come alive. to those of you who fought, stood out in the cold, did what

you thought was right, never, ever stop doing what you think is right. >> we will have more from wisconsin after the headlines. seventeen civilians have reportedly been killed in an airstrike by u.s.-led nato forces in afghanistan. a local official said the bombing killed a tribal elder and 16 family members, including women and children, inside their home. six taliban fighters were also reportedly killed. nato is denying knowledge of the deaths and says only that two civilians were lightly injured. if confirmed, the bombing would mark the deadliest known attack on afghan civilians by nato forces in many weeks. in other news from afghanistan, at least 22 civilians have been killed in a twin suicide bombing near a nato base and kandahar. the obama administration says a u.s. drone strike that killed at least 15 people in pakistan on monday claimed the life of the al qaeda's second-in-command, abu yahya al-libi. on tuesday, white house press

secretary jay carney called al- libi's that the major defeat for al qaeda. >> this would be a major blow, we believe -- al-libi's debt is a major blow to al qaeda. it further damages the group's morale and brings it closer to its ultimate demise than ever before. >> latin leaders in pakistan say al-libi escaped the attack with his bodyguard and driver among those killed. it is unknown if any civilians died in the strike. senate republicans have blocked the advance of a bill aimed at narrowing the wage gap between men and women. the paycheck fairness act received 52 votes in favor of proceeding to final consideration, eight votes short of the 60 required. also republicans voted against it. among other protections, the bill would have barred employers from retaliating against workers who disclose their own pay information to co- workers and increased the ability of workers to pursue

punitive damages for pay discrimination. on average, women who work full- time in the u.s. make 77 cents for every dollar men earn for equivalent work. the a federal appeals court has declined her challenge to a decision that declared california's same-sex and -- ban on same-sex marriage unconstitutional. a three judge panel struck down the ban and a two to one decision earlier this year, ruling that proposition 8 "serves no purpose, and has no effect, other than to lessen the status and human dignity of gays and lesbians in california." today's decision -- tuesday's decision to refuse hearing an appeal clears the way for the case to go before the supreme court. the syrian government has reached a deal to allow humanitarian workers into the country while at the same time announcing the expulsion of foreign diplomats. an agreement brokered tuesday would mark the first authorized entry of international aid groups into syria aside from the red cross.

a u.n. official said the deal marked an important first step. >> today marks a step of progress and there is now an agreement with the syrian government on this scale, scope for humanitarian response in syria moving forward. so the discussions have come to a point of conclusion on the need for scaling up and how we will do that. whether this is a breakthrough or nine will be evident in the coming days and weeks, and it will be measured not in rhetoric, not in agreements, but in action on the ground. across the announcement on aid workers came as the regime of bashar al-assad announced 17 foreign diplomats are no longer welcome inside syria. ambassadors from the u.s., britain, france and turkey as well as other countries have been ordered to leave immediately.

the move came days after the u.s. and 12 other countries expelled syrian diplomats following the massacre of civilians in houla. protests continue to grow across egypt over dick's alteration of top regime officials for killings during the uprising as well as the involvement of a top regime official in the ongoing presidential election. tens of thousands flooded cairo's tahrir square and other cities and the largest show of outrage to date following the sentencing of ousted egyptian president hosni mubarak and other former regime officials on saturday. mubarak and his former interior minister, habib el-adly, were given like prisons for failing to stop the killing of unarmed to a mistress during the protest ended mubarak's billy 30-year rule. six former police chiefs were acquitted for their roles during the uprising when 840 protesters were killed and more than 6000 injured. no one was found guilty of

