Thom Hartmann: So, what can we do to put back together our economy? Jonathan Tasini is one of our best economists and has a great understanding of where we are, how we got here and how we can get out of the mess 30 years of Reaganomics has put us into. And you’re not gonna wanna miss this discussion as it’ll open your eyes and, if we can awaken enough people, could help save our Nation. His new book, or now out in paperback, "The Audacity of Greed: Free Markets, Corporate Thieves, and the Looting of America". Jonathan Tasini, welcome back to the program.
Jonathan Tasini: Hey Thom, it’s great to be back.
Thom Hartmann: Great to have you with us, Jonathan. Let’s just, you’ve organized this in such a clear and straightforward fashion, let’s just step right through the thing. Laying the groundwork for Looting America, how was this done?
Jonathan Tasini: Well, you know, we basically went through 30 years of this consistent relentless attack and ideological persuasion on the part of liberals and conservatives, or better put, Democrats and Republicans, that made us believe in the great free market, the so-called free market and its close cousin, so-called free trade. And what that made us think, and I said that us as a nation, was that the free trade and particularly the free market, they wore the gods of everything. That no matter what happened, you couldn’t do anything that was contrary to the so-called free market. And what we got in return for that was at the, during the same 30 years, where productivity were skyrocketing, basically wages were flat. So we were sold a bill of goods by, as I said, liberals like Robert Reich and conservatives also. So people thought throughout the political spectrum that was the way to go.
Thom Hartmann: And Bob Rubin. We should add that this was ridiculed. I mean Milton Friedman’s theories were widely ridiculed when he first laid them out in the 1930s in the Chicago School of Economics. And the ‘30s, the ‘40s, the ‘50s, actually maybe it was the ‘40s that he was, you would know, when he was writing. And it wasn’t until the ‘70s that he started to actually get taken seriously. In the ‘80s, that Reagan put these principles into action, and now 30 years later we see how bankrupt and corrupt they are. But you’re absolutely right. And these same people, I mean Summers and Rubin and what not, the same people who paved the way for the looting of America have now embedded themselves in the Obama administration, this is troubling isn’t it?
Jonathan Tasini: Yeah. First, Thom, you made a fabulous point there, and I think we should underscore this for your listeners. The so-called free market, and particularly the notion of supply side economics, was thought of as the fringe. And it only became mainstream because of the Reagan revolution and because conservatives saw that as essentially giving a nice varnish to really what was a looting of America, both literally the CEOs pocketing tons of money, but also taking away the workers' sweat of the brow. Now in your point about the Rubinites, that is quite troubling. And now one of the things I want to be very clear, you’ve probably had a lot of these conversations recently with your friends and colleagues about how “disappointed” they are in the current administration. But let’s be very clear. Those people were surrounding now President Obama during the campaign also. So President Obama was pretty clear about where he was coming from from an economic point of view, and Bob Rubin and those same folks were his advisors prior to the election.
Thom Hartmann: And of course they were Clinton’s guys before that. Which brings us to the second chapter of your book, "The Club". The people, you know you talk about Robert Rubin in here. And the President of the Club. Tell us a little bit about these people and about "The Club".
Jonathan Tasini: Well, you know, the club is pretty simple. It’s a bunch of guys on Wall Street, mostly men I would underscore, white men, who go to the same literally clubs, they go to lunch together, they are on the phone together, whether it be Tim Geithner when he was the head of the New York Federal Reserve calling his friends in Wall Street, and they all know each other and they all breath the same air and they all breath this, what I call, this false marketing phrase, The Free Market.
Thom Hartmann: Right, and they all travel in the same fleet of corporate private jets, and they all travel in the same limousines and they all eat at the same, you know, $1000 dinner restaurant kind of things. They live in a world apart from the rest of us, in other words.
Jonathan Tasini: Yeah. And they go to Aspen to ski and they stay in great chalets and it’s…
Thom Hartmann: They have their own television network, did you know that?
Jonathan Tasini: Which one is that?
Thom Hartmann: Plum TV. Plum TV is a television network which is only available in I think about 17, the website, PlumTv.com. It’s only available in like 16 or 17 of the most affluent communities in the United States and their marketing material, if you want to advertise on Plum TV, points out that they are viewed by the super rich and they have programs about the latest Tiffany, I mean you know it’s all geared to multi millionaires and billionaires. It’s really quite astounding.
Jonathan Tasini: Well that is, I learned something on your program. I had not heard about that and that is a fabulous thing. I’m gonna go check that out. Not for my own, obviously, consumption, but just uh to sort of be aware of.
Thom Hartmann: It’s a great little op ed too, it’s a chapter in my next book, I just finished researching it. It’s pretty amazing.
