07/30/12 07/30/12 [captioning made possible by democracy now!] >> from pacifica, this is "democracy now!" >> the middle class finds itself in this position, a lot of politicians and experts will say it is inevitable, just natural force out there and everyone is helpless. we reject that and say it is not true. policies were put in place that have caused these things to happen or allow them to happen, similarly, policies can be put in place to change them. >> "the betrayal of the american dream."

the reporting team of donald barlett and james steele publish a followup to their "america: what went wrong." we will speak to them on the assault of the middle class, the cost of free trade, the great tax heist, deregulation and the end of retirement. >> what is happening is not related to the recession. yes, it is kind of focused on it, but the downward incline in order to continue after the recession is over. >> donald barlett and james steele. we will also look, corporations took the money and jobs and ran to china. apple doesn't manufacture a single product in the united states. and head of the 2002 olympics, romney helped raise the federal treasury. all of that and more coming up.

this is "democracy now!," democracynow.org, the war and peace report. i'm amy goodman. the nine nations failed to meet a deadline on friday for the first-ever global agreement regulating the arms trade. hopes had been raised for a last-minute deal, but the negotiations collapsed without the required consensus. arms control advocates heavily criticized the obama administration, which demanded a number of exemptions and ultimately said it needed more time to review the proposals. white house officials had cited the need to protect second met rights in the u.s., despite u.n. assurances the treaty text would not interfere. in a statement, amnesty international usa said the u.s. had shown stunning cowardice adding -- the u.s. is now under new pressure to revive the talks to reach a deal before the u.n.

general assembly this fall. and the macdonald of oxfam said enough progress has been made to fuel hopes for an eventual agreement. >> it goes without saying the increased use of heavy weapons, reportedly even jet fighters, has already caused many civilian casualties and with many more a grave risk. taking all this together with the report of forces in and around aleppo, we believe this bodes ill for people of that city. >> as the talks collapse of the united nations, top state department official openly bragged u.s. government efforts had helped boost foreign military sales to record levels this year. speaking to a group of military reporters, andrew shapiro said --

according to shapiro, u.s. arms sales have already topped $50 billion in fiscal 2012, putting u.s. on pace to increase its total for the year by 70%. at least seven people have been killed in the u.s. drone strike in the pakistani area of north waziristan. as in previous strikes, pakistani officials say the victims were militants, but the obama administration's policy is to deem all adult male drone targets as militants unless exculpatory evidence is found after their deaths. the strike comes just as the head of pakistan's intelligence service is preparing to visit washington for talks later this week. relief officials meanwhile are warning that some 240,000 children of pakistan are now i risk after local taliban warlords banned polio vaccination in both north and south missouri stan.

the taliban called the move a response to the ongoing drone attacks and the potential for espionage and to the cover of immunization, citing the c.i.a.- backed fake vaccination program that helped locate osama bin laden. pakistan is one of three countries in the world where polio remains a large-scale risk. republican presidential candidate mitt romney continued a foreign trip over the weekend with a visit to israel. romney's campaign drew headlines after a top aide initially announced sunday that romney would announce support for his pre-emptive israeli military attack on iran should israel deem it necessary to stop iran's alleged nuclear activities. but after taking the stage for a speech sunday night, romney backed off from the stance, stopping short of declaring his support for unilateral strike. instead, he echoed president of his longstanding position to leave all options on the table. >> we should employ any and all measures to dissuade the iranian regime from its nuclear cores,

and it is our fervent hope that diplomatic and economic measures will do so. in the final analysis, of course, no option should be excluded. we recognize israel's right to defend itself, and it is right for america to stand with you. >> as romney headed to israel, president obama took new steps to display his support for israeli government policies. on friday, obama announced a new measure to increase military aid to israel. speaking to reporters, he 0 -- obama correctly said the aid was worth $70 million -- but then, apparently thinking he had made a mistake -- stopped himself wrongly claim the aid was in fact worth $70 billion. >> my administration to deepen cooperation with israel across the whole spectrum of security issues, intelligence, military, technology and in many ways, what this legislation does is bring together all the

