Former US Senator Bill Bradley believes a better tomorrow is within our grasp, despite the economic pain that the middle class is experiencing today.
He wrote his new book We Can All Do Better to address the growing despondency and resentment he sees among Americans. With the right vision, leadership, and civic participation, he believes we can work our way back to prosperity and growth.
Chris was honored and excited to speak with the former Senator, particularly to uncover what awareness there is of the Three Es among our top political leaders. Not surprising for a longtime insider, Senator Bradley looks through the lens of working within the current system — i.e., if we can fix its shortcomings, it will solve our problems. Potential structural limits to growth, such as Peak Oil, are less bright on the radar.
There is much to learn here about what our Congressional leaders are focused on and what they are not. Listeners will undoubtly find points to agree with, and possibly others that are out-of-alignment with the concerns presented in the Crash Course. We expect an animated discussion to ensue in the Comments section below.
We take it as a good sign that widely-known veteran politicians such as Senator Bradley are increasingly standing up to admit "there is a problem" — that's the first step towards taking corrective action. And we're very thankful for the time the Senator has given to speak to our community.
On What's Missing Most from the System Today
I think politicians generally have been viewed anywhere from humorously to angrily by citizens at various times in our history. I think right now we have a very specific problem and that is we have had a long run as the dominant country in the world, as the country where people come in order to make a better living because the economy is dynamic enough and there are far sighted investments made. I mean whether it was Lincoln doing land grant colleges and transcontinental railroad. Or Eisenhower doing the federal highway system or varieties of other examples. We have had times where we are able to think long term and we simply need to do that now. We need to do that because if we don’t we are going to have problems down the road that will potentially endanger our status as the number one economy in the world.
On Money in Politics
The Dodd Frank Bill is an improvement, but it didn’t deal with the basic question. I mean it is pretty simple: limit leverage, increase capital, divide the investment bank function from the commercial bank function and you are back in the business. You have an economy that is growing, you have people who are able to invest over the long term. And the financial system now is really not functioning as well as it could. I think you mentioned the five public policy errors that put us into the mess in 2007/2008. If we are going to seriously address the health of our financial system we are going to need to do the things that I just mentioned. I think that the key point here is what prevents us from doing that. That is where I get the money and politics. For example, in 2009 and 2010, those two years the financial sector, financial industry contributed $318 million to people in Washington, politicians in Washington. And so it shouldn’t be a surprise that we got a watered down financial reform bill instead of dealing with the basic questions, as you said. We kind of hid the fact we were not dealing with the basic questions in a morass of complicated regulatory and legal verbiage. I think that what we need to do is we need to peel back and address the basic questions that you raised in terms of leverage, in terms of capital adequacy, in terms of the investment bank function versus the banking function. I think the time should be over where large mega banks that in 1990 had 10% of the financial assets in this country and now have 75% of the assets speculate with depositors money.
I do think money is at the core of the problem. You have mentioned and we have talked about all of the changes that could have been made that weren’t made and all the mistakes that were made since the mid 90’s. Well if you go from 1990 to 2010 you have the financial industry contributed $2 billion to politicians in Washington. Because the Supreme Court says that money is speech and you can’t limit speech therefore you can’t limit money. The only way you can deal with this issue is by making a constitutional amendment that says the federal, state, and local government may limit the amount of money spent in a political campaign. It is that simple.
On What's Needed for Economic Recovery
There is no question that we have to both cut spending and increase taxes. The key is you don’t want to do that in the next year or two because that would make our economy worse; fewer people working, the deficit is bigger. What you want to do is you want to address the structure of programs such as Social Security. If you increase the retirement age from 67 to 69 over 50 years, well that is not going to have an impact on the budget this year or next year but it is definitely going to change your numbers of what it costs the taxpayer. And I think that we have to have that kind of far range thinking. I think that we need taxes in this country that are I think that those who have more should pay more, for example. But we also need to have a tax system that taxes things more than employment.
Right now 40% of federal revenues comes from Social Security tax, Medicare and unemployment taxes. And if we simply funded those programs with a tax on things, say aluminum, paper, various other products like that and inefficient buildings and cars. If you did that you would be able to have a tremendous incentive for people to hire. You would still preserve the programs but you would liberate the private sector to do what it needs to do which is hire more people at better wages.