Jonathan Tasini: I can’t wait to read that. But your point is very important. Here we had a system that is broken. Not just the financial crisis that we just went through the past year, but a system that was broken for 30 years that allowed everybody to work really hard, productivity was going crazy and wages were flat. They had a system that was broken and yet these very same people are being turned to and allowed to keep the reins over how we’re gonna fix it and that is astonishing to me.
Thom Hartmann: Right. You talk about the stock options scam… We’re talking with Jonathan Tasini, his book, ‘The Audacity of Greed.’ Talk about the stock options scam. You know, it used to be that it was difficult to compensate senior management with stock and during the Reagan era there came this weird idea that there were only two parties in the corporate world. There were the owners and there were the managers. And prior to the Reagan era there was this understanding that there was really a third party and that was the institution itself, the corporation itself. And so very often you would have people who had been at General Electric or General Motors, or whatever, 30, 40 years of their lives, eventually worked their way up to CEO and not be big holders of stock. They were simply, they were part of the institution. And when the rules were changed and the owner and the senior managers started getting compensated with large amounts of stock rather than cash they started behaving as if they were stock holders, in other words looking at quarterly profits and stock price rather than as if they were the representatives of the institution. That is, is this a healthy company? And I would argue that that was one of the major things, and that’s one of the rules that we need to change, that blew up corporate America. Your take on that.
Jonathan Tasini: I think that’s a great explanation. I think what you just described was right on. And I think that on top of that came the deification of the CEO, probably started around the time that Lee Iococa took over Chrysler. And it basically mushroomed from there. But what you pointed out along with the deification of the CEO, the Reagan era where it was okay to basically take for a small elite. And I’m sure we’re gonna get to this, and of course the parallel decline of the labor movement at the same time, all that basically shoveled an enormous amount of wealth and power towards the CEO elite. And on the stock options what was fascinating, and I have a chapter about that as you pointed out, they use all sorts of manipulations to try to get even more benefits from the stock. When the stock went down, when they had to sell it, they could so-call ‘reload.’ And it never, it was never the case that the CEO suffered. In other words, even when the stock went down and the company did poorly the CEO profited.
Thom Hartmann: Right. I mean this is one of the ways that the current CEO of United Healthcare, Stephen Hemsley, and his predecessor, Bill McGuire. Bill McGuire at United Healthcare walked off with 1.78 billion dollars for 10 years of work. So far Hemsley is sitting on over 700 million, most of it is stock and stock options. It’s nuts. They’re making decisions based on the interests of stock holders rather than on the interests of what’s best for the corporation. And in the case of a corporation like that, which is really part of the commons, arguably, what’s best for the nation even, um Jonathan Tasini, we have to take a break. Can you stick around for a few minutes after the break because I want to… Vodka and penises, I want to talk about that with you. And I want to get to the labor issue.
Jonathan Tasini: Be happy to.
Thom Hartmann: It really nails the whole thing. Jonathan Tasini is with us. The book, “The Audacity of Greed,” and his website by the way, WorkingLife.org is really worth checking out. We’ll be right back. It’s the Thom Hartmann radio program and television program and media, whatever, all of the above. Stick around.
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Thom Hartmann: It’s Viagra for your brain, the Thom Hartmann program. However it does not lead to stiff thinking and don’t tell Limbaugh, he will want some. Welcome back. Jonathan Tasini is with us, he is the author of “The Audacity of Greed: Free Markets, Corporate Thieves, and the Looting of America.” The website for Jonathan’s work is over at WorkingLife.org. And Jonathan, just a couple of things here that I want to get into. First of all, you have a chapter titled “Penises and Vodka” which is a provocative title and also I think emblematic of this huge schism that is happening in America right now and I’d like you to riff on that just a little bit but I also want to get to what can we do about this schism? It seems to me that we need to forget talking about rolling back the Bush tax cuts, and start talking about rolling back the Reagan tax cuts; that we need to change our insane trade policies. That we need to, you know, at 19 of the G20 countries, the most recent G20 meeting, have 'buy domestic' provisions in their own, for their own federal government purchases which is 20% of GDP here in the United States. And yet manufacturing is only 10% of GDP in the United States. There’s a disconnect there. I mean what can we do? But first of all, Vodka and penises.
Jonathan Tasini: And I hear you pounding the table when you say what can we do.
Thom Hartmann: Yes, sir.
Jonathan Tasini: I like that passion. So, you know, when you talk about this policy stuff and this looting and so on, a lot of it’s policy but you can’t help but sometimes laugh at some of these obscene examples of the avarice and the greed. And my favorite, the reason I titled that chapter as Vodka and penises. There was a guy named Dennis Kozlowski who has lived in fame…
Thom Hartmann: Tyco.
