Park Avenue: Money, Power and the American Dream (2012) - full transcript
Filmmaker Alex Gibney investigates the fact that the 400 richest Americans control more wealth than the 150 million people in the bottom 50 percent of the population.
[ DRAMATIC MUSICAL INTRODUCTION
PLAYS ]
[ CLASSICAL MUSIC PLAYS ]
Narrator: THIS STRETCH
OF PARK AVENUE ON THE
UPPER EAST SIDE OF MANHATTAN
IS THE WEALTHIEST NEIGHBORHOOD
IN NEW YORK CITY.
THIS IS WHERE THE PEOPLE AT
THE TOP OF THE LADDER LIVE...
THE UPPER CRUST...
THE ULTRA RICH.
BUT THIS STREET IS ABOUT A LOT
MORE THAN MONEY.
IT'S ABOUT POLITICAL POWER.
THE RICH HERE HAVEN'T JUST USED
THEIR MONEY TO BUY FANCY CARS,
PRIVATE JETS, AND MANSIONS.
THEY'VE ALSO USED IT TO RIG
THE GAME IN THEIR FAVOR.
OVER THE LAST 30 YEARS, THEY'VE
ENJOYED UNPRECEDENTED PROSPERITY
FROM A SYSTEM THAT THEY
INCREASINGLY CONTROL.
BUT IF YOU HEAD NORTH FOR ABOUT
10 MINUTES, THIS PARK AVENUE
COMES TO AN END AT
THE HARLEM RIVER.
ON THE OTHER SIDE OF THE WATER,
THERE IS ANOTHER PARK AVENUE.
THIS IS THE SOUTH BRONX,
HOME TO AMERICA'S POOREST
CONGRESSIONAL DISTRICT.
[ SIREN WAILS ]
THERE ARE 700,000 PEOPLE IN THIS
DISTRICT.
ALMOST 40% OF THEM LIVE IN
POVERTY, MAKING LESS THAN $40
A DAY.
FROM HERE, THE LAST 30 YEARS
HAVE LOOKED VERY DIFFERENT THAN
THE VIEW FROM MANHATTAN'S
PARK AVENUE.
PEOPLE HERE HAVE SEEN THEIR
WAGES FALL AND THE COST OF
ALMOST EVERYTHING ELSE GO
THROUGH THE ROOF.
THEY'VE LOST THEIR JOBS IN
A RECESSION CAUSED BY BANKERS
ACROSS THE RIVER.
THEY'VE WATCHED THEIR CHILDREN
STRUGGLE AND FAIL IN SCHOOLS,
AND THEY'VE ENDED UP EVEN WORSE
OFF THAN THEY WERE A GENERATION
AGO.
BUT AMERICA IS STILL A LAND
OF OPPORTUNITY, ISN'T IT?
A PLACE WHERE ANYONE CAN MAKE
IT TO THE TOP IF THEY'RE WILLING
TO WORK HARD AND SET THEIR
SIGHTS HIGH.
THAT'S WHAT MAKES THIS COUNTRY
GREAT.
ISN'T THAT WHAT WE TELL
OURSELVES?
BUT IN TODAY'S AMERICA, WHAT ARE
THE CHANCES THAT SOMEONE WHO
STARTS THEIR LIFE ON THIS
PARK AVENUE WILL END UP LIVING
ON THIS PARK AVENUE?
[ CLASSICAL MUSIC FINALE PLAYS ]
[ UP-TEMPO MUSIC PLAYS ]
LET'S IMAGINE THAT YOU'RE
INVITED TO A GAME OF MONOPOLY,
AND YOU ARRIVE AT THIS GAME TO
FIND OUT THAT ALL OF THE
PROPERTY'S BEEN DIVIDED UP,
ALL OF THE MONEY'S ALREADY BEEN
HANDED OUT, BUT YOU'RE TOLD,
"HEY, GO AHEAD AND SIT DOWN,
PLAY THE GAME.
WE'RE GONNA GIVE YOU A CHANCE
TO PLAY JUST LIKE EVERYONE
ELSE"?
THERE ARE SOME IN SOCIETY THAT
HAVE A LOT OF ACCESS, A LOT
OF SOCIAL MOBILITY, A LOT OF
RESOURCES TO DO THE THINGS THAT
THEY WANT AS OPPOSED TO OTHER
PEOPLE WHO ARE MORE
DISADVANTAGED, MORE
UNDERPRIVILEGED, DON'T HAVE
THE SAME LEVELS OF RESOURCES.
Narrator: PAUL PIFF IS
A SOCIAL PSYCHOLOGIST AT
THE UNIVERSITY OF CALIFORNIA,
BERKELEY, WHO STUDIES THE
PSYCHOLOGY OF WEALTH
AND THE CONSEQUENCES OF
INEQUALITY IN OUR SOCIETY.
I READ ABOUT AN EXPERIMENT HE
CONDUCTED, AND IT CAUGHT MY
INTEREST.
♪ COME ON ♪
♪ LET'S PLAY MONOPOLY ♪
♪ CASH FUN AND RITZY PROPERTY ♪
OH, YEAH, YEAH.
Narrator: MONOPOLY FIRST
BECAME A HIT DURING
THE GREAT DEPRESSION.
IT'S A GAME OF RUTHLESS,
DOG-EAT-DOG CAPITALISM.
♪ PASSING GO ♪
Narrator: TRUE TO THE
AMERICAN DREAM, EVERYONE HAS AN
EQUAL OPPORTUNITY, STARTING WITH
THE SAME AMOUNT OF MONEY AND
THE SAME CHANCE TO SUCCEED.
WINNING IS A MIX OF LUCK AND
SKILL.
FOR HIS EXPERIMENT, PIFF RIGGED
THE GAME BY GIVING ONE PLAYER
A HUGE ADVANTAGE.
SO THERE ARE TWO PLAYERS.
THEY DON'T KNOW EACH OTHER.
YOU FLIP A COIN TO DETERMINE
YOUR POSITION.
SO IT'S RANDOM, ALMOST LIKE YOUR
EMERGENCE INTO THE WORLD IS
RANDOM -- WHETHER YOU LAND IN
THIS FAMILY OR THIS OTHER
FAMILY.
IF YOU WERE THE RICH PERSON,
YOU GOT A LOT MORE MONEY.
YOU GOT TWO TIMES AS MUCH MONEY.
WHEN YOU PASS GO, YOU COLLECT
$200.
YOU GET TO ROLL BOTH DICE,
SO YOU'RE ALLOWED TO MOVE AROUND
THE BOARD QUICKER.
[ LAUGHS ]
NOW, IF YOU'RE ON THE LOW
END, WE REALLY HIT YOU HARD.
YOU GOT HALF THE MONEY.
WHEN YOU PASSED GO, YOU
COLLECTED HALF THE SALARY.
YOU ONLY GOT TO ROLL ONE DIE,
SO YOU'RE MOVING AROUND THE
BOARD VERY, VERY SLOWLY AS
THE OTHER PERSON'S JUST WHIZZING
AROUND YOU, COLLECTING $200
EVERY COUPLE OF TURNS.
Narrator: EVEN IN A GAME
THAT'S OPENLY RIGGED, THE RICH
PLAYERS INEVITABLY EXHIBIT A
SENSE OF ENTITLEMENT.
THEY GOBBLE UP MORE OF THE
CAREFULLY PLACED PRETZELS.
THEY COME TO BELIEVE THAT THEY
DESERVE TO WIN.
[ CHUCKLES ]
Narrator: AND THEY SHOW NO
CONCERN FOR THE MISFORTUNE OF
THE POOR PLAYERS EVEN THOUGH
THE POOR PLAYERS DON'T STAND
THE SLIGHTEST CHANCE OF WINNING.
THE IDEA OF THE
AMERICAN DREAM IS THAT
EVERYONE'S GOT AN EQUAL
OPPORTUNITY.
YOU JUST GOT TO DECIDE TO PLAY.
BUT, IN FACT, THERE ARE LARGE
GROUPS OF PEOPLE THAT EXPERIENCE
THE GAME AS UNFAIR.
THE OPPORTUNITY'S NOT THERE.
ALL THE RULES HAVE BEEN DECIDED.
THE PROPERTY'S ALREADY BEEN
BOUGHT UP AND THE MONEY'S
ALREADY IN THE HANDS OF
THE OTHER PLAYERS.
GET A REBOUND.
GO! GO!
FIRST TIME FOR EVERYTHING.
THAT'S MY GOAL.
I'M MICHAEL JORDAN.
I'M KOBE.
I-I-I'M RAY ALLEN!
ALMOST ALL FAMILIES START OUT
WITH WANTING THE SAME THINGS
FOR THEIR CHILDREN.
THEY WANT THEM TO BE SAFE,
THEY WANT THEM TO BE HAPPY,
AND THEY WANT THEM TO BE
SUCCESSFUL AND HEALTHY.
BUT EVEN BEFORE BIRTH, SO MANY
KIDS START THAT RACE BEHIND.
THEY COME INTO A NEIGHBORHOOD
THAT'S UNSAFE.
[ SIREN WAILS ]
MAYBE THEY'RE IN AN
OVERCROWDED APARTMENT.
THEY DON'T HAVE HEALTHY
NUTRITION.
THEY MIGHT HAVE MEDICAL ISSUES
THAT AREN'T BEING ADDRESSED.
I WOULD SAY THEIR NUMBER-ONE
CHALLENGE IS JUST A LACK OF
OPPORTUNITIES IN GENERAL.
Narrator: IN PARTS OF THE
SOUTH BRONX, UNEMPLOYMENT HAS
REACHED 19%, AND MANY FAMILIES
STRUGGLE JUST TO PUT FOOD ON
THE TABLE.
PASTOR COLIN DUNKLEY AND HIS
WIFE, APRIL, RUN A FOOD PANTRY
IN THE SOUTH BRONX THAT FEEDS
ABOUT 200 STRUGGLING FAMILIES
EVERY WEEK.
