Chapter 8: The 1% | Crooked Media
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August 13, 2018
The Wilderness
Chapter 8: The 1%

In This Episode

Why do we have an historic level of inequality in this country? The economic transformations and political decisions that have diminished the American Dream.

 

The Wilderness with Jon Favreau is presented by Honey. Join for free at www.joinhoney.com/wilderness

 

 

Transcript

 

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Jon Favreau: On January 11th, 1944, in the middle of World War Two, President Franklin Delano Roosevelt delivered his State of the Union:

 

[clip of President Franklin Delano Roosevelt] This republic at its beginning and grew to its present strength under the protection of certain inalienable political rights, they were our rights to life and liberty. We have come to a clearer realization of the fact, however, that true individual freedom cannot exist without economic security and independence.

 

Jon Favreau: He went on to propose a second Bill of Rights:

 

[clip of President Franklin Delano Roosevelt] Under which a new basis of security and prosperity can be established for all—

 

Jon Favreau: Which included a right to a job, a right to a living wage, a right to a home, to medical care, and to a good education. More than half a century later, we still don’t have a second Bill of Rights, but we do have a huge gap between the richest few and the rest of America. The government’s role in closing that gap and guaranteeing what FDR called equality in the pursuit of happiness is a challenge that touches on almost every other issue we’re talking about. So we’re devoting the next two episodes to the economy. In this episode, we’ll talk about the economic transformations and political decisions that have led to a level of income inequality that we’ve never seen before. In the next episode, we’ll get into solutions and talk about some big ideas and policies that Democrats can run on and hopefully pass. I’m Jon Favreau and you’re listening to The Wilderness.

 

Jill Lapore: There’s a whole genre of 1930s film kind of suffering the depression, calling attention to the difference between the haves and the have nots, and what it means to make a commitment to make the world better than that.

 

[movie clip] And you know that you fight for the lost causes harder than for any others, because of just one plain simple rule: love thy neighbor.

 

Jill Lapore: You find that in films in the 40s and 50s as well, the different focus of attention on the nature of sacrifice.

 

[movie clip] See to what the decent, hardworking people in this community aren’t robbed blind by a pack of money mad pirates.

 

[movie clip] I think I’m the man to do it. You see, I have money in property. I don’t look after the interests of the under-privileged—

 

Jill Lapore: Even in the 1950s and 1960s, there’s a different sensibility about the common good, which is largely fueled by the civil rights movement, which infuses all of American culture with this notion that the real heroes are people who stand up with courage for their convictions. And their convictions are, above all, the commitment to equality.

 

[movie clip] In this country, our courts of the great levelers. Our courts, all men are created equal.

 

Jill Lapore: By the time you get to the sort of Wall Street “greed is good”, go, go ’90s stuff, that there’s something very different being put forward that’s a whole different sensibility about well—

 

[movie clip] Well, the point is, ladies and gentlemen, that greed, for lack of a better word, is good.

 

Jill Lapore: It’s more that there’s a changing set of ideas about uber wealth. There’s this new language with which people talk about that Lifestyles of the Rich and famous moment.

 

[clip of Lifestyles of the Rich and Famous intro] I’m Robin Leach with those champagne wishes and caviar dreams. We all look forward to joining you on the next edition of The Lifestyles of the Rich and Famous.

 

Jill Lapore: It’s just a reflection. It’s not a driver.

 

Jon Favreau: The person walking you through this history is Jill Lapore, American historian and staff writer at The New Yorker. She raises an important question: how do we get to this place where massive inequality isn’t just tolerated, but often celebrated? To find out, we’re going to talk about some of the big ways the economy has changed over the last few decades. And take a look at how different political leaders and movements responded, including a close look at labor unions, which used to be the backbone of the Democratic Party. We’ll start with a key moment during World War Two, when the country needed a massive workforce to build Roosevelt’s Arsenal of Democracy.

 

Rich Yeselson: After the start of the Second World War, Roosevelt calls in the heads of the National Association of Manufacturers and the Chamber of Commerce, all the top companies, says: OK, guys, cut the crap.

 

Jon Favreau: This is Rich Yeselson, a freelance writer specializing in labor union history.