actually ordering the killing of protesters. protesters are calling for the reinstatement of a measure that banned the involvement of mubarak's last prime minister, ahmed shafiq, in egypt's presidential elections. shafiq won nearly a quarter of the vote in last month's elections and is headed for run off with muslim brotherhood candidate mohammed morsi. and other news from egypt, the ruling military council has given lawmakers a 48-hour deadline to form an assembly to write a new constitution or face having a charter imposed. palestinians rallied across the occupied territories tuesday to mark the 45th anniversary of the outbreak of the 67 more when israel seized arab lands including the west bank and gaza. scuffles erupted to the israeli military camp when israeli troops fired tear gas to disperse palestinian demonstrators waving flags and throwing stones. the artistic director of the

acclaimed company for palestinian children has been seized in an israeli military raid. he was taken from his home in the early morning hours and taken to an undisclosed israeli army base. his freedom theatre was done to help palestinian children express themselves through the arts. the founder of the theater was shot to death last year. the head of the international atomic energy agency has publicly accused iran for the first time of seeking to hide evidence of the 2003 nuclear weapons test. the iaea director says iran may have tried to clean up the military complex ahead of a potential visit by international monitors. the u.s. ambassador to the iaea called for immediate inspections. >> it is clear from some of the images that were presented to us that further sanitation efforts are ongoing at the side. there are a number of countries

in that meeting that asked serious questions reflecting the concern about parching. what we all believe needs to happen is for iran to open up the facility to the iaea and to do it now. >> new details have emerged on the u.s. rejection of the 2005 iranian offer to resolve the nuclear standoff. a journalist reports the bush administration blocked france and germany from negotiating with iran over tehran's willingness to convert enriched uranium to fuel rods. a former negotiator said european negotiators told him -- there were ready to compromise, but the united states was the obstacle. american muslims in new jersey say they are suing the new york police department for its widespread surveillance of muslim americans. the associated press won a

pulitzer prize for its series revealing the nypd has extensively spied on muslims, targeting mosques, businesses, and student groups. the suit is led by the national advocacy group muslim advocates. showedsurfaced documents u top executives neglected to tell shareholders about the losses at merrill lynch before completing the $50 billion purchase of the company in 2008. the losses actually resulted in a $20 billion taxpayer bailout. documents filed as part of a shareholder lawsuit in federal court show bank of america executives knew about the losses before the purchase. the documents include testimony from bank of america and chief executive kenneth lewis who admitted he received loss estimates that were not included in documents given to shareholders. documents show just days before the vote, both companies determine merrill lynch's losses would be $14 billion before

taxes. the bank's former treasurer reportedly warned another executive at the time that failing to disclose the losses could be criminal. and occupy wall street protester says he has gone on hunger strike in a stopped taking his aids medications to stop -- protest trespassing charges against activists who were arrested at new york's trinity church on december 17. jack boyle, 57, has been on a hunger strike and without medication for roughly two weeks. protesters have as the church, one of the city's largest landowners to "forgive us our trespasses" a reference to the phrase in the lord's prayer. the arrests occurred when protesters scaled a fence on the the church owned property after trinity refused to give them sanctuary following their eviction from zuccotti park. those are some of the headlines. this is "democracy now!," democracynow.org, the war and peace report. i'm amy goodman with nermeen shaikh. >> welcome to all our listeners and viewers from around the country and around the world.

we begin our show in wisconsin where republican gov. scott walker has survived a historic recall election over milwaukee mayor tom barrett. walker won 53 to 46%, 7% margin. he house been pared by seven to one margin. walker becomes the first ever in the country to survive a recall election. democrats appeared to have gained control of the wisconsin senate as john lehman remains in a lead over the incumbent republican. the statewide recall effort was launched last after scott walker and republican legislators stripped public sector unions of their collective bargaining rights and reduce their benefits. shortly after polls closed last evening, walker delivered a victory speech to his supporters. >> tonight we tell wisconsin, we tell our country, and we tell people all across the globe that

voters really do want leaders who stand up and make the tough decisions. [applause] but now it is time to move on and move forward in wisconsin. [applause] tomorrow i will meet with my catmint in the state's capital, and we will renew our commitment to help small businesses, grow jobs in the state -- [applause] we will renew our commitment to help grow the quality of life for all of our citizens both those who voted for me and those who voted for someone else. because tomorrow is the day after the elections. and tomorrow we're no longer opponents. tomorrow we are one as

