Has the Washington establishment failed the world

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the first time i came to washington

from the glorious place that i grew up

which was new jersey which

thank you thank you um everybody has

that jersey

envy um uh

we came down and i i don’t remember a

lot about it but i do remember that one

night we went to

dinner at a restaurant called blackie’s

steakhouse do any of you remember black

estega

i may not be the oldest one in the room

it closed i think about uh 14 years ago

something like that but we went there

because my dad said well you know

presidents go here and maybe you’ll see

somebody j

edgar hoover goes here with his

boyfriend it’s really cool

and and so you know they thought i was

going to be mesmerized by that but what

i was really mesmerized by was that

there was a

teletype machine in the lobby and it

just it did the wire services and it

just you know you could stand in front

of it news stories would come you know

from everywhere in the world

and i had a pretty dark imagination and

so i kind of thought well if i stand in

front of this

i will be the first one to know when the

russians attack us

you know i didn’t really recognize

that the russian attack would take a

long time to come and when it did

it would be in the form of tweets and a

reality star

but something clicked in me and i

thought this is the place i want to be i

want to be in washington there’s so much

going on here that’s exciting this is

the center of power

and so i did the things that you do to

go and become a washington insider you

know i

went to the right kind of schools and i

studied history and those kind of things

and the very first job i got

was as the press secretary to a

congressman a guy named steven solars of

brooklyn

even even more glorious than new jersey

a really

a good guy and i i came down here and i

got to know

the system a little bit and then i went

back to new york and i worked in media

and i worked on wall street

all those things that sort of feed the

path in washington i came back

i was a senior official in the clinton

administration i was

deputy under secretary of commerce for

international trade policy development

where i learned that the longer your

title the less power you have in the

government

and then for about half a year i was

acting under secretary for international

trade

and then i did all those other things

that you do if you’re gonna be in the

washington establishment i

taught at georgetown i taught at

columbia i wrote books i was the

managing director of

kissinger associates i founded a

consultancy i then ran foreign policy

magazine

and so you know i was rewarded in the

way that you are rewarded

uh when you come here to washington and

i got my own table

at the four seasons breakfast restaurant

um

and so they would say mr roskoff let me

show you to your table and that’s

kind of as glorious as it got for me um

here in washington of course now you

know like everybody else i have a

podcast i

am they’re like 400 of you and i’m sure

they’re 300

podcasts um but uh

good good luck to you all uh uh

the the the reality though

is that now as i look back on it on a

more serious note

having made my way through that and i

came here in 1979 so it’s 40 years

i’m ashamed i’m ashamed

to be a member of the washington

establishment

i believe the past 40 years will go down

in history

as 40 years in which the united states

of america

lost its way and in which it was

led in this

dangerous journey by the washington

establishment

and i don’t say that in a partisan way

um i was a member of the clinton

administration i’m a democrat

uh but i also worked for henry kissinger

i’m a

uh you know wanted to be a centrist you

know because i thought everybody would

like me because i was a centrist you

know who would

as it turns out everybody hates you

because you’re a centrist

but the reality is um

i i think we had it wrong as a centrist

too

because what started to happen shortly

after i got to washington

is that we lost track of the things that

was

that were making america great we had

this vision of ourselves we came out of

world war ii

half of all world trade went through the

united states uh we were booming

uh inequality was far falling social

mobility was rising 90

of the people born in the 1940s uh

ended up earning more money than their

parents 70

of the people born in that decade ended

up having more education than their

parents

so there was economic mobility there was

social mobility income inequality

hit lowest levels in history in 1957 and

1967

particularly income inequality in the

united states was at the lowest level

that there was

so there was leadership there was

economic growth

there was prosperity but it benefited

everybody people at the bottom benefited

people at the top benefited

when there was top line growth it passed

on in wages

this was the model and we started to

take it for granted

and then in the 1980s something changed

and in that era you can call it the

onset of corporate capitalism the onset

of gordon gekko capitalism

uh what happened was we started to

change in our values we we first changed

by looking at different metrics you know

we said well

if gdp is going up and the stock market

is going up and the bond market is going

up and the wealthiest people are getting

well

then everybody else will benefit that

was trickle down economics of course

we’ve subsequently learned it doesn’t

work you know that’s that was that was

a myth but in

pursuing that myth we started to put

into place

laws and policies that benefited the few

to the expense of the many we put into

place

tax cuts that benefited the few at the

expense of the many

we passed laws that benefited the few at

the expense of the many

and when the clinton administration came

around

you know we thought well you know we’ll

we’ll fix some of this stuff but we also

said we’re going to be centrists and

we’re going to take the third way

