Full Transcript: How Our Winner-Take-All Political System Has Divided America

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As an outpouring of voter outrage roils the election, Bill Moyers revisits a conversation he had with Jacob Hacker and Paul Pierson, authors of the book Winner-Take-All Politics: How Washington Made the Rich Richer — and Turned Its Back on the Middle Class. Here is the full transcript of the podcast. We encourage you to listen to the interview and subscribe to our podcast here.


 


 

Transcript

Bill Moyers: Welcome. I’m Bill Moyers. And I want to talk about the hurricane that’s blowing across America right now.

(Soundbite of Sanders rally)

Bernie Sanders: In our country today, we have more income and wealth inequality than any other major industrialized nation on earth.

Moyers: It’s blasting the race for president from left and right.

(Soundbite of Trump rally)

Donald Trump: Middle-income people are making less money today in real dollars by far than they made 18 years ago.

Moyers: Voters are angry. Angry at stagnating wages. Angry at the loss of upward mobility for their kids. Angry at the power of corporations and rich people over our political system.

(Soundbite of Democracy Awakening protest)

Democracy Awakening Crowd: The American people…

Kai Newkirk: …won’t take this anymore.

Crowd: …won’t take this anymore.

Newkirk: We’re going to end this corruption!

Moyers: And they’re angry over the vast gap that keeps growing between rich and poor.

(Soundbite of Hillary Clinton rally)

Hillary Clinton: Prosperity can’t be just for CEOs and hedge-fund managers. Democracy can’t be just for billionaires and corporations.

Moyers: Let’s call this what it is: gross inequality. And what’s happening is not inevitable. Inequality is no force of nature. For more than 40 years our politicians have collaborated with campaign contributors to make the rich richer even as Washington turned its back on the middle class. So stay with us as we explore America’s winner-take-all politics.

 


 

Moyers: For over 40 years now, I’ve worked at the intersection of politics and journalism. Inside the White House with President Johnson, I was his assistant for domestic policy and then became his press secretary.

On the outside, as a broadcast journalist for these past four decades, I’ve kept a wary eye on those at the center of power. I’ve spent years listening to America, covering our history, our mythology, the reality of our politics and the power of corporations.

Back in 2012, I began my last television series with a question that was beginning to trouble the country: What were these forces that were making the rich richer and more powerful, while obstructing everyone else?

Why had the economy stopped working for the middle class, even as those at the top were enjoying massive rewards? It was that mystery — every bit as puzzling as a crime drama — that convinced me to bring back my weekly broadcast and line up interviews.

(Soundbite of Occupy Wall Street protest)

Occupy Protestors: We are the 99 percent! And so are you!

Moyers: But I wasn’t the only one who wanted answers.

Protestor: We are tired of corporate America, corporate finance and the media industry controlling our political system.

Moyers: The very day I conducted my first interview of the series, protesters were setting up camp in a park near Wall Street.

Bill Black: The 1 percent…

Crowd: The 1 percent…

Black: …have dominant…

Crowd: …have dominant…

Black: …political power…

Crowd: …political power…

Black: …over both parties.

Crowd: …over both parties.

Moyers: They wanted to wake the rest of us up as, through those financial canyons, they shouted their displeasure at the country’s gross inequality.

Protestors: Whose streets? Our streets!

Moyers: When I saw what the Occupy movement was doing, I was reminded of a woman named Amanda Gruebel. Her testimony before Congress came straight from the heartland.

(Soundbite of Senate hearing)

$10,000 might not seem like a lot to some people, but that loss of income required a complete financial, emotional and spiritual overhaul in our family.

—Amanda Gruebel

Amanda Greubel: My name is Amanda Greubel. I am 32 years old, born and raised in Iowa. I’ve been married for 10 years today to my high-school sweetheart, Josh. He’s the high school band director in the same district where I am the family resource center director.

Moyers: This recording is from a 2011 Senate hearing exploring how middle-class Americans were struggling.

Greubel: We have a 5-year-old son, Benen, and our second child on the way in December. Like a lot of American families, we have a lot of debt, mortgage, two vehicles and, because we both have master’s degrees, a lot of student loan debt.