Given that political discussion often brings out strong emotions on all sides, we remind everyone that we take a politically-agnostic approach here at Peak Prosperity. Please make any comments as objectively and fact-based as possible.
Click the play button below to listen to Chris' interview with Senator Bill Bradley (24m:42s):
Chris Martenson: Welcome to another ChrisMartenson.com podcast. I am Chris Martenson, your host, of course. Today we have the extraordinary pleasure and privilege of talking with Senator Bill Bradley, who served in the US Senate from 1979 to 1997, representing the State of New Jersey. Then he was candidate for the Democratic Nomination for the President for the 2000 elections for the United States. And before serving in the Senate, he was an Olympic Gold Medalist in 1964, and a professional basketball player with the New York Knicks. We are just really pleased to have him here. We are here to talk about his new book We Can All Do Better. Welcome, Bill Bradley.
Bill Bradley: Thank you very much. Thanks for having me.
Chris Martenson: All right, well, I’m very interested in this book that you have got, and the title of it is We Can All Do Better. It is just out. In it you offer your state of the nation. Could you summarize those views for us? What exactly is it that we can and need to do better?
Bill Bradley: Well, all of us can do better. The point is that last summer I was struck by the debt limit debacle and the fact that middle income people were stuck per capita income the same in 2010 as in 1996. And we were in two wars on the other side of the world. People came up to me and said, “It’s hopeless. I don’t think anything will improve.” I wrote this book to demonstrate to people that we can have hope that there are specific things that we can do to deal with the economy, the foreign policy, and with the structure of our democracy.
Chris Martenson: Well there is a lot of, I would say, some hopelessness out there right now. People, especially in the middle and lower classes, are very much in a hard position right now, struggling. And I have an analysis that I have been working with for quite a while. I can summarize a lot of our nation’s ills in just three words: too much debt. We have been borrowing faster than our economy has been growing for a long time, and in here I note in your book that a lot of the proposals that come forward are going to require us to really come up with some brand new priorities, shift our spending. Do you think we can do that?
Bill Bradley: Well, that’s a question for our political system. I think given the fact that money dominates our political system at this stage that it raises some doubt. But there is something we can do about money dominating the system, and that is a constitutional amendment that says the federal, state, and local government may limit the amount of money in the campaigns. The Supreme Court has essentially said they can’t. That then liberates us to address the real problems, one of which is the debt issue that you mentioned.
I think the real economic issue is, how do we get more Americans working and earning more income? To me, that is where it is, because upward mobility is what this country has been all about. For the vast majority of Americans, they have been stuck for about 20 years.
Chris Martenson: Well, indeed they have. Many of these things, I think, can be traced to certain policies. We have had a free trade policy, which essentially has an un-level playing field across the world, as I see it. So we are now having and asking American workers and businesses to compete with companies that are not beholden under the same labor laws, environmental laws, the laws that give us a clean, safe place to live in our own country. Would you propose, then, in some way re-leveling that playing field? Are we talking tariffs and other actions like that?
Bill Bradley: No. I do not think we are talking about that kind of action. I think where we have gotten, indeed, we have lost a lot of jobs. Some of that has been outsourcing. For example, in the last decade, 40,000 factories have closed in this country and 6 million people have lost their jobs in the manufacturing sector. That is a fact of life. Part of that movement was for the reasons that you said. We also had job loss because of technology-displaced workers. You don’t need as many workers to produce the same amount of product. I think there are a number of causes to the current job stagnation.
But then a funny thing is happening. That is, take China, for example. Wages have gone up there 15-20% year. And within a couple of years it will be cheaper and more efficient and more productive to produce a product in the United States than go to China, pay the higher wages, have to deal with the transportation cost, have to deal with the uncertainty of your supply line. So I see a manufacturing renaissance occurring in the United States over the next decade or so. Now that is not going to generate the same number of jobs that were in manufacturing in the 1970s when [only] 25% of the workforce is in manufacturing. But it will generate a lot of growth and generate, increase jobs.
I think, after that, we need to address large public issues in our country. We need a massive infrastructure program, for example. That would create 5 million jobs, if we had a trillion dollar infrastructure program over a decade. And the real question is, how do we get the private sector to hire? Right now there is $1.8 trillion, $1.8 trillion on the books of non-financial corporations in the form of cash or other liquid assets. If they spent 20% of that hiring people at the median wage, which is $49,000 a year, unemployment would be 5%. When you ask a CEO why aren’t you doing that, he says, uncertainty. I need a rainy day fund, and he is saying, demand. Well, you address the demand question with the infrastructure program. And then you address the uncertainty question by doing something about the federal deficit on a long-term structural basis, which means doing changes in the entitlements, changes in defense procurement (among other things in the defense area) and having increased taxes on some products.
