Inequality for All Page #7

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was borrowing, going into debt,

which seemed easy because

housing prices were going up.

For 13 years, Americans

have enjoyed a housing boom,

the longest ever.

This a great time

to buy a house in Delray Beach.

You can make,

if you have some cash,

an unbelievable deal.

From the mid-to late '90s

onward,

you have this huge rise

in housing prices.

People said, "Well,

I can take out a loan

against my home."

"I could use my home

as collateral,"

or, "I can refinance my home."

And that kept the middle class

going.

Homes were like piggy banks.

Americans have been using

their home as an ATM,

cashing out more than

$500 billion in home equity

from 2001 to 2005 to cover

expenses like health costs,

student debt, repairs,

and credit cards.

We had a debt bubble

prompted by middle-class America

trying to maintain

its living standard

in the face of stagnant wages.

We're seeing more clients

every day that,

very sadly, they've gotten

into a debt hole

that is very difficult

to dig out of.

But there's a limit

to how far you can do that.

You know,

that was a speculative bubble,

and it burst in 2008.

We know what happened.

And so all of the coping

mechanisms

that the middle class has used

to avoid the inevitable reality

that their wages

have gone nowhere for 30 years,

adjusted for inflation,

are now exhausted.

When the middle class doesn't

share in the economic gains,

you get into this downward

vicious cycle.

The problem is,

for the last three decades,

nothing

has fundamentally changed

in terms of inequality.

And it wasn't until

the Clinton administration

that there was an opportunity

to reverse all of this.

And that was what was

so damn frustrating.

The Senate, I believe,

is on the verge of passing

the jobs program.

Things are going well.

I mean,

we had budget surpluses.

We might have been able

to take those surpluses

and invest them in education

and job training,

change the structure,

ultimately, of the economy.

But there wasn't

the political will to do that.

Before I leave,

I also want to say

a special word of thanks

to my longtime friend

Secretary Reich,

who's carried on this fight

for the minimum wage.

This was an especially sweet day

for him as well,

and I thank him for his efforts.

I should say something

just so it's not misunderstood.

You know,

Bill Clinton did preside

over one of the best economies

we've had in this country

in living memory.

The wages

of most people went up.

Poverty actually declined.

But we didn't do enough.

We did really alter

the underlying trend.

I became a true pain in the ass.

I mean, looking back on it,

I'm embarrassed.

In meetings,

I would sound off about,

you know, inequality,

and, "Are we looking

at the distributional impacts

of this policy or that policy?"

I mean, I became predictable.

People would roll their eyes.

I'm surprised Bill Clinton

kept me around.

I did want to bring you

up to date

on a couple of matters.

First of all,

the president was reelected.

The second

is that I'm going home.

I am so glad you did not clap.

In the end, I left.

Partly, I was frustrated.

Partly, I just hadn't seen

anything in my family.

I hadn't seen the boys.

I said to Bill Clinton

I had to go home.

I... I do ask myself

whether I've been

a total failure.

I've been saying much

of the same thing for 30 years.

And some of the trends

have grown worse.

Inequality has become worse.

The danger to the economy

and democracy have become worse.

But here's what I tell myself

in my quiet moments.

I say, close to home,

you know, nuts and bolts,

over the kitchen sink,

dining room table,

you know, this is what counts

for most people:

Good jobs, good wages,

a good opportunity

and set of opportunities

for their kids.

This is where people live.

Detective Conan O'Brien

and Detective Former Secretary

of Labor Robert Reich.

I am a cockeyed optimist.

I ask you,

do I look like big government?

I wouldn't have spent

so much of my adult life

banging my head against the wall

if I didn't think

that ultimately

it would pay off

in terms of social change.

No!

That's why I teach.

Now, people who are worried

about widening inequality

are also worried

about something else.

It's not upward mobility.

It's not even trust.

They are worried about

the undermining of democracy...

when so many resources,

so much money, so much wealth,

so much income

accumulates at the very top,

that with money

comes the capacity

to control politics.

There's nothing sinister

the way it starts.

Usually they bring in somebody

you haven't seen

for a few years.

You know,

they're paying them 10 grand.

Might be the best man

in your wedding

or a guy

you played football with.

You say, "Eddie, hell,

I haven't seen you..."

And then they say,

"Now, I'd like to turn it over

to old Freckles here..."

And then they give you

the whole load.

But money...

I mean, do the lobbyists come in

and obviously

the unspoken reality is,

"We can help you win

your next election

if you cooperate with us"?

There's a guy in every office

to say, "So-and-so

wants to see you.

"He's from the American

Shoe Leather Company.

"They have maxed out,"

meaning they gave you

the maximum in your primary

when you first started.

"They gave you the maximum

in every general.

"You've run three times now,

and they were there for you

at every point."

And what for?

Access.

This is actually

where there is blame,

and I think the blame

is justifiable.

It's not that people are rich.

It's that they abuse

their wealth

by lobbying for bailouts

and subsidies and taxes

that are going to entrench

their wealth.

That's the reason why the rules

have changed so dramatically.

Look at history.

Inequality and top tax rates

have had

an inverse relationship.

When inequality was lowest,

top tax rates were higher.

When inequality was highest,

tax rates on the wealthy

went down.

Under Dwight D. Eisenhower...

you know, he was a Republican;

Nobody dared call him

a socialist...

the top marginal tax rate

was 91%.

I mean, even when you consider

all deductions

and all tax credits,

they were still paying

way over 50%.

I, John Fitzgerald Kennedy,

do solemnly swear...

I will faithfully execute...

The office of president

of the United States...

So help me, God.

Taxes on the top

were never below 70%

until Reagan dropped

those taxes on the top.

Read my lips.

No new taxes.

I, William Jefferson Clinton...

I, George Walker Bush...

Do solemnly swear...

I, Barack Hussein Obama,

do solemnly swear...

In fact, most of the very rich

in this country

don't even pay close to that

because most of their income

is in the form

of capital gains,

which is now taxed at 15%.

My total taxes paid...

payroll taxes plus income tax,

mine came to 17.7%.

The average for the office

was 32.9%.

There wasn't anybody

in the office,

from the receptionist on,

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