and i have to be honest with you in

retrospect

that third way was a bit of a sellout

essentially what it was was saying we

will win

by being a little bit like reagan we

will win by

embracing a little bit of reaganomics

and when you look at it

it wasn’t just that we

proposed certain kinds of policies i for

example was involved in the advocacy of

free trade

and as i sit and look back on it now you

know we said well rising tide lifts all

boats

without a heck of a lot of evidence that

it did and without any concern for the

disruptions that might be caused when

that rising tide swamped

other boats you know when the clinton

administration got elected

we looked at things like welfare reform

and that seemed

you know sound and sensible but it was

also a dog whistle wasn’t it

welfare reform was also a way of of

saying we are

we are going to be a little bit tougher

on the poorest and on minorities and

although i don’t think that was in the

heart of bill clinton

i do think that was how we won power

and bill clinton also put into place

economic officials bob rubin larry

summers other economic officials

who danced essentially to the music of

wall street

we looked at macro economic indicators

we looked at top line indicators where

and we said well if the stock market’s

doing well the bond market’s doing well

the gdp is growing then things are going

to be fine but we also put into place

new laws there there was a

a decision to allow hedge funds and

others to

not pay taxes on their carried interest

there was

the repeal of the glass-steagall

provisions which

kept banks from growing too large out of

size

and these kinds of things then continued

with george w

bush’s administration and dick cheney

and a bunch of energy cronies setting

energy policy or

the military-industrial complex driving

us into

um oil wars and you know don’t you know

look at military-industrial complex as a

kind of a radical term right that’s an

eisenhower term from 1960. that’s not

some

wacky socialist term but that’s what led

us into wars that cost

three trillion dollars but some people

benefited from those wars

and the tax changes took place and

deregulation took place and

the obama administration came in and i

think the obama administration may be

the most liberal administration

of the past 50 years but barack obama

took more money

from wall street than any presidential

candidate

in history and when wall street reforms

were seen after 2009 through dodd-frank

they were not implemented the agencies

that needed computers were not even

given the computers that they needed

and right now when you look at it we’re

right back in exactly the same situation

with

bad debt and too big to fail

institutions 10 years later

and that’s because of things that

happened back

then and along the way there are other

kinds of acts that you don’t know in the

reagan administration there was the

elimination of the fairness doctrine

which ultimately led us

into the world of competing information

bubbles that were in or there was the

telecom act of 1996

which essentially said to dot-com

companies you can be a media company

without having the responsibilities of

being a media company

and there were um uh laws that were

passed or approved by the the uh the

congress or

um decisions made by the supreme court

citizens united is one that comes to

mind

where um the supreme court essentially

said that money is speech

and that meant that you couldn’t

regulate the amount of money going into

politics well who does that benefit it

benefits people with money it says

if money is speech the people with more

money have more speech

and you know i can go on and on with the

list of these things

um and i’ll be happy to meet you later

if you want another hour or two of this

but but i’m sure you look forward to

that

but um but but you know when you

look at them there are consequences and

the consequences are that the united

states economy is broken now

the united states society is broken

now inequality is at the worst levels

since before 1929 before the crash

the top 0.1 percent of the population

the top one percent of the population

make the same percentage of of wealth

and income that they made

before then three people bill gates

warren buffett

and jeff bezos have a net worth

equivalent to the bottom

50 percent of the population the top

five percent of the population has a net

worth equivalent

to the bottom two-thirds of the

population

and income mobility and educational

mobility have fallen whereas

in the 40s 90 percent of people thought

that they would and ended up making more

than their parents

now it’s 40 or 50 percent uh in the 40s

where

um something like 70 percent ended up

with a better education than their

parents

now it’s 40 um the bottom

fifth stay in the bottom fifth when they

rank the top 10 economies in the world

in terms of income mobility we the place

of the american dream ranked at the

bottom

with the united kingdom and by the way

if you are born into the top fifth

you tend to stay in the top fifth uh the

odds are much better in your favor

in fact the best indicator of how you

will do in getting into a college

is your zip code uh in other words it’s

the place that you are from and it’s

worse if you’re in a minority

the average the median net worth of a

white family in america is 147 thousand

dollars

the medium net worth of a black family

in america is thirty five hundred

dollars

it’s a little more than that for a

latino family but it’s still

one twenty second of what it is for a

white family

so if you’re black or you’re latino or

you’re poor in general or you are a

woman in our society

you are doing worse and according to a

recent brookings institution study

you are stuck it is not changing

and you know i have to say this you know

we can look at this and we can talk

about it like it’s the weather

but it’s not the weather it’s a choice

it’s a choice that all of us

are making as a country it’s a choice

that the establishment has made in the