Moyers: And that year when the state cut funding for local school districts, her salary was cut by $10,000.

Greubel: $10,000 might not seem like a lot to some people, but that loss of income required a complete financial, emotional and spiritual overhaul in our family. […] It means that even though I would rather shop at local grocers, I shop at Wal-Mart for groceries because that’s where the lowest prices are. Sometimes the grocery money runs out before the end of the month, and then we have to be creative with what’s in the cupboard — and that was a fun challenge at first, but the novelty wears off after a while. […] It means that most of our clothing comes from Goodwill, garage sales and the clearance racks because we try not to spend full-price on anything anymore. It means that when my son brought me the snack calendar for his classroom and I saw that that month was his week to provide snacks for 15 classmates, I was scared because I knew that it would stretch the grocery budget even further.

Moyers: You could imagine Amanda Gruebel channeling the anguish of millions of Americans.

Greubel: If my family with two master’s degrees is struggling, you can imagine how bad it is for other people. Kids don’t necessarily tell their parents when they’re afraid, because they see that their parents are stressed out enough already and they don’t want to make it worse. When kids don’t have enough to eat or they worry about losing their homes they cannot concentrate on learning their math facts, or their reading strategies. And in some cases financial concerns lead to or exacerbate issues such as domestic violence, child abuse, substance abuse and physical or mental-health conditions. All of the things that are ailing our families right now are so interconnected.

Moyers: So as Occupy Wall Street was rallying, and our once and future middle class was struggling, I turned to Jacob Hacker and Paul Pierson to help me understand what had gone wrong.

They are noted scholars. Paul Pierson teaches political science at the University of California, Berkeley. Jacob Hacker is a professor of political science at Yale and director of the Institution for Social and Policy Studies.

When I first met Hacker and Pierson in 2012, they had just published a book that was receiving high praise — and fast becoming a best seller. It was called Winner-Take-All Politics: How Washington Made the Rich Richer — and Turned Its Back on the Middle Class.

Paul Pierson: I think a lot of people know that inequality has grown in the United States. But saying that inequality has grown doesn’t begin to describe what’s happened.

Moyers: This is Paul Pierson.

If you take all of the income gains from 1979 to 2007 — so all the increased household income over that period — around 40 percent of those gains went to the top one percent. And if you look at the bottom 90 percent, they had less than that combined.

—Jacob Hacker

Pierson: The metaphor that we had been using lately is if you imagine a ladder, with the rungs in the ladder, and you think, “Okay, well inequality’s growing. So the rungs are getting further apart from each other.”

That’s not what’s happened in the United States. What’s happened in the United States is that the top one or two rungs have shot up, you know, into the stratosphere while all the other ones have stayed more or less in place. It’s really astonishing how concentrated the gains of economic growth have been.

Moyers: Here’s Jacob Hacker.

Jacob Hacker: You know, the startling statistic that we have in the book is that if you take all of the income gains from 1979 to 2007 — so all the increased household income over that period — around 40 percent of those gains went to the top one percent. And if you look at the bottom 90 percent, they had less than that combined.

And it is not just a one- or two-year story. I mean, we’ve seen a terrible economy over the last few years. And the last decade is now being called “The Lost Decade” because there was no growth in middle incomes, there was no — there was an increase in the share of Americans without health insurance, more people are poor. So there was a terrible 10 years.

But we were actually looking at the last 30 years, and seeing that the middle class had only gotten ahead to the extent that it had because of families working more hours.

So this is a story that isn’t just about those at the top doing much, much better. But is, also, we found, a story about those in the middle not getting ahead, often falling behind in important ways, failing to have the same kinds of opportunity and economic security that they once had.

Moyers: Let’s take a look at just how dramatic the inequality is. You have a chart here…

…I asked them to explain a dramatic bar graph from their book. It showed how much incomes grew between 1979 and 2006 among five segments of the population. The poorest fifth grew by 11 percent. The middle-income groups all grew too, by increasing amounts. But the top fifth grew the most at 55 percent, which sounds like a lot — until you see the top 1 percent.