 

Rich Yeselson: Here’s what’s going to happen, you companies, you’re going to be 24/7 in war production mode: guns, bullets, uniforms, bombs, airplanes, ships, everything we need for the war effort. And you’re going to make a hell of a lot of money from that. But in return, what you give up is you’re going to let these guys, these union guys, organize unions, all the way through. Anywhere they want a union, you’re not fighting them—we don’t have time for that.

 

Jon Favreau: A little context here. Right before the Great Depression, during the Gilded Age, anti-union sentiment was high among businesses and the government, and union membership was on the decline. FDR changes all that. He makes labor and organizing protections a big part of the New Deal.

 

Rich Yeselson: So by the end of the war, the union relationship with the Democratic Party, it’s a deeply attached one.

 

Jon Favreau: By the mid ‘50s, over 30% of American workers belong to a union, which allows people to bargain for better wages, better benefits, safer working conditions and all kinds of other job protections. You also have an entire generation of World War Two veterans who benefit from a piece of legislation proposed by FDR that’s known as the GI Bill.

 

[voice clip] The GI Bill of Rights is not a reward or a handout or a gravy train, but rather an American way to make it easier for each man to take his place once again in the community and get some of those things for which he went to war: a job, a business, an education, a home.

 

Jill Lapore: You can think about all the wartime production from the Second World War that got the nation out of the Great Depression, and provided the great Arsenal of Democracy in FDR s terms. But during the conversion to peacetime, all those factories continued to produce pretty much at the same levels for a new consumer-driven economy.

 

[voice clip] The zoom in the American market after the war, the unprecedented volume of goods of all kinds gobbled up by an insatiable tide of buyers, was largely the work of this middle-income man.

 

Jill Lapore: And that consumption was driven by a new and really quickly growing middle class that was formed because of the GI Bill, which essentially was a kind of full social welfare state for veterans—provided in education and housing loans and all kinds of other benefits to veterans—and also a source of American economic stability because it distributed resources.

 

[voice clip] Veterans Administration offices have been set up in every state and it’s here the ex-soldier goes if he wants to continue with education. . . You mean, he can get any kind of education he wants? . . . Any kind of education, and in any part of the country.

 

Jill Lapore: You know, my dad went to college on the GI Bill. My family would never have risen into the middle classes being Italian immigrants, if he hadn’t fought in World War two and been able to get a college degree and get a housing loan. And many Americans trace their family’s own prosperity to that one specific piece of federal legislation.

 

Jon Favreau: The ’50s and ’60s are a good time to be working in America. Employees share in the success of their employers. The economy grows and people’s incomes grow, too. Unions help with benefits. The government helps with programs like Social Security, Medicare, Medicaid and all kinds of regulations that protect workers and consumers. Of course, not everyone’s included. Take the GI Bill, for example. It helped white veterans buy homes in the suburbs, which help them build wealth. But a lot of banks wouldn’t approve loans for Black veterans or any Black Americans, a racist practice known as red-lining. And so even during the good times, Black families weren’t able to build wealth like white families could.

 

Keith Ellison: If you want to ask Black people what is one of the main ways that racial oppression is harming your life, they will say: the economy.

 

Jon Favreau: This is Keith Ellison, deputy chair of the Democratic National Committee.

 

Keith Ellison: —that we earn less, we’re redlined. We can’t afford our rent. Programs that help us, the right wing is always attacking them. Black folks in unions make more money than Black folks who are not in unions. Right? I mean, Martin Luther King famously said, what difference does it make if you can eat at lunch counter if you can’t afford a hamburger? And it was the 1963 March on Washington—it was not just the march on Washington for civil rights, it was for jobs and justice.

 

Jon Favreau: We’ve talked about these racial disparities before. And we’ll come back to the issue again. As Keith mentioned, though, American Union workers did make more than their nonunion counterparts. And by 1945, over 500,000 black workers are in unions, which helps raise incomes and reduce inequality. What we also see from the ’50s through the ’70s is a general political consensus around these economic policies, some of which were even supported by Republican presidents like Eisenhower, Nixon and Ford. It helps that those presidents were presiding over the world’s strongest economy, since it took Europe and Japan decades to fully recover from the war. For a long time, we were able to export our goods all over the world without much competition from anyone else. But eventually the rest of the world catches up. And as they do, we start to see the beginning of some major transformations that have to do with technology and globalization. Manufacturers start finding ways to produce more with fewer workers. You start to see competition from the Japanese auto industry, and its steel industry, and then its telecommunication and computer industry.