wisconsinites. >> wisconsin governor scott walker speaking last night. his opponent, mayor tom barrett, delivered his concession speech in milwaukee. >> i just got off the phone with governor walker and congratulated him on his victory tonight. [bbos] we agreed it is important for us to work together, and i want to thank all of you for the work you have done. this has been the most amazing experience of our lives. and what we have seen over the last 16 months is we have seen this democracy, alive. to those of you who fought, who obtained signatures, who stood

out in the cold, who did what you thought was right, never, ever stop doing what you think is right. that is what makes this such a great country. >> tuesday's election was the most expensive in wisconsin history with more than $63 million spent. in a final flurry of television advertising, walker out spent barrett 7 to 1. walker raised millions of dollars from conservative donors outside the state banks they to a clause in the state law that allowed him months of unrestrained fund-raising. it was the first election since the citizens united ruling, which opened the floodgates for unlimited corporate spending on election campaigns. we go directly to madison, wisconsin to john nichols. he is a political writer for the nation and author of, "uprising: how wisconsin renewed the politics of protest, from madison to wall street." john nichols, welcome back to "democracy now!"

can you react to what happened last night? >> i think we had an incredible test in wisconsin of money power versus people power. we always like to tell ourselves that if the people get organized enough, they can offset any amount of money. but in wisconsin, we got a pretty powerful lesson about this new era we're entering into with unlimited cash as well as unlimited so-called independent expenditures that the parallel to those of a candidate. the result wisconsin was an unsettling one. use of a governor who had really put themselves in a position where i think in most political instances, he would have been unelectable. his poll numbers last year were terrible. there was a broad sense of discomfort with him. not just during this campaign,

really the better part of the year, he used massive television advertising as well as astounding amounts of mailings, and huge amounts of internet and social media communication to basically alter people's impression of him sufficiently to win a 53-46 victory. it is something we should be taking a good look at. not merely for wisconsin, but for the whole country. >> john nichols, you've suggested the democrats made some mistakes and their campaign, particularly with respect to the message they were trying to get across. >> i think that is a very serious issue. when you are outspent massively -- and there's no question the democrats were on the week and of the money chain in this fight -- you have to spend your money wisely. unfortunately, i think the democrats brought the cold war.

they marshal their money and kept it for a last battle against scott walker. much of the accusations were legitimate. but at the end of the day, walker had succeeded early on in defining the issues and the debate. i think the democrats and their allies in the labor movement, frankly, failed to get out front and talk about two critical things. first off, they needed to talk about why collective bargaining is important. the battle over labor rights is worthy fight in wisconsin began, yet it was scott walker who for the last year did a lot more of the messaging on the assault on collective bargaining rights the launched in february 2011. similarly, i think democrats and labor needed to talk about the recall power and explain it and much more detail. walker was very critical of the recall. again, he used a lot of money and messaging to win the debate. >> john nichols, what about the

democratic national committee, president obama not going to wisconsin, the dnc not putting in the money that people were calling for although walker had tens of thousands of the questions of millions of dollars poured into his campaign from outside the state? >> it was a stark contrast. you see republican party that is active and engaged down into the state and local levels. the rnc chairman who is a member of the law firm that is representing gov. walker in many of his current legal troubles said from the start of the race that the republicans were "all in" this contest. the republican governors association began attacking democrat tom barrett before he had announced his candidacy. it was an overwhelming amount of republican engagement.