I LIKE HELPING PEOPLE.
I LIKE SERVING THE PEOPLE,
I LIKE HELPING THE PEOPLE.
IF THERE'S SOMETHING WE COULD
DO TO BLESS THEM, THAT'S WHAT
WE'RE GONNA DO.
SOMETIME WE GET THE LITTLE
SIPPY CAPRI SUN JUICES.
WE'LL PUT THOSE IN A BAG FOR
THE KIDS.
Narrator: BUT THEY DON'T HAVE
NEARLY ENOUGH TO MEET THE
DEMAND.
WHEN WE VISITED, THEY RAN OUT
OF FOOD IN 15 MINUTES.
[ INDISTINCT TALKING ]
THERE IS NO MORE FOOD AT THIS
TIME.
YOU CAN COME BACK NEXT MONDAY
AT 2:00.
WHAT DO I DO?
THAT'S IT, MOMMY.
THAT'S IT.
NO, SIR, I'M SORRY -- NO MORE.
OKAY, OKAY.
IT IS VERY, VERY HARD TO PULL
YOURSELF OUT OF EXTREME POVERTY
IN THE UNITED STATES.
IT ALMOST NEVER HAPPENS.
THIS RUNS COMPLETELY COUNTER
TO WHAT PEOPLE'S NOTION OF
AMERICA HAS BEEN FOR A VERY LONG
TIME.
WE THINK OF OURSELVES AS
THE LAND OF OPPORTUNITY.
MOBILITY IN THE UNITED STATES
LAGS MOST OTHER ADVANCED
INDUSTRIAL DEMOCRACIES.
WHEN I WAS GROWING UP, THE
IMAGE OF AMERICA, THE SELF-IMAGE
WAS OF A VAST MIDDLE-CLASS
COUNTRY.
OF COURSE, THERE WAS A SMALL
RICH GROUP AND THERE WERE SOME
POOR, BUT AMERICA PRIDED ITSELF
AND UNDERSTOOD THAT ITS HEALTH
WAS BECAUSE OF A VAST MIDDLE
CLASS.
WE'RE NOT THAT KIND OF SOCIETY
ANYMORE.
Narrator: THERE'S ALWAYS BEEN
A GAP BETWEEN THE WEALTHIEST IN
OUR SOCIETY AND EVERYONE ELSE.
BUT IN THE LAST 30 YEARS,
SOMETHING CHANGED.
THAT GAP BECAME
THE GRAND CANYON.
THE INCOMES OF PEOPLE AT
THE LOWER END STAGNATED.
A DISPROPORTIONATE AMOUNT OF
THE GROWTH IN THE ECONOMY HAS
ACCRUED TO THOSE AT THE UPPER
END.
Narrator: THIS IS WHAT
AMERICA'S ECONOMIC PIE LOOKED
LIKE IN THE DECADES AFTER
WORLD WAR II.
INCOME GAINS WERE SHARED BY
EVERYONE WITH BIG PORTIONS GOING
TO AVERAGE AMERICANS.
BUT SINCE THE LATE 1970s,
THE BOTTOM 90% HAVE SEEN THEIR
SHARE OF THE PIE COMPLETELY
DEVOURED BY THE TOP 1%.
THE WEALTHY ARE GETTING AN
ENORMOUS PERCENTAGE OF ALL OF
THE GAINS IN THE ENTIRE ECONOMY.
WHEN I TALK ABOUT THE WEALTHY,
I'M TALKING ABOUT LIKE IN THE
THOUSANDS OF PEOPLE.
Narrator: THOUSANDS MIGHT BE
OVERSTATING IT.
AS OF 2010, ONLY 400 OF THE
RICHEST AMERICANS CONTROLLED
MORE WEALTH THAN THE BOTTOM HALF
OF AMERICAN HOUSEHOLDS.
THAT'S 150 MILLION PEOPLE.
THE QUESTION IS, WHAT ARE THE
PEOPLE AT THE TOP GONNA DO WITH
ALL THAT MONEY?
THERE IS A LITTLE TINY GROUP,
AND IT'S PROBABLY 1% OF THE 1%.
THOSE PEOPLE ARE CONCENTRATED
IN A VERY SMALL NUMBER OF
PLACES.
NEW YORK HAS BEEN ONE OF THOSE
PLACES SINCE THE EARLY
19th CENTURY.
IT HAS BEEN A WORLD CITY WITH
WORLD-CLASS FORTUNES, AND IT HAS
BEEN A MAGNET FOR PEOPLE WHO
LIVE IN THE 1% OF THE 1%.
I WAS IN A TAXI GOING DOWN
FIFTH AVENUE, LOOKING FOR
THE RICHEST APARTMENT BUILDING
IN NEW YORK.
THERE WERE ABOUT 10 BUILDINGS
THAT WERE ON THE INITIAL LIST.
740 PARK BECAME THE EPICENTER
OF THE PEOPLE WHO RULED THE
WORLD -- TRULY THE MASTERS OF
THE UNIVERSE.
THEY ALL LIVED AT 740 PARK.
IT WAS KNOWN BEFORE MY BOOK
AS THE ROCKEFELLER BUILDING,
BUT, IN FACT, ROCKEFELLER WAS
NOT ONE OF THE ORIGINAL PEOPLE
IN THE BUILDING.
IT WAS BUILT BY JACKIE KENNEDY'S
GRANDFATHER JAMES T. LEE
IN A CONSORTIUM WITH A GROUP
OF THE PEOPLE WHO WERE
CONSIDERED TO BE RESPONSIBLE
FOR THE MARKET CRASH OF 1929
AND THE DEPRESSION THAT
FOLLOWED, AND THEN IT BECAME
KIND OF THE STANDARD OIL
BUILDING.
IT WAS A BUILDING WHERE LOTS
OF STANDARD OIL EXECUTIVES
AND THEIR FRIENDS ALL LIVED.
IT WAS TRULY CONSIDERED
THE HOLY GRAIL FOR A CERTAIN
KIND OF WEALTHY NEW YORKER.
NOW THE LARGEST CATEGORY IN
740 PARK ARE HEDGE FUND GUYS,
AND THEY'RE THE PEOPLE WITH
THE MOST MONEY NOW.
THEY'RE THE EQUIVALENT OF
THE OIL PEOPLE FROM THE '30s.
THESE GUYS RULED THE WORLD,
YOU KNOW.
THEY ARE MULTIBILLIONAIRES
OF, YOU KNOW, THE C.E.O.s
OF THE MAJOR CORPORATIONS IN
THE WORLD.
Narrator: THIS DOORMAN ONCE
WORKED AT 740 PARK AVENUE.
HE AGREED TO BE INTERVIEWED
UNDER THE CONDITION THAT WE HIDE
HIS FACE AND ALTER HIS VOICE.
TO WORK AT 740, YOU REALLY
NEED TO KNOW SOMEBODY WITHIN
THE BUSINESS.
YOU KNOW, YOU'RE WORKING AT
THE TOP BUILDING IN THE WORLD.
IT'S ONLY 31 UNITS.
IT'S NOT A LOT OF RESIDENTS,
BUT THEY'RE HIGH-TEMPERED,
AND, YOU KNOW, YOU HAVE TO HAVE
A THICK SKIN TO WORK THERE.
YOU'RE GONNA BE DEALING WITH
DETESTABLE PEOPLE, AND YOU'RE
GONNA BE DEALING WITH
BILLIONAIRES.
YOU NEED TO KNOW EVERYTHING
ABOUT THE RESIDENTS -- WHAT TIME
THEY WAKE UP TO GO TO
WALL STREET, WHOSE CAR'S WHICH,
WHO LIKES TO GET THEIR OWN DOOR,
WHO GETS IN THE PASSENGER SEAT,
WHO GETS IN THE BACKSEAT.
YOU KNOW, THESE THINGS DON'T
SEEM LIKE A BIG THING TO ME AND
YOU, BUT EVEN A MINOR MISHAP,
AND, YOU KNOW, YOU'LL BE FIRED
STRAIGHTAWAY.
YOU'VE GOT JOHN THAIN,
THE C.E.O. WHO PRESIDED OVER
THE DOWNFALL OF MERRILL LYNCH.
EZRA MERKIN, WHO WAS THE FEEDER
TO BERNIE MADOFF.
DAVID KOCH, WHO IS THE RICHEST
PERSON IN THE BUILDING.
THEN, OF COURSE,
STEVE SCHWARZMAN, THE POSTER
CHILD OF CAPITALISTIC GREED
IN THE LAST 10 YEARS.
Narrator: BILLIONAIRE
STEPHEN SCHWARZMAN, ONE OF
THE KINGS OF PRIVATE EQUITY,
LIVES IN 740 PARK'S MOST
EXTRAVAGANT APARTMENT.
SCHWARZMAN WAS A MANAGING
DIRECTOR AT LEHMAN BROTHERS
BEFORE CO-FOUNDING THE
BLACKSTONE GROUP.
HE IS ONE OF THE MOST PROMINENT
C.E.O.s WHEN IT COMES TO
LOBBYING FOR TAX POLICIES
THAT FAVOR THE ULTRA RICH.
HE WAS A STRANGE GUY,
MR. SCHWARZMAN.
THANK YOU FOR THE OPPORTUNITY
TO ADDRESS THE 66th ANNUAL
ALFRED E. SMITH
MEMORIAL FOUNDATION DINNER.
WE CALL IT OCCUPY WALDORF.
[ LAUGHTER ]
HE SEEMED TO BE OUT OF
THE PUBLIC EYE, BUT THEN THESE
LITTLE SPURTS WHERE HE'D HAVE
A 60th BIRTHDAY PARTY, HE HAD
ROD STEWART PLAY, AND IT WAS ALL
OVER THE PAPERS, AND HE HAD
A REPLICA OF HIS APARTMENT BUILT
IN THIS HOTEL, AND IT WAS JUST
COMPLETELY RIDICULOUS.