 

[voice clip] From across the ocean they came. Little cars determined to change the buying habits of a nation.

 

[old ad] It’s a great looking car, what do you call it? Isuzu. Gesundheit.

 

[voice clip] 9 out of 10 home radios are made in Japan. 9 out of every 10 baseball mitts sold in the U.S. are made somewhere else.

 

Jon Favreau: More trade agreements mean that American consumers have the option to buy cheaper foreign products. Meanwhile, American companies start realizing they can move their manufacturing overseas, where it’s cheaper to pay workers, since there aren’t strong unions or a minimum wage or labor standards. And of course, this weakens American unions because it’s harder to negotiate a higher wage or better benefits if your employer can just ship your job overseas. And in 1978, we see the Labor Law Reform Act fail, a piece of legislation that would have made it easier for union members to collectively bargain and organize.

 

Rich Yeselson: With a Democratic House, a Democratic Senate, and a Democratic president, Jimmy Carter, that was a tremendous shock for Labor. Because these were like some reforms that would have increased penalties on companies, made it easier for unions to organize. It definitely would have helped. So that was a key legislative loss.

 

Jon Favreau: Politically, things get much worse for the labor movement with the election of Ronald Reagan, who goes after the air traffic controllers union during his first year in office. They were striking for higher wages, better working conditions and a shorter workweek.

 

[news clip] Good evening. The strikes began as scheduled. Most flights delayed, many more canceled.

 

[clip of President Reagan] If they do not report for work within 48 hours, they have forfeited their jobs and will be terminated.

 

Jon Favreau: After 7,000 flights are canceled across the country, Reagan fires over 11,000 air traffic controllers. On top of that, he bans them from ever being hired by the FAA again. It’s a crucial turning point for unions across the country. Before Reagan, it was taboo to fire or replace striking employees. Not anymore.

 

[voice clip] Reagan’s actions has legitimized anti-union tactics that had been considered unacceptable since World War Two.

 

Rich Yeselson: Corporate America says we don’t need to deal with these guys. Let’s try to bust them/.

 

[voice clip] The new atmosphere that it is OK to bust a union has combined with new competitive pressures to drive out unionized employees.

 

Rich Yeselson: You had like basically losing strikes all over the country, from previously strong unions like the UAW, like steel, like the machinists, like the mine workers. And again, unions get weaker and weaker. So that’s when the decline really is encapsulated, and it’s concentrated. And then just steadily it keeps eroding because the manufacturing base is no longer there.

 

Jon Favreau: The decline of labor is a huge blow to American workers, and financially, it’s also a blow to the Democratic Party, which had always relied on unions to fund their campaigns. When those unions start losing power and losing members, it becomes a real problem for Democrats. Robert Reich, Bill Clinton’s secretary of labor, explains.

 

Robert Reich: The Democrats were not getting as much money as they should be getting in terms of campaigns. Organized labor was shrinking as a percentage of the workforce. It was not providing quite as much money as it did in the 1960s and ’70s and ’80s. Also, campaigns were becoming far more expensive. It was necessary to look for other sources of funding. Starting in the 1980s, Tony Coelho, a congressman who was head of the Democratic Congressional Campaign Committee, was so convinced the Democrats would keep control of the House—they had had control for many, many years—that he felt the Democrats should start telling big businesses that they should be contributing to Democrats instead of Republicans. After all, contributing to Democrats would be a much better deal for business because Democrats would continue to have control. Well, that was the beginning of a deal with the devil, because once Democrats began drinking at the same trough as the Republicans in terms of big business corporations, Wall Street, it was very difficult for Democrats to stop. It’s very hard when the going gets tough to bite the hand that feeds you.

 

Jon Favreau: Meanwhile, as Democrats are struggling to figure out how to respond to the decline of unions and outsourcing and foreign competition, Reagan and the Republican Party give America their answer: cut regulations, cut government, cut taxes. They called it Reaganomics. Democrats called it trickle-down economics. Either way, it’s bullshit.

 

[clip of President Reagan] Our proposal is for a total cut in tax rates of 30%.This proposal for an equal reduction in everyone’s tax rates will expand our national prosperity enlarge national incomes and increase opportunities for all Americans.