Hacker: It exploded at the top.

The line for the top 1 percent, it’s hard to fit on the graph because it’s so much out of proportion to the increases that occurred among other income groups including people who are just below the top 1 percent. So, that top 1 percent saw its real incomes increase by over 250 percent between 1979 and 2006. Yeah. Over 250 percent.

Pierson: And actually, even this graph — we couldn’t find a graph that fully describes it because even this graph actually really understates the story. Because it —

Moyers: Understates it?

Pierson: Understates it.

Since we’ve been keeping records on the incomes of the richest from tax statistics in the early 20th century, we never saw as large a share of national income going to the richest one-in-a-thousand households as we did just before the Great Recession.

—Jacob Hacker

Moyers: I mean, this is pretty powerful. When I looked I thought it was a showstopper.

Pierson: OK, so well, if you really if you really want the showstopper you have to go one step further because that big increase is for the top 1 percent. But the real action is inside the top 1 percent. If you go to the top tenth of 1 percent or the top hundredth of 1 percent, you know, you would need a much bigger graph to show what’s happening to incomes for that — for that more select group, because they’ve gone up much faster than have incomes for just your average top 1-percent kind of person.

Moyers: But we’ve all known for a long time that the rich were getting richer, and the middle class was barely holding its own. I mean, that was no mystery, right? 

Hacker: Oh, it is. It’s a mystery when you start to look beneath the familiar, common statement that inequality has grown. Because when we think about rising inequality, we think, “Oh, it’s the haves versus the have-nots.” That the top third of the income distribution, say, is pulling away from the bottom third.

And what we found is it’s not the haves versus the have-nots. It’s the have-it-alls versus the rest of Americans. And those have-it-alls, which are households in say the top one-tenth of 1 percent of the income distribution, the richest one-in-a-thousand households are truly living in an unparalleled age.

Since we’ve been keeping records on the incomes of the richest from tax statistics in the early 20th century, we never saw as large a share of national income going to the richest one-in-a-thousand households as we did just before the Great Recession.

Their share of national income quadrupled over this period, to the point where they were pulling down about 1 in 8 dollars in our economy. One-in-a-thousand households pulling down about 1 in 8 dollars in our economy before the great recession began.

Moyers: You set out to try to solve three mysteries: who done it, who created the circumstances and conditions for the creation of a winner-take-all economy. And your answer to that in one sentence is?

Hacker: American politics did it far more than we would have believed when we started this research. What government has done and not done and the politics that produced it is really at the heart of the rise of an economy that has showered huge riches on the very, very, very well off.

Moyers: It’s the politics, stupid?

Hacker: Exactly.

Moyers: How did they do it?

Pierson: Through organized combat, is the short answer.

Moyers: And why did they do it?

Hacker: Because they could. Because the transformation of political organization, the creation of a powerful, organized, business community, the degree to which that was self-reinforcing within both parties has meant that politicians have found that they can on issue after issue cater to the interests of the very well off while either ignoring or only symbolically addressing many of the concerns that are felt by most Americans and get reelected and survive politically.

Pierson: If you listen to many public officials over the over the last 20 or 30 years as they’ve started to recognize that inequality has grown, typically what they’ll say is, this is a result just of economic change. It’s a result of globalization changes in technology that have advantaged the educated at those with high skills at the expense of the uneducated.

And there, clearly — there is some truth to this story that education matters more in determining economic rewards. But the more we looked at this, the less satisfied we were with that explanation.

That it couldn’t explain why the economic gains were so concentrated within a very small subset of the educated people in American society. I mean, 29 percent of Americans now have college degrees. But a much, much smaller percentage of Americans were benefiting from this economic transformation.

Moyers: Remember, this was 2012. Mitt Romney was working to oust Obama from the White House.

(Soundbite of Republican fundraiser)

Mitt Romney: There are 47 percent of the people who will vote for the president no matter what.

Moyers: He got into trouble talking behind closed doors, when he wrote off a group of Americans who weren’t doing so well.