in contrast to that, the dnc was in a bit of a wrangle with state democrats about whether they would give $500,000 for some get out the vote efforts. president obama meticulously avoided visiting the state and made his final contribution to the campaign, which was a tweet monday night. the comparison between tens of millions of dollars and the ever by rnc and the national republicans and a tweet from president obama, i think it sums it up a little painfully. >> what you think the significance is of the democrats having regained control of the state senate? >> it has some significance. we're in the midst of an election year, so there will be amazingly enough more states and contest, november brent is a brief period for democrats have controlled the senate, but there is significance. first off, governor walker is an

incredibly ambitious person. he has a lot of ideas, things he would like to do. because democrats control one chamber of the state legislature, it will be very hard for them to launch special sessions of the legislature on issues he wants to work on. he is interested in taking apart many of the state's environmental laws in order to allow for a particularly controversial form of mining in northern wisconsin read that is likely to be blocked. he has been very aggressive on voting rights issues. is a big backer of voter id laws, changes and registration and that sort of thing. without control of the state senate, they are unlikely to be able to do that. >> i want to turn to an ad was bankrolled by the virginia-based coalition for american values. >> i did not vote for governor walker. for scottnot vote first

walker. >> there is a right way and wrong way. i think this is the wrong way. >> i elected to do a job. >> let him serve out. >> you have to have faith. >> i did not voted for scott walker, but i am against the recall. >> can you talk about the role of the koch brothers as we look at what this means for the national elections coming up in november? >> i think he got right at its, in defense of what this means for national elections. i think wisconsin was a testing ground. particularly in independent expenditures. folks like karl rove and many other people who set up super pacs and to independent groupings to help conservatives and republican candidates. they can in a very, very early,

came in strong with messaging. that ad was talking about what a bad idea recalls were. that became a real underpinning of the race. there were some in the ads that can in. one thing to remember, the koch brothers were in very, very early and very, very big. we still do not know how much money they actually moved in the state. we may never know because some of these expenditures, and quite hidden ways. but we continue the gate more than $1 million to the republican governors association -- they gave more than $1 million to the republican governors association. there are other groups they find in have been engaged with. some estimates the amount of money they put into wisconsin is in the range of $6 million or $7 million, and theoretically, could have been more. it is important to understand the koch, particularly david koch, said it would go all in,

do whatever they could to make sure scott walker was reelected because he was running an agenda they approved of. what they learned from wisconsin is, this approach works. they are highly engaged with the fall elections. i think -- when we talk about the fall elections, we focus on the presidency. remember, the fall elections will see a bitter and intense battle for the u.s. senate. it is in for the take a look at what happened in wisconsin and recognize -- important to take a look at what happened in wisconsin. there are groups that khadr the big senate races and have a profound impact. -- there are groups that could go into big senate races and have a profound impact. >> john nichols, there were primaries held in other states yesterday. the sale of about montana?

california? >> we had a small scale super tuesday yesterday with primaries from the east coast to the west coast. two democratic members of congress were defeated in primaries. this the california primary between brad sherman and howard berman and the l.a. area. sherman one and it was interesting because he tended to be the more populist candidate to assimilate and new jersey, you saw steve rothman defeated by bill pasquel. the big race that interested me was in montana. steve bialek is the current attorney general. he, as attorney general of montana, is the fellow who has battled citizens united, got to the supreme court arguing states should be able to keep corporate money out of their elections.

that case is in the courts right now, but this guy has been nominated for governor of montana, running on the -- i think, anti citizens, and have big money campaign. i think we will keep a close eye on him to see whether we get another one of these old- fashioned western populist governors coming in and talking about big money. it is an encouraging development. >> john nichols, a thank you for being with us, author of, "uprising: how wisconsin renewed the politics of protest, from madison to wall street." this is "democracy now!," democracynow.org, the war and peace report. i'm amy goodman. when we come back, nobel prize- winning economist joseph stiglitz. stay with us. ♪ [music break] ♪ [music break]

>> this is "democracy now!," democracynow.org, the war and peace report. i'm amy goodman with nermeen shaikh. >> we turn to an issue that has gained increasing prominence in the last year, increasing inequality in the u.s. and the divide between the richest 1% in the rest of the country. bloomberg news reported tuesday that pay for the top ceos on wall street increased by over 20% last year. the article is based on analysis of data reported to the securities and exchange commission and finds the substantial rise comes after 26% jump in ceo salaries in 2010. census data shows nearly one in two americans, or 150 million people, have fallen into poverty or could be classified as low- income. 38 percent of african-american children and 35% of latino children live in poverty.