 

Jon Favreau: One of Reagan’s biggest targets is welfare reform.

 

[clip of President Reagan] Government will not continue to subsidize individuals or particular business interests where real need cannot be demonstrated . . . strong and effective work requirements, we will tighten welfare . . . the food stamp program will be restored to its original purpose.

 

[voice clip] You’re asking the wrong people to sacrifice. The tax cuts are designed to give the middle class a break true enough, but the only one that can really realized any real profit off it are the rich and the super rich.

 

Jon Favreau: So as Republicans start getting rid of government benefits, they also start getting rid of government regulations. Big businesses start taking advantage of this and you start seeing a lot more mergers and monopolies.

 

Lina Kahn: My name is Lina Kahn and I’m Director of Legal Policy with the Open Markets Institute.

 

Jon Favreau: Lina focuses on antitrust law, which is basically antimonopoly law. She explained how the Republican crusade against regulations helped create this problem of too many mergers and monopolies.

 

Lina Kahn: We started seeing more of a trend towards deregulation generally. In practice, this has encouraged a very permissive approach. We’ve seen merger wave after merger wave since the ‘0s, and we’ve seen very little action by the agencies to halt this. And that’s why we see almost every sector so concentrated.

 

[voice clip] NBC, which owns Channel four, is being taken over by General Electric, which bought NBC’s parent RCA.

 

[voice clip] Bankrupt American Airlines is now about to become the world’s largest airline.

 

Lina Kahn: Four airlines dominate that market. We see this throughout the health care industry. We see this throughout retail, throughout food and agriculture. You really see how excessive consolidation and concentration has become kind of a systemic feature of our economy, rather than just an isolated trend.

 

[voice clip] The blockbuster Disney deal, the parent company of ABC buying many of the assets of 21st Century Fox, creating an entertainment giant.

 

[voice clip] A blockbuster deal is in the works with drugstore giant CVS agreeing to buy health insurer Aetna.

 

[news clip] Breaking news on this Friday, Amazon agreeing to buy Whole Foods for 13.7 Billion dollars. Let’s talk about it now.

 

Lina Kahn: There are a host of ways in which dominant companies can abuse their power to bilk us as consumers, to reduce wages, to depress innovation because there isn’t as much competition in labor markets. I think some of the concerns are now being underscored in the context of the tech platforms because they are able to use their power in somewhat novel ways. Amazon is not just a big platform, but it’s also a book publisher, it’s also a big movie producer, it’s also a manufacturer producing goods from baby food to batteries to coffee. I think this is worrying across the board generally.

 

Jon Favreau: To recap: the American economy rises from the ashes of World War Two as the dominant superpower. New Deal policies and strong unions lead to a huge middle class and the lowest income inequality in 100 years. Then a combination of globalization and Republican policies begin to tear it all down. And that’s not even the worst of it. We’ll dive in after the break.

 

[ad break]

 

Jon Favreau: We’re in 1980’s America, where a lot of people are seeing their jobs outsourced and their unions lose power. The Republican response is to shred the social safety net, and let companies do whatever they want by getting rid of regulations. The results aren’t great. Productivity increases, but prices increase, and wages stop rising. Over four million more people fall into poverty, and the national debt more than triples. George H.W. Bush, the president who follows Reagan, promises to keep the revolution alive.

 

[clip of President George H.W. Bush] Read my lips: no new taxes.

 

Jon Favreau: That doesn’t work out too well either. By the end of Bush’s term, one in eight Americans are on food stamps, the unemployment rate is up to 7.5 % and the country is in recession.

 

[clip of President Clinton] We no longer can have a country where I worry about me, you worry about you, they worry about them. That’s the kind of country the Republicans have given us for more than a decade. We’ve got to be one country again, going up or down together again.

 

Bruce Reed: Clinton’s 1992 economic message was a positive economic populist message.

 

Jon Favreau: This is Bruce Reed, who was Bill Clinton’s domestic policy adviser and more recently, Joe Biden’s chief of staff.

 

Bruce Reed: He called for taxes on the rich. He attacked pay increases that CEOs were giving themselves. He proposed tax cuts for working people, expansion of the EITC.

 

Jon Favreau: ITC stands for Earned Income Tax Credit, which gives money to workers who are earning lower incomes, especially benefiting people with children. It’s one of the better anti-poverty policies out there, and helps millions of people each year.

