Original subtitles

[Robert Reich] In 1964, I got a job on a radio station.

They needed somebody from midnight to, it must have been, 4:00 or 6:00 a.m.

The station policy was you can only play the same Top 10 songs,

over and over and over again.

I just... I was so bored, that I... I...

I announced on the air,

"If anybody's listening to this program

and would like to engage in a little bit of a banter,

just a little discussion - not much, just 30 seconds -

it would be great.

And I'll give you 25 bucks, the first person who calls in."

This was before talk radio, by the way.

And nobody called in.

I upped it to $50.

Nobody called in.

I got up to $100.

Not a soul called in.

And I had a feeling...

of what so many people have felt,

and continued to feel for years,

of desperately wanting to be heard...

and nobody is listening.

[all chant] The whole world is watching!

[shouts] Protect who you serve!

You work for us!

Work hard - we have!

[Reich] There's a huge amount of anger and frustration in the United States.

It's been growing for years.

People are worried about their jobs, they're worried about their wages.

They feel like they don't have a voice in deciding anything

that pertains to them,

politically or economically.

I pick this up everywhere I go.

Americans all over the country are asking...

[applause]

"How can we make our voices heard?"

[indistinct conversation]

[cheering]

Well, thank you.

[loud applause]

The name of the book is Saving Capitalism.

I've got two kinds of reactions just to the title.

"Saving Capitalism? Wait a minute.

That implies that there's something wrong with capitalism."

How are you paying for this?

There are others who say...

"Why would you want to save capitalism?"

[laughter]

[announcer] Robert Reich, Professor of Public Policy at UC Berkeley

and former Secretary of Labor under President Clinton.

[Geist] You've captured this moment

in American culture and politics very well in this book.

It's Saving Capitalism: For the Many, Not the Few.

[Mike Barnacle] We've got 20 seconds. Can you...?

[Reich] I thought we'd have more time than that.

[laughter]

Can you define the aspirations of the middle class today,

as opposed to 30 years ago?

I think the aspiration of the middle class today

is almost exactly what it was 30 years ago.

That is: "Let's have a better life."

"If I'm working hard, I want my children to have a better life."

Upward mobility is what people expect from this system, but they aren't getting it.

Most Americans now have severe doubts about the system.

They think the system is rigged.

The real issue is, is the system working for most people,

or is it working for a very small group,

becoming smaller and smaller at the top?

Robert Reich, thank you very much for being with us.

Former Labor Secretary under President Clinton...

These days, a lot of people certainly know the game is rigged.

They hear that, they feel it.

But they don't know exactly how it's rigged.

[Reich] I wanted to go to where people didn't really know me, my books...

I wanted to go to places where I could actually interact.

I didn't expect to sell many books, but I did hope to learn something.

[Yuja] You found us.

-[Reich] Hi, Yuja. -[Yuja] Welcome.

-[Reich] Nice to see you. -[Yuja] So great to finally meet you.

Look who we found.

-Morning! -Reverend Sandoval.

-Welcome to Kansas City. -Reverend.

-Thank you. -Claudia Nelson.

Hi, Claudia.

-You're Chair of the Board? -I'm the Chair.

I am a part of this work because of my family and my community.

My youngest son, Paul,

is married and has four little children.

He's worked all of his life.

But unlike when I started to work as a young person,

he seems to find jobs that don't have a livable wage.

They're not full-time jobs.

He works 60 hours-plus a week to take care of his wife and four kids,

and still struggles a lot,

even to the point that he's had to move back in my house

with his family of six at one point,

because they continued to struggle.

His wife has $100,000 in debt in student loans.

She has a Master's degree. She has no job.

It is not an uncommon story in our community.

Unfortunately, Claudia, I'm hearing it all the time.

And it's...

It's a story that affects huge numbers of Americans.

A lot of these things that we're talking about, to me,

is all a spin-off...

of...

an economy that has been immoral

from its inception.

It was not designed to include everyone...

in a fair way,

in the sense of access.

How do you reform something that's immoral...

at its core?

There's nothing inherent in an economic system

that makes it either immoral or moral, or good or bad.

It depends on how it's organized.

And if it's organized for people,

then it can be a good and moral system.

[Reich] Our American economic system -

capitalism -

is a system based on private property

and a free exchange of goods and services.

One of America's greatest strengths is our free market.

Let the free market system decide.

We all believe in the free market.

You know, that's...

That's what our capitalist system is about.

The law of supply and demand operating unimpeded by government.

Government is not the solution to our problem,

government is the problem.

Few ideas have more profoundly poisoned the minds of so many

as the notion of a free market

existing somewhere in the universe...

into which the government intrudes.

There's no such thing as a free market

without government making the rules of the game.

What kind of rules?

Rules governing property.

Monopoly.

Contracts.

Bankruptcy.

And enforcement.

Let's take property.

Until the 1860s,

human beings were lawful property in the United States.

It took years of activism and a civil war,

but Americans finally made slavery illegal.

We'll take bankruptcy.

If you're a big business,

you can declare bankruptcy over and over again

to protect your assets.

But if you're a student,

you can't reorganize your debt in bankruptcy.

Or if you're a homeowner who's under water because the market has collapsed,

you can't use bankruptcy.

