Thank you so much for joining us tonight. My name is kate brouns and on behalf of Harvard Bookstore i am so pleased to introduce this event tonight with robert reich, his new book the system who rigged it, how we fix it. Harvard bookstore brings authors and the book to a committee and our new virtual committed during this unprecedented. Our Event Schedule appears on a website where you can sign up for a newsletter and you can browse our bookshelves. This evenings discussions going to conclude with some time for questions. If you have a question for either of our speakers anytime during the talk goes to the ask your question but at the bottom of the screen and well get to as many as time allows. Also at the bottom of the screen during a presentation you will see a button to purchase the night featured book, the system. All sales to the sling support Harvard Bookstores so huge thank you for your support during this difficult time. Your purchases and your financial contributions are also a donate button at the bottom of the screen. Make this Virtual Office responsible and now more than ever they support the future of a landmark independent bookstore. So thank you for tuning in in support of our authors and the staff of booksellers at Harvard Bookstore. We sincerely appreciate the support now and always. Finally, she might have experience in virtual gatherings the last couple of weeks, technical issues can arise, and if they do will do our best to resolve them as quickly as possible. Thank you for your patience and understanding. So now i am very pleased to introduce our speakers. Renowned economist Robert Reisch is chancellor professor Public PolicyPublic Policy at the Goldman School of Public Policy at uc berkeley. He served in three National Administration and is written numerous previous titles including the work of nations which has been translated into 22 languages. He he is also the author of the bestseller the common good and saving capitalism, among others. He is a cofounder of inequality media Whose Mission parallels his own mission come to inform and engage the public about new balance of power. Hes cochlear of the awardwinning film in inequaliy for all and the Netflix Original saving capitalism. He is doing to conversation tonight by acclaimed political philosopher at our own harvard university, michael sandel. With the author of International Bestseller what money cant buy, and justice, what is the right thing to do. They will be discussing roberts new book the system, how the status quo came to be an average citizens cant enact change. Its a muchneeded Political Economic analysis. Senator Elizabeth Warren writes quote robert reich is one of her country most insightful commentators from politics and economics. Both the diagnosis and called her arms, the system shows our economy and our democracy are raked to work for the wealthy and wellconnected. Change is possible if we willing to fight for it. We are so happy to have the two of them here tonight. So without further ado, robert and michael, the digital podium is yours. Thank you, kate. What a pleasure it is to be with you to discuss your book, the e system who rigged it, how we fix it. Actually i think a manifesto for a new progressive politics, and so im eager to discuss it with you and to see what our audience and our participants have to say. Everybody knows bob, that you are one of the leading progressive voices and thinkers on the american scene today, and this book, its an example really of fresh thinking for progressive politics. So thanks so much for joining us and for writing the book. Michael, let me thank you for joining us as well, and Harvard Bookstore for putting this on. This is a virtual book tour in the way, and there are virtues in virtual book tours, and after having done a lot of book tours and my life i am thankful for virtual book tour present a real book tour. The downside is i dont get to see in person. Michael, you are a a dear fried and i wish to reestablish in person, someday post coronavirus, hope we have a chance to sit down and have a coffee somewhere. Great. Lets begin with what really is as i take it the central theme of the book, which is that american Politics Today is not about democrats versus republicans or left versus right. Its about democracy versus oligarchy. Tell us what you mean by that, bob, and what oligarchy means in the context of american Politics Today. I dont have to tell you, michael, but oligarchy is a good old ancient greek term meaning in a kind of shorthand version society in which most of the wealth and power are held by a few rather than majority. The ancient greeks talked about and an oligarchy as being a limited number of families that really presided over in terms of wealth and power the rest of society. Russia today is commonly referred to as oligarchy and the russian oligarchs are very prominent in russia. We dont usually use the term for the United States but i think its becoming more and more appropriate. When i say the Major Division in America Today is between democracy and oligarchy, instead of traditional left versus right, i simply mean that the way in which we used to talk about our political divisions, either more government if you on the left, or Less Government if youre on the right and again im giving you the Cartoon Version of that, we were all involved many of us were involved in those discussions but they become less and less relevant over the past 40 years as well and power have moved to the topic top. We still engage in those leftright discussions and we still pretend or maybe were selfdeluded