 

[clip of President Clinton] Instead of taxing people with modest incomes and of poverty, we help them to work their way out of poverty.

 

Gene Sperling: I think what Bill Clinton taught me and I think taught the party that was helpful, is that you can have a very progressive agenda, but you have to make sure you’re building it among values that the basic American, Democrat, Republican supports.

 

Jon Favreau: This is Gene Sperling, the top economic aide to Presidents Clinton and Obama.

 

Gene Sperling: The line he came up with there that was adopted by both Barack Obama and Bernie Sanders, it was: if you work full time, you shouldn’t have to raise your child in poverty.

 

[clip of President Clinton] By expanding this earned income tax credit to working families and especially to the working poor, now if you work hard, and you have children in your home, and you spend 40 hours a week at work, you can be a successful worker and a successful parent and you will be lifted out of poverty.

 

Jon Favreau: Things start off pretty well for Clinton, but as we talked about on the first episode, the economic populism of his first term gives way to fiscal centrism in the second term. All that talk about deficits and balanced budgets and the era of big government being over, as Gene reminds us, this all starts after Clinton tries and fails to pass health care reform.

 

Gene Sperling: We fought so hard for universal health care, and of course, one of the things people don’t always realize is that that health care plan was rejected for being essentially too progressive. And it had polled very well for a while, but they had just hammered over and over again with the Harry and Louise ads.

 

[political ad] Things are changing and not all the better. The government may force us to pick from a few health care plans designed by government bureaucrats. Having choices we don’t like is no choice at all. If they choose, we lose.

 

Gene Sperling: I think that that not only led to a gradual erosion of public support, it also for Clinton started taking away any of the brand that he was a different type of Democrat. I think by the time he went into the 1994 election, they were pretty much telling you: look, he’s really a socialist, he’s really trying to take over health care. But the larger issue is simply that we lost both houses of Congress.

 

Jon Favreau: The Democrats get clobbered in the 1994 midterm elections, lose the House, lose the Senate. Newt Gingrich is the new speaker, and he’s like Reagan on steroids in terms of cutting government and the social safety net. Clinton has to decide whether he doubles down on liberal policies, even if it means he doesn’t get anything passed through Congress, or whether he moves to the center and tries for incremental progress.

 

Gene Sperling: So it puts you in a situation where you could only really get something positive if you’re willing to make a trade. To use a football analogy, you start going for less 60-yd passes and more for ten, six-yard runs up the middle. So something like Head Start, we end up doubling over that period and probably a few billion dollars more a year. Dislocated worker programs are tripled. But they’re not done with a big flourish that will clearly get rejected—they’re done kind of in hand-to-hand combat.

 

Jon Favreau: But Clinton also makes some economic decisions that aren’t simply a reaction to the Republican Congress. He proposes and then passes welfare reform, which moves some people off welfare and into jobs, but moves a lot more people off welfare and into poverty.

 

[voice clip] Half of the House Democratic caucus voted against this bill, so the president is facing a kind of a mini revolt in his own party. Outside the White House yesterday, there were protesters. There hasn’t been a protest of that size of Democrats carrying banners saying, we voted for you and you betrayed us.

 

Jon Favreau: He signed into law the repeal of an obscure law known as Glass-Steagall, which allows commercial banks to start making all kinds of financial investments with their customers’ money, a move that contributes to the financial crisis a decade later. And most famously, he negotiates and passes the North American Free Trade Agreement, known as NAFTA.

 

[clip of President Clinton] In a few moments, I will sign the North American Free Trade Act into law. NAFTA will tear down trade barriers between our three nations. It will create the world’s largest trade zone and create 200,000 jobs in this country by 1995 alone.

 

Jon Favreau: NAFTA is supposed to eliminate barriers to trade and investment between the US, Canada and Mexico, and there’s no doubt that it’s helped the American economy grow, created some new jobs, and lowered the prices of certain goods. But NAFTA also cost the US a lot of manufacturing jobs by giving more companies the chance to move their factories to somewhere outside of the United States, where there was less regulation and cheaper labor, which in turn weakened unions here in America. Heather McGhee, distinguished senior fellow at the progressive think tank Demos, spoke about its impact,.

