timothy noah timothy is an american journalist and a senior editor at the new republic where he writes the t.r.p. column as well as a political blog he's also contributing editor to the washington monthly and frequent commentator on the c.b.s. news program sunday morning twenty ten he was a national magazine award finalist in the online news reporting category and he wrote the chatterbox column in slate magazine for ten years and if he is the author of multiple book books including his latest the great divergence america's growing inequality crisis and what we can do about it joins me now in the studio thanks for being with us thanks for having me the great divergence you mention that paul krugman and better this phrase if i call he did yes the. the period from one thousand nine hundred thirty four to one nine hundred seventy nine had been characterized by the harvard economist claudia golden as the great compression because incomes became steadily more equal. and picking up on that terminology been called the period from one nine hundred seventy nine to the present day the great divergence the opposite was happening incomes were becoming more than equal and why why has nobody really been talking about this seriously it seems like this is like a major change in the history of america what people are talking about it now but they haven't been for most of the past third of a century which is how long it's been going on for a long time condiments weren't sure whether it was real whether it was some strange blip on the screen. and then once they recognized that it was real that the trend had reversed itself and that incomes were becoming more unequal they struggled to figure out what was what was causing the problem and. finally it was really just in the last decade that it started to come into focus what what is causing this this great divergence and what is the well there really i should say there are two there are two inequality trends that are happening at the same time one is the famous one percent versus the ninety nine percent and that's a huge run up in incomes for those at the very top and that was discovered in two thousand and three by thomas piketty and emmanuel so as we have a graphic of this if i could just show this and you can comment on it we can pull that since the one nine hundred eighty s. the rich are pulled away do we have that there we can get this this was one thousand nine hundred seven in one thousand nine hundred eighty three the great compression period and here we have the great divergence and this is the top twenty percent these are quintiles fifths the bottom twenty percent is actually not just flat lose. if you if you look at it if you go all the way to the top one percent what you'll see is a doubling of the income share since one nine hundred seventy nine this is one hundred twenty percent that would be two hundred that would be off the top of that right so that's the one percent versus the ninety nine percent and then the second trend is a more complex trend and it's it's the divide between skilled labor and less skilled labor between people of college degrees and people who don't between people who have graduate degrees and people who didn't go to college. and that has multiple causes one cause is that the high school graduation rate level off in the one nine hundred seventy s. and so we didn't see a continuation of the trend that it held through most of the twentieth century which was that as technology. became more sophisticated and technological demands on the average worker became greater the education system was able to raise the skill level of workers that stopped in the one nine hundred seventy s. at the same time you saw a falling off of the college completion rate. another issue is the collapse of labor unions. union density the percentage of workers who belong to private sector unions is down to seven percent which is right where we were at the start of the new deal. and that has been a tremendously important cause offshoring has contributed some trade has contributed some although only recently. until pretty recently until really the mid ninety's. the united states was not really trading very much with countries that had significantly lower wages that changed of course with the rise of trade with china which manages to be a rich country and a poor country at the same time now you mentioned the the divergence in college completion for example or college degrees graduate degrees undergraduate. when reagan became governor of california education was free in that state and and most of the land grant colleges the abraham lincoln had founded. were. damn near free you know through the forty's. for a long long period of time and by the time reagan's presidency was done. that i mean first of all he had ended the free college in california but it had become basically a trend across the nation is that one of the things that is driving this i mean we now have a trillion dollars in college debt which is something that in the fifty's and sixty's and seventy's was unimaginable people didn't graduate from college right well that's that's a fact and the college completion rate and that's keeping a lot of people from going to college in the first place it's a cause. universities have priced themselves out of the market for a significant segment of the population the inflation at colleges and universities has been relentless since one thousand nine hundred seventy nine and in recent years it's actually the inflation has actually been faster and public universities than private ones isn't that they've price themselves out of the market or the we we the people the government institutions have stop subsidizing them and the university of california was free it wasn't like everybody who worked there didn't take a salary it well it's both certainly pell grants the available funding for pell grants is down. and but you know the basic problem is rising cost i think. one of the solutions i propose in my book is the imposition imposition of federal price controls on college tuition increases which i thought when i mentioned in the book was this wildly radical idea that i sent my book off to the printer and barack obama said almost the same thing at the state of the union address and what was really striking is that it didn't it didn't cause that much controversy we've seen an explosion