HE'D HAVE HIS ANNUAL
CHRISTMAS PARTY, AND HE'D HAVE
25 CHRISTMAS TREES COME IN --
THESE MASSIVE CHRISTMAS TREES.
25 CHRISTMAS TREES?
YEAH.
I MEAN, EVERY ROOM WOULD GET
A CHRISTMAS TREE AND BE FULLY
DECORATED.
STEVE SCHWARZMAN LIVES IN
THE APARTMENT THAT HAD
PREVIOUSLY BEEN OWNED BY
JOHN D. ROCKEFELLER JR.
IT'S A SPRAWLING APARTMENT.
IT'S 37 ROOMS.
LAVISH BEYOND YOUR WILDEST
IMAGINING -- YOU KNOW, 20,000
SQUARE FEET.
Narrator: SCHWARZMAN PAID
JUST UNDER $30 MILLION FOR THIS
APARTMENT -- POCKET CHANGE FOR
A WALL STREET TYCOON WORTH
OVER $5 BILLION.
IF A FEW PEOPLE, YOU KNOW,
DO REALLY WELL, WHY IS THAT SUCH
A BIG DEAL?
ISN'T THAT JUST PROOF OF THE
AMERICAN DREAM -- YOU WORK HARD
AND YOU'RE SUCCESSFUL?
WE AS A SOCIETY HAVE VERY
COMPLEX VIEWS ABOUT ECONOMIC
INEQUALITY.
AMERICANS ARE NOT OF THE VIEW
THAT ALL INEQUALITIES OF WEALTH
OR INCOME ARE UNJUST, AND,
IN FACT, THEY THINK IF YOU WORK
HARDER, IF YOU SEIZE
OPPORTUNITIES, THEN YOU SHOULD
BE ABLE TO GET AHEAD.
Narrator: JACOB HACKER IS
A POLITICAL SCIENTIST AT YALE
AND THE CO-AUTHOR OF
"WINNER-TAKE-ALL POLITICS,"
WHICH ARGUES THAT THIS
EXTRAORDINARY ACCUMULATION
OF WEALTH AT THE TOP ISN'T
JUST ABOUT HARD WORK.
IT'S ABOUT WEALTHY INTERESTS
USING THE POLITICAL SYSTEM
TO RIG THE RULES IN THEIR FAVOR.
THERE'S BEEN A REINFORCING
CYCLE.
THOSE AT THE TOP HAVE DONE WELL.
THEY'VE INVESTED IN POLICIES
THAT ARE FAVORABLE TO THEM, AND
THEY'VE DONE EVEN BETTER, AND
THEN THEY'VE TURNED A LOT OF
THAT MONEY BACK INTO POLITICS.
Narrator: TO UNDERSTAND HOW
BIG MONEY RIGS THE RULES IN
WASHINGTON, I SOUGHT OUT THE
POSTER CHILD FOR POLITICAL
CORRUPTION, FORMER LOBBYIST
JACK ABRAMOFF.
A FEW YEARS AGO, I MADE A FILM
VERY CRITICAL OF JACK.
NOW AFTER SPENDING NEARLY FOUR
YEARS IN FEDERAL PRISON FOR
CONSPIRACY TO BRIBE PUBLIC
OFFICIALS, HE'S TOURING
THE COUNTRY TRYING TO PROMOTE
REFORM.
I WISH I COULD TELL YOU THAT
IN THE MIDST OF ALL OF MY
LOBBYING ACTIVITY, I CAME TO
AN EPIPHANY, BUT I DIDN'T.
IT, UNFORTUNATELY FOR ME,
REQUIRED MY DEMISE.
JACK ABRAMOFF HAS PLED GUILTY
TO FEDERAL CORRUPTION CHARGES.
BUT EVENTUALLY I DECIDED
TO LOOK HONESTLY AT THE PAST
ACTIVITIES I ENGAGED IN.
I ALSO SYSTEMICALLY LOOKED AT
THE OVERALL PICTURE AND REALIZED
THE SYSTEM ITSELF WAS REALLY
BADLY IN DISREPAIR.
♪ I'M JUST A BILL ♪
♪ YES, I'M ONLY A BILL ♪
♪ AND I'M SITTING HERE ON
CAPITOL HILL ♪
Narrator: THIS
SCHOOLHOUSE ROCK VIDEO FROM
1975 IS STILL USED TO TEACH
MANY AMERICANS ABOUT HOW THEIR
GOVERNMENT IS SUPPOSED TO WORK.
SOME FOLKS BACK HOME DECIDED
THEY WANTED A LAW PASSED, SO
THEY CALLED THEIR LOCAL
CONGRESSMAN, AND HE SAID,
"YOU'RE RIGHT.
THERE OUGHT TO BE A LAW."
THEN HE SAT DOWN AND WROTE ME
OUT AND INTRODUCED ME TO
CONGRESS, AND I BECAME A BILL.
IT WAS VERY CUTE, BUT IT'S
NOT WHAT GOES ON IN WASHINGTON.
THE BILL IS VERY RARELY --
I WOULD SAY NEVER TYPED UP
BY THE CONGRESSMAN AFTER HEARING
FROM A DIVERSE GROUP OF
CITIZENS.
YOU KNOW, THE STAFF ARE BUSY,
THE CONGRESSMEN ARE BUSY, SO
THEY FREQUENTLY PASS AND STILL
AVAIL THEMSELVES OF THE
SERVICES, LET'S CALL THEM,
OF THE LOBBYISTS TO WRITE
THESE BILLS.
THE LOBBYISTS WILL BRING IN
THE EXACT DRAFT OF WHAT THEY
WANT BECAUSE THEY WANT TO MAKE
SURE IT IS EXACTLY WHAT THEY
NEED.
NOW, AS A LOBBYIST, WHAT WAS
YOUR LEVERAGE IN TERMS OF
GETTING MEMBERS TO SPONSOR THE
BILLS THAT YOU HAD WRITTEN?
A LOBBYIST NEEDS TO GET
TO THE DECISION-MAKER, THE
CONGRESSMAN OR THE STAFF, AND
THAT INVOLVES, UNFORTUNATELY,
FINANCIAL CONVEYANCES.
ONE OF THE DIRTY LITTLE
SECRETS IN WASHINGTON TODAY
IS HOW MUCH TIME MEMBERS OF
THE HOUSE AND SENATE SPEND
EVERY WEEK -- NOT JUST IN
THE ELECTION SEASON, BUT ALL
THE TIME, YEAR-ROUND, ON THE
TELEPHONE ASKING PEOPLE FOR
MONEY.
IT'S BEGGING FOR MONEY.
IT'S A SAD SPECTACLE.
WHEN YOU HAVE CAMPAIGNS THAT
ARE COSTING TENS OF MILLIONS
OF DOLLARS, THE PEOPLE WHO HAVE
THE MONEY WANT SOMETHING BACK.
MONEY IS BEING USED TO BUY
RESULTS.
THAT IS THE PROBLEM.
THAT'S HOW I USED MONEY.
I KNOW WHAT I WAS DOING.
Narrator: SO WHEN DID THIS
ALL BEGIN?
WHEN DID BIG MONEY TAKE CONTROL
OF WASHINGTON?
IT REALLY HAS TO DO WITH
THE MOBILIZATION OF BUSINESS
THAT OCCURRED IN THE MID 1970s.
BECAUSE OF RALPH NADER AND OTHER
CORPORATE REFORMERS, BUSINESS
WAS PUSHED BACK STRONGLY ON
THE DEFENSIVE.
AIR AND WATER POLLUTION
CONTROL, SAFER CARS AND
HIGHWAYS, AND MANY, MANY BETTER
WAYS OF DOING THINGS.
WE'RE A RICH COUNTRY, BUT WE'RE
NOT DISTRIBUTING IT FOR OUR
MAJOR PUBLIC NEEDS.
RALPH NADER, A DEEPLY, DEEPLY
HATED FIGURE BY CORPORATE
AMERICA IN THOSE DAYS.
IT SCARED THEM TO DEATH.
AND WHAT DID BUSINESS DO?
WELL, THEY FOLLOWED THE
PRESCRIPTION OF THE FUTURE
SUPREME COURT JUSTICE
LEWIS POWELL, WHO WROTE AN
INFLUENTIAL MEMO FOR THE
CHAMBER OF COMMERCE SAYING
THAT BUSINESS NEEDED TO
ORGANIZE.
BUSINESSMEN OF THE WORLD,
UNITE.
Narrator: LEWIS POWELL,
A CORPORATE LAWYER FOR THE
TOBACCO INDUSTRY, WAS APPOINTED
TO THE SUPREME COURT BY
RICHARD NIXON IN 1972.
PRIOR TO JOINING THE COURT,
POWELL SENT A CONFIDENTIAL
MEMO TO THE U.S. CHAMBER OF
COMMERCE.
IN IT, POWELL TARGETED
RALPH NADER AS THE BIGGEST ENEMY
OF AMERICAN BUSINESS AND
DESCRIBED A ROAD MAP FOR THE
CORPORATE TAKEOVER OF AMERICAN
PUBLIC INSTITUTIONS.
IT CALLED FOR BIG CORPORATIONS
TO BECOME MORE AGGRESSIVE IN
MOLDING AMERICAN POLITICS AND
LAW.
CORPORATE AMERICA HEEDED THAT
CALL.
YOU SAW AN ENORMOUS BUILD-UP
DURING THE 1970s IN CORPORATE
LOBBYING POWER.
THEY INVESTED ENORMOUS NEW
SUMS IN POLITICS.
THEY STARTED TO CHANGE THEIR
STRATEGIES, MOVING FROM
NEW YORK, IN THE CASE OF ONE
BIG BUSINESS ORGANIZATION, TO
WASHINGTON, DEVELOPING PERSONAL
RELATIONSHIPS BETWEEN C.E.O.s
AND POLITICIANS.