>> our next guest has helped to popularize the expression the 1% and bring to light the causes behind increasing inequality in the u.s. joseph stiglitz is a nobel prize-winning economist. his may 2011 vanity fair article, "of the 1%, for the 1% ," serves as the basis of his new book, "the price of inequality: how today's divided society endangers our future." joseph stiglitz teaches at columbia university. we welcome you back to "democracy now!" this figure on page 8 of your book when you say considered the walton family, the six heirs to the walmart empire, and wealth of $69.7 billion which is equivalent to the wealth of the entire bottom 30% of u.s. society. >> it is a comment both on how well off the top are and how poor the bottom are.

it is really emblematic of the divide that has gotten much worse in our society. one of the point i tried to make in the book is none of this is inevitable. it is not just market forces. the united states is the country in the world with the highest level of inequality and it is getting worse. >> the highest level? >> of the advanced industrial countries. what is even more disturbing is we have become the country with the least equality of opportunity of all the advanced industrial countries. we think of ourselves as the land of opportunity, the american dream. there are examples we know of where people have made it -- immigrants and other people have made it to the top. but what really matters are the numbers, the chances. what are your chances if he had the misfortune of being born to a poor family or someone whose

parents are not well educated? what are your chances of going from the bottom to the middle or the bottom to the top? they are lower in the u.s. than other advanced industrial countries. >> you talk about it a few times in your book, but an old europe, there is more class mobility than in the u.s. the always think of europe as being very class rigid. >> and this is a change in many respects. another point i try to emphasize in the book is it has consequences. it has consequences for our sense of identity, but also you may say narrow economic consequences. what it means is if you make the mistake of choosing the wrong parents, the likelihood is he will not live up to our potential. in that sense, we are wasting our most important asset, our

human resources. >> use that ultimately the rich will pay an extraordinary price for this inequality. how? >> we're in the same boat. there are a lot of people who are bright and work very hard to a very low incomes. the point is, all of us benefit from our education system, our legal system, the way our whole society functions. in those parts of the world where there is a large divide, mainly emerging markets in developing countries, society's fall apart. there is political, social, economic turmoil. in that context, not even the 1% can do that while. >> i want to ask about the people we value and the people we don't. you have an amazing set of

examples. you say if you are an inventor -- by looking at those of the top of the wealth distribution, we can get a feel of the nature of this aspect of america's inequality. few are investors who every ship technology or scientists to every shift our understandings of the loss of nature. think of the genius provide of the mathematics underline modern computer or einstein of the discoveries of laser or the inventors of transistors or the one who unraveled the mystery of dna. none of them who made such large contributions are among those most rewarded by our economic system we have very different names that are tied to the so- called inventions, like the internet. >> that's right the theory that was developed in the 19th century to justify the equality

of merging with capitalism was margin of productivity theory, this notion that those who contributed most to society would get bigger rewards. it was a sense you may save moral justification, but also an argument for economic efficiency. what we realize now is individuals who have made the most important contributions are not those who are at the top. many of the people at the top, for instance, are those financiers who brought the world to the brink of ruin. the moment of great recession, it was a telling moment in our rethinking of what was going on. we sort of understood something was wrong. but in that crisis where you saw some many bankers who had brought the world to the brink of ruin, who actually brought their companies to the brink of ruin, were rewarded with pay in

the millions of dollars. it was clear there was a disconnect between private wars and social returns. undermining the theory that was the basis of the justification of inequality in our society. a >> when did financiers, to have this kind of power? >> it has been an evolution. in my mind, but really telling change was the repeal of glass- steagall. where we told the banks, don't focus on what you are supposed to be doing, which is providing credit to new businesses, to expand businesses. we brought together the commercial banks, which were the basis of this prudent lending. and investment banks, took rich people's money and gambled. we put it together. we created these financial institutions that were too big to fail. the results of that was the grew larger and larger.