Romney: There are 47 percent of people who are with him, who depend on government, who believe that they are victims, who believe that government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you name it. That that’s an entitlement, and the government should give it to them.

So it’s one thing to say, “Oh, the rich are getting richer because we have this new global economy.” But how do you explain the fact that we’ve seen over this period where the rich have gotten richer the tax rates on the richest of the rich come dramatically down?

—Jacob Hacker

Moyers: Inequality was still a fringe issue that election year — two years before Thomas Piketty’s book Capital became a surprise best seller; three years before Pope Francis officially preached about a moral obligation to work for a “just distribution of the fruits of the earth”; and four years before the populist uprising we are now seeing in the current presidential race — a wave of frustration from people who are furious with Washington for doing so little to help them.

Back then, Hacker and Pierson were on to something. They rejected the conventional wisdom that inequality is primarily a product of the global economy, and they pointed fingers.

Moyers [To Hacker and Pierson]: Well, as you speak, I can hear all of those free-marketers out they say, “Come on, Pierson, come on, Hacker, it is the global economy. It’s that cheap labor overseas. It’s those high-technology skills that you say are required, these deep forces that actually are beyond our control, and are making inevitable this division between the top and everyone else.” Right? That’s what they’re saying as they listen to you right now.

Hacker: We think the story that’s told about how the global economy has shifted clearly matters. But that it doesn’t get to the sort of really powerful role that government played in adapting to this new environment and in changing the well-being of people in the middle and at the top.

Pierson: And again, we wouldn’t want to say that the kinds of changes that they’re talking about don’t matter at all. But they still leave open for a country to decide how they’re going to respond to those kinds of economic challenges.

And when you look at other affluent democracies that have also been exposed to these same kinds of pressures, who are actually more open — smaller economies are often more open to the global economy than the United States is — you don’t see anything like the runup in inequality, especially this very concentrated high-end inequality, in most of these other countries that you see in the United States. Which to us, really, was a very strong clue that we need to understand why the American response to globalization, to technological change has been different than the response of most other wealthy democracies.

Hacker: So it’s one thing to say, “Oh, the rich are getting richer because we have this new global economy.”

But how do you explain the fact that we’ve seen over this period where the rich have gotten richer the tax rates on the richest of the rich come dramatically down? You know, Warren Buffet now says that he thinks he’s paying a lower tax rate than the people who work for him do.

The Bush tax cuts in a lot of ways were written like a subprime mortgage. You know, they were designed to make people see certain things, and not see a lot of the fine print.

—Paul Pierson

Pierson: The thing that got us going at the very beginning was the Bush tax cuts.

(Soundbite of President George W. Bush)

George W. Bush: This tax relief plan is principled. We cut taxes for every income taxpayer. We target nobody in, we target nobody out. And tax relief is now on the way. Today is a great day for America.

Moyers: But what Bush had just done in 2001 was a bonanza for the very rich.

Pierson: The Bush tax cuts in a lot of ways were written like a subprime mortgage. You know, they were designed to make people see certain things, and not see a lot of the fine print.

Hacker: Fully 30 to 40 percent of the benefits were going to the very top of the income distribution. The top 1 percent. And when you broke it down, it was really the top one-tenth of 1 percent that did so well because of the estate tax changes, and because of the changes in the top tax rates, the changes in the capital gains taxes. And if you go to 2003, changes in the dividend tax.

I mean, these were all tax breaks that were worth a vast amount to the richest of Americans and worth very little to middle-class Americans.

Pierson: Within a few weeks after the legislation was passed, we all get a letter that says Congress and the president have given you this tax cut. And then that’s pretty much it for the middle class. But for higher-income groups, the further forward you go in time, the bigger and bigger the benefits get. So it was really designed to front-load the relatively modest benefits for the middle class, and to back-load the benefits for the wealthy.

Hacker: So why? Why do the winners get policies that make their winnings even larger? You know, this is not a trivial change. If you say from the mid-’90s to 2007, those top 400 tax payers, they’ve seen their tax rates decline so much that it’s worth about $46 million for every one —

Moyers: For every —

Hacker: — of those 400 tax payers. So it’s — the numbers are staggering. When you start to look within the top 1 percent, and look at what government has done to help those people out, through taxes, through changes in the market, financial deregulation and the like and through protecting them from efforts to try to push back.