Narrator: THE RESULT WAS
A SHIFT FROM POLICIES THAT
BENEFITED THE MIDDLE CLASS
AND POOR TO POLICIES THAT
FAVORED WEALTHY INTERESTS.
IN 1978 AND BEYOND, YOU GET
A MAJOR DEFEAT FOR ORGANIZED
LABOR, A DEFEAT OF AN EFFORT
TO LINK THE MINIMUM WAGE TO
GENERAL WAGE INFLATION SO THAT
THE MINIMUM WAGE WOULDN'T JUST
ERODE OVER TIME.
YOU GET THE PASSAGE OF MASSIVE
TAX CUTS FOR THE RICH, INCLUDING
A BIG REDUCTION ON CAPITAL-GAINS
TAX RATE.
LOBBYING WAS A
$400-MILLION-A-YEAR INDUSTRY
IN THE 1980s, AND IT'S ABOUT
A $4-BILLION INDUSTRY TODAY.
WASHINGTON IS ALMOST OWNED
AND OPERATED BY THE U.S.
CORPORATE SECTOR AT THIS POINT.
THERE ARE SO MANY BILLIONS OF
DOLLARS OF SPENDING ON LOBBYING.
THERE ARE SO MANY LOBBYISTS
THAT ARE IN THE ROOM WRITING
THE REGS, WRITING THE LAWS
RIGHT NOW.
THERE IS SO MUCH FINANCING
OF POLITICAL CAMPAIGNS.
THERE ARE SO MANY BOUGHT
POLITICIANS.
Narrator: OUR CIVICS BOOKS
TELL US THAT THE PRESIDENT
IS THE MOST POWERFUL PERSON
IN THE WORLD AND THAT SPECIAL
INTERESTS MUST GO TO WASHINGTON
TO PETITION THE GOVERNMENT.
BUT WHEN IT COMES TIME TO RAISE
MONEY, OUR PRESIDENTS GO HAT
IN HAND TO THE PEOPLE WHO
REALLY HAVE THE POWER.
IN 2007, PRESIDENT
GEORGE W. BUSH MADE
A PILGRIMAGE TO
STEVE SCHWARZMAN'S APARTMENT
TO ASK FOR MONEY FOR THE
REPUBLICAN NATIONAL COMMITTEE.
THE SECRET SERVICE WERE
COMING FOR, I WOULD SAY, THREE
TO FOUR MONTHS BEFORE THE ACTUAL
VISIT, AND THEY WOULD COME EVERY
WEEK JUST TO CHECK UP, LOOK
AROUND THE BUILDING.
THEY DID BACKGROUND CHECKS ON US
FOR SURE.
THEY HAD THE SHARPSHOOTERS OUT.
THEY BROUGHT MR. BUSH TO
MR. SCHWARZMAN'S APARTMENT.
HE SPENT MAYBE 15 MINUTES OUT,
AND THAT'S IT.
WHY DID JOHN DILLINGER ROB
BANKS?
THAT'S WHERE THE MONEY IS.
WELL, 740 PARK IS WHERE THE
MONEY IS, AND IN THIS DAY AND
AGE, ANY CANDIDATE WHO DIDN'T GO
TO 740 PARK WOULD PROBABLY BE
FOOLISH.
I'M MITT ROMNEY.
I BELIEVE IN AMERICA.
AND I'M RUNNING FOR PRESIDENT
OF THE UNITED STATES.
[ CHEERS AND APPLAUSE ]
ROMNEY HAS A PRIVATE MEETING
ON PARK AVENUE WITH PROMINENT
C.E.O.s EAGER FOR CHANGE IN
WASHINGTON.
MITT ROMNEY WENT TO KISS
MR. SCHWARZMAN'S RING AND MEET
SOME OF HIS FRIENDS AND NO DOUBT
COLLECT A FEW CHECKS.
WHAT MAKES HIM GOOD FOR
THE COUNTRY?
MITT -- HE'S A NATURAL LEADER
AND HE'S ACCESSIBLE.
HE LISTENS TO WHAT YOU SAY.
AND WHAT ARE YOU TELLING HIM
ABOUT WHAT NEEDS TO BE DONE?
WELL, WE HAD A NICE MEETING
ABOUT THREE WEEKS AGO FOR AN
HOUR, AND WHAT I TELL HIM STAYS
WITH ME.
[ LAUGHS ] OKAY.
FAIR ENOUGH.
BUT I'M NOT SHY.
THEY CAN INFLUENCE THE
WRITING OF LAWS, THE
IMPLEMENTATION OF REGULATION,
THE DEGREE TO WHICH THE TAX CODE
TILTS TOWARDS BUSINESS AND THOSE
AT THE TOP VERSUS ORDINARY
WORKING AMERICANS.
Narrator: A PERFECT EXAMPLE
OF THE INFLUENCE THAT A SMALL
GROUP OF BILLIONAIRES CAN HAVE
ON THE GOVERNMENT IS SOMETHING
IN THE TAX CODE CALLED THE
CARRIED INTEREST PROVISION.
IT ALLOWS HEDGE FUND AND
PRIVATE EQUITY MANAGERS LIKE
STEVE SCHWARZMAN TO PAY A 15%
TAX RATE ON THEIR INCOME EVEN
THOUGH, UNLIKE NORMAL CAPITAL
GAINS, THEY'RE NOT REQUIRED
TO RISK THEIR OWN MONEY.
WHEN IT'S EXPLAINED TO
PEOPLE, THEY THINK IT'S CRAZY.
THE MOST HIGHLY PAID FINANCIAL
EXECUTIVES GET TAXED AT A RATE
LOWER THAN YOUR MOM-AND-POP
GROCERY.
IT IS IN THE TAX CODE BECAUSE
OF THE INCREDIBLY EFFECTIVE
LOBBYING OF THE FINANCIAL
INDUSTRY.
OKAY, IT WAS A QUESTION ABOUT
CARRIED INTEREST BEING TAXED
AT A LOWER RATE.
WE SORT OF LOOK AT THIS AS SORT
OF AN ISSUE THAT'S NOW IN THE
POLITICAL WORLD, AND, YOU KNOW,
IT WILL BE SOLVED IN THAT WORLD.
WE DON'T HAVE MUCH OF A SAY IN
THAT.
SCHWARZMAN WENT TO
CAPITOL HILL YESTERDAY AND STOOD
OUTSIDE THE SENATE CHAMBER
LOBBYING SENATORS.
SCHWARZMAN WAS THERE TO FIGHT
AGAINST HIGHER TAXES ON
SO-CALLED CARRIED INTEREST.
FROM 2006 ON, EVERY
DEMOCRATIC LEADER AND PRESIDENT,
IN THE CASE OF PRESIDENT OBAMA,
HAS SAID, "WE'RE GONNA GET RID
OF THIS."
LET'S ASK HEDGE FUND MANAGERS
TO STOP PAYING TAXES THAT ARE
LOWER ON THEIR RATES THAN THEIR
SECRETARIES.
AND THEN MAGICALLY IT MANAGES
TO SURVIVE.
BEFORE YOU KNOW IT, THE
CONGRESSIONAL SESSION HAS ENDED,
AND, OH, MY GOD, WE RAN OUT OF
TIME.
WE DIDN'T GET TO IT.
WE'LL DO IT NEXT TIME.
IT APPEARS THE DEMOCRATS HAVE
COMPLETED THEIR TAKEOVER OF
CAPITOL HILL.
Narrator: EVEN WHEN THE
DEMOCRATS CONTROLLED BOTH HOUSES
OF CONGRESS, THEY COULDN'T CLOSE
THE CARRIED INTEREST LOOPHOLE.
THE QUESTION IS WHY?
IT PASSED THE HOUSE TWICE,
BUT IN THE SENATE, THE
HEDGE FUNDS HAD A PAL IN
CHARLES SCHUMER OF NEW YORK,
THE SENATOR FROM WALL STREET
AS HE WAS KNOWN FOR MANY YEARS.
Narrator: CHARLES SCHUMER
IS ONE OF THE MOST POWERFUL
SENATORS IN THE COUNTRY AND HAS
RAISED MORE CAMPAIGN MONEY FROM
THE FINANCIAL INDUSTRY THAN ANY
OTHER DEMOCRAT CURRENTLY SERVING
IN CONGRESS.
SCHUMER BECAME FAMOUS FOR
HIS ABILITY TO GAIN WALL STREET
DOLLARS.
THAT'S WHY HE WAS ELEVATED
WITHIN THE DEMOCRATIC LEADERSHIP
IS BECAUSE HE WAS SUCH AN
EFFECTIVE FUNDRAISER.
SCHUMER IN THAT PERIOD WAS
THE CHAIRMAN OF THE SENATE
DEMOCRATIC CAMPAIGN COMMITTEE,
WHICH YOU GOT TO GIVE THE GUY
CREDIT.
HE TURNED THIS INTO AN ABSOLUTE
MONEY MACHINE.
Narrator: SCHUMER HELPED
THE DEMOCRATIC PARTY RAISE
RECORD AMOUNTS FROM WALL STREET,
AND IN JUNE 2007, AS THE SENATE
WAS CONSIDERING LEGISLATION TO
CLOSE THE CARRIED INTEREST
LOOPHOLE, SCHUMER WENT ON
A FUNDRAISING FRENZY.
IN THAT ONE MONTH, HE RAISED
MORE THAN $1 MILLION FROM
HEDGE FUNDS AND PRIVATE EQUITY
FIRMS LIKE BLACKSTONE.
THE CARRIED INTEREST BILL NEVER
SAW THE LIGHT OF DAY.
SCHUMER JUST BURIED THE IDEA.
IT NEVER CAME UP FOR A VOTE IN
A COMMITTEE OR ON THE FLOOR
OF THE SENATE.
IT JUST DISAPPEARED.