i think in more cases than not, to think that those are the most important discussions we could be having. But they are not. I think the most important discussion we could be having is the choice we have made not explicitly but implicitly in favor of moving towards an oligarchy and away from our democracy. Now, as we made that choice, as we made that movement away from democracy and toward oligarchy, you say there were three developments here one had to do with the shift from stakeholder to shareholder capitalism and the conception of the role of the corporation. The other was the second was the decline of labor unions. The third is the deregulation of finance and the growth of finance and its centrality in the economy. Tell us, we could spend the entire evening going through the diagnosis but i want to save us time also to get to some of the solutions you propose. I wonder if you could focus on the third, the deregulation of finance and extension of the place of finance in the economy. Can you tell us how this happened and how it contributed to oligarchy rather than democracy . Yes. All three of those changes happened over the last 40 years and they in a way propelled each other and reinforce each other. Finance, the deregulation of finance, happened mostly starting in the 1970s, and remember the legacy that we had inherited from the 1930s was a Financial System that was pretty boring. It worked pretty well but it did not attract a lot of talent for a lot of energy or really much attention. And largely because the regulations were so well developed, because we learned so much on the great crash of 1929 and the excesses of finance in the 1920s and before. Those set of regulations starting with the securities and exchange act of 1933 and the subsequent act of 1934, and on, and all of the regulations that went with those major pieces of legislation, by the 1970s were beginning to wear thin. Because, and for reasons that ii go through in the book, various people involved in finance, in wall street begin to see opportunities for exploitation. Opportunities to act on the fringes of the law. That is, arguably still legally in ways that could make them a great deal of money, and then they can also bribe the politician. I use the term bribe advisedly because ive been in washington for many years in and out of washington, and its a much more subtle system and outright bribery but lets use the term bribery just as a kind of a way of understanding because it is basically giving money to politicians and their campaigns for the sake of getting something in return. Some of that bribery went to loosening the laws come loosening the regulations so that by the 1980s it became possible for financial corporate raiders, if thats what you want to call them, people who saw opportunities involved in taking over companies are threatening to take over companies, that they felt were not well managed a weather was too much fat or where employees didnt need to be hired. You could do the same work by outsourcing outsourcing abroad bring in Automated Equipment or whatever have you, which gets to know the piece of the puzzle. Finance continued to be deregulated. It has its own internal almost self propelling mechanism. Once you begin to deregulate it, more and more opportune for money, then more, was attracted wall street and more talent attracted wall street found more and more ways of exploiting the system and using bribes to deregulate. So by the time we got to the late 1990s, early 21st century, the system was ripe for an explosion and, of course, thats what we had in 2008. Now i want to get to the part of your book that is concerned with who rigged it. One of the striking themes of the book is that it is not only republicans oligarchs, republican politicians who rigged the system, you argue that probusiness or wall street friendly democrats as well as republicans participated in rigging the system. Much of the deregulation, getting rid of the glasssteagall law, for example, happened during a democratic administration. In that case, the bill Clinton Administration. We will get to the bailout during the obama years and a moment, but can you describe how it is you have watched as democratic administrations, not only republican ones, have been participants in the deregulation of finance and the rigging of the system as you described it. I dont want to engage in a false equivalence between republicans and democrats because when it comes to rigging, republicans were much more, more experience in rigging the system for the benefit of the big corporations and the wealthy. The democrats certainly as i sit in the been guilty as well. There are wall street democrats, there are corporate democrats, they exert great influence in Democratic Party. I build the book around a gentleman named jamie dimon who is the ceo of j. P. Morgan chase, the largest bank in the United States. A man with the norms influence in politics as those in finance, who was very often interviewed on positions, on television because of his acumen but also because he has positioned himself as a democrat, somebody who straddles both parties but really is, he says in his heart, a democrat and a democrat who cares about widening inequality and so forth but jamie dimon is very much an exemplar of what has happened to the Democratic Party. That is, these wall street democrats and corporate democrats with the best of intentions, and it dont mean to suggest that these are bad people, one reason i entitled the book the system is so we dont fall into the trap of thinking that all we have to do is get