It's illegal.

These rules don't come from nature.

They reflect the interests of those with the most power.

Which means they change over time.

[cheering]

[cheering continues]

In the name of all those who do the work,

pay the taxes,

raise the kids and play by the rules...

In the name of the hard-working Americans who make up our forgotten middle class,

I proudly accept your nomination

for President of the United States.

[loud cheering]

[Reich] Just about 50 years ago,

I met Bill Clinton.

I had already met Hillary Rodham.

She was an undergraduate at Wellesley.

I had been president of my class at Dartmouth.

We were both involved in student government.

So I knew her and I knew Bill. And I...

Even the first day of Yale Law School,

I was sitting in the cafeteria talking to Bill Clinton,

and Hillary came up and she said, "Bob, how are you?"

I said, "Great, Hillary.

I want to introduce to you my friend from Oxford.

We were just at Oxford together. Bill Clinton."

She said, "Hi, Bill."

And he said, "Hi, Hillary."

[Reich] And then, 25 years ago,

Bill Clinton called me.

He wanted me to be his Secretary of Labor.

I was excited,

because maybe we could actually make some real, real progress.

You had this pent-up demand in the country

for something that is very, very different,

that has a different vision.

We wanted to create the possibilities

for people who were not really yet participating in the economy.

Because it was building the future of the country.

It was building the capacity of the country to not only grow,

but to bring everybody along in that growth.

[loud cheering]

We were young.

We were the new generation. We were the boomers.

I was gonna go down

and try to help him figure out what to do about the economy.

In Focus this evening, the shrinkage in America's middle class.

Even though the economy is now growing,

many of the jobs it is creating pay poverty wages.

[reporter] President Clinton has been promising wages would rise.

But, at the Labor Department,

Secretary Robert Reich sees the number of working poor growing.

More and more of the nation's income and wealth were going to the top.

People in the middle - the middle class -

were under greater and greater stress.

The poor were not doing well at all.

I thought we could actually reverse that direction.

I spent a lot of time all over America,

and what I got back from people was a lot of the skepticism and cynicism

and the beginnings of the anger

that has really emerged full force in 2016.

It was just beginning then.

[Tim] A pleasure to introduce Secretary Reich to the Show Me state,

and to mid-Missouri.

Thank you for being here.

As Tim said...

I'm...

This started out as a book tour.

You know? I've done a lot of books.

I've written a lot of books.

I've tried to help people understand what's really going on.

I don't want to just go out to book stores.

I really want to talk to people about their lives.

[cow moos loudly]

Yes, that's true!

[laughter]

[Reich] That's great.

My name is Darvin Bentlage and I'm a farmer.

And...

There are other names they use for me, but...

I just mainly go by "farmer" and "cattle man."

The family farm has been around for 80 years.

You're kind of raised into it, you know?

I jumped on my first tractor when I was ten years old.

I could barely reach the pedals.

It's a lot of hard work.

Our margin of profits are way down, you know?

Farm income this year has been predicted to drop 50%.

Well, excuse me. Nothing I buy has dropped 50%.

I don't think anything in the grocery store has dropped 50%.

I have a son who would kind of like to come back on the farm.

There's nothing that I would want more than to sell my home and move down here.

The fiscal part of it is pretty rough.

What kind of profit margins are you pulling in a year?

Oh, the profit margins, yeah.

It varies, but...

The total deal, you know... I make around...

Um...

The year before was like $320,000.

-You spent... -[Darvin] $300.

$300, so, in my mind,

your profit margin...

would have been $20,000.

Correct?

Yeah.

There is a vicious cycle that has set in.

The American economy today

is almost twice as large as it was in 1980.

But the median wage has gone nowhere.

If fact, if anything, most Americans' wages,

adjusted for inflation, have declined.

So where did all the money go? It went upward.

In 2014, corporate profits before taxes

reached their highest share of the total economy

in at least 85 years.

Meanwhile, the percentage of the economy going to people's wages

has dropped dramatically.

Hidden inside the rules of the market, money flows upwards -

out of the pockets of average Americans,

and into the profits of major industries,

executives

and shareholders.

The vicious cycle is that, as income and wealth go to the top,

so does political power.

And here is where it gets interesting,

because as political power goes to the top,

the top has more and more ability

to influence the rules of the game.

[Reich] I began my political education

when I went to Washington in 1967

as an intern for Robert F. Kennedy.

Being in Washington was thrilling.

People in the bottom 20% were getting ahead.

In 1964,

when our large and growing middle class was the envy of the world,

roughly 77% of Americans said they trusted government

to do the right thing.

That's compared to 20% today.

Washington itself was kind of seedy in those days.

There wasn't much money flowing into Washington.

The business community was just beginning to come to Washington

and set up shop.

It was just... just starting.

In the late 1970s,

I got a job as Director of Policy Planning for the Federal Trade Commission.

While I was there, we came out with a proposed rule

that would ban advertising directed at children,

with regard to unhealthy, sugary products.

The Federal Trade Commission votes today on recommendations by its staff

that would put tight new restrictions on TV commercials aimed at children.

[reporter #2] Advertisers are spending hundreds of thousands of dollars

fighting the consumer groups and the FTC staff proposals.

The makers of sugared cereals, candy, and toys are fighting back.