WELL, I BELIEVE THAT INCOME
EQUALITY, JOBS, THE ECONOMY HAS
BEEN THE ISSUE FOR A LONG TIME.
SCHUMER CONSISTENTLY SAYS,
"OH, I DON'T THINK THIS IS
A GOOD PROVISION.
WE NEED TO CHANGE IT."
ARE YOU WILLING TO VOTE TO
GET RID OF THE CARRIED INTEREST
PROVISION WHICH ALLOWS PEOPLE
LIKE MITT TO MAKE THAT KIND
OF TAX BREAK?
YES.
"BUT WE NEED TO MAKE SURE
THAT EVERY POSSIBLE GROUP THAT
MIGHT GET A SIMILAR KIND OF
PREFERENTIAL TAX TREATMENT
IS ALSO DEALT WITH."
BUT ANY CARRIED INTEREST,
WHETHER IT'S VENTURE CAPITAL OR
OIL AND GAS OR ANYTHING ELSE...
HE'S BASICALLY SAYING,
YOU KNOW, "WE NEED TO OVERHAUL
THE WHOLE TAX CODE," WHICH,
OF COURSE GUARANTEES THAT YOU'LL
NEVER REACH AGREEMENT.
EVERY SENATOR PAYS ATTENTION
TO THE INDUSTRIES WITH BIG
FOOTPRINTS IN THEIR STATES,
AS THEY SHOULD.
Narrator: IN DEFENDING THIS
LOOPHOLE, SENATOR SCHUMER OFTEN
SAYS HE'S MERELY REPRESENTING
HIS CONSTITUENTS, THE BANKERS.
BUT WHAT ABOUT HIS OTHER
CONSTITUENTS -- POLICE OFFICERS,
NURSES, FIREMEN?
THEY HELP TO SAVE THE LIVES
OF NEW YORKERS, INCLUDING
HEDGE FUND MANAGERS, YET THE
SENATOR FROM NEW YORK DOESN'T
THINK IT'S UNFAIR THAT A VETERAN
FIREMAN CAN PAY NEARLY DOUBLE
THE TAX RATE OF A HEDGE FUND
BILLIONAIRE.
CHUCK SCHUMER IS THINKING,
"I NEED TO MAKE SURE THAT I
REPRESENT THESE DEEP-POCKETED
WALL STREET INTERESTS IF I WANT
MY PARTY AND ME TO BE
SUCCESSFUL," AND THAT, I THINK,
IS A PERFECT EXAMPLE OF THE WAY
IN WHICH MONEY TALKS IN AMERICAN
POLITICS TODAY.
Narrator: AND NOBODY'S MONEY
TALKS LOUDER THAN DAVID KOCH.
THIS RIGHT-WING OIL TYCOON WITH
A FORTUNE OF $25 BILLION IS
THE RICHEST RESIDENT OF
740 PARK AVENUE.
DAVID AND HIS BROTHER CHARLES
RUN KOCH INDUSTRIES, ONE OF THE
LARGEST PRIVATELY OWNED
COMPANIES IN THE WORLD.
THEY MAKE THINGS LIKE
DIXIE CUPS, BRAWNY PAPER TOWELS,
LYCRA, AND STAINMASTER CARPET.
BUT THEIR MOST PROFITABLE
BUSINESS IS OIL AND GAS, WHICH
HELPS KOCH INDUSTRIES BRING IN
OVER $100 BILLION IN ANNUAL
REVENUES.
TOGETHER THE KOCH BROTHERS
MAY HAVE SPENT MORE MONEY TO
INFLUENCE AMERICAN POLITICS THAN
ANYONE ELSE IN THE COUNTRY.
THEY BASICALLY ARE
UNPRECEDENTED.
THEY INFLUENCE AMERICAN POLITICS
ON A COMPLETELY DIFFERENT
DIMENSION THAN ANYBODY ELSE.
♪ THE MINUTE YOU WALKED
IN THE JOINT ♪
♪ I COULD SEE YOU WERE A MAN
OF DISTINCTION ♪
♪ A REAL BIG SPENDER ♪
MILLIONS OF DOLLARS TO
REPUBLICAN POLITICIANS.
MORE THAN $50 MILLION,
FOR EXAMPLE, TO LOBBY IN
WASHINGTON SINCE 2006.
♪ GOOD-LOOKING ♪
♪ SO REFINED ♪
♪ SAY, WOULDN'T YOU LIKE TO KNOW
WHAT'S GOING ON IN MY MIND? ♪
AS MUCH AS $200 MILLION OF
THEIR OWN MONEY THIS YEAR TO
HELP DEFEAT PRESIDENT OBAMA.
♪ HEY, BIG SPENDER ♪
♪ SPEND ♪
♪ A LITTLE TIME WITH ME ♪
THEY ARE JUST, YOU KNOW, AN
INCREDIBLE DYNASTY STORY IN
AMERICA.
IN 1927, THE FATHER, FRED KOCH,
CAME UP WITH SOME METHOD FOR
REFINING OIL THAT WAS BETTER
THAN THE METHOD THAT WAS BEING
USED.
THE MAJOR OIL COMPANIES
SUPPOSEDLY BLOCKED HIM BECAUSE
THEY HAD A MONOPOLY ON THEIR OWN
PROCESS, AND SO HE TOOK HIS
METHOD TO RUSSIA.
♪ GLORY ♪
AND HE BASICALLY SET UP
THE OIL BUSINESS FOR THE
SOVIET UNION.
HE BECAME A VIRULENT
ANTICOMMUNIST.
HE CAME BACK TO AMERICA, HAVING
SEEN THE HORRORS OF STALIN,
AND HE BEGAN TO SEE THE
UNITED STATES GOVERNMENT,
PARTICULARLY ANYTHING
PROGRESSIVE IN THE UNITED STATES
GOVERNMENT, AS THE BEGINNING
OF SOME SORT OF SOCIALIST AND
COMMUNIST TAKEOVER.
SO THAT'S THE MILIEU IN WHICH
THE KOCH BROTHERS GREW UP, AND
THEY WERE TAUGHT FROM A VERY
EARLY AGE BIG GOVERNMENT IS
BAD.
IN 1980, DAVID KOCH ACTUALLY RAN
FOR VICE PRESIDENT ON THE
LIBERTARIAN TICKET.
THEY COUNT ON GROWING
SYMPATHY FOR THEIR PARTY'S
SINGLE GOAL -- FREEDOM FROM
GOVERNMENT.
HE DID ABYSMALLY.
THE LIBERTARIAN TICKET GOT
1% OF THE VOTE IN AMERICA
IN 1980.
WHAT THEY LEARNED FROM THAT
IS THEY HAD TO FIGURE OUT
ANOTHER WAY TO GET THEIR IDEAS
TO BECOME INFLUENTIAL.
Narrator: SO THE KOCHS
DECIDED TO USE THEIR MONEY
TO ADVANCE THEIR AGENDA.
THEY GAVE GENEROUSLY TO
POLITICAL CANDIDATES, BUT, MORE
IMPORTANTLY, THEY INVESTED
HEAVILY IN GROUPS THAT COULD
BRING THEIR ANTIGOVERNMENT IDEAS
INTO THE MAINSTREAM.
THE BROTHERS GAVE MILLIONS TO
RIGHT-WING THINK TANKS, AND
CHARLES EVEN FOUNDED ONE, THE
LIBERTARIAN CATO INSTITUTE.
GOVERNMENT'S TOO BIG, AND
IT'S GETTING BIGGER, AND WE
DON'T WANT TO ENCOURAGE BIGGER
GOVERNMENT.
TAKE THE KEYS TO THE LIQUOR
CABINET AWAY FROM THE
ALCOHOLICS.
Narrator: THE KOCHS ALSO
WROTE OUT ENORMOUS CHECKS TO
UNIVERSITIES TO SUPPORT PROGRAMS
THAT WOULD PROMOTE DEREGULATION
AND FREE-MARKET ECONOMICS.
THEIR FREE-MARKET IDEOLOGY,
THEY ARGUE, IS JUST ABOUT
PRINCIPLE, BUT THERE ARE MANY,
MANY AREAS IN WHICH THEIR
BUSINESS INTERESTS BUTT INTO
REGULATIONS.
Narrator: ENVIRONMENTAL
REGULATIONS HAVE BEEN ESPECIALLY
BAD FOR THE KOCHS' BOTTOM LINE,
AND THEY'VE BEEN SLAPPED WITH
NUMEROUS FINES FROM THE
ENVIRONMENTAL PROTECTION AGENCY.
WE ARE TALKING ABOUT MILLIONS
OF GALLONS OF CRUDE OIL BEING
RELEASED INTO THE ENVIRONMENT.
Narrator: IN 2000,
KOCH INDUSTRIES HAD TO PAY
A $30-MILLION FINE FOR ITS ROLE
IN OVER 300 OIL SPILLS.
AT THE TIME, IT WAS THE LARGEST
CIVIL PENALTY IN THE E.P.A.'s
HISTORY.
WHEN YOU MAKE BUSINESSES LESS
COMPETITIVE BECAUSE THEY'RE
HAVING TO DEAL WITH REGULATIONS
FROM THE
ENVIRONMENTAL PROJECTION AGENCY
AND OTHER UNELECTED
BUREAUCRACIES, INSTEAD OF
CREATING JOBS AND INSTEAD OF
BEING ABLE TO COMPETE WITH OUR
FOREIGN COMPETITORS, WE KNOW IT
KILLS JOBS.
Narrator: THIS IS
TIM PHILLIPS, THE HEAD
OF THE KOCH BROTHERS'
LATEST VENTURE,
AMERICANS FOR PROSPERITY.
WE'RE GENUINELY FIGHTING
TO PRESERVE AND EXPAND ECONOMIC
FREEDOM, WHICH WE BELIEVE IS
THE BEST WAY TO GIVE FOLKS FROM
EVERY WALK OF LIFE PROSPERITY
AND A SHOT AT A BETTER LIFE.