the risk-taking, gambling, speculation dominated rather than the landing, which is the basis of a growing, productive economy. in a way, the revolution began began tohere the ceo's realize they could take a larger and larger share of the corporate income. they understood we have deficient corporate governance laws. we did not require the same way. shareholders are supposed to on the firms, the shareholders had no say in the pay for the managers of the companies they were supposed to own. a very strange situation. if you have someone working for you, you would want some say in their pay. the result is they took a larger

and larger share. if you look at those at the top, they're not those who made big changes, but corporate ceo's critics who is bronner's label? >> these are people who make the internet. >> we think mark zuckerberg, gates, jobs. >> all of these played an important role. we should not underestimate the importance of that, but all of these rest on a foundation which was largely publicly provided, publicly funded. you could not have a program if you did not have a computer. you only have a computer if you do the math medical research that provided the foundation. that was alan turing. you do not have internet programs unless you have the internet. and that was something the u.s. government helped to develop.

and these other people helped develop the world wide web. the irony is the people who provided the foundation on which our entire modern economy is based are not the people who have done well. >> i want to ask about the presidential race. and about republican candidate mitt romney's record. york mayor cory booker, a supporter of president obama, generated controversy when he defended romney's former company bain capital. booker spoke on "meet the press." >> from a personal level, i am not going to indict private equity. we're getting to ridiculous point and american. i live in a state or units and pension funds -- if you look at the totality of bain capital's record, they've done a lot to support businesses, grow businesses. >> your comments on the role of

private equity fund bain capital in particular? >> the financial sector is very important. no economy can work well without a well functioning financial sector. the problem with the united states is, we have not been doing what we should be doing. it should provide financing to create jobs, not destroy them. it should help manage risk. the concern about bain capital is twofold. one, much of what they were doing was financial restructuring, which meant not creating jobs, taking money out of companies and the thing them in a fragile situation where -- and putting them in a fragile situation and jobs to destroy. it is important to restructure, to make them sustainable and efficient. but that is not what a lot of the enterprises were doing. the second problem, and most

find it very disturbing, we have a tax law that says those who are engaged working for this kind of restructuring, and an important activity if it is done well, why should those people pay so little taxes? going back to the upper 1%, their average tax rate is about 15%. we tax speculators at a lower rate than those who work for a living. it makes no sense critics there booker got a lot of flak. a number of democrats have been saying there is a war in the demonstration. to attack romney on bank capital more than being governor of massachusetts? a lot of democrats are involved with bain capital or have supported those who are involved with bain capital. president clinton, he said to

back off bain. you can see this tug of war not only about bain capital, and i see them not really talking about bain and talking about what you're mentioning, joseph stiglitz, but also his offshore investments, offshore bank accounts -- himself and his company. can you talk about clinton is one of the champions about saying, do not raise this, he is a good businessman? >> romney is running on the platform, it is good that a businessman running the white house. we do a better job. the last mba president we have was george bush, and i don't think anyone would say the economy was well run and those eight years. deficits soared in the economy when over the brink into the great recession. that qualification he is touting, if i've looked at that harvard mba, i'm not sure i was

said that is the certification i want for running the country. you have to understand public policy, not just the money for yourself. which they took good job of, but that has nothing to do with running the country. some say, let's not make this personal but try to keep at the basic level of principles. the basic level of principals are relatively simple. people should be paying their share of taxes. and that means you do not pay half the rate of other people who are working for a living. it means you do not use offshore centers to escape taxes. why is a much banking going on in the cayman islands? it is not that the weather is particularly suited for running banks, but there for one reason only -- to escape regulation and taxation, to undermine the basic principles of our economy. and it is wrong for someone who is trying to run for the