You would have thought we had declared World War Three,

because the business community was so upset.

I began to see businesses and business associations

begin to get more and more power in Washington,

more and more power over...

the legislative process.

They closed the Federal Trade Commission because of that rule.

[reporter #3] At the Consumer Complaints Office, yesterday's mail was unopened.

Hearings with food companies were suspended.

A laboratory machine that smokes 500 cigarettes a day

to monitor tar and nicotine content of the different brands got a break.

It didn't have to smoke.

[Reich] What I discovered is that big corporations, Wall Street,

very, very wealthy individuals,

they could actually change laws and regulations

to favor them,

and to hurt others...

that that process was almost invisible.

It happened inside the administrative agencies,

inside legislatures.

But the net effect of all of it

was to, very subtly, change the rules of the game.

What I had witnessed had been quietly launched in 1971.

The Chamber of Commerce,

a powerful business lobbying group,

asked a corporate lawyer named Lewis Powell

to write a position paper.

Known as The Powell Memo,

his paper rapidly circulated among national business leaders.

"The American economic system," he said,

"is under broad attack."

Business must learn "the lesson that political power is necessary,

that such power must be assiduously cultivated,

and that when necessary,

it must be used aggressively and with determination,

without embarrassment,

and without reluctance."

His memo tuned into a manifesto

for new business-oriented think tanks,

lobbying groups,

trade associations,

and professional organizations

committed to shaping the government to better meet their needs.

The vicious cycle was in full swing.

[general chatter]

First, let me ask, how do you like to be called?

How should we call you?

-Your Excellency. -Yeah.

[man] Bob.

No, call me Bob.

Can we go around the table?

-Maybe... -...introduce yourselves.

Yes, introduce yourselves.

My name is Woody Cozad. I used to be a lawyer.

Now, I'm a lobbyist.

And,

as one of my...

fellow right-wing friends said to me, I...

I'm like a doctor who specializes in the diseases of the very rich.

And so...

[laughter]

I try to represent people who can pay my bills.

So I'm one of those evil guys manipulating the rules and changing them.

What are you…? Don't be defensive.

[Cozard] I'm not defensive!

I'm very proud of my job.

You're doing a job and a job has to be done.

I'm Crosby Kemper, the Director of the Kansas City Public Library.

And I was a Republican candidate for the state legislature in 1980.

And I referred to myself then as I refer to myself now, as a Libertarian.

I have been a very moderate Republican

and, actually, have helped a few Democrats.

So...

I was happy that Crosby invited me.

Thank you.

You know what I would like to do? If you don't mind...

Please.

I would like to put party labels aside and not talk Democrats and Republicans,

just for a little while.

Because I really want to talk about

how you view...

politics, the economy, your values.

You try... You...

You want to dismiss the argument about government versus the market.

I'm just talking about government.

And people who operate that government

will do so in their own self-interests.

And that's what the constitution was designed to limit.

And so the government should be limited.

I was a regulator.

I was at the Federal Trade Commission.

We would come up with simple rules.

And then the lobbyists...

-[man] Right. -...would attack.

They would say,

"You have got to give this little...

Make this exception and this exception and this exception."

And then...

Congress would start calling and they'd say,

"Our business constituents want this exception."

It's not either market or government.

It is power that is misused.

Let's talk about power.

Let's talk about my two clients who started a company 20 years ago

and are now billionaires.

They employ 9,000 people,

they pay hundreds of millions of dollars in taxes,

they pay high wages -

it's a high-tech company, with value added, generous benefits.

And yet they're held up

to scorn, hatred, ridicule and contempt

because they've added to income inequality,

added to the concentration of wealth,

added to disparity...

-[Reich] I... -Why are they scapegoats? They're doing...

They are enacting the American dream. One of them is an immigrant.

Let's agree that there should not be any scapegoats,

and there's nobody evil here.

Let's also agree that there's a problem.

I mean, I actually really like you.

And I didn't expect to.

But you have vilified everything I've worked for all my life.

I've had four very successful small businesses.

I grew up poor in Springfield, Missouri.

Student loans, worked my ass off,

employed...

I probably created 200 jobs.

OK, it's not a lot. I'm not the Koch brothers.

But I worked my ass off.

But you made me feel badly about what I've done for America.

My theory is work. Take care of yourself.

Accept responsibility for yourself, regardless of what life throws at you.

Yes, we've made it. There's no question we've made it.

My husband and I pinch each other every day

that we get to live in this lovely community.

We're able to put his kids through college.

But I think the opportunity

for employment

has become very complicated.

Today, it's hard for people to really make ends meet.

I don't feel like being 20 today

is gonna be as easy as it was when I was 20.

It's just a different time.

It's a very, very different time.

[Guadalupe] I've been working at McDonald's for four years.

I work at the drive-through window.

I get paid $12.50...

$12.55 per hour.

I make about $1,200 a month.

$900 goes straight to rent.

And I have to pay for gas

and then my phone bill.

I end up with nothing.

We barely, barely make it.

[speaking Spanish]

[Guadalupe] Those big corporations can pay us more.

They have the money.

Me, as a cashier at my job,

I know how much money goes in there, OK?

And that is only in a few hours.

They're open 24/7.