 

Heather McGhee: NAFTA was something that deeply affected the community that I grew up in, in the south side of Chicago, which was a heavily unionized neighborhood. It really kind of built the Black middle class. So I had a real sense of Clinton-era economics and the Clinton economic story, which was one that sort of demonized government, denigrated Black people, particularly Black women, and had a sort of laissez faire view of the way corporations and Wall Street should write the rules. The big thing that Clinton did to fund the sort of new Democratic Party was line up the economic agenda with the business class.

 

Jon Favreau: Still, as Clinton leaves office, the economy is booming. Over the course of eight years, 22 million new jobs had been created. The median family income had risen by $6,000, and there was actually a budget surplus for the first time in decades. But a lot of those underlying economic issues that had to do with globalization and technology, problems like jobs being automated out of existence and moved overseas, and workers losing their bargaining power, continue to get worse. And the next president wouldn’t do much about it.

 

[clip of President George W. Bush] Those who think that they can say we’re only going to have a stimulus package, but let’s forget tax relief, misunderestimated—or excuse me, underestimate—

 

Jon Favreau: Ah, the Bush years.

 

[clip of President George W. Bush] Just making sure you’re paying attention.

 

Jon Favreau: We don’t need to relive every detail, but on the economy, the record is pretty clear. He passes two massive tax cuts that are tilted towards the wealthiest Americans. Those tax cuts take us from a budget surplus to massive deficits, and do nothing to create jobs or raise incomes. On top of that, the Bush administration leads more attacks on labor unions and pushes for more deregulation, which culminates in the worst economic crisis since the Great Depression.

 

Gene Sperling: I think what you had was the decade that started in 2000 after Clinton, is a decade where you’re having much more disruption and pain from globalization. There’s no question. And companies are now profiting by squeezing down worker salaries because they can outsource to anywhere in the world. And I think you have this growing frustration that even when productivity is high, unlike in the ’90s where productivity really flowed beautifully to typical working families and everybody’s income was going up, you now have a decade where higher corporate profits and productivity are not only not flowing to workers, they may be high corporate profits because you’re squeezing workers, and you get this growing resentment.

 

Jon Favreau: The crisis makes all of this infinitely worse.

 

[voice clip] The Dow traders are standing there watching in amazement. And I don’t blame them.

 

[news clip] The closing numbers on the markets today fell as if down a well.

 

Jon Favreau: People who are comfortably middle class start losing their jobs and their homes and their savings. People who are teetering on the edge before the crisis fall into poverty. People who are in poverty before the crisis are now facing a life or death emergency. And in 2009, as Obama and the Democratic Congress and the Federal Reserve are making decisions that eventually pull us back from the brink, you start to realize that getting the economy to where it was before the crisis will a) take up most of Obama’s eight years in office, and b) won’t be good enough for the millions of people who were already struggling when the markets tanked.

 

Robert Reich: Obama rescued the American economy from a Great Depression.

 

Jon Favreau: Robert Reich again.

 

Robert Reich: And he deserves a lot of credit for that and his economic team deserves a lot of credit. I think the problem is that Barack Obama did not reverse the underlying structural difficulties in the American economy, in which more and more of the gains from growth were going to the top and middle-income people and people below middle income were seeing effectively, adjusted for inflation, very little, if any, wage growth. And on top of that, less and less job security.

 

Jon Favreau: He’s right about that. Obama certainly tried and he certainly made progress. The Affordable Care Act was the greatest redistribution of wealth from the rich to the poor in generations. Obama also saved the American auto industry, and he reregulated the banks, the credit card industry, and the student loan industry. But in episode two, we also talked about how Obama only had about a year with a Democratic Congress. And in the Senate, a lot of those Democrats were moderate and conservative. For most of his presidency, Obama faced what Clinton faced: a Republican Congress that refused to pass or even compromise on a single piece of progressive legislation that would have done more to bring down the cost of health care or increase the minimum wage or create more jobs or reverse any of the underlying structural trends that Secretary Reich was talking about, which means that by the end of his presidency, a lot of people are still hurting, and they’re still pretty pissed about it.

 

Keith Ellison: Housing prices are out of control. College affordability is just not there.

 

Jon Favreau: This is Keith Ellison again.

 

Keith Ellison: We don’t really have an apprenticeship program in this country that prepares people for the next great job or employment opportunity. Wages are still pretty flat and we’re about to destroy public employee unions. This economy still not working for working people.