Chris Martenson: Well, this infrastructure, to burrow in on that because I completely agree with this idea, this would be investing in America. We clearly need an upgraded infrastructure. Anybody who has, say, taken a cab ride from JFK into the cities notes that there may be some improvements we can make along the way. Infrastructure gets a D- from the Association of Engineers. There is clearly a lot that can be done, and yet, somehow, we are not prioritizing that. We have some money goes into that during some stimulus bills. But there doesn’t seem to be a wholesale "let’s really burrow down and get in and do this." It seems like a politically popular thing to do; it would create jobs, give us new infrastructure. I’m trying to find the flaw in it. Why doesn’t it happen?
Bill Bradley: I think that first of all, it requires long-range thinking. You mentioned the road in from the airport from JFK. Well, there was a man in the 1950s who basically conceived the whole highway system of New York City and saw that it was built -- Robert Moses. We need that kind of long-range thinking. So I’m proposing that we have 50 priority infrastructure projects. What kind of things? Not your local bridge, but a new air traffic control system. Right now you go to the airport, all the delays. Why is that happening? You look up in the tower; there is an air traffic controller. He or she is following a red dot going across a television screen. That is the system that existed in the 1960s. It is way antiquated. It is a massive investment. It would dramatically improve our productivity.
Take high-speed rail lines on the east coast, the west coast, across the upper midwest in the Texas Triangle, you end up there with an opportunity to dramatically improve productivity, create jobs, and then free up the airports for long-range travel and the roads for travel that would be more short-range.
So I mean, there are major things that we can do. What happens is when you talk about public priorities, 55% of the budget now goes in direct payments to people. And that means if you are a politician and you have to decide, are you going to spend the money to do an infrastructure project long-term, or are you going to increase whatever, Social Security? You will always increase Social Security because those are voters and infrastructure is not organized. That is why you need farsighted leadership. You need to lay it out there and connect the dots between the investment in infrastructure and job creation and economic growth and returning us to the virtual spiral upward in our economy where more people are working and earning more money.
Chris Martenson: Well, that vision you are talking about, all businesses do it, it is strategy. Where are you going? How are we going to get there? The two main arms of strategy. Where are we going to go [is] the vision and how are we going to get there are the resources; you pull them together, never have enough resources, so you make your priorities and do what is right. That seems what long-range vision does seem to be lacking. Does every generation think that their politicians are short-sighted, or do you think that somehow the vision has shrunk over time?
Bill Bradley: Well, I think politicians generally have been viewed anywhere from humorously to angrily by citizens at various times in our history. I think right now we have a very specific problem, and that is, we have had a long run as the dominant country in the world, as the country where people come in order to make a better living because the economy is dynamic enough and there are farsighted investments made. I mean, whether it was Lincoln doing land grant colleges and transcontinental railroad, or Eisenhower doing the federal highway system, or varieties of other examples, we have had times where we are able to think long term. And we simply need to do that now. We need to do that because if we don’t, we are going to have problems down the road that will potentially endanger our status as the number one economy in the world.
Chris Martenson: Agreed. And [with] a lot of these investments, of course, infrastructure might be $1 or a $2 trillion tab, depending on who is doing the counting. Some say that the government does not really have a tax problem right now; it has a spending problem. Do we not face a future of both higher taxes and lower spending if we want to avoid ever-mounting debts that will, as surely as two plus two equals four, someday land us in a Greek bath?
Bill Bradley: There is no question that we have to both cut spending and increase taxes. The key is, you don’t want to do that in the next year or two, because that would make our economy worse; fewer people working, the deficit bigger. What you want to do is you want to address the structure of programs such as Social Security. If you increase the retirement age from 67 to 69 over 50 years, well, that is not going to have an impact on the budget this year or next year, but it is definitely going to change your numbers of what it costs the taxpayer. And I think that we have to have that kind of far-range thinking. I think that we need taxes in this country that are, I think that those who have more should pay more, for example. But we also need to have a tax system that taxes things more than employment.