I sometimes have to go for the payday loan

and get a loan on my paycheck,

in order to make it on time and not get any late fees,

and try to make ends meet.

[Reich] Nobody…

Nobody should be working full-time and not making it.

Nobody in our society, the richest...

country, the richest nation in the history of the world...

should feel as...

frightened and anxious and as insecure as so many people do today.

The reality is that our system can reflect our values.

Capitalism is what we make of it.

Either the rules are going to expand opportunity

and widen the circle of prosperity,

or they're going to narrow opportunity.

[MC] The Secretary of Labor, Robert Reich.

The Secretary of the Treasury, Robert Rubin.

And the President of the United States.

[applause]

I don't know whether Bill Clinton organized his economic team

so that people like me would

have a good chance to make our case,

but we'd lose a lot of our...

a lot of the fights.

What I do know is that it was a tough slog.

[Clinton] ...to make economic policy...

I was fighting very hard for maintaining

the original goals of that campaign.

We wanted to do away with some of the tax subsidies

the federal government was giving corporations,

that left average people picking up the tab.

[applause]

The president had pledged to end the tax break for CEO pay.

The average CEO at a major American corporation,

according to a recent Senate hearing,

is paid about 100 times as much as the average worker.

And our government today rewards that excess

with a tax break for executive pay, no matter how high it is.

That's wrong.

If companies want to overpay executives and underinvest in their future,

that's their business.

But they shouldn't get special treatment from Uncle Sam.

[applause]

[Reich] There were voices, particularly in the Treasury,

who wanted a very different rule.

Bob Rubin had been the CEO of a big Wall Street bank,

and then became the Secretary of the Treasury.

He viewed the economy

and viewed America through the eyes of Wall Street.

And I remember the meeting with Rubin.

He said, "Well, why don't we make it that

you can't deduct CEO pay in excess of $1 million,

unless it's related to corporate performance?"

I said, "Wait a minute. Wait. Wait.

This has nothing to do with corporate performance.

It's to do with excessive CEO pay relative to the pay of average people.

We're not talking corporate performance. We're talking about widening inequality."

Well, I lost that one.

And because of this tax loophole,

CEO pay skyrocketed in the form of stock bonuses.

And this subsidy for executive pay

was just one example of thousands of subsidies and tax breaks

that go to corporations.

The top five oil companies receive a combined $4 billion

in tax breaks each year.

Google receives $632 million

in government subsidies

to build data centers.

And the United States

Department of Agriculture

spends $20 billion every year

on subsidies that go mostly

to the largest producers.

These subsidies are costing taxpayers

tens of billions of dollars every year.

Some estimates put it at over 100 billion.

That's more than the cost to fund the entire Department of Education.

We have a huge system now of corporate welfare -

aid for dependent corporations,

subsidies and tax breaks that have no economic justification at all,

that are there because individual corporations

or specific industries have lobbied to get them.

It's in the tax code.

It's in appropriation bills.

It's in our trade laws.

Wherever you look, you find corporate welfare.

I began to feel, in myself, some anger...

towards people I knew in the administration

with a lot of power.

Not anger at them, personally, because they were nice people.

I enjoyed them.

But anger at not only what they represented,

but the narrowness of their view.

It was as if Washington was an island

that was separate from the rest of the country.

The voices of average citizens

had disappeared -

all but disappeared.

Another member of the Clinton administration announced today

that he's dropping out of the game entirely.

Labor Secretary Robert Reich,

who's been a central player on the President's domestic policy team,

is returning to Massachusetts to spend more time with his family.

My friends, we are on the way to becoming a two-tiered society...

composed of a few winners...

and a larger group of Americans left behind,

whose anger and whose disillusionment

is easily manipulated.

Once unbottled,

mass resentment

can poison the very fabric of society,

the moral integrity of a society,

replacing ambition with envy,

replacing tolerance with hate.

Today, the targets of that rage

are immigrants,

and welfare mothers,

and government officials,

and gays,

and an ill-defined counterculture.

But as the middle class continues to erode,

who will be the targets tomorrow?

[Reich] You can see the cumulative effect of all of this over time.

Wealth creating political power,

creating changes in the rules that enhance wealth.

It's not sustainable. It's getting worse and worse and worse.

[Brian Williams] Big trouble for millions of American homeowners,

as foreclosures across the country

are up a staggering 87%.

The number of Americans either behind on their mortgage payments

or in foreclosure

rose to record levels in the third quarter.

Those mortgages made to borrowers

with poor credit histories

are called sub-prime loans.

And the explosive growth in this kind of lending in the past few years

is now having a devastating impact.

We are briefly interrupting regular programming

with the latest on a wild day today on Wall Street

in which the stock market officially crashed.

[newscaster] Now, three of the top five Wall Street institutions are gone,

leaving many to wonder whether Americans can trust the system

to keep their money safe.

So, what happened in the 2000s?

Well, Wall Street went amok.

I mean, completely crazy.

They're gambling with people's deposits.

They're... They're gambling with the entire economy.

These are not aberrations. This is not an accident.

Since the Reagan administration,

there's been a systematic changing of the rules of our financial system -

always billed as deregulation

that would get government out of our free market.

Government, with its high taxes, excessive spending,

and over-regulation,

has thrown a wrench in the works of our free markets.