outstanding cooperation that we have seen really at an unprecedented level between our two countries that underscores our unshakeable commitment to israel's security. i am very pleased that this week we're going to be able to announce $70 million in additional spending -- $70 billion, excuse me, for iron dome. >> the white house took new steps to back the israeli government's position on bombing iran. citing a u.s. official, the israeli newspaper ha'aretz reported sunday that president obama is national security adviser had personally briefed israeli prime minister benjamin netanyahu on contingency plans to bomb iran should the u.s. decide to abandon diplomatic track on iran's nuclear program. the israeli government has denied the report. a pregnant shooting victim who sustain serious injuries in the aurora, colorado massacre has

lost her young daughter in the attack and suffered a miscarriage. ashley moser was eight weeks pregnant when she is scared from the trauma of the shooting while undergoing treatment in the hospital. her six-year old daughter veronica was the youngest victim to be killed in the attack. the suspect, james holmes, is to make a second court appearance today. his public defender has made court filings showing he had been receiving psychiatric treatment before the shooting occurred. police in maryland say they may have prevented another shooting with the arrest of a man who made violent threats and was found to have a large stockpile of weapons. the suspect, the press got, reportedly had called as workplace and a threat referring to himself as the joker just as james holmes allegedly had called himself. maryland police and the bureau of aqaba, tobacco, and firearms officials described the raid on the home. >> he made significant threats

to come back and harm the people at the business. he said, i am a joker and i'm going to load my guns and blow everyone up. that initiated a 36-hour investigation that culminated early this morning. >> we had several agents on the scene that evaluated the evidence, recover approximately 25 firearms, several thousand rounds of ammunition. the firearms were described the semi-automatic rifles, semi- automatic pistols may cut the canadian oil company enbridge has sustained another leap to one of its oil pipelines in the u.s.. a major pipeline for canadian light crude spilled more than 1,000 barrels of oil in wisconsin friday, forcing the company to shut it down. the leak came nearly two years to the day after enbridge's oil spill in the kalamazoo river, the most expensive onshore spill in u.s. history. the fbi is being accused of targeting political activists in

the northwestern united states. at least three homes have been rated in portland in granger is subpoenas that have been handed out in seattle and olympia against people linked to occupy and other groups. a spokesperson from a group calling itself the committee against repression says people are being targeted for their ideological beliefs. >> people are being targeted based on their political beliefs. specifically in the search warrant, there was -- the worst seeking anarchist literature. >> more arrests have been made. the fbi says only the raids were conducted as part of an investigation of violent crimes. a grand jury in seattle is to convene later this week. police in burlington, vermont are being accused of firing bullets at activists protesting a meeting of new england governors and eastern canadian premiers. sunday, police said they took action after a group protesters tried to block a bus picking up conference delegates.

video footage posted online shows police shooting least one protester at close range. thousands of people rallied on capitol hill on saturday to protest the gas drilling process known as fracking. organizers of the stop the frack attack rally say they brought together members of communities across the country whose lives are being adversely impacted by the environmental damage of hydraulic fracturing. the rally culminated in a march to the offices of america's natural gas alliance and the american petroleum institute. police in london are being accused of political repression in a mass arrest of cyclists to in the olympics opening ceremony. on friday, at least 132 people on bicycles were arrested while taking part in a critical mass. the cyclists say they were peddled by police and held overnight. one of those arrested was 13 years old. in japan, thousands of people broke through police barriers to march on parliament sunday night

in a massive protest against nuclear power. japan has seen its largest anti- nuclear protest to date after bringing a shuttered plant back online for the first time since last year's fukushima disaster. in syria, clashes continue to rage between government and rebel forces in aleppo, both sides offering conflicting accounts of how much they are in control of the city. at the u.n., the office of the united nations high commissioner for human rights, warned civilians aleppo are under siege. >> it goes without saying the increased use of attack helicopters, tanks, and even jetfighters and urban areas, has already caused many civilian casualties and puts many more at grave risk. taking this all together with a reported buildup of forces in and around aleppo, we believe this bodes very ill for the people of that city.