of for profit educational institutions project in the last decade and a half two decades but most in the last decade and along with that growth of those institutions comes an explosion in the number of people who are in debt largely as a consequence of those institutions so i mean they're there they run boiler rooms where they call people and trying to get the rights on them they're there they're right there they're mostly federal aid mills is that part of the problem. well it's an attempt to address the problem but so far the record has been fairly dismal attempt to to to vulture as they do it at will and it's an attempt to reach a population that is not being terribly well served by the colleges by the nonprofit sector but yes it's the evidence suggests there were congressional here. as a couple of years ago it was discovered that these companies were making money hand over fist even as the default rates on these loans was going through the roof now the federal government is trying to impose some limits it's being i think a bit more timid than it really should be strangely the great defenders of a lot of these shysters turned out to be the republican party you would think that they would be very wary of anything that could be characterized as poverty pimping but in this instance they because it's called for profit. they have to be in favor of it and that i mean the g.i. bill after world war two brought that population of basically poor people or people who were added below the middle class into college education well middle class people yes it tremendously increased the college age population we need something analogous to the now well. again i think that the problem is is cost i think that. we certainly need to increase the level of funding for pell grants and we need to i think the president was right to impose a limit on. interest rates on student loans but if the basic good is becoming it is out of control and it's cost we need to address that i was reading just the other day in the new york times about ohio state university and you know the president makes two million dollars a year there and he was saying gee maybe we should think about closing down our airport. it makes no sense and yet you know the argument made by some is the availability of pell grants and there's an argument that's being made in conservative circles against pell grants right now and other forms of student aid because they say that by providing this aid what you're doing is you're driving up the price you're increasing that that price inflation and in public education or and in private education any kind of education second or education and they're opposing it because you know there's money in there that you know so somebody will come in but if you look back at the g.i. bill there was just an incredible amount of money and you know my dad went to college on the g.i. bill my wife's dad went to college became a lawyer became this internal job for the state of michigan on the g.i. bill and and there was no inflation in prices then and there were no price controls it seems to me pell grants shouldn't be inflationary because they're not available to everybody they're only available to low income people if you take away pell grants. what colleges will do is they'll just admit people who aren't poor. so i have a hard time following that argument well could that argument i mean what about the argument that college should basically be free for everyone if you jump through some kind of hurdle most of the european countries if you do a military you're a military service for example it will ultimately i think that would that would be great and of course if if if the government were paying for college education it would probably impose some pretty strict direct price controls and it's that would get you back to that you can i'm more oversight and you wouldn't have a university president making two million dollars i guarantee you they were in the sixty's and seventy's probably the eighty's and close to that so we've kind of. gone through the college thing he said the second problem or the second condition that led us to this was the collapse of unionization that's right and again i remember ronald reagan you know you made a deal with patco before the election they supported him because he said he was going to support them as soon as the election was over you know he stuck the night . after the break can we can we get into the great ok will more conversations with great minds to. the climate of american power continues. things in our country. might actually be time for a revolution. and it turns out that a programmer drink at starbucks has a surprising him. you know sometimes you see a story and it seems so you think you understand it and then something else hears you some other part of it and realize that everything is ok. i'm sorry welcome is a big issue. here is what i. love and they alone i felt they'll get the real headline that none of them are the problem with the mainstream media today is that they're completely disconnected from the viewers and what actually matters to those viewers and so that's why young people just don't watch t.v. anymore if they want news they go online and read it but we're trying to take those stories that people actually care about and transfer them back in t.v. . mr. waller back to conversations in the great minds of timothy noah timothy is an american journalist and senior editor of the new republic where he writes the t.r.p. column as well as a political blog he's also the author of multiple books including his latest great divergence america's growing inequality crisis and what we can do about it let's go back to what we were we were talking just a did. actually the author of only one book this is my first book i've read a couple of other books over the first one i've written well congratulations and so that's. it's an achievement of this book in particular we talked about college and then we started on unions here and how trying to hold together the pieces of what is causing this great divergence and how we might put it back together and you noted that the level of unionization right now is where it was before the wagner act the national labor relations act was passed in thirty five and a great deal you know had commenced basically how did that happen well the the new deal really caused the labor move