Moyers: Protecting them?

Hacker: Well, I think this is something that really needs to be understood. You know, these large shifts in our economy had been propelled in part by what government has done, say deregulating the market, the financial markets, to allow wealthy people to gamble with their own and other people’s money, and ways to put all of us at risk, but allow them to make huge fortunes.

And at the same time, when those risks have become apparent, there has been a studious effort on the part of political leaders to try to protect against government stepping in and regulating or changing the rules.

Moyers: You write: “We have a government that’s been promoting inequality, and at the same time, as you just said, failing to counteract it.” This has been going on, you write, 30 years or more. And, Paul, here’s the key sentence: “Step by step, and debate by debate, our public officials have rewritten the rules of the economy in ways that favor the few at the expense of the many.”

Pierson: In some ways, the fundamental myth that we’re trying to break out of is the idea that there’s something natural out there called “the American economy” that is prior to government, prior to politics. And that government, if it’s involved at all, is only involved sort of at the end of the day, maybe tidying things up around the edges, or redistributing money from some people to another.

What we’ve seen is an organizational revolution over the last 30 years that has meant that business, and Wall Street, and ideological conservative organizations that are pushing for free market policies have all become much more influential.

—Jacob Hacker

And I think the financial crisis has been a rude awakening for people who viewed the economic world that way. It’s now, I think, very clear in retrospect that the decisions that leading public officials made over a period of decades helped to get us to a point where a financial crisis could be so devastating to all Americans.

Moyers: How can this happen? I mean, how could Washington turn its back on the broad middle class to favor a relatively few at the top — in a democracy?

Hacker: What has really changed is the organization of American politics, particularly the organizations that represent the deepest-pocketed members of American society. What we’ve seen is an organizational revolution over the last 30 years that has meant that business, and Wall Street, and ideological conservative organizations that are pushing for free market policies have all become much more influential.

And at the same time, a lot of the organizations that once represented the middle class — labor unions, broad-based civic organizations and sort of, organizations at the local and grassroots level, including social movements, have all lost enormous ground.

And so it’s that imbalance, that shift, I think, that is the sort of underlying pressure that plays out in our politics today. The way we describe it in the book is as if the ecosystem of American politics has changed. And everyone in American politics, Democrats, Republicans, liberals, conservatives, has had to adapt to this new world where money matters much more in our politics, and where groups representing business and the wealthy are much more powerful than in the past.

Moyers: And you don’t beat around the bush. You say, quote, “Most voters of moderate means … have been organized out of politics, left adrift as the foundations of middle-class democracy have washed away.”

Hacker: Yeah, I mean, if you look at the history of American democracy it is about a broadening of our understanding of political equality to incorporate African-Americans and women and ultimately to also incorporate the idea that large inequalities of property were a threat to democratic equality. So FDR during the Great Depression famously said that political equality was meaningless in the face of economic inequality.

So we now, I think, understand that inequality of income and wealth is part of a capitalist society, but it can’t overwhelm our democracy. And what we’ve seen in the last 30 years is a gradual erosion of the firewalls that protect our democracy from the inequalities that are occurring in the market. Money has come into politics much more.

And the power that people have in the market is being used more and more in politics as well. And that’s a concern because Americans have very complex views about equality, but they all agree in this basic idea that as Thomas Jefferson famously said, “All men are created equal.”

And he meant men probably, but you know, the modern understand of that phrase, we believe that people whether they’re rich or they’re poor, whether they have lots of property or not, whether they’re in, on Wall Street or off, they should have equal potential to influence what government does. Anybody who looks around at our government today cannot believe that’s the case or that we’re even close to that.

Moyers: There was a time when we were sure that a strong middle class was the backbone of a democracy. And there was a time, after the second World War when I was a young man, when incomes actually grew slightly faster at the bottom and the middle than at the top, is that right? Paul, Do your figures support that?