[Reich] Then in 1998,

Wall Street devised new complex financial instruments

to maximize their profits,

known as "derivatives".

Despite warnings, these went unregulated.

[interviewer] What are you trying to protect?

We're trying to protect the money of the American public,

which is at risk in these markets.

[Reich] And then, in 1999,

Clinton did away with the Glass-Steagall Act.

We're here today to repeal Glass-Steagall

because we've learned that government is not the answer.

We have learned that freedom and competition are the answers.

[Reich] The Glass-Steagall Act was a 1930s law

designed to protect people's savings

from being used by Wall Street speculators.

But now, with no laws in place

to keep risky investment banks from merging with commercial banks,

or controlled derivatives,

we ushered in too-big-to-fail mega banks,

that led to the stock market crash.

[camera shutters clicking]

There's this fiction that somehow you have

regulation or deregulation.

You don't have regulation or deregulation.

The question is, what regulation do you have?

You allowed commercial and investment banks to get together

and then what happened is you have a new kind of regulation.

It's called "bailouts".

Good evening and even congratulations.

You are now the proud owner of a massive insurance company.

American taxpayers woke up this morning

to learn their money makes up most of a bailout package

the Federal Reserve slammed together

to save a huge insurance conglomerate called "AIG".

[newscaster #2] The rescue of Bear Stearns, Fannie Mae,

Freddie Mac and AIG

puts an extra $314 billion of taxpayer money at risk.

[Savannah Guthrie] The administration and Congress are hammering out the details

for what would be the largest financial bailout in US history.

This is a big package, because it was a big problem.

We're not getting rid of government. That's the point.

Government will still be involved.

The question is, how is government going to be involved?

Is government going to be involved

in terms of keeping banks relatively small and tame,

or is government going to be involved in dealing with the consequences,

from homeowners and everybody else sweeping up the mess?

In other words, it's not government versus no government.

It's...

what are the government rules going to be?

[Victoria Dzorka] I received my diagnosis

in January of this year.

After receiving an infection abroad, I came home and was treated for that.

And while in the hospital, they discovered that I had cancer.

I have a couple of different medications for nausea.

There are two specific ones that I take on days two and three after chemo.

I get a steroid when I'm in the hospital to get me through the treatment,

an antibiotic,

and another that helps me sleep,

because I get kind of a weird vertigo

during a certain point of my treatment cycle.

Even with the insurance provider that I have,

I was informed that they no longer cover chemo drugs fully.

And so we were told by a medical social worker

that we could potentially receive a bill for thousands of dollars.

With the four drugs that I take for chemotherapy,

the total comes out to about $3,000 a month,

per treatment.

So, for me, that's about three months of income...

[chuckles]

just for...

Just for one round of treatment.

What is the alternative to receiving your chemotherapy drugs?

There isn't one.

So whatever the cost is, you have to pay it.

You and I and everybody else in this country,

pays more for pharmaceuticals...

than any citizens of any advanced nation.

Why is it that we pay so much?

It has to do with the way in which pharmaceutical companies

have got laws and rules that protect them.

And that gives them huge market power.

And it also gives them huge political power.

And that political power is being exercised in all kinds of ways

to tilt the market in their direction.

In June of 2003,

the Medicare Modernization Act came up for vote in the House.

This will be

a 15-minute vote.

[Reich] It was a bill that was ostensibly intended

to help seniors pay for prescription drugs.

But it would also bar the government from interfering with negotiations

between manufacturers and pharmacies

and prescription drug plan sponsors.

In other words,

it would prevent the government, with its huge purchasing power,

from negotiating cheaper prices for drugs.

So, as new drugs hit the market,

patients would have no choice

but to pay the costs set by the drug companies.

The bill was over a thousand pages.

And it was rushed to a vote in the House at 3:00 a.m. the next morning.

We had leaders going around

and gathering around individuals and trying to twist their arms

to get them to change their vote.

[Burton] I think a lot of the shenanigans that were going on,

they didn't want on national TV in prime time.

On this vote, the ayes are 220, and the nays are 215.

-The conference report is agreed to. -[loud cheering]

Without objection, the motion to reconsider is laid upon the table.

[Reich] This is a piece of legislation

that's hailed as a move toward a free market.

But it's actually a government regulation

that benefits only a few at the top.

Similar manipulations of the rules of our economy

are happening across our major industries.

Americans pay more for Internet service

than citizens of any other industrialized nation,

and have some of the slowest speeds.

Because cable companies have enough political power

to stifle competition.

We're paying more for airline tickets,

because airlines have merged into just four major carriers

that barely have to compete with each other.

We pay more for health insurance as health insurers consolidate.

So, in every way, you see, they're using their political power,

and that means you and I and every other American

are paying more.

How do these industries manage to get rules that benefit them?

It's no mystery.

Campaign contributions buy access to government officials.

[sound of crowd cheering]

Well-funded public relations firms, think tanks and research institutes

produce reports to promote those views

and sometimes even draft the laws they want passed.

The tunes of lawyers argue on their behalf

in courts and regulatory proceedings in Washington.

Finally, there's the revolving door.

In the 1970s,

about 3% of outgoing members of Congress

became lobbyists.