rid of the bad people and the villains, and dividend will be fine. Jamie dimon and others have contributed to the rigging and then made it, and ive seen it, very close, they have corrupted the Democratic Party just as the Republican Party has been corrupted. Finally, michael, you alluded to my years in the Clinton Administration. I am very proud to have been part of the bill Clinton Administration. Im very proud of what we accomplished, but what i saw firsthand was this tidal wave of money and its corrosive effects on the not only the Clinton Administration and the Republican Party and democrats in congress, but our entire democracy. It was before Citizens United against the federal election commission, that Terrible Supreme Court case, way before Citizens United already money, big money was engulfing our democracy and making it very difficult to enact or promulgate policies that were for the benefit of everyone. Now lets move on to the 2008 financial crisis in the bailout which begin under the Bush Administration continued and was administered under the Obama Administration. To what extent do you think that the Obama Administration handling of the bailout contributed to the rigging of the system . Even as some would argue, paved the way to donald trump. Is that going too far or do you think theres something in that . I think there is something in that. In the book i do trace the developments of that kind of vicious rightwing populism, that angry populism the steps that were taken including, including the Obama Administration, and that bailout was viewed by americans, and i think quite fairly, as a huge kayden to wall street that it perpetrated for years i kind of gambling casino that made the entire economy very fragile. And when that fragility made itself evident in 2008 and cause the entire economy to collapse, a lot of people felt that bailing out wall street, although they understood, they might understood rationally why it was necessary, they felt it was unfair, and homeowners who also supposed to be bailed out under the tarp mechanism, what a wonderful acronym, tarp. Tarp is something you cant see behind. That was acronym for that program. Homeowners did not get bailed out. The big Financial Institutions did. Very few if any top executives were indicted or in any way held accountable for what happened. Jamie dimon, for example, was right there at the helm of that big, big j. P. Morgan bank, bailed out. And then subsequently was in the forefront of the business communities efforts to actually minimize the amount of regulation that would be put in place to make sure that that 2008 explosion did not happen again. A lot of people were angry, and the Tea Party Movement on the right and the brief occupy movement on the left both came out about experience, that since that the game was rigged in favor of the rich and the powerful. And then some ways, michael, i think that Bernie Sanders and donald trump are both lineal descendents of the Tea Party Movement on the right and the occupy movement on the left. One just quick note, and that is, in 2015 i was doing some very preliminary research for this book, and i was undertaking focus groups in the midwest, in michigan, wisconsin, a lot of the rust belt areas and also down in North Carolina and missouri. I kept on asking people, well, there are no primary candidates in the democratic and republican primaries. Who are you most interested in . Who would you support for president . I kept on hearing from people in these rust belt states and also in some southern and western states come i kept hearing the same thing. People said we are very interested in two gentleman. One is Bernie Sanders and the other is donald trump. Michael, when they heard people repeatedly using these two men as the kind of, as who, for people who they were most interested in voting for, should they get the election, should they get the primary nod in both parties, i knew something had changed in america, that there was a degree of willingness to do something quite radical. As people why donald trump and Bernie Sanders . Face it, both of them were outsiders and he will shake things up. They will on rig the american political system that is now rigged against them. As you point out in your interviews, people that not only think that they it had failed craven that the system was unfair, they felt anger and resentment at the absolute. People analyzing the 2016 election have attributed much of Donald Trumps victory to racism. And i think that simplifies far too much. Yes, there was obviously an element of racism but you ask yourself why was the racism . Weve had racism in american politics since it for the founding of the republic. Racism and xenophobia and misogyny all played a very large part in the 2016 election i think because people were ready to be used to use their angry, to have their anchor channel by a demagogue called donald trump toward scapegoats that event scapegoats before in american history. It was the anger, the sense of frustration that was the really Compelling Force in 2016. Heres a political question which arose in 2016 but is very much in the moment now. Given the anger and frustration on the right and on the left, at the system being rigged, at wages been stagnant, a sense of cultural exclusion, a sense of powerlessness, why do you think that unless they are turning populist, as donald trump from the right, was able to capture that anger and resentment more effectively than Bernie Sanders was able to do on the left . Its a good question. I asked myself over and over. I think the answer isnt t