united states

and they made the choice because it was

in their self-interest because they said

i will get rich doing this

or i will have the money i need to run

for office doing this

you can’t run for president unless you

have a billion dollars behind you

well you can’t get a billion dollars

unless you’ve got rich people behind you

and so the money primary is all of a

sudden more important than any of the

other primaries that take place

later on uh you know how it works on

capitol hill

with funding and now you’ve got you know

the kind of

apotheosis of this or maybe we call it

the nadir of this

where not only do you have the

government working for the one percent

with a tax cut for the one percent that

didn’t benefit

anybody else but you’ve actually got the

president not just working for the one

percent but for himself and for his

family

you know so that he is you know selling

white house memorabilia

and he is doing deals with countries in

terms of foreign policy that he would do

deals with in terms of real estate

and you may say that’s anathema to me

that’s terrible

but that’s 40 years of history we have

been

led to this he is a symptom he is not a

leader he couldn’t conceivably be a

leader under

any definition of the word um

but

but you have to ask yourself what do we

do about it you know and

and i remember when i went there to

blackies we also then went the next

next day to the national archive and i

tend to you know when i look at things

like this my reaction is

go back to the basics what’s the social

contract is the social contract in

america

to make america the wealthiest country

in the world to create wealth is that

why we’ve come together

as a society um you know is that the

metric we use because the metrics that

we use

uh like gdp which by the way when it was

created

in the commerce department uh by kuznets

in the 1930s he said don’t use this as

an indicator

of economic health you know but we all

as a country we sort of treated that

like one of those tags on a mattress we

tore it off we said forget that

we’re gonna we’re gonna use that but you

know if you use gdp

as a metric it can be great for

corporations it can be great for rich

people and it can be really bad for

everybody else in fact

there are some incentives for it to be

really bad for everybody else so

what’s the social contract and i went i

looked the declaration of independence

there are 22 words in the declaration of

independence that actually speak to it

it’s more of a political document but of

course you know them and you know that

at the end they say we are endowed by

our creator with certain inalienable

rights and among these are life liberty

and the pursuit of happiness the

constitution by the way also goes all

the way up to 22 words devoted to this

but it gives us sort of five areas

including the public welfare

uh tranquility uh security and so forth

that we are coming together to create

well that may not be

um enough but i found that if you go

back a little bit further

back beyond the declaration back beyond

the constitution

to the words that inspired them both of

john locke

uh who wrote during the glorious

revolution in england in the 17th

century

and he wrote about life liberty and

property and there’s been a lot of

discussion about that

but at the second half of the paragraph

in which he wrote about that

he then said once your own security is

taken care of

you then should look after the security

of others once your own security is

taken care of

you then should help those in need and

you should never act

in a way that infringes on the health

or life and limb or liberty of other

people in your society in other words

the reason we are in this is to help

one another it’s not to be the richest

the reason we are in this is to work

together

as a society to improve the quality of

life

for everybody and there are people

seeking metrics that are better examples

of this whether it’s bhutan and it’s

gross national happiness or it’s

economists like joe stiglitz

who’ve been working on this for a while

there are ways to say

yes we are going to look at how we

improve quality of life in the united

states

and we are going to take money out of

politics and we are going to

tax people in a way that is

proportionate to their wealth and we are

going to tax corporations

in a way that’s proportionate to their

health and you might think oh my god

socialist socialists alexandria

ocasio-cortez

um you know um

you know but but of course the marginal

tax rate

when the marginal tax rate was 90 that

was dwight eisenhower

you know that not exactly socialist and

when general lucius clay

led the us forces in europe

restructuring the german economy which

became one of those wacky

socialist economies it was the u.s army

that said to the germans

you must have labor unions uh on the

board of your company

general lucius clay did that so having

fair tax rates or having responsive

governance systems in businesses is not

something

that is radical it’s something that’s

american

it’s something that’s traditional it’s

something that goes back to eisenhower

or general lucius clay

or franklin roosevelt or the declaration

of independence

or john locke it’s it’s a radical idea

in the history of society

um but it’s not radical in the united

states it’s just that we have

drifted as a society towards greed

and drifted away from purpose

and what and

what i want to say today is enough

my generation those of you who remember

blackie’s steakhouse

it’s time to get off the stage we have

we have contributed we can kibbits from

the wings

but it is time for new people who

recognize

the nature of our changing society who

see how technology is changing jobs who

see how technology is changing

productivity and who are not tainted

by this broken system to get back to the

business

that was mandated as our mission

in the 17th century and in the 18th

century

and when america had a generation we

called the greatest generation

thank you very much