Pierson: Yes, they do. And we describe that period after World War II, which lasted for about 30 years as being a country which we labeled Broadland. And —

Moyers: Broadland?

Pierson: Broadland. And I think it’s most clearly captured by that old idea that a rising tide lifts all boats.

Everybody’s income is going up at the roughly the same rate, slightly faster actually toward the bottom of the income distribution than toward the top, but everybody’s incomes were going up. And it’s important to understand, this wasn’t some egalitarian fantasy world. It wasn’t Sweden.

It was the United States, recognizably the United States with significant inequalities of wealth, but everybody was participating in prosperity and seeing their incomes rise. And then after the mid-1970s we start moving toward a distribution of income that looks more like that of a Third-World oligarchy. It looks more like Mexico or Brazil or Russia. Income inequality that — statistics on income inequality now suggest that inequality is higher in the US than it is in Egypt. And that’s quite a journey from where we were when I was growing up.

I think almost all Americans lose from the shift toward a society in which rewards are so narrowly concentrated on a small segment of the population.

—Paul Pierson

Hacker: Right now I think we’re seeing the kind of bitter fruit of winner-take-all politics because this financial crisis was not an act of God or work of nature. It was brought on by poor decisions that were made in Washington and on Wall Street. Yes, there’s a global dimension to this, but a big part of it was failures of domestic policy. You know, if you look to our northern neighbor, Canada, it had nothing like the same degree of banking crisis the United States did. And that’s partly because it had much more effective regulations of the financial sector. You know, over this period that we saw leverage and speculation increasing on Wall Street, Washington — both Democrats and Republicans — were trying as hard as they could to allow Wall Street to do even more.

Moyers: So the winner-take-all politics has produced a winner-take-all economy? Right?

Hacker: Yes.

Pierson: Yes.

Moyers: And the winners are?

Hacker: The winners are those who’ve made out so well in this new economy, the very well off and financial — and people in the highest reaches of finance and corporate executive suites.

Moyers: And the losers?

Pierson: Well, the losers are, I think, almost all of us.

I think almost all Americans lose from the shift toward a society in which rewards are so narrowly concentrated on a small segment of the population.

Hacker: And there’s no sign that the sort of massive concentration of the gains of the economy at the very top is slowing down. In fact, this downturn has been remarkable in the degree to which those at the very top seem to have weathered it pretty well. Profits are still very high. Those who are on Wall Street have recovered thanks to a massive government bailout.

Moyers: Taxpayers put it up. I mean, they’re spending taxpayer money.

Hacker: Yes, yes. And so we’ve seen the economy over 30 years very consistently shift in this direction. And what I think has not happened and what concerns us greatly is a kind of real undermining, deep undermining, of the operation of our democratic institutions.

I mean, we’re describing a massive erosion, but the question is could we see those democratic political institutions really cease to function effectively in the future if we have a society that continues to tilt so heavily toward winner-take-all. And that’s why we wrote the book because, you know — Walter Lippmann back in the early 20th century said the challenge for democratic reform is that democracy has to lift itself up by its own bootstraps.

And we’re — we are deep believers in the ability of American democracy to reform itself, of the strength of our democratic institutions. But they’re in very serious disrepair right now. And we’ve seen in recent political fights a sort of paralysis and a broad loss of faith in government. And that sort of secession of the wealthy from our economic life that we’ve already started to see could be matched by a secession of them from our political life and a sort of loss of that broad democracy that was characteristic of mid-20th century. That’s the greatest fear that we have.

Moyers: Would you say we still have a middle-class country?

Pierson: That’s —

Moyers: Wow.

Pierson: No, no, I wouldn’t, I wouldn’t.

Moyers: You’re hesitant.

Pierson: If you asked me if you asked me that point blank, I mean —

Moyers: Point blank, Paul, do we still have a middle-class country?

Pierson: I would say no. I mean, obviously there is still something there is still something that we would recognize as a middle class, it’s still probably the biggest segment of the population. But in terms of its weight in the society, its ability to produce a society and reproduce a society that is oriented around the needs and concerns and opportunities of the middle class, I don’t think that we live in that country anymore.