presidency who should be symbolizing, making their fair share to be using offshore accounts to avoid taxes and avoid regulation. the other point is, businesses are supposed to be creating value, creating jobs in america. this is where we have a tax system that is distorted. when you're running for the president, you should be out there and saying, we do not want a distorted tax system that encourages jobs to move abroad, that encourages speculation over real wealth creation. if he had come out and said like warren buffett that it is wrong for him to have a lower tax rate than his secretary, if he said, it is wrong that the tax structure that encourages jobs to move abroad, then i

might have a little more sympathy. but so far, i've not heard that. >> the former managing director of bain capital who has been treated to romney, advises romney, argues explicitly for doubling the income inequality. >> i found that astounding. i debated him yesterday, actually. the point is, he believes in trickle-down economics. the notion you throw a lot of money at the top and everybody does a lot better because of their innovation. given the level of inequality in the u.s., i wish it were true. if it were, we would all be doing very well. but the evidence is overwhelmingly against that. we have had growth at the top, but what is going happen to the average american? he is not doing well. most americans today are worse off than over a decade and a half ago. people at the bottom have done

even worse. if you start looking at say full-time male workers, today the average typical income would be lower and was in 1968. -- than it was in 1968. it has not been delivering for most americans, but those at the top. the period, like after world war ii, we grew to gather in the quality and grew much more rapidly than we have since 1980 we have been growing apart. so the notion that more inequality leads to more growth, to put it frankly, it is nonsense. >> we will come back to this discussion, joseph stiglitz, author of, "the price of inequality: how today's divided society endangers our future." stay with us. ♪ [music break] ♪ [music break]

>> this is "democracy now!," democracynow.org, the war and peace report. i'm amy goodman with nermeen shaikh. maybe we should talk about working women. >> joseph stiglitz, you spoke about the austerity measures that have been imposed across europe or are being considered across europe, and said they are "a suicide pact." what did you mean by that? >> in europe, these measures of austerity are going to make the country's weaker and weaker. i predicted back in 2010 increased when the greek crisis first emerged, what has happened is greece has become weaker and weaker to the point where the youth unemployment is 50%, political turmoil is breaking out. i said the same thing when spain began that process. now in spain, the youth unemployment rate is 50% in the

unemployment over all is well over 20%. just yesterday, spain's conservative government has said we cannot deal with it, even though they had run on the platform of, you have messed up economic policy. the point is, we have done this experiment in austerity over and over again. the first example in modern history we might say was herbert hoover when he responded to the stock market crash by austerity and the great depression. east asia and thailand, indonesia. it was all the economy -- consequences of the economy going down. we know almost for certain what the outcome is going to be. >> is it only europe? let's turn to the federal budget.

republicans control the house in calling for cuts to food aid, others also services while protecting funds for the pentagon. this was paul ryan. >> we say, let's get on growth and prevent austerity. the whole premise of the budget is to pre-empt austerity by getting our borrowing under control and preventing medicare and social security and medicare from going bankrupt rid that pre-empts austerity. the president, his budget puts us on a path toward european- like austerity. that is what we're trying to prevent from happening. >> that was paul ryan. your response? >> the good thing about what he said is austerity is fine, but getting a bad name. the question is, what are you proposing? he is proposing weakening the basic economic fiber. if you do not invest in infrastructure, education, technology, the economy gets

weaker. >> where do you get the money? >> right now, the markets are willing to lend to the u.s. if you're a business and you could borrow at 1.5% or 0% for investments with very high returns, you would be foolish not to do it. the right teams focusing on one side of the country's balance sheet or the government's balance sheet -- what they owe. they do not look at the other side, the assets. that is what is important if we're going to have long-term economic growth. it is like a company that says, let's cut out our investment in research and development. do you know where it will go? in the tubes. that is his recommendation for america. >> you have also said if the republicans win the elections in november that that would significantly raise the likelihood of a recession. >> republicans have consistently