Jonathan Tasini: Tyco, very good. Who ran a company called Tyco. And what he did was he apparently loved his wife very, very much because he spent 3 million dollars to have an incredible birthday party for his wife. He flew people to Italy, he brought in I think it was Jimmy Buffet as a personal act, and the highlight of this birthday party was a replica of Michelangelo’s David and out of the penis of that replica poured vodka. And you cannot but laugh and think who had the mind or the brain to think about using that great sculpture art and using it in that bizarre way. Now, of course the problem was that the 3 million dollars that Kozlowski spent on his wife and everybody’s entitled to love their wife and shower them with gifts, he spent the 3 million dollars out of the corporate coffers, that was company money, shareholder money. And that was just one example of the way in which he looted his company. He ended up going to jail and is still in jail. So…
Thom Hartmann: But there’s a lot of guys, you know, like Stephen Hemsley with United Healthcare, who could easily have spent that 3 million bucks out of his own back pocket and not even noticed it.
Jonathan Tasini: That’s correct.
Thom Hartmann: And uh, you know, they just don’t, they’re not as sleazy as Dennis Kozlowski, I mean he was the exception, frankly, that I think proves the rule. And so you know, we did not see in the United States, we saw this kind of mind-boggling wealth emerge during the Robber Baron era from the 1870s after reconstruction with the railroad families, the Huntingtons and the Goulds and what not. And um, through oil Rockefeller, steel Carnegie, banking Mellon, we saw these dynastic families emerge between 1870 and 1930 basically. There’s a small interruption there for World War I and couple of years when Teddy Roosevelt pushed back. But basically that was the Robber Baron era. And then we went for roughly 50 years, you know, from the 1930s until the 1980s with no dynastic families emerging, or very few. And a middle class dramatically expanding where as it contracted during the Robber Baron era. And now we’re back in the Robber Baron era mindset again. And labor is becoming the working poor, Americans are massively in debt, and the very wealthy are becoming very wealthy and our society has become the most rigidified society in the world in terms of the ability of any child born into any economic class today being able to move upward out of that class. It is possible I suppose to move downward, but even that is less likely. So what do we do about this, Jonathan Tasini?
Jonathan Tasini: Well, I think you gave a very good explanation of what happened over the course of the last 100 years and remember, one of the things that first of all that changed that was government worked and we believed actually the New Deal. We said, 'wait a minute we’ve got to have some things in place to make sure that we have some equality in society' and actually business understood, it was the old Henry Ford notion that he wanted to make sure that workers had enough money to buy his cars and the business people today have forgotten that. And I would argue that the financial collapse that we just had in the past year was really a direct result from the 30 years of idiotic policy among business people to grab whatever they could and crush unions, for the following reason. You know, people just don’t have money. So people ran out of plastic, there was no more home equity, what the heck are they gonna buy stuff with? So to go to the positive part, what we should do is number one, we have to have serious progressive taxation, or what George Lakoff explains quite well, we have to talk about what are the dues that all of us require to pay to have parks and police and fire and roads and all the decent things we have in society. And the second...
Thom Hartmann: Right. The cost of a civil society, taxes cover it.
Jonathan Tasini: That’s right. And the second thing I’d say, and then I’d be happy to talk about it, is obviously because I’m a product and a proud member of the organized labor, unions. I often say I am pro labor but I am also pro business. If business wants to survive and grow and make a profit, it has to have people; consumers who can buy. And the only thing that makes that possible is the labor movement.
Thom Hartmann: Yeah. Well and Franklin Roosevelt saved American capitalism, saved American business and American business flourished during the 50 years after Roosevelt, before Reagan started taking it apart. We had average GDP on a decade by decade basis in the 50s, 60s, 70s, and, 50s, 60s, and 70s anyway, over 4%. In the 80s, 90s, and this decade, it’s you know in the 2, in the 3 % neighborhood. And, you know, ever since Reaganomics there has been a substantial difference.
Jonathan Tasini: That is correct. And, you know, our current President I think understands that. I think that he needs to be pushed in a much more progressive direction. I think part of the problem that we face right now, and people are very anxious about this, is that there’s no pressure coming from the progressive movement to move him.
Thom Hartmann: Right. And so, and we’ll get into a conversation about how do we push President Obama, what do we do, how can we as activists do that with our callers, right after this. Jonathan Tasini, “The Audacity of Greed” and WorkingLife.org, the website. Jonathan thanks for being with us today.
Jonathan Tasini: Always a pleasure Thom.
Thom Hartmann: Keep up the great work and good luck in your campaign.
Transcribed by Suzanne Roberts, Portland Psychology Clinic.