Right now 40% of federal revenues comes from Social Security tax, Medicare, and unemployment taxes. And if we simply funded those programs with a tax on things, say, aluminum, paper, various other products like that, and inefficient buildings and cars; if you did that, you would be able to have a tremendous incentive for people to hire. You would still preserve the programs, but you would liberate the private sector to do what it needs to do, which is hire more people at better wages.
Chris Martenson: Agreed. Now if I could, I want to turn to what I think is the core of the issue right now in some respects. That is the financial mess that we find ourselves in. Not just what is happening in Europe, but here in the United States in 2007/2008, we certainly had a shot across the bow. In doing the post mortem on that, we can look back and say, well, maybe in retrospect, the 1999 repeals of certain provisions of the Glass Stiegel Act, maybe those weren’t wise. We failed to regulate derivatives even though there were experts saying we really need to have some sort of a brokerage clearing house for these things rather than having them be opaque and out of sight. We had loosening of regulations of Fannie Mae, Freddy Mac, all this increase in leverage that happened. And, of course, Alan Greenspan just mumbling along how everything is fine and he loved how financial markets controlled risk so beautifully and perfectly these days. And, of course, in hindsight we look back and say we made some mistakes. As I look across the current landscape, I do not see what I am calling credible efforts to actually correct those mistakes in the current landscape. I wonder if you agree with that, or if that is true, what can we do?
Bill Bradley: Well, the Dodd-Frank bill is an improvement, but it didn’t deal with the basic question. I mean, it is pretty simple: limit leverage, increase capital, divide the investment bank function from the commercial bank function, and you are back in the business. You have an economy that is growing; you have people who are able to invest over the long term. And the financial system now is really not functioning as well as it could. I think you mentioned the five public policy errors that put us into the mess in 2007/2008. If we are going to seriously address the health of our financial system, we are going to need to do the things that I just mentioned. I think that the key point here is what prevents us from doing that. That is where I get the money and politics. For example, in 2009 and 2010, those two years, the financial sector, financial industry, contributed $318 million to people in Washington, politicians in Washington. And so it shouldn’t be a surprise that we got a watered-down financial reform bill instead of dealing with the basic questions, as you said. We kind of hid the fact we were not dealing with the basic questions in a morass of complicated regulatory and legal verbiage. I think that what we need to do is we need to peel back and address the basic questions that you raised in terms of leverage, in terms of capital adequacy, in terms of the investment bank function versus the banking function. I think the time should be over where large mega-banks, that in 1990 had 10% of the financial assets in this country and now have 75% of the assets, speculate with depositors money.
You saw what happened recently with JP Morgan. Well, that was an investment bank. And they made the trades; they live with the result. The key is, you don’t use depositors' money to do that.
Chris Martenson: Absolutely this idea, if maybe it is the undue influence of financial contributions on the system. I have spent time on some of the emerging movements that happen to be out there right now. We have the Tea Party and Occupy movement, there is even a Back to the Land movement. There are all kinds of movements that essentially I think at the core share one common element that there is a loss of faith in how the system operates. It has led to anger in some cases; it has led to resignation in others. It has a host of emotions that have come along with it. At its core there is a sense of having lost faith in how the system operates. Is modifying our campaign finance law, is that enough? Is that sufficient, or just a necessary step?
Bill Bradley: I think there are two you need to do for our political system. One is change the way we draw congressional district lines so that more races are competitive and there are fewer people who have to just worry about a primary because they are certain they are going to get re-elected because of districts drawn by partisan state legislatures that give the vast majority of congressmen very safe districts. I think you need to be more competitive, that is the first thing.
Second, I do think money is at the core of the problem. You have mentioned and we have talked about all of the changes that could have been made that weren’t made and all the mistakes that were made since the mid 90s. Well if you go from 1990 to 2010, you have the financial industry contributed $2 billion to politicians in Washington. Because the Supreme Court says that money is speech and you can’t limit speech therefore you can’t limit money. The only way you can deal with this issue is by making a constitutional amendment that says the federal, state, and local government may limit the amount of money spent in a political campaign. It is that simple.