>> and those are some of the headlines. this is "democracy now!," democracynow.org, the war and peace report. i'm amy goodman. democrats and republican lawmakers are in a deadlock over whether to extend the politically decisive bush-era tax cuts. the republican-controlled house of representatives is planning to vote this week to extend all the cuts, but obama says those americans making above $250,000 a year should return to the tax levels they paid before bush took office. pointing to the senate's passage of the white house-backed proposal, obama called on house republicans to support the bill in his weekly address on saturday. >> this week the senate passed a plan and proposed a few weeks ago to protect middle-class americans and virtually every small business owner from getting hit with a big tax hike next year. a tax hike of $2,200 for the typical family. it comes down to this. if 218 members of the house vote

the right way, 90% of american families and 97% of small- business owners will have the certainty of knowing their income taxes will not go up next year. that means something to a middle-class family who is already stretching the budget as far as it can go in co john boehner countered that obama's tax plan would destroy hundreds of thousands of jobs. >> the president's plan would cost about 700,000 new jobs that would not be treated or could be lost by taxing a small business -- small businesses. the house will not do that. they will extend all the existing tax rates. we have 8% unemployment, 41 months of it. this is not the time to be raising taxes on the american small businesses. >> as republicans and democrats continue disputing who should bear the brunt of the tax burden, our next guests argue that america's of a class has been decimated over the years to

the policies governing not only taxes, but also bank regulations, trade deficits, and pension funds. their new book chronicles how the american middle class has been systematically impoverished and its prospects thwarted in favor of a new ruling elite. we're now joined for the hour by donald barlett and james steele. they have worked together for over 40 years. most recently, the road together at "vanity fair." their first book was a new york best seller, "america: what went wrong." the share two pulitzer prizes and two national magazine awards. the latest book is called, "the betrayal of the american dream." start off by laying out your thesis, start off by talking about the the trail of the american dream. >> it goes back to when we did the, "america: what went wrong." at that time, people were upset

around the country. they knew something was happening, but did not know what. what made the book so successful is we pull everything together in terms of pensions and pay and union membership -- just everything economics. you could see there was a systematic attack going on in the middle-class. at that time, it was still the alleged it could have gone either way -- it could have gone either way. there was not a political response. as a result, we received literally hundreds and hundreds of letters of emails over the last several years saying, would you go back and look at this in terms of what you wrote the first time? if we made one mistake the first time, it was we grossly underestimated how fast this country was going to go down the tubes. and we really did.

back then, there were still defined benefit pensions and people had a hope of getting them. they are gone. there was one wage structure. there were a two-tier wage system, and no one is gone. income has been flat, for the most part since then. you go down the list and everything has gotten incredibly worse than it was then. one of the arguments raised by critics, right at the talent of one of the recessions, and people said, what is happening now is related to the recession and once we're out of the recession, everything will be fine. we make the point, this was not true. what was happening was totally unrelated to the recession. it was the result of structural defects in the american economy, and was going to continue unless they were dealt with. they were not dealt with, and

now everything -- you could not even go back now to the 2000 level and give people what they had then. it would be impossible. the attitudes in congress, the gardening lines -- hardening lines in washington. >> of want to talk about specifics and go general. james steele, the story of corporations tell a very major story about the united states. corporations like apple and boeing. apple doesn't manufacture one product in the united states? >> that is correct. i think some of the parts are made here, but the essential not.that is noproduct is what is significant about what apple has that is not just working conditions in china, but what they did was completely closed down manufacturing in

this country after really less than a generation. the historic pattern in this country was the product would be invented here, a company would go into business and start making it. up and down the line, yet a broad based work force for that product from the factory floor to the designers to the salesman to the stockholders who might be part of that company. ultimately, the of this broadbased situation. apple or originally had some manufacturing in this country, but in less than a generation, close that down and shipped must things to china. it is just part of that pattern where jobs were once middle- class people have them in this country are gone. you have a similar situation with boeing. boeing has outsourced all kinds of parts of the new streamliner, which has recently run into problems with parts of their engines falling off, apparently. boeing is getting into the chinese market, which everyone agrees would be a huge market.