focused on cutbacks. americans do not realize we already have begun austerity. there are about 1 million fewer public-sector employees than before the crisis. the standard recommendation of macroeconomics is that when the private sector gets week, the government is opposed to stem in, stimulate the economy so the economy is stabilized. the private sector is very volatile. but we have been doing the opposite. as the private sector got weaker, we cut millions of jobs. the republicans would make those cutbacks even bigger. wisconsin is an example. more cutbacks a public employees. as a result, our economy is going to go further into the hole. in the context of europe, very likely going into turmoil, there is going to be a risk of a

significant downturn. those policies increase the possibility of our weaker economy tipping over into recession. >> yesterday, every single senate republican voted against the paycheck fairness act so it cannot move forward. explain what the act is, the significance of it for working women. >> this is one of the issues i take up in my book. what is distinctive about american inequality is too much goes to the very top, the 1%. the metal has been hollowed out. the bottom is doing very badly. when you look at what is happening in the middle and the bottom, one of the factors that contribute to witnesses is discrimination. women get paid on average less than 80% of men of the same qualifications, during the same

kind of work. that is discrimination. that weakens the economic fiber of our country and creates more inequality. this bill was an attempt to circumscribe the kind of discrimination. things are better than they were 30 years ago. we have made progress. but what is clear, in spite of our awareness of this kind of discrimination, we have not closed the gap. >> particularly among african- american and latino women. >> one of the aspects of the crisis, we now realize the banks targeted african-americans and latinos who are these predatory lending, bad loans, high transaction costs -- one of the consequences of that discrimination, and the banks have paid very large fines and settlements of claims against

the kind of discrimination, the consequence is the wealth of those at the bottom were afro- american, spanish, latinos, have been wiped out. we had a bigger gap in well and -- gap in wealth than income. if you look at the wealth gaps in the latinos and afro- americans, it is so much larger. it is really unconscionable. >> your comments on occupy wall street, you write about it in your book. >> occupy wall street was a reflection of a lot of americans pause perspective that our economic system is unfair. the protest movement that began in tunisia was partly about lack of jobs, but partly -- i went to tunisia. it was partly on the and

fairness in our system. there is hope after the crisis that government would fix things. it did not. or did not do enough. that combination of economic and fairness and the political system that does not seem capable of correcting these injustices, i think, is what motivated a lot of the occupy wall street. >> i want to go to a clip of bloomberg talking about occupy wall street saying is a critical tax breaks for new york city. >> the protest that are trying to destroy the jobs of working people in the city are not productive. some of the labor unions, municipal unions that are participating, their salaries come from the taxes paid by the people they're trying to vilify. >> what say you, joseph stiglitz? >> i think he is 100% wrong. the fundamentals of a democracy

are that you want people to express their views. they had hoped the politicians would hear their voice. they hoped the politicians would address the inequalities in our society, the lack of or deficiencies and our financial system. what became increasingly clear is money was driving our politics. that is an important point i raise in the book. many shapes markets. markets do not exist in a vacuum. the way they work, it is based on rules and regulations that come out of congress. when politics shapes those rules and regulations to help the 1% rather than the rest of society, something is wrong. with the protest movement -- it

was out of frustration, a sense that democratic politics did not reflect the views of the majority of americans. the 99%. >> do you want to see it grow bigger? >> i think it is very important that somehow we get a politics that reflects the interest of the majority of americans. let me have a bankruptcy law, for instance, that says first priority goes to derivatives. that encourages speculation in the financial markets. when we have a bankruptcy law that says students can not discharge their debt even in bankruptcy the matter how bad an education equal or -- profits goes give them, there is something wrong. >> we will continue to talk to you online. joseph stiglitz author of "the price of inequality: how today's divided society endangers our future." [captioning made possible by democracy now!]