Narrator: THROUGH
AMERICANS FOR PROSPERITY,
THE KOCHS HAVE PROVIDED
TREMENDOUS FINANCIAL BACKING
TO THE TEA PARTY MOVEMENT BY
ORGANIZING RALLIES AND PROTESTS,
FLYING IN BIG-NAME GUEST
SPEAKERS...
DON'T TAX US ANYMORE!
Narrator: ...AND FLOODING
THE AIRWAVES WITH ADVERTISING.
PEOPLE WERE LOOKING AT THE
TEA PARTY MOVEMENT AS THIS SORT
OF SPONTANEOUS COMBUSTION AND
THIS GRASSROOTS THING THAT JUST
EXPLODED, AND WHAT IT REALLY
WAS, WAS SOMETHING THAT WAS
BEING FED BY LIBERTARIAN
BILLIONAIRES.
WE WANT THE MAXIMUM FREEDOM
TO LAUNCH BUSINESSES, CREATE
OPPORTUNITY, AND EXPAND
PROSPERITY.
WE DESIRE A TAX CODE THAT DOES
NOT PUNISH HARD WORK OR CRUSH
THE ENTREPRENEURIAL SPIRIT THAT
MAKES AMERICA UNIQUE IN THE
WORLD.
THEY HAVE THIS IDEOLOGY
OF THE FREE MARKET AND HOW
MAKING MONEY EQUALS FREEDOM,
AND IF YOU LISTEN TO THE
TEA PARTY RHETORIC, YOU HEAR
EXACTLY THE SAME PHRASES.
OUR SIDE, THE SIDE YOU'RE ON
TODAY IS THE SIDE, FRANKLY, OF
FREEDOM.
YEAH!
[ CHEERS AND APPLAUSE ]
THEY'RE CHANTING "LIBERTY"
AND CHANTING "NO MORE TAXES."
FREEDOM, LIBERTY, AND PEOPLE
WAKING UP TO THE FACT THAT THIS
IS OUR COUNTRY, AND IT'S UP TO
US TO TAKE IT BACK.
OUR RIGHTS ARE BEING TAKEN
AWAY LITTLE BY LITTLE.
Narrator: BUT WHAT KIND
OF FREEDOM IS
AMERICANS FOR PROSPERITY
TALKING ABOUT?
IS IT FREEDOM FOR EVERYONE OR
JUST FOR BILLIONAIRES WHO WANT
FREEDOM FROM TAXES, THE FREEDOM
TO POLLUTE, AND FREEDOM FROM ANY
RESPONSIBILITY TO THE REST OF
SOCIETY.
TO ANSWER THAT QUESTION, JUST GO
TO ONE OF THEIR RALLIES WHERE
YOU'RE LIKELY TO SEE SIGNS
PROMOTING A ONCE DISCREDITED
PHILOSOPHER AND NOVELIST, WHO'S
RECENTLY FOUND A NEW AUDIENCE.
HERE IN THE UNITED STATES,
PERHAPS THE MOST CHALLENGING AND
UNUSUAL NEW PHILOSOPHY HAS BEEN
FORGED BY A NOVELIST AYN RAND.
MISS RAND'S POINT OF VIEW IS
STILL COMPARATIVELY UNKNOWN
IN AMERICA, BUT IF IT EVER DID
TAKE HOLD, IT WOULD
REVOLUTIONIZE OUR LIVES.
I'M OPPOSED TO ALL FORMS OF
CONTROL.
I AM FOR AN ABSOLUTE
LAISSEZ-FAIRE, FREE, UNREGULATED
ECONOMY.
AYN RAND WROTE A SERIES OF
NOVELS THAT HAD BECOME A KIND
OF TOUCHSTONE FOR CONTEMPORARY
REPUBLICAN POLITICIANS, MOST
NOTABLY "ATLAS SHRUGGED."
THERE'S ATLAS.
HE HOLDS THE WORLD ON HIS
SHOULDERS.
WHAT IF ATLAS SHRUGGED?
PICTURE THIS.
AN ANTI-UTOPIA SOCIETY THAT
COLLAPSES UNDER GOVERNMENT
CONTROL.
DOES THAT SOUND FAMILIAR?
IT SHOULD.
IT'S AYN RAND'S STORY OF
"ATLAS SHRUGGED," AND NOW IT'S
A MOVIE, ONE VERY POPULAR WITH
TEA PARTY MEMBERS.
Narrator: "ATLAS SHRUGGED"
IS ABOUT AN AMERICA WHERE
BUSINESSES ARE REGULATED,
THE RICH PAY TAXES, AND THE
GOVERNMENT TRIES TO HELP THE
MIDDLE CLASS AND THE POOR.
IN OTHER WORDS, A DOOMSDAY
SCENARIO.
VIOLENCE AND CRIME ARE
SKYROCKETING.
Narrator: IN RAND'S WORLD,
ANYONE WHO NEEDS A LITTLE HELP
IN LIFE IS A MOOCHER OR A
PARASITE, AND ANYONE WHO WANTS
TO HELP OTHERS IS A VILLAIN.
HER HEROES ARE PROUD TO BE
AS SELFISH AS POSSIBLE.
YOU REALLY DON'T CARE ABOUT
HELPING THE UNDERPRIVILEGED,
DO YOU?
NO, PHILLIP, I DON'T.
THERE ARE STATEMENTS BY
JOHN GALT, THE CHARACTER IN
"ATLAS SHRUGGED," THAT IF YOU
SO MUCH AS SMILE AT THE POOR
PERSON, IF YOU GIVE HIM PENNIES,
YOU PUT THE WORLD ON A PATH OF
DESTRUCTION.
Narrator: FINALLY, THE
C.E.O.s OF AMERICA GET SICK
AND TIRED OF LIVING UNDER
A GOVERNMENT THAT NO LONGER
CATERS TO THEM, AND THEY DECIDE
TO GO ON STRIKE.
WHAT ARE YOU SELLING, PAL?
NOTHING.
I'M SIMPLY OFFERING A SOCIETY
THAT CULTIVATES INDIVIDUAL
ACHIEVEMENT.
Narrator: THEY HEAD OFF INTO
THE MOUNTAINS AND START A NEW
SOCIETY, ONE WHERE THERE IS
NO GOVERNMENT.
"ATLAS SHRUGGED" IS TOLD AS
A HORROR STORY, A NIGHTMARISH
VISION OF WHAT WOULD HAPPEN
TO OUR COUNTRY IF WEALTHY
AMERICANS LIKE DAVID KOCH AND
STEVE SCHWARZMAN JUST LEFT US
TO FEND FOR OURSELVES.
NOOOOOO!
YEAH, WE SUPPORT IT.
WE HAD SCREENINGS AROUND THE
COUNTRY, AND WE LIKE THAT STORY
TO BE OUT THERE, AND WE LIKE
THE IDEAS TO BE OUT THERE, AND
WE CERTAINLY BELIEVE AND SHARE
MANY OF THE PRINCIPLES AND
VALUES THAT BOOK WAS BASED ON,
THE INHERENT MORALITY OF
CAPITALISM.
YOU DO NOT LIKE THE ALTRUISM
BY WHICH WE LIVE.
WELL, SAY THAT I DON'T LIKE
IS TOO WEAK A WORD.
I CONSIDER IT EVIL.
THE APPEAL OF AYN RAND IS
THAT, YOU KNOW, IT'S BASICALLY
THE GORDON GEKKO MESSAGE --
"GREED IS GOOD."
THAT IDEOLOGY IS APPEALING,
I SUPPOSE, IF YOU HAVE A
TREMENDOUS AMOUNT OF MONEY.
YOU MIGHT FEEL GUILTY,
OTHERWISE.
HOW DOES YOUR PHILOSOPHY
TRANSLATE ITSELF INTO THE WORLD
OF POLITICS?
WE BELIEVE THAT AMERICA
DESERVES A CHOICE OF TWO
FUTURES.
WE BELIEVE...
Narrator: PAUL RYAN RECEIVES
MORE MONEY FROM THE KOCH
BROTHERS THAN ANY OTHER MEMBER
OF CONGRESS.
HE IS ALSO THE COUNTRY'S MOST
POWERFUL POLITICIAN TO PUBLICLY
EMBRACE THE PHILOSOPHY OF
AYN RAND.
BY RUNNING ON HIS ANTIGOVERNMENT
VIEWS, THIS REPUBLICAN FROM
WISCONSIN BECAME A TEA PARTY
FAVORITE, A POWERFUL MEMBER
OF CONGRESS, AND A CANDIDATE
FOR HIGH OFFICE.
JOIN ME IN WELCOMING THE NEXT
PRESIDENT OF THE UNITED STATES,
PAUL RYAN.
VICE PRESIDENT OF THE
UNITED STATES.
[ LAUGHS ]
WE WILL RESTORE THE GREATNESS
OF THIS COUNTRY.
IT IS OUR DUTY TO SAVE THE
AMERICAN DREAM FOR OUR CHILDREN.
WHAT KIND OF PEOPLE DO WE WANT
TO BE?
Narrator: WITH HIS RISE TO
PROMINENCE, RYAN HAS DENIED HIS
AFFECTION FOR AYN RAND, BUT
HISTORY TELLS A DIFFERENT STORY.
I JUST WANT TO SPEAK TO YOU
A LITTLE BIT ABOUT AYN RAND AND
WHAT SHE MEANT TO ME IN MY LIFE
AND THE FIGHT WE'RE ENGAGED HERE
IN CONGRESS.
I GREW UP READING AYN RAND, AND
IT TAUGHT ME QUITE A BIT ABOUT
WHO I AM AND WHAT MY VALUE
SYSTEMS ARE AND WHAT MY BELIEFS
ARE.
THE REASON I GOT INVOLVED IN
PUBLIC SERVICE, BY AND LARGE,
IF I HAD TO CREDIT ONE THINKER,
ONE PERSON, IT WOULD BE
AYN RAND.