basically, what boeing is doing, and many companies are doing, basically showing the chinese how to make airplanes. what have the chinese done? they are creating their own civilian aircraft industry. we were told in this country the idea was to have a presence there so we could sell them airplanes. where will that lead down the line if we're turning over to them some of the technology that will let them build airplanes that are our principal export in this country? >> how much of that knowledge is a tax-payer financed? >> boeing has been a major defense contractor over time, in many contracts have led to all sorts of technology that worked the way into both civilian and military airplanes. taxpayers have supported that. now you have a situation where some of the technology that taxpayers have paid for through boeing and other contractors is now would be handed over to the

chinese to build airplanes to compete against us. civil aircraft is the only significant export this country has. >> and the number of jobs boeing has moved to china? >> i think it is 20,000 to 30,000 by boeing was on statement. i should correct one thing, we have other exports, but civilian aircraft is the only thing where we have a surplus of exports. we export a lot of things, and most of those products like auto parts and things of that sort, the import vastly overwhelms our export. >> back to apple, we spoke to charles to dig -- charles duhigg. i asked what it would take to make iphones in the united states. this is what he had to say. >> one of the things president obama asked was, is it ever possible to bring back those jobs to the united states, to make iphones in the u.s.?

steve jobs said, those jobs are never coming back. it isn't just because workers are cheap er in china, it is because china has established a huge competitive advantage over the u.s. their supply chains that exist in asia which the u.s. cannot replicate. >> i also asked charles duhigg about the human costs of apple products for workers in china. >> what apple says, and you have to take them at their word, is the set every single time they find a violation inside of supplier, they mandate a change is made and a management system is put in place an order to prevent it from occurring again. but we look at the aggregate statistics apple publishes every year, we see the same violations occurring over and over. >> charles duhigg about it human costs of apple products, james steele. >> i think he is right. these apple products will not be

coming back. but the issue is not they're not coming back, but what happened to let them go over there to begin with. i think the point could easily be made, apple could of had some manufacturing in this company as well as elsewhere. but they made a conscious decision to go over there. the reason a lot of companies do that is not just the cheap labor. the chinese have a system in place that subsidizes companies, land, low-interest loans, a whole range of things, the kinds of things a company in this country cannot compete with. it goes way beyond the labor. we talk about free trade. other countries do not really practice free trade. china is a perfect example of that. how's the company over here expected to compete with a company that has that kind of support that and then bring its product back here duty-free? it is almost impossible. this is true of dozens of products. >> why couldn't apple build factories here now?

>> they could if they wanted to, but i'm guessing it is not going to happen because they do not want to. >> but consumers could make a statement. >> absolutely. >> and make demands. >> and make demands. we have so much -- we got so much mail after our piece on apple. people bought the products were so expensive because they were built in this country. people were astonished to find out, no, they are not. yet they still cost you more than things that might be made here. >> donald barlett? >> the only thing i would add to that, you need to put controls on corporations. somewhere along the line, we have reached the point where there can be no tariffs, nothing on corporations. they are free to do whatever they won. look no further than fracking. especially in pennsylvania where we are both from.

you grow up in pennsylvania and you remember what it was like -- well, i am older than jim, i remember, you went out of the house in the morning and it was covered in a large dust from the blast furnaces. it was a way of life. was it help the? no. but now, that kind of behavior is tolerated. not only tolerated, but encouraged because nothing is done to prevent it. you have all this talk on the far right about the regulations that are stifling creativity and all this -- that is utter and complete nonsense. when it is put in historical terms, it is just mind-numbing that we have allowed -- jim made the distinction, talking about civilian aircraft. the chinese have just been given the keys to the u.s. attack

helicopter. what does this say? as an old cold war era, in which i spent time in intelligence, security clearances would have been killed automatically for the corporation. nobody says anything in washington? they like to pretend they are charged with something, but they are not. they're just there to do whatever corporations want them to do. >> interesting -- .> let me qualify this bree we need to distinguish between global corporations and domestic corporations, with virtually being screwed in washington. the domestic corporations, the ones who employ people in this country, have really taken it in the ear, and only because washington is a free pass to the

international global corporations. >> james steele, the statement on apple products designed by apple in california? what's right. but manufactured elsewhere. and in the past, this is the point i was time to make earlier, in the past, yet a whole chain of people. you had the inventors, the designers, the people who manufacture, the people who sold it, and at the end of that you had the consumers that brought that -- but that product. it does not mean you cannot have factories elsewhere, but the idea that we do not have the capability of building these products, that we did not have the engineers to do that, i mean, we totally reject that. too many people in manufacturing were very upset by this whole trend because they say separating the design from the actual manufacturing floor is a huge mistake. that is the way so many great things were done in the past. >> that is where you got your new products and innovations

from. if you're not making it on the floor, it does not come. >> we will come back to the discussion with our guests, donald barlett and james steele , the pulitzer prize-winning dynamic duo or authors of, "the betrayal of the american dream." a clarification, police in burlington, vermont are being accused of firing rubber bullets at activists protesting a meeting of new england governors and eastern canadian premiers. police said pellets were fired, but have denied firing rubber bullets. this is "democracy now!," democr i'm amy goodman. we will be back in just a moment. ♪ [music break]