In recent years,

42% of retiring representatives

and half of all retiring senators

have turned to lobbying.

Lobbying has been going on since America's founding.

What has changed is the magnitude of corporate lobbying

versus any other interests.

It's gone from a cottage industry

to an influence industrial complex.

Today,

corporate interests spend $34

for every $1 dollar spent by unions

and all public interest groups combined.

In 2016,

they spent a total of $3.15 billion on lobbying.

That's the equivalent of $5.9 million

per member of Congress.

[engine whirring]

[Darvin] I'm kind of independent.

At times, I see both parties...

doing some stuff that I don't think...

that's what they were elected to do.

They don't care about the promises they made to the people.

They care about the promises they made to their backers.

They give them the money.

Most of us out here...

I don't contribute much to the political deals, you know?

Because...

I'll vote for you.

If I vote for you, that's all I should have to do.

I don't have to buy your loyalty to me.

Their money is their voice.

Why, excuse me, but where did I miss that?

Money is used to purchase something,

not as a voice.

You know? So what are they purchasing?

They are purchasing the influence of politicians.

[car alert beeping]

[Dave Brat] Do you feel that you are truly represented in Washington?

Do you feel that this country is headed in the right direction?

No one does.

That's why I'm running for Congress.

My name is Dave Brat

and I'm a lifelong Republican and conservative.

I'm ready to take economics and ethics to Washington.

-Congressman. -Hey, Bob. Nice to see you.

Good to see you. Thanks for coming in.

Well, I appreciate you taking the time. Seriously.

I know you're in the middle of a campaign and this is an imposition.

-No, it's not. Pleasure to meet you. -It's great to meet you, too.

-I have a lot to talk to you about. -Great.

The Conservative Review...

has given you an award...

for being one of the two most conservative Republicans

out of 247 Republicans in Congress.

Yep.

-You use the term "crony capitalism"... -Yeah. Yep.

What do you mean by "crony capitalism"?

The big folks get together, no matter what industry,

protect their turf, at the expense of the small guy.

The government's job is to make sure that doesn't happen.

Instead, the government's job has turned into,

they make that happen.

I mean...

I'm not against business.

But I'm against this crony business

that takes advantage of the taxpayer.

I do think it's coming. People--

The intuition right now is clear. Something is wrong.

All over the country. Right, left, everybody.

Something is way off.

The old assumption has been that division is Democrat versus Republican.

That's fading.

But what we are beginning to see is that

it's actually anti-establishment versus establishment.

Yep.

It's people who don't want the big money and the crony capitalism

versus the crony capitalists.

Democrats, Republicans, conservatives, liberals...

There's gonna be disagreement on a lot of stuff.

But if you could come together on these fundamentals...

It's fine with me.

You're at a deeper level.

You've been teaching economics and all that for 30 years.

I used to use your book.

-You used to use my book? -Yeah.

-I used to-- -Can we just make--

-I have a book out, too. -Can we get that again?

Congressman, what do you think of the title?

Yeah, it surprised me a bit coming from you,

but in a pleasant way.

I think you and I are united. We could do this in the right way.

Ethics and capitalism together,

and we'll save the country.

-Congressman, thank you. -Thank you very much.

[Reich] Everything fundamentally comes down to American democracy.

Is it working for most people?

Or is it working for a very small number?

Researchers at Princeton and Northwestern University

wanted to find out how much political power

ordinary citizens have.

They examined a 20-year period,

from 1982 to 2002.

They first discovered that if large corporations and wealthy individuals,

regardless of political party,

want a law passed,

there's nearly a 60% chance it will be passed.

And if they don't want a certain law,

it doesn't pass.

Then they looked at everyday voters.

Issues that almost no one supports

having 30% chance of becoming law.

Issues that almost everyone supports

also have a 30% chance of becoming law.

They concluded, in their own words....

"The preferences of the average American

appear to have only a miniscule -

near zero -

statistically non-significant impact upon public policy."

I'm always struck by how close you can come,

as just an average American, to the White House.

But,

your voice can't really reach the decision-makers in the White House.

Over the last 50 years,

Washington has become an Emerald City.

It's capital money.

Money that is there for only one purpose,

and that is to influence outcomes.

It's apparent to me

that certain judges are alleging

that somehow corporations have the same rights as citizens.

I don't accept that premise.

The US Supreme Court today overturned laws on the books

for nearly a century,

and ruled that corporations can spend freely now

on political campaigns.

What's the point in individual people

trying to influence politics with their donations

if Exxon or some other company

can quite literally match, and therefore, cancel out,

the combined donations of every single individual donor in the nation?

The cacophony now...

of special interests...

with...

with...

megaphones larger than you've ever seen in your life,

will drown out...

the voice of the people.

The bottom line is this.

The Supreme Court has just predetermined the winners

of next November's elections.

It won't be Republicans.

It won't be Democrats.

It will be corporate America.

[crowd chanting] Whose streets? Our streets!

Whose streets? Our streets!

Whose streets? Our streets!

Whose streets? Our streets!

[reporter #4] There was a giant show of support

for the "Occupy Wall Street" movement on Wednesday.

Approximately 10,000 people marched through lower Manhattan.

[chanting] We got sold out!