Moyers: And you say we are way behind in mobility. Behind Australia, Norway, Finland, Germany, France, Spain and Canada. We are way down the list in terms of social mobility. Am I reading you right?

Hacker: Over this period in which those at the very top have done better and better, the chance of climbing up the economic ladder hasn’t grown at all; it may have actually declined. And that is reflected, I think, in a sense of pessimism that you see among many middle-class Americans about whether the American dream still holds true.

At the individual level Americans are extremely optimistic. And if you ask them, “Will you achieve the American dream?” Most Americans say yes. But at a collective level when you ask people, “Does the American dream still hold true?” We’re seeing in surveys for the first time that only about, you know, half of Americans are agreeing that the American dream still holds true. And that’s remarkable.

Moyers: What’s the practical consequences of that? Jacob? Of giving up faith and hope in that dream?

Hacker: The fact is that for most middle-class and working-class Americans the politics seems increasingly removed from their everyday experience and their life. And there is a current of distrust and anger toward Washington is that is so deep right now.

Hacker: That is one of the big changes that occurs over this period. Money becomes more important for campaigns and it also becomes much more important in terms of lobbying, which in some ways is the more important way that money changed American politics. It’s really the development of lobbying over this this last 25, 30 years that stands out as the most dramatic role of money in American politics.

In the mid-20th century we saw a period in which income gains were broadly distributed, in which middle-class Americans had voice through labor unions, through civic organizations and through, ultimately, their government. We’ve seen an erosion of that world, but just because it’s lost ground doesn’t mean it can’t be saved.

—Jacob Hacker

We tell the story in the book of the Tax Reform Act of 1986, because this was one of these great examples when the lobbyists were overcome. You know, the Gucci Gulch right outside the Senate chamber, where the well-heeled lobbyists attend to members of Congress. Well, Gucci Gulch was a place of, not of celebration, but of despair after 1986 because all these tax loopholes were closed, rates were brought down in a way that was actually making the tax code more equitable. And that was considered to be a big step forward for the public interest.

Well, a few years later lobbyists had written a lot of these loopholes back into the tax code. Ten years later, you know, you could hardly see any traces of the 1986 Tax Reform Act. Almost all of the good-government public-interest reforms that were put into the tax code in 1986 overcoming the lobbyists have been put back in, have been overwhelmed by the day-in, day-out lobbying to get those tax provisions right back into place.

Moyers: Quite a cycle, I mean, if you’re creating a winner-take-all economy the winners have more money to contribute to the politicians, who turn it into a winner-take-all politics. I mean, it just keeps —

Pierson: Right. It is the story that we try to tell in this book that there has been a 30-year war in which the sound of the voice of ordinary Americans has been quieter and quieter in American politics and the voice of business and the wealthy has been louder and louder. Many people, I think, read this book and think it’s a pessimistic book, that it’s grim reading and there are ways in which that’s true.

But Jacob and I genuinely believe that it’s an optimistic story compared with the story that we’re typically told about what’s been happening to the American economy. Because what we’re typically told is there’s nothing you can do about this, that it’s just an economic reality, there’s no point in blaming any political party.

And I think the main punch line of our story and the optimistic message is that politics got us into this mess and therefore potentially politics can get us out of it.

Moyers: But if both political parties are indebted to the winners where do the losers find an army to join?

Hacker: When citizens are organized and when they press their claims forcefully, when there are reformist leaders within government and outside it who work on their behalf, then we do see reform. This is the story of the American democratic experiment of wave after wave of reform leading to a much broader franchise, to a much broader understanding of the American idea.

In the mid-20th century we saw a period in which income gains were broadly distributed, in which middle-class Americans had voice through labor unions, through civic organizations and through, ultimately, their government. We’ve seen an erosion of that world, but just because it’s lost ground doesn’t mean it can’t be saved. And so in writing this book we were hoping to sort of tell Americans that what was valuable in the past could be a part of our future.

Moyers: Jacob Hacker and Paul Pierson, thank you.

Pierson: Thank you so much.

Hacker: Thank you.

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