>> more than 120 million video

views on youtube. this is "democracy now!," democracynow.org, the war and peace report. i'm amy goodman. we are joined by donald barlett and james steele, the authors of the new book, "the betrayal of the american dream." i want to go to the issue of the olympics. in 2001, you wrote a story called "snow job" about the 2002 olympics in salt lake city, headed by none other than mitt romney. in your investigation, about these olympics, which published in "sports illustrated," reported "$1.5 billion in taxpayer money that congress is pouring into utah is 1.5 times the amount spent by lawmakers to support all seven olympic games held in the u.s. since 1904 combined."

james steele? >> it is an interesting position for some against new taxes and wants to cut the deficit, here you had some heading the olympic committee that for the entire operation raided the federal treasury like no other politics and history. they got everything. salt lake infrastructure, salt licks your lines, land exchanges that transformed the -- salt lake store lines, land exchanges that transformed into a world class resorts. all of these things happen one way or another under romney's watch. that is what astonished us about the comments were he was this in the london olympics, that they're not operating right are doing this right. i think he is so vulnerable on that issue and everyone who had anything to do with the salt lake olympics is very vulnerable on an. what struck us so much, here is utah, a state famously with a great antipathy to hang in thpad

of taxes, had no qualms whatsoever to raid the national treasury to take care of their needs relief for the next generation. the fact he would make this point in london is astonishing. >> he is right. utah got anything they wanted out of this. other states would of had to pay for it on their own. utah got from the federal government. the hypocrisy of people like romney who want everyone in the middle and bottom to pay their own way, but they themselves have no trouble grabbing as much money as they can get out of washington. and they do it all the time. it is just astonishing. people generally do not know it. the news media does not do what it should on this area, and never has. part of the problem is here, most people today get their news

from tv, and it is not public tv, but commercial tv. commercial tv is not about to do this kind of work. >> with nbc covering the olympics around the clock, we do not see any of the protests taking place an increasing anger of the small businessmen in its london who are getting wiped out, the whole issue of not criticizing the corporate sponsors, the corporate sponsors getting huge numbers of seats yet they do not fill them. these arenas are empty. the british government is try to get soldiers in there, school kids tell-someone. it shows these seats in these stadiums were sold out years in advance and on no one is there because the corporations are not people. >> wait a minute. >> like so many of these other issues. like he said, romney and some of the policies he advocates will benefit very few.

the tax structure of the wealth in this country, the tax structure of the whole country is out to solely benefit the wealthy. some of the statistics are amazing. the wealth of the top 1% of this country is greater than the well of the bottom 98%. that is staggering. one thing that has made that possible as a whole series of tax changes over a long period of time, mainly in the last 10 years. one thing that they have done that we cannot get over was in 2003 when they made dividend income taxable at 15%, this was the first time ever the dividend income was treated differently than someone earning a wage or salary. and the idea that somehow should be more favored then someone working by the sweat of their brow is absolutely appalling and ridiculous. >> in the coming weeks, you know better than anyone, just a constant, you know -- i don't

know what you call it, but out of washington and on taxes, how we're penalizing on to canoers and all that garbage -- into they paid 51.2% of their income in taxes. that is 1955. in 2007, they paid 16.6%. everybody is talking about a deficit. of course there is a deficit and there always be at a deficit until they oppose the tax system that exists in this country in the 1940's, 1950's, 1960's, 1970's in which people at the top that had money paid serious taxes. no one, but no one at the top pays serious taxes even remotely close to what their peers would have paid back in the 1960's and