The truth is,

many of the reasons they're hitting the streets

are similar to the reasons the Tea Partiers began their protest:

crony capitalism, bailouts to big business.

[newscaster #3] Washington should listen to their message because it is similar

to the Tea Party's message.

That is crony capitalism needs to stop.

[chanting] We have a voice!

We have a voice!

They're spending our children's money, our grandchildren's money.

They're just going to continue to push the country into debt.

They're gonna destroy the economy of America.

This country is upside down.

It's not working for 99% of our society anymore.

The 1% keep getting richer

and everyone else is getting poorer and poorer.

[protestor] It seems to me that the blame has to be placed on both parties.

And it's time we sent a clear message to them.

You either stop railroading our people and our country,

or we're gonna throw all you bums out.

[crowd cheering]

[Megyn Kelly] It is 9:00 p.m. on the East Coast.

And the moment of truth has arrived.

Welcome to the first debate night of the 2016 presidential campaign

live from Quicken Loans Arena.

[Bret Baier] Mr. Trump, you have also donated to several Democratic candidates.

You explained away those donations,

saying you did that to get business-related favors.

You said recently, quote,

"When you give, they do whatever the hell you want them to do."

[Trump] You'd better believe it.

-It's true. -[Bret Baier] What did they do?

I will tell you that our system is broken.

I gave to many people.

Before this, two months ago, I was a businessman.

I give to everybody. When they call, I give.

And you know what?

When I need something from them two, three years later, I call them.

They are there for me.

-What did you get? -That's a broken system.

I've never heard a candidate, never,

who's received huge amounts of money from oil,

from coal, from Wall Street,

from the military industrial complex...

Not one candidate.

"All these campaign contributions will not influence me.

I'm gonna be independent."

But why do they make millions of dollars of campaign contributions?

They expect something. Everybody knows that.

You've received millions of dollars in contributions and speaking fees

from Wall Street companies.

How do you convince voters that you're gonna level the playing field

when you're indebted to its biggest players?

Well, I think it's pretty clear that they know that I will.

You've got two billionaire hedge fund managers...

[woman] They want to hear your thoughts on Donald.

Oh, yeah.

Trump.

Brutally honest?

[laughter]

[woman] Go for it. Yeah!

[overlapping chatter]

I think he's a great businessman.

[woman] Oh.

I think this country needs a businessman's standpoint.

[woman] Yeah?

-Do you know, he's against the union? -A lot of people...

Yeah, I do. I do.

A lot of people don't like...

like to hear it, but I think that's what this country needs.

A businessman.

-Not a politician. -There you go.

I'm totally thinking that

we're being led too much by politics.

-"Politics"... -Yes.

...instead of running this country like a business.

But Donald Trump... Just... It's a joke. He makes it into a joke.

-I agree but-- -We're a joke in other countries.

-He addresses a lot of the issues... -[Darvin] The anger.

-...that are on.... -[woman] The anger.

Anger or issues.

It's anger. It's anger. He's...

He's using the people's anger over the way government is operated.

And why do you think he's getting the reaction that he's getting?

It's because he's saying stuff that people are thinking.

-[woman] Oh, yeah. -He's getting the reaction of the people.

[Darvin] That's the same thing with Bernie.

-Bernie's saying... -[man #2] Exactly.

That's why I like Bernie.

-And I like Trump. I'm torn. -[woman] I know.

Bernie is a smart, intelligent man.

Bernie is my man.

So it's not Republican - Democrat.

-[woman] No! -[Darvin] No, it's both.

-It is. So... -[woman] Both of them.

If it was up to me, I would say, "Hey, let's get a fresh stack of...

people that we can put in office."

I don't like any of them now.

-[Darvin] Re-elect nobody. -Huh?

-[Darvin] Re-elect nobody. -[man #3] There you go!

[woman] Elect Willie Nelson.

[man #2 laughs]

Populism is a reaction against those in power

in favor of the broad public.

But populism, let me hasten to say,

has two very different faces...

Donald Trump and Bernie Sanders.

[laughter]

But to be more general about it,

when people are angry and frustrated and afraid,

and they feel economically insecure,

they tend to either move toward authoritarian populism

which is, "Give me the strong man

who's going to fix everything on behalf of the people."

But it's anti-Democratic

and often uses scapegoating

as a way to generate greater and greater support.

Or, alternatively,

populism can take the form of reform.

That is "We're gonna rebuild the system.

We're going to create a very, very different system

that is much more reflective of the people's needs."

So populism is not necessarily good.

It depends...

on what form it takes.

Faith in our major institutions

has plummeted over the last 30 years.

And this is dangerous.

Because if people don't trust that our society

is working for most people...

then they are very vulnerable.

We're at a critical turning point in this country.

And we're either going to go toward authoritarian populism...

over the long-term,

or we're going to go in the direction of a democratic...

a fundamental democratic change.

A democracy is a very fragile thing.

The other day, I was going through the airport.

Somebody came up to me - a complete stranger.

She said to me,

"So, what are we gonna do?"

[laughter]

I said, "I don't know."

[laughter]

And then other people in other airports and other places,

they come up and say,

"Can you believe it?"

[laughter]

The way we get our economy back...

really is about the way we get our democracy back.