 

Jon Favreau: This is the reality: people who aren’t wealthy or upper middle class, which is like the vast majority of people in America, they’re sort of watching everything unravel. First, they see good jobs disappear after years of trade agreements that, at best, don’t seem to be reversing that trend, and at worst, seem to be accelerating it. And now it’s not just manufacturing jobs that are leaving, it’s jobs that can be outsourced to any country with an Internet connection that’s willing to pay its workers less and make them work in pretty shitty conditions. And there’s a bunch of other jobs that are getting automated out of existence altogether. So if you can find a new job, it probably pays less and has shittier benefits. If you don’t like that, and you want to negotiate for a better salary or better benefits, tough shit because there usually isn’t an option to join a union. Starting your own business is harder because there’s too much consolidation and too many monopolies. Getting a better education is harder because it cost too much. So does health insurance. So does rent. So does buying a home. Meanwhile, all the famous and powerful people you see on TV or on the Internet or on your phones are rich: entertainers, CEOs, politicians of both parties. And that pisses people off who are hurting. And the politicians really piss them off because they’re the ones who are supposed to help but they all seem like there’s some mix of stupid or corrupt. Either way, they definitely don’t seem to be doing anything to actually improve people’s lives. So a lot of people thought that when it came to the economy, Obama had good intentions and he did some good things, but they’re still not doing much better. And a lot of people thought that Hillary was more of the same. Some people liked what Bernie had to say about inequality and millionaires and billionaires, but he lost. Some of them thought Trump was a businessman who was going to take on the corruption in DC and make them money, but now he’s joining with the Republicans to give tax cuts to rich people and he’s trying to take away their health care. His cabinet is corrupt and he’s too busy tweeting to give a shit about them. That leaves the Democrats. What are they for? Who are they for? What could they do for these families?

 

Gene Sperling: If you look at people’s lives, they want to ensure that they can work, that they get first and second chances in their lives to continue to pursue their dreams, their potential, to support their family. They want to make sure that there’s a certain baseline level that they can raise their kids, which I think to people means safe, decent housing. It means health care. So these things like family medical leave, these things like minimum wage, they may sound at times like, well, that’s a laundry list, but I think of it more that they’re building blocks to what the ultimate end goal of economic policy should be, which is: do working people feel that they can live a life of respect and dignity from their work? And I think that the number one thing that’s happening in advanced countries, in the United States and around the world, is people doubting that. It’s not just economic inequality. It’s a hollowing out of the middle class. When they talk about hollowing out a middle class, it’s not just saying: oh, there’s less people in a particular range. It’s the sense that there’s less people who believe if they do the right things and they work hard, they can have the kind of family life, they can work and raise their kids and retire, you know, with the degree of autonomy and dignity and respect. And the challenge for us as Democrats is to address it, because we see when you have that kind of economic pain, somebody will address it. Somebody will either address it with real policies that make a difference in people’s lives, or somebody will address it with racial resentment, anti-immigration policies—things that won’t make a difference, but just fuel the anger over the failure of government to be addressing the pain and the aspirations in their lives.

 

Jon Favreau: So what do we do? What should Democrats propose? How do we head into November and then 2020 with an economic agenda that’s equal to the challenges that most people are actually dealing with? That’s next on The Wilderness.

 

Jon Favreau: The Wilderness is written and directed by me, Jon Favreau of Crooked Media. It’s produced by Zach Akers and Skip Bronkie of Two Up, and Ruth Lichtman, Tanya Somanader of Crooked Media is our co-producer. Andrea B. Scott is our editor, and David Fox is our assistant editor. Our archival producer is Rebecca Kent, and our archival researcher is Gianna Jefferson. Music by Marty Fowler Sound Design and mixing by Joel Robbie. Tracy Lie is our lead interviewee researcher. Additional writing from Zach Akers and Andrea B. Scott. John Maynard and Dan Kelly were our recording engineers. Fact checking by Anna Altman. Promo segment editing from Allison Grasso. Agency services from Ben Davis at WME. Legal services from Dean Bahat at Ziffren Brittenham and Chad Russo at Ramo Law. Clearance counsel is Kathryn Alimohammedi from Donaldson + Califf. Thanks for listening.

 

The Wilderness