YOU BELIEVE THAT THERE SHOULD
BE NO RIGHT BY THE GOVERNMENT TO
TAX.
YOU BELIEVE THAT THERE SHOULD BE
NO SUCH THING AS WELFARE
LEGISLATION, UNEMPLOYMENT
COMPENSATION.
IT'S INSPIRED ME SO MUCH THAT
IT'S REQUIRED READING IN MY
OFFICE FOR ALL MY INTERNS AND
MY STAFF.
WE START WITH "ATLAS SHRUGGED."
HOW DO WE BUILD ROADS,
SANITATION FACILITIES,
HOSPITALS, SCHOOLS?
I BELIEVE IN PRIVATE ROADS,
PRIVATE POST OFFICES, PRIVATE
SCHOOLS.
IT'S SO IMPORTANT THAT WE GO
BACK TO OUR ROOTS TO LOOK AT
AYN RAND'S VISION, HER WRITINGS
TO SEE WHAT OUR GIRDING,
UNDERGROUNDING PRINCIPLES ARE.
WE HAVE TO GO BACK TO AYN RAND.
OUR PLAN TAKES POWER AWAY FROM
WASHINGTON AND GIVES IT BACK
TO THE INDIVIDUAL.
Narrator: WHILE IN CONGRESS,
RYAN PUT AYN RAND'S PHILOSOPHY
INTO PRACTICE THROUGH A PLAN
HE CALLED
"THE PATH TO PROSPERITY."
IT WAS A BUDGET PROPOSAL THAT
WOULD DRAMATICALLY CUT
GOVERNMENT PROGRAMS TO THE POOR
WHILE HANDING OUT AN EVEN BIGGER
TAX CUT FOR THE RICH.
I THINK THAT
"THE PATH TO PROSPERITY"
THAT CHAIRMAN RYAN AND HIS
COMMITTEE HAVE PUT TOGETHER
IS A BLUEPRINT FOR AMERICA'S
FUTURE.
Narrator: "THE PATH TO
PROSPERITY" PASSED THE HOUSE
OF REPRESENTATIVES IN MARCH
OF 2012.
IT NOW APPEARS TO BE AT THE
HEART OF THE ECONOMIC PHILOSOPHY
OF THE REPUBLICAN PARTY.
MITT ROMNEY AND I WILL TAKE
THE RIGHT STEPS IN THE RIGHT
TIME TO GET US BACK ON THE RIGHT
TRACK.
WHAT DO YOU THINK OF RYAN'S
BUDGET FRAMEWORK?
OH, I THINK IT'S RIDICULOUS
ON THE FACE OF IT.
HE'S PROPOSING A $10-TRILLION
TAX CUT AS PART OF HIS
DEFICIT-REDUCTION PLAN, AND
OBVIOUSLY IF YOU'RE GONNA CUT
TAXES BY $10 TRILLION, YOU'VE
GOT TO CUT SPENDING BY EVEN MORE
THAN $10 TRILLION.
EVERY PROGRAM YOU CAN POSSIBLY
THINK OF FROM ROADS TO EDUCATION
TO ENERGY WOULD BE MORE OR LESS
ABOLISHED IF YOU'RE GONNA TAKE
SERIOUSLY THE NUMBERS THAT HE
HAS PUT FORWARD.
THE IDEA THAT THERE'S
LEGITIMATE ECONOMICS BEHIND THIS
IS ABSURD.
CONSERVATIVES THROUGHOUT THE
AGES HAVE NEVER SPOKEN LIKE
PAUL RYAN.
MILTON FRIEDMAN TALKED ABOUT
NEGATIVE INCOME TAX AND
GUARANTEED INCOMES FOR THE POOR.
FRIEDRICH HAYEK, WHO WAS ONE
OF THE ACMES OF FREE-MARKET
ECONOMICS, TALKED ABOUT THE NEED
OF SOCIETIES TO GUARANTEE
MINIMUM STANDARDS AND PROVIDE
HEALTHCARE.
SO THERE'S CLEARLY AN
IDEOLOGY INVOLVED HERE.
THEY ACTUALLY WANT TO USE TAX
POLICY TO EVISCERATE GOVERNMENT
PROGRAMS.
IF WE TRY TO GO DOWN THE PATH
WHERE WE PUT THE GOVERNMENT IN
THE PLACE TO EQUALIZE THE
RESULTS OF PEOPLE'S LIVES, WHERE
WE TRY TO EQUALIZE OUTCOMES,
WE'LL ALL BE MORE EQUALLY
MISERABLE.
[ LIGHT LAUGHTER ]
RATHER LET'S FOCUS ON EQUALITY
OF OPPORTUNITY.
MY MOM USED TO SAY TO ME,
"SON, IT DON'T MATTER WHERE YOU
BEGAN.
WHAT MATTERS IS WHERE YOU END.
YOU LIVE IN THE UNITED STATES
OF AMERICA," AND THAT'S
SOMETHING THAT I THINK IS AN
INHERENTLY MORAL THING ABOUT
AMERICA.
IT GIVES YOU A CHANCE TO MAKE
IT.
MUCH OF WHAT THEY SAY IS
ABOUT PROVIDING OPPORTUNITY
TO MAKE MONEY TO EVERYBODY
EQUALLY.
THAT'S WHAT THEY WOULD ARGUE
ABOUT, AND IT DOESN'T SEEM TO
ACCEPT THE POSSIBILITY THAT IF
YOU'RE POOR ENOUGH AND YOUR
SCHOOLING IS BAD ENOUGH THAT YOU
DON'T REALLY HAVE AN OPPORTUNITY
TO COMPETE.
[ INDISTINCT CONVERSATIONS ]
Narrator: ALMOST EVERYONE
AGREES THAT EDUCATION IS THE KEY
TO UPWARD MOBILITY.
FOR PEOPLE STARTING AT THE
BOTTOM OF THE LADDER, A COLLEGE
DEGREE CAN QUADRUPLE THEIR
CHANCES OF MAKING IT TO THE TOP.
BUT COLLEGE IS INCREASINGLY OUT
OF REACH.
THE COST HAS GONE UP OVER 500%
SINCE 1980.
MEANWHILE, WITHOUT A COLLEGE
DEGREE, IT'S HARDER THAN EVER
TO GET A JOB.
IF YOU ONLY HAVE A HIGH-SCHOOL
DIPLOMA, THERE'S A 7-IN-10
CHANCE THAT YOU DON'T HAVE
FULL-TIME WORK AT ALL.
IT'S A CRUEL IRONY THAT THE
U.S. ECONOMY HAS A DESPERATE
NEED FOR SKILLED LABOR IN
MANUFACTURING, HIGH-TECH,
AND HEALTH INDUSTRIES.
BUT THERE AREN'T ENOUGH
QUALIFIED WORKERS TO FILL THOSE
JOBS.
EVEN WITH 12 MILLION AMERICANS
UNABLE TO FIND WORK, TRAINING
AND EDUCATION PROGRAMS ARE BEING
SLASHED BY BOTH PARTIES IN FAVOR
OF TAX CUTS FOR THE RICH.
I FIND IT HARD TO BE AN
OPTIMIST RIGHT NOW FOR PEOPLE
WHOM I CARE ABOUT AND PEOPLE
WHO THE POVERTY INSTITUTE CARES
ABOUT, PEOPLE WHO WANT TO
SUPPORT THEIR FAMILIES THROUGH
WORK AND CAN'T.
Narrator: TODAY ONE IN SEVEN
AMERICANS RECEIVES FOOD STAMPS.
MORE THAN HALF OF THOSE PEOPLE
ARE CHILDREN AND ELDERLY.
41% OF RECIPIENTS LIVE IN
WORKING HOUSEHOLDS.
A JOB IS NO LONGER ENOUGH TO
KEEP AMERICANS OUT OF POVERTY.
FOR THE PEOPLE THAT THINK,
"OKAY, THEY DON'T NEED ANYTHING.
THEY DON'T NEED A HANDOUT.
THEY SHOULD JUST GO GET A JOB."
YES, AS SOON AS THEY CREATE JOBS
FOR PEOPLE TO GET THEM, THEN
GREAT.
I'M PRETTY SURE THEY'LL BE
THERE.
THERE'S NOTHING.
SO WHAT DO YOU DO WHEN THERE'S
NOTHING?
THAT'S WHERE THE SAFETY NET
COMES IN.
Narrator: BUT IT'S NOT JUST
THE POOR WHO ARE STRUGGLING IN
AMERICA.
IN PAUL RYAN'S HOME STATE OF
WISCONSIN, MANY RESIDENTS WHO
WERE ONCE MIDDLE CLASS NOW HAVE
A HARD TIME MEETING THEIR BASIC
NEEDS.
IN THE WELL-TO-DO COUNTY OF
WAUKESHA, OVER 6,000 PEOPLE
USE THIS FOOD PANTRY EVERY
MONTH.
WE DO HEAR A LOT FROM PEOPLE,
YOU KNOW, "WHY DO YOU NEED A
FOOD PANTRY IN WAUKESHA COUNTY?
THERE'S NO WAY THAT SHOULD BE
NECESSARY."
WE'RE SEEING MORE INDIVIDUALS
AND FAMILIES THAT HAVE HIGH
EDUCATION LEVELS AND
PROFESSIONAL TRAINING MORE SO
THAN ANY OTHER TIME IN OUR
HISTORY, PEOPLE WHO, BECAUSE
OF DIFFERENT FACTORS IN THE
ECONOMY RIGHT NOW HAVE LOST
THEIR JOB OR HAVE HAD REDUCTIONS
IN INCOME.
SO ACCESS TO FREE FOOD IS ABOUT
THE ONLY WAY THAT THEY CAN
STRETCH THEIR MONETARY
RESOURCES.
THE VEGETABLE WITH BEEF.