And that is getting together

and creating institutions

that countervail the power of the biggest corporations,

and the biggest banks and the wealthiest people.

Citizenship is more than just voting and jury duty and paying taxes.

Citizenship really is participating and engaging

and making a ruckus when a ruckus is necessary.

It's all of our responsibilities to make sure for ourselves,

but also for our children and grandchildren...

that we make this thing work.

Thank you.

[applause]

Thank you for coming tonight. Thank you.

Thank you. Thank you.

I stay positive,

first, because I know American history.

I know that every time capitalism gets off the rails,

our instinct in this country is to put it back on the rails.

We are seeing the same kind of concentrated income and wealth,

the same kind of political corruption.

We saw the same thing in the 1880s and 1890s.

And the rules added to the wealth.

You saw a similar kind of vicious cycle to the vicious cycle we have now.

People became so angry.

And that anger was channeled in a positive direction.

People organized themselves

and changed the organization of the political economic system.

The first major antitrust legislation was passed,

which broke up huge monopolies.

And then President Teddy Roosevelt

signed a law that prohibited

corporate donations to political campaigns.

We don't succumb,

as other countries have,

to fascism or communism.

We are much more pragmatic than that.

And I think we'll do it again.

[Reich] I'm also optimistic because I teach.

I surround myself every day with young people.

And I see in young people today

a huge yearning,

a huge dedication to making the system work.

[indistinct chatter]

It's a time of great, great opportunity

and great, great danger.

Some of you, and I don't know who it is,

and I don't know how many of you...

will be part of the solution.

Some of you will be leaders.

Does everyone have a seat? I can't...

[overlapping chatter]

This is the most extraordinary...

historic period I've lived through.

And I'm old enough to have lived through a number.

This summer marks the 50th year for me

that I've been involved in and out of government.

And so it's a little bit humbling

to think that it's been 50 years,

and we're in deeper shit...

[laughter]

...than we were then.

If you've got young people who don't have the experience

of a system that is actually working,

then where do they get their idealism from?

Where is the next generation going to draw its...

strength from?

[student] I wouldn't say that American history

has had a golden age and we've passed it.

But I do think that at least there was a sense that we were better together.

A sense of shared identity. I don't think that exists so much anymore.

Certainly, there are moments of despair and hopelessness

and the sense that, like, all of this is for nothing.

So, like, that... That comes, too.

But you have to believe things will get better.

Or...

Or you'll just always be living in hopelessness.

But it's also an opportunity

because people are also getting more aware and more understanding of the challenges,

and that's mobilizing people, also,

into making people act and reflect on and...

participate in politics.

So, it's... It's hope.

I wish, with hindsight,

that when I had had the opportunity...

in government...

I wished I had pushed harder.

But at the time, I thought I was pushing as hard as I could.

As hard as I dared.

It's now up to the next generation.

[Reich] All social change occurs

when people become aware of a tension

between the ideal that they carry around in their heads

about how the system really ought to work,

and the reality they see around them.

And when that tension becomes too great,

that dissonance becomes too intense,

they are willing to take action.

[crowd chanting] Affordable care!

-We want it now! -We want it now!

[Guadalupe] It's getting a bit better because we are doing something

to make a change.

I've been fighting for $15 in the union for about three-and-a-half years.

What do we want?

$15 in the union!

When do we want it?

[crowd] Now!

My friends, this is about power.

It's about reclaiming our democracy and reclaiming our economy.

[crowd cheering]

This is a huge victory. I feel very proud.

Because now the rest of the nation is looking at us.

And they're seeing that $15 per hour...

It's achievable.

We can do it.

[overlapping chatter and laughter]

We're getting hardened on how to organize.

When they start trying to discredit you, and belittle you,

you know you're making an impact.

[sounds drowns out]

[indistinct shouting]

[Victoria] My question is,

how can I be sure that you will advocate for me as your constituent,

and can you guarantee for me quality affordable healthcare, at age 26,

with a pre-existing condition, as I live below the poverty level?

[loud cheering]

[cheering and whistling]

It's Office Hours Live.

[cheering]

A lot of people who, until now, have said, "Well, politics is out there,

politics is for other people",

are now understanding that they can't sit back.

The people in control

have reason and means to keep us in separate groups

and keep us angry at each other.

The strength you have is in numbers.

-[group] Right. -It's not just in guts.

[woman #2] That's right.

I ask you all

to take five minutes out of your day

and make at least one phone call to your congressperson,

one phone call to your senator,

and I guarantee you,

that if we continue doing so, we will succeed.

[cheering]

[chanting] Do your job! Do your job!

Do your job! Do your job!

[Reich] The only way forward to a system that works for the majority of us,

is to get organized

and politically active.

[indistinct speech]

[Reich] The moneyed interests are doing what they do best -

making money.

[speaks indistinctly]

[Reich] The rest of us need to do what we can do best...

Use our voices.

Our vigor.

And our votes.

It's up to us to change the rules.

[music playing]

If you're gonna be a citizen activist, three things...

Number one, you've got to be tenacious and patient.

Social change does not happen quickly.

Number two,

talk to people who disagree with you.

Get out of your bubble.

Maybe they will convince you that you are wrong,

or you'll convince them that they are wrong.

But you've got to talk to them!

Number three,

have some fun.