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Elizabeth Warren & Economist Thomas Piketty discuss economic equality on HuffPost Live - YouTube
Channel: Brave New Films
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Welcome to a special edition of Huffpost Live,
we're here in Boston at the old south meeting
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house, I'll be your host i'm Ryan Grim of
the Huffington Post and I am joined here by
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two people that have written books that have
surged the top of Amazon, New York Times bestseller
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list.
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The first one, Capital In The 21st Century
by Thomas Pikkety the second by Senator Elizabeth
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Warren, Fighting Chance.
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Senator Warren's book makes the case that
the system is rigged on behalf of the rich
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and against the middle class.
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Professor Pikkety's case makes the same case
that Warren's does except he makes the imperial
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point that this has been happening for 250
years.
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So Senator Warren, I actually want to start
with you and ask you.
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Tell us what you made of capital.
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I saw it as a book that had a pretty straightforward
thesis the rich gets richer and everybody
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else gets poorer.
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That kind of says what this book is about
and what Dr.Pikkety has done is drawn the
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data together to show how this has happened
across countries across time and I have to
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say that the first thing I thought when I
read this book or one of the first things
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is.
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I thought George Bush Sr. was right.
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Remember when he called trickle down economics
voodoo economics?
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Dr.Pikkety has assembled a lot of data to
show that in fact wealth does not trickle
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down it trickles up.
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It trickles from everyone else to those who
are rich.
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And demonstrates with his data that it keeps
happening as I said over time and over countries.
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We took a lot of questions from the public
here, actually a lot of questions were about
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this particular issue in specifically on taxation.
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How do you propose to convince more wealthy
people that taxing themselves at a fair rate
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is actually in their own interests as well
as ours.
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The difference between taxation and voluntary
giving is that for taxation, you tax, in principle
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It takes a majority to get a tax decision
and not everybody has to agree, so the short
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answer is, you know, if you wait for each
individual to be willing to pay more tax,
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of course that can take a long time.
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However, were not exactly one person one vote
here anymore.
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Yeah, right so were not in a post citizens
united world.
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That's the biggest danger with rising inequality
is that at the end it creates rising access
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to political votes, political power, and this
can make it even more difficult but at the
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same time, we have better information technologies,
better opportunities to spread information
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and to have new forms of political mobilization
than ever, so you know.
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I think I'm not as pessimistic as what a number
of people seem to be after they've read my
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book and I feel really sad that some people
were depressed, apparently after they've seen
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that, and I think there's room for reasonable
optimism, as well.
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This is about were in a moment in American
history that our tax system has become so
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riddled with loopholes.
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You talk to small business owners, small business
owners pay, and pay, and pay on taxes they
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pay because the loopholes aren't as available
to them.
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But you look at fortune 500 companies, companies
that are profitable and end up paying zero
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in taxes.
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When that happens the cost is more than the
dollars, the cost is the integrity of the
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system and the sentence that we are all in
this together.
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And the first place for me that we have to
start, is we have to clean up the tax system
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we've got.
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That has to be the first step.
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There is a strong lack of transparency in
particular about cross-border assets offshore
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wealth, and this is really very close to what
Elizabeth is saying right now and we cannot
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just go for more trade liberalization we also
need more regulation in the social, environmental,
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and physical domain.
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For instance, we need to make sure that multinationals
and very high net worth individuals pay their
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share, their fair share in taxes you cannot
just make huge profits from free trade and
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then pay no taxes anywhere, you have to find
some balance, so that everybody's ready to
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make an effort.
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You argue that it was the shocks of two World
Wars that lessened the inequality through
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much of the 20th century.
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Was it a coincidence that on the eve of World
War 1 we had historic levels on inequality
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if you look at the situation in Ukraine now,
you have high inequality and you have Oligarchs
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battling for resources is there, you demonstrate
a connection between war and inequality, does
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it go the other way?
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Could there be a connection between inequality
and war?Well I think sometimes extreme inequality,
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if you don't manage to address it in a rational
and peaceful way at the domestic level it's
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very tempting to blame others a nationalist
response is sometimes a possible response
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to extreme inequality so you start to blame
foreign workers, or to blame your neighbors,
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they blame the European Union, they blame
Germany, they blame China there's always someone
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to blame, so yes, nationalist response and
sometimes war or conflict can be aggravated
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by inequality.
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But Dr.Pikkety has proposed as many of you
may know global wealth tax which is an extension
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of the property tax to include other forms
of property, stock, investments, etc.
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It has been called Utopian by some people
but the income tax was called Utopian 100
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plus years ago.
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Could you talk a little bit about the US experience
with the income tax.
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When people start to feel like its not about
how hard I work that I face the risk that
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I will work hard but end up with nothing.
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That's when the pieces start to break apart.
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And so the way I see this is we are right
to talk about taxes where taxes should be
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appropriately placed which parts of wealth
and income we want to tax.
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But it's fundamentally a question about whether
or not the game is rigged, and the game right
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now in America is rigged.
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It is rigged so that those at the top keep
doing better and better and everyone else
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is under increasing pressure, is under increasing
economic strain.
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My view of that is why that is happening is
not because it is inexorable, not because
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it had to be that way.
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Because those at the top can hire the lobbyists,
can hire the lawyers.
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They can now under citizens united effect
the electoral system so powerfully that they
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get a set of rules written over and over and
over, year by year by year.
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Rules don't get better for middle class, the
rules are getting better for those who are
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thin sliced at the top.
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That is profound danger that we see from great
inequality.
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We got a ton of questions submitted on one
particular issue that jumped out and that
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was actually student lending.
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Barbara from Arkansas and Robert from Oregon
both MoveOn members asked if you would support
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some version of student loan forgiveness,
do you think we are headed in that direction
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where it is becoming so unsustainable that
there might have to be some outright forgiveness.
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So right now we have 1.2 trillion dollars
outstanding in student loan debt 40 million
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Americans are dealing with outstanding student
loans.
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It is starting to be so much debt, that its
dragging down the economy.
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The reports are starting to pile up from the
Fed from the consumer financial protection
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bureau from the treasury department.
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What it shows young people not buying homes
at the rate we would anticipate.
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They are not starting businesses at the rate
we would anticipate, they are not buying cars.
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They are just not doing the economic things
we should expect them to do because they are
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so burdened with debt.
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So we have got a situation, and by the way
one more piece on it just so we are giving
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the big data pieces, its growing and its growing
fast.
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Over less than a decade the amount of student
loan debt has grown by about 70% think about
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that we are on a fast slope up in terms of
debt.
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So what can we do about student loan debt,
there are multiple things we can do about
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outstanding student loan debt.
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There are forgiveness programs, that is a
piece of it.
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We can bring down the interest rate on all
student loan debt outstanding.
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As your book shows, it's tough.
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It is an uphill climb, it will not happen
naturally, that the world will even back out.
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But what it also shows is that these are not
financial forces that makes it happen.
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It is a set of rules, by which we govern ourselves.
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And here in America, we the people get to
decide what the rules are.
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So i get how hard this is, this is about concentrated
money and power on one side, but it's about
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our values our voices and our votes on our
side.
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I believe we can fight back I believe we can
win.
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I believe it.
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