Now people, you say, are frustrated, etc. Right. But the system is not somebody else. The system is us. This is a democracy. In a democracy it is not a vicarious experience. You have to take action yourself. We have been there before. I think that in the 19th century, corrupt state legislatures sent corrupt Senators to the US Senate who were on the payroll of railroads and banks and oil companies. And then the people rose up. And I think we are in a situation now where the people need to rise up. Take a look at the Tea Party movement, the Occupy movement, these are manifestations of the people trying to do something. But there is no specific program to address the major issue on people’s minds, which is how do we create more jobs at higher income. I mean, that is the challenge. And ironically, if we look at the 21st century, even in foreign policy the issues are going to be more economic than they are military. And so by doing this domestically, getting our own house in order, we will be strengthening our role in the world.
Chris Martenson: I can fully agree with that, and there is a big difference between savings, investment and consumption and much of this I think means that it is a time to reinvest and reinvigorate our own nation. And that certainly is something I see you project as I look across the ocean and I see what China is doing. They are very clearly laying a path for the future. So we have got our challenges cut out for us. In closing, what is the hope in the story? You have the final chapter, the Path to Renewal. What is it that we can do, and how optimistic are you that we are going to get that done?
Bill Bradley: Well, I’m optimistic. I do have hope. I know what America is. I’ve seen it up close. I think, first of all, we must never forget who we are as a people. The central chapter in the book is called Celebrating Selflessness. What I used to call when I ran for President is the goodness of the American people. Like the guy who shines shoes at the Pittsburgh Children’s Hospital for 46 years, and out of every tip he puts a portion of that tip into a fund to pay for poor kids’ healthcare. He put over $100,000 into that fund. There are people like that all over America. They are the foundation for anything we do in government. And we must never forget that. People understand that they are part of a larger community. Are there selfish people? Sure. But the vast majority of Americans give their neighbor the benefit of the doubt and will help somebody if they stumble. And so I think that is the first thing.
Second, we need politicians who tell us the truth. What is the truth here? The truth is that we need to get our house in order. We need to reduce the long-term debt. We need to create more jobs. We need to create those jobs in the short term in a variety of ways, so that these corporations that have all this cash on their books will actually hire people. And so I look out there and I say the most important thing to remember as you think about the future of your country is you. What have you done recently to make this country a better place? Now, if you are the shoe-shine guy, you have done something to make your community a better place. What have we done to make the country a better place? In the Internet age, apathy is not an answer. It is not an option. I mean, look at the Arab Spring. Look at the movements all over the world where citizens take increasing action. So that is what has to happen in this country to create a context for politicians to do the right thing. It is not pressure politics, it is not special interest wanting to have their back scratched. It is instead far-sighted decisions about the structure of our democracy and our economy that will generate higher living standards and a more responsive democracy.
Chris Martenson: We have been talking to Senator Bill Bradley about his new book We Can All Do Better. We all heard some inspiring words. Of course, apathy is not an option. And with that I am going to thank Senator Bradley very much for your time today.
Bill Bradley: Thank you so much, Chris. Enjoyed it.
Chris Martenson: Best of luck with your book and with everything else you do.
Bill Bradley: Good. And I think you know, Chris, the key thing here is, I’m trying to start a dialogue on doing better. I mean, I have a Twitter account that is basically trying to create that kind of dialogue. And that is what we need to do.
Chris Martenson: What is that Twitter account?
Bill Bradley: Bradley#dobetter.
Chris Martenson: And 140 characters at a time we can -
Bill Bradley: Have a lot of ideas.
Chris Martenson: Have a lot of ideas.
Bill Bradley: You know, people need to start MeetUps in their community and ask themselves the question, What can we do better? Obviously what the national policy makers do better, but what can each of us do better? Can we have healthier bodies? We are in control of that. Can we save more? We are pretty much in control of that. These are the questions we need to ask ourselves and national policy makers.
Chris Martenson: I agree. At my website [PeakProsperity.com] we have started what we call "groups," which allow people to organize. It is around two words; we are asking people to take control of what they can to become more resilient and to become more engaged. So once your own house is in order, then how is your neighbor doing, how is your community doing? There is a lot of appetite for that right now. In some ways we are getting back to the roots of this country. There are things that made this country great; intellectual property protection, freedom, and those things in some ways have been a little bit corroded, but really it is the community roots and values. And we see a lot, personally I see a lot, of rising appetite for that. People want to have meaningful, substantive discussions.
Bill Bradley: I agree. Thanks, Chris.
Chris Martenson: Fantastic. Be well.