MY HUSBAND LOST HIS JOB, AND SO
WE ARE WORKING OFF ONE INCOME,
AND WE ALSO HAVE A 6-YEAR-OLD
WHO HAS A MEDICAL CONDITION,
SO IT GETS A LITTLE EXPENSIVE
WITH THAT, AS WELL.
I WOULD SAY IF WE DIDN'T HAVE
IT, WE PROBABLY WOULDN'T GET
A LOT OF THE THINGS THAT WE
NEED.
WHEN YOU'RE ON UNEMPLOYMENT,
YOU'RE SUPPOSED TO APPLY FOR
WORK TWO PLACES A WEEK, AND I
WAS APPLYING, LIKE, EVERY DAY.
I RAN OUT OF PLACES TO APPLY TO.
I WOULD APPLY EVEN AT
McDONALD'S.
THEY NEVER EVEN CALLED ME BACK.
I'M HOPING OUR POLITICIANS ARE
SMART ENOUGH TO KEEP THESE
PROGRAMS.
WHAT WORRIES ME IS WHEN THEY SAY
THEY WANT TO CUT GOVERNMENT
SPENDING.
I'M THINKING LOW-INCOME HOUSING
'CAUSE IT'S ALL A WASTE TO THEM,
BUT I DON'T THINK THEY REALIZE
HOW ESSENTIAL IT IS TO US.
YOU KNOW, THEY MAKE MONEY.
THEY DON'T HAVE TO WORRY ABOUT
THAT, AND 9 TIMES OUT OF 10,
THEY'VE COME FROM WEALTHY
BACKGROUNDS.
THEY HAVE NO CLUE WHAT IT'S LIKE
TO BE THIS, AND UNTIL YOU BEEN
THERE, IT'S A WHOLE DIFFERENT
BALL GAME.
WHEN I WAS WORKING THE CORNER
GRILL AT McDONALD'S ON THE
INTERSTATE IN JANESVILLE AS
A KID, WHEN I WAS DETASSLING
CORN, WHEN I WAITED TABLES
TO PAY BACK MY STUDENT LOANS,
I DIDN'T THINK OF MYSELF AS
STUCK IN SOME CLASS.
I THOUGHT OF MYSELF ON THE WAY
TO OPPORTUNITY.
THAT'S WHAT THIS COUNTRY'S ALL
ABOUT.
[ CHEERS AND APPLAUSE ]
Narrator: YET PAUL RYAN'S
BUDGET PROPOSAL WOULD CUT
THE FOOD-STAMP PROGRAM BY
$134 BILLION OVER THE NEXT
10 YEARS, WHICH COULD SHRED
THE SAFETY NET FOR 8 MILLION
PEOPLE.
[ LAUGHS ]
I APPRECIATE IT.
I'VE GOT SOME BIBLES.
THANK YOU VERY MUCH.
[ ENGINE TURNS OVER ]
Narrator: IN APRIL 2012,
THE U.S. CONFERENCE OF
CATHOLIC BISHOPS URGED CONGRESS
TO PROTECT FOOD STAMPS.
BISHOPS SUGGESTED THAT IF
SPENDING CUTS WERE NECESSARY,
THEY SHOULD BE MADE TO
GOVERNMENT SUBSIDIES FOR RICH
AGRICULTURAL COMPANIES INSTEAD
OF TAKING FOOD FROM HUNGRY
CHILDREN, POOR FAMILIES,
AND VULNERABLE SENIORS.
OUR NATION IS APPROACHING
A TIPPING POINT.
WE'RE AT A MOMENT WHERE IF
GOVERNMENT'S GROWTH IS LEFT
UNCHECKED AND UNCHALLENGED,
AMERICA'S BEST CENTURY WILL BE
CONSIDERED OUR PAST CENTURY.
THIS IS A FUTURE IN WHICH WE
WILL TRANSFORM OUR SOCIAL
SAFETY NET INTO A HAMMOCK.
YOU CAN PAUL RYAN TALK ABOUT
HIS HAMMOCK.
THIS HAMMOCK -- THE AVERAGE
BENEFIT IN WISCONSIN WAS $246
A MONTH LAST YEAR FOR TWO
PEOPLE, ABOUT $350 FOR FOUR.
IS THAT ENOUGH FOR YOU TO SAY,
"AH, PUT MY FEET UP ON A
HAMMOCK.
YOU KNOW, I GOT THESE FOOD
STAMPS."
FEEDING PEOPLE IS SOMETHING THAT
THIS COUNTRY CAN AFFORD TO DO
AND SHOULD BE ABLE TO DO.
THAT'S NOT A HAMMOCK.
AND IF YOU TRY TO RAISE OUR
TAXES AND TRAMPLE ON OUR
LIBERTIES, WE'RE EITHER GOING TO
BEAT YOU OR MAKE YOUR LIFE
MISERABLE!
[ CHEERS AND APPLAUSE ]
THE GOVERNMENT HAS BEEN
STARVED OF FUNDS.
WE'RE AT ABOUT THE LOWEST TAX
COLLECTION AS A SHARED NATIONAL
INCOME IN OUR MODERN HISTORY.
WE CAN'T EVEN PAY FOR THE MOST
BASIC PUBLIC SERVICES RIGHT NOW.
WE CAN'T KEEP OUR SCHOOLS
FUNCTIONING, WE CAN'T KEEP OUR
ROADS INTACT.
TAXES ARE THE PRICE YOU PAY FOR
CIVILIZATION, AND IF YOU DON'T
PAY TAXES, YOU DON'T GET
CIVILIZATION.
IT'S AS SIMPLE AS THAT.
Narrator: BY THAT MEASURE,
OUR CIVILIZATION IS IN TROUBLE.
GENERAL ELECTRIC MADE
$5 BILLION IN U.S. PROFITS LAST
YEAR, BUT CLAIMED A $3.3-BILLION
TAX CREDIT.
Narrator: THESE DAYS, SOME OF
THE NATION'S MOST PROFITABLE
COMPANIES ARE PAYING LITTLE OR
NO TAXES AT ALL.
THANKS TO TAX BREAKS, LOOPHOLES,
AND CLEVER ACCOUNTING, THE
TAX RATE CORPORATIONS ACTUALLY
PAY IS AT AN ALL-TIME LOW.
THE SAME THING IS TRUE FOR
PERSONAL INCOME TAXES,
ESPECIALLY FOR THE ULTRA RICH.
TAX RATES FOR MILLIONAIRES HAVE
DROPPED MORE THAN 25% IN THE
LAST TWO DECADES, AND FOR A
HANDFUL OF EXTREMELY WEALTHY
INDIVIDUALS AT THE TOP, TAXES
HAVE FALLEN BY ALMOST 50%.
A BIG PART OF THAT DIP IS
BECAUSE OF THE TAX CUT SIGNED
INTO LAW BY PRESIDENT
GEORGE W. BUSH.
BUSH SLASHED THE CAPITAL GAINS
RATE ON INVESTMENTS TO 15%,
NEARLY HALF WHAT THE RATE WAS
UNDER RONALD REAGAN.
BUT EVEN THOUGH THE RICH GOT
MOST OF THE BENEFITS, THE
ARGUMENT WAS THAT THESE TAX CUTS
WOULD BE GOOD FOR ALL OF US.
IF YOU HAVE ZERO CAPITAL
GAINS IN TERMS OF THE TAX CODE,
YOU'RE GONNA SEE BILLIONS OF
DOLLARS POUR INTO INVESTMENT,
BILLIONS OF DOLLARS OPEN UP NEW
FACTORIES, BILLIONS OF DOLLARS
INVEST IN NEW TECHNOLOGY, AND
WE'RE CERTAINLY GONNA HAVE THE
MOST DYNAMIC ECONOMY IN THE
WORLD.
[ CHEERS AND APPLAUSE ]
Narrator: IT'S A THEORY
AYN RAND WOULD LOVE.
YOU HAVE TO MAKE SURE THAT
THE RICH ARE HAPPY SO THEY DON'T
GO ON STRIKE.
WELL, THAT'S THE ARGUMENT,
BUT YOU DON'T REALLY SEE ANY
ACTUAL ECONOMIC EVIDENCE TO
PROVE THAT.
THE REPUBLICANS MADE ALL THESE
ARGUMENTS BACK IN 2003 THAT IF
WE CUT TAXES ON DIVIDENDS AND
CAPITAL GAINS AND REDUCE THE TOP
TAX RATE ON THE WEALTHY, WE'LL
GET THIS EXPLOSION OF INVESTMENT
AND GROWTH AND JOBS.
YOU CAN LOOK UP THE DATA FOR
YOURSELF, BUT I CERTAINLY DON'T
REMEMBER ANY BIG INCREASE IN
GROWTH AFTER 2003.
YOU KNOW, MY JOB IS,
I'M A VENTURE CAPITALIST.
WHAT I DO IS I INVEST IN SMALL,
TYPICALLY HIGH-TECHNOLOGY
COMPANIES WITH THE OBJECTIVE
OF HELPING THEM GROW AND
HOPEFULLY HAVING THEM GROW
A LOT.
Narrator: GARRETT GRUENER IS
A MILLIONAIRE BUSINESSMAN AND
A MEMBER OF THE
PATRIOTIC MILLIONAIRES
FOR FISCAL STRENGTH, A GROUP
THAT ADVOCATES RAISING TAXES
ON PEOPLE LIKE HIMSELF.
THE REPUBLICANS ARGUE THAT AS
YOU REDUCE MARGINAL TAXES, YOU
INCENT PEOPLE TO MAKE THE SORTS
OF INVESTMENT THAT I'VE MADE.
IN FACT, THAT HAS NOT BEEN MY
EXPERIENCE AT ALL.
I HAVE LITERALLY NOT ONCE EVER
LOOKED AT MARGINAL TAX RATES
AS A REASON TO MAKE OR NOT MAKE
AN INVESTMENT.
THE BUSH TAX CUTS WERE THE