1970's. >> journalist nicolas shaxson wrote about mitt romney's fortune called "where the money lives." we spoke to nick shaxson about someone as wealthy as romney has an average personal rate of less than 50%. >> this is about u.s. tax code. this is the way that privileged people like mitt romney and other hedge fund managers and private equity titans receive their income. they receive it as something called carried interest. many would argue it is just like a salary earned by anyone else. instead of the top tax rate, for historical reasons, it is taxed at a very low rate of 15% bronner's tax rate is a little lower, so he has deductions and other kinds of income as well, but it is not too far off of a

teen%. the tax treatment of carried interest is the central reason why this is a much lower than other americans. but i want to go to -- go ahead >> we need to point out these pleas for him to release the rest of his tax returns, which every canada has always done. >> and his father did it for 12 years when he ran. >> his father was kind of a straight arrow compared to mitt romney. we wondered in the back of our minds, there may not be anything in those returns, but he may be amending them furiously. this is what candidates do once they reach a point where, this is one of the public so we have to go back and clean up the returns. >> how do you clean it up? >> the file an amended return. it is not uncommon. >> so completely replaces the

one that was there. >> exactly. in our minds, we think that is the more likely thing going on, not that they are afraid of something in those returns, but they're being sanitized. >> earlier this month, mitt romney gave a series of television interviews defending his role at bain capital. this is romney speaking to cnn's jim acosta. >> there's nothing wrong with being associated with bain capital, but i left any role that bank capital in february 1999. that is not an said by the people at the firm, known by the documents offering document the firm made subsequently about people investing in the firm. i think anyone knows that i was out full-time running the olympics would understand that is where i was. i spent three years running the olympic games. after that, we worked up a retirement program for bain capital and handed over the shares i had. there's a difference between being a shareholder, an owner,

if you will, ending a person who is running an entity. i had no role whatsoever in managing bain capital after february 1999. >> that is mitt romney on cnn. james steele? >> i think that whole story is to probably evolving and developing. it is just one of the reasons why it would be nice to see a tax return. but i think the most significant thing about bain capital is not just that period of time. bain, like all the private hedge and equity funds, very much involved in basically killing jobs one way or another. because when they take over a company, people are let loose, streamed down, sometimes the work is sent offshore. that is just the way they work and have always worked, whether it was when he worked there or after. it is a common way of the private equity firms function.

people know this. that is what we found out when we talk to people around the country. people know what is going on in this country. they know the deck is being stacked against them. they know they're almost powerless when one of those companies buys a company. famous companies like birds i bought by another private equity firm, blackstone. all kinds of people let go. the company supposedly streamline. you see that across industries. a food, computers, technology and so forth. that is just the way that process works. that is how the deck is stacked against the average person in favor of the equity firms. we have a whole section in the book about carried interest. it is a complex concept that people sometimes have trouble getting their minds around. >> if you could explain. >> it is outrageous. the idea is, if you're heading one of those private equity firms, you take a portion of the

interest of one of these companies that you are theoretically managing, part of your salary comes were part of your money comes in a salary, which is paid normally. but part of it is supposedly an interest in this company, but you have not bought the interest, you're just been given as the manager. when you cash out on that, because supposedly you were an investor, you pay the 15%. that is much as anything is why someone like romney and other private according moguls make 15%. there's a big movement to try to rid this a few years ago. there were hearings and the senate and house. people thought, this is going to change. once again, people do not seem realize how powerful those interests are in washington. they trotted out all kinds of people to lobby against it, mainly the private equity funds. people paid visits to capitol hill. >> is called that part

capitalism? >> excellent work. that is exactly what it is. they defeated the effort to try to change it. you could not do it in this congress at all, but back then there was a little more common sense that some people had. even then, they could not get a change. as much as anything illustrates how the system totally geared against the average person. there is no defensible, and no defense for that tax break. it is something that was not basically used years ago, the typical how folks in power figure out a way to bring the code to their advantage. and when it happens, congress should amend it and change it. but because that lobbying -- >> i want to turn to president obama's recent attack on romney's record at bain capital. >> i said, let's stop giving tax breaks to companies shifted jobs overseas and give tax breaks to companies that are investing right here in the united states

of america and investing in american workers a week and make american products stamped with those three proud words "made in america." that is how we build an economy that lasts and that is why i'm running for a second term president. mr. romney has a different idea. he invested in companies that have been called pioneers of outsourcing. pioneer int a outsourcing. i want some insourcing. i want to bring companies back. >> that is president obama. by the way, he is in new york tonight at the nomad hotel at a fund-raising dinner, 60 guests spending $40,000 each at a hotel near the gramercy park. >> we won't be there. >> but his idea? >> his idea is a very valid idea.

