Has the Washington establishment failed the world
[Music]
[Music]
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