one of the things happening with the multinationals is a lot of the money they earn offshore they keep offshore. the estimates the amount of money, it's like apple, pharmaceutical companies, technological companies, their estimates are $2 trillion sitting in foreign accounts that they will not bring back to this country. and they will not bring it back is because of this onerous u.s. tax rate. but the fact is, of years ago congress waived that and let the number of them bring money back. it's mine memory is correct, they brought back $3.3 billion. with the understanding they would create jobs here. but do you know what they did? those companies actually killed 20 sell as -- 27,000 jobs. going back to earlier, the power of these corporations, they are beyond our control erratically. even when they can a right like

that, it is not enforced. as a result, no jobs are created. >> on a talk about wrecking of the mecca banks, pensions, retirement and more. donald barlett and james steele, authors of, "the betrayal of the american dream." years ago, they wrote, "america: what went wrong." there were accused of exaggerating, now they say they did not go far enough. stay with us. ♪ [music break]

>> johnny cash. this is "democracy now!," democracynow.org, the war and peace report. i'm amy goodman. our guests are donald barlett and james steele, the pulitzer prize-winning dynamic writing

duo who are writing us recently for "vanity fair." the latest book is out tomorrow, "the betrayal of the american dream." the former ceo of the banking giant citigroup is drawing headlines for publicly calling for the breaking up of the nation's largest banks and for restoring the separation of commercial and investment banking. sandy weill made the comments last week on cnbc. >> what we should probably do is go and split up investment banking from banking, have banks be deposit-takers, have banks make commercial loans and real estate loans, have banks do something that is not going to risk the taxpayer dollars, that is not one to be too big to fail. >> that is a pretty radical idea. are you suggesting going back and really breaking these companies up? >> that is exactly what i'm

suggesting. i want to see the u.s. be the leader. i really believe in our country. we're not going to be a leader if we keep on trashing our institutions. >> the former head of citigroup. major lobbying to end glass-steagall. now this is what he is saying. >> we will both take a shot at this, but there's a reason this law, glass-steagall, went into place after the great depression. there was no reason whatsoever to change it. everybody recommended it was flat wrong. weill must have some terminal disease and was to clear his conscience. it never should have been repealed. the serve to benefit only one tiny slice of the population. the people at the top. it did enormous harm to middle- class america.

it is part of the reason why people lost their homes. >> one of the things that happened after the removal of the far wall is it then became -- >> commercial banks and investment banks. across the whole mortgage industry was transformed by this. if you go back a few years and you're buying a house or condo or copper what ever, he almost had to mortgage your firstborn child in order to get a mortgage. you had to go through dramatic process. but because selling the mortgages, the fees and so forth, was more important than the person's ability to pay and so forth, led to all kinds of abuses. it was not just putting people in houses that should not have been there, they trekked an awful lot of people who had been in their house that had been misled about the provisions of those instruments because the fees up front or so significant. to if weill is finally getting religion, it is wonderful. but the fact is, he is right.

in never should have happened. i think clinton signed it because it was part of the whole deregulatory mind-set that has gripped this country for really the last two or three decades. before that it was true with airlines, true in the trucking industry. two industries where the wages have been driven down, earnings driven down tremendously for people in those fields. the profits of many of the companies in those fields have not been borne out. but that those industries have been in total chaos for 20 to 30 years. they extended that, even with that record in 1999, they for the repealed glass-steagall, which then further added to that chaos. >> the other thing that runs along with this is everybody talks about creating jobs and nobody looks at the kind of jobs being created. there at the bottom end of the wage scale, which feels the

ripple effect, really, on tax revenue and social security revenue because under the old system in which people had jobs that paid solid middle-class wages, now you have jobs in which people are paying little or no taxes because they do not make enough money to pay the taxes. that in turn affects the deficit. people are talking, we have to fix this deficit overnight, and are just people who want to take care of the tiny 1% at the top. there's no other reason to do that. >> you write deregulation is one of the trams of america's ruling class, but the middle-class families, the fallout has been devastating. what about retirement and pensions? >> one of the most astonishing statistics that we think we have in the book, since 1985, almost

85,000 pension plans have been killed. in the 1950's, 1960's, 197 is, even early 1980's, more and more people were eligible for pensions, without a specific benefit when he retired. but since the mid-1980s, corporations with the greatest assistance of congress have been shifting people out of pensions into 401k plans. there's nothing wrong with those plants, but they were not seen as pensions. it would shift the responsibility totally to the workers. they would not contribute enough to take their retirement needs as well. what has happened -- this is one of the greatest title shifts in the country. we were going in a certain direction for decades. middle-class people -- we know not everyone had a pension, but more and more did over time giving since the 1980's, this

has been reversed. it raises all kinds of questions to a retirement will be light. people have to work for ever. what are those jobs going to pay? what -- its pressure on people coming into the work force. how are they going to get a job when people having to work until they're 65 or 7 years old? that puts more pressure on the job left. >> more irony, you have the current head of aig who was not there during the collapse. he worked for another global insurance company. he was brought in after aig collapsed and the taxpayers' bill them out, and still have not paid everything back yet. he was quoted as saying earlier this year that people are just one that it used to the idea of working until they are 70 or 80. -- people are just going to have

ofto git used to the idea working until they're 70 or 80. we have a friend who is basically a job recruiter. she said, look, if you are over 50, you're going to have trouble getting a job. i hate to say it, but i have to tell people, you cannot look your age anymore. you really cannot. she is talking about somebody in their fifties, maybe 60. 80? he had to be kidding me. you have to be kidding me. >> having to work will be on 65, for a long time this woman delivered meals on wheels to people because she is just living solely on social security. she worked for tax preparation for 20 years until she was laid off.

she is still looking for work. even if you get a job, you're putting pressure on the other end of the workplace. >> the 1 job i was counting on was being a greeter at wall market now they have killed that program. what are you going to do? >> veterans, what they face today? >> one of the places we visited was a veteran center outside fort myers, florida. this is what brought the mortgage crisis on to us. it isn't the story of people who are buying a house and maybe should not own a house. many of the veterans in the center on houses for many years. some were tricked by the circumstances of their mortgage, some have lost their homes, some were on the verge of losing their homes these are after people, going back to the korean war, vietnam, even world war ii. beyond that, the young veterans

coming into the center, those have done all the right things after serving multiple tours of duty. one in particular had gone back to college and got his degree of began to look at what was available out there and was thinking about reenlisting in his mid-30s because he saw no real job opportunities. this is one of the underlying things of the book. we make the point, manufactured in got hammered and continues to be getting hammered, but our jobs are supposed to be service jobs, smart-based jobs. the whole process began to eliminate the blue-collar jobs has moved into the white collar jobs with a real vengeance. even the labor department is sensing this. there is a study that said 160 service, 20% of the workforce is susceptible to offshore. >> you have a whole chapter restoring the american dream. it is dedicated to solutions.

>> the most obvious thing to us is the tax code. it needs to be amended. folks who can afford to pay more, should. almost every poll out their shows widespread american support for this. this is what is so bizarre about john boehner's comment about raising taxes on people who make money. totally ridiculous. people can afford it -- many rich people have come forth to say it. multiple brackets. brackets' mean the more you pay -- the more you earn, the more you pay. that is the way things used to be done and the economy thrived. it created a broad based society. trade policy is another that needs to be amended. do not just have our door open to let everybody center staff in, unless they're going to do the same with us. we have never had the guts to enforce the proper trade policy. also, we really need to invest in the country. corporations are not. some near going abroad.

a true broadbased investment infrastructure. the largest peacetime infrastructure investment program in this country was under dwight eisenhower in the 1950's. the interstate highway program. that was with broad ar bipartisan support. obama's in the mix stimulus program was the love-it is things like that better part the solution to the problem. >> we will in the conversation here and continue offline and post it democracynow.org. donald barlett and james steele , their latest book is called, "the betrayal of the american dream." there the authors 20 years ago of the no. 1 best seller, "america: what went wrong." democracy now! is looking for feedback from people who appreciate the closed captioning. e-mail your comments to outreach@democracynow.org or mail them to democracy now! p.o. box 693 new york, new york 10013. [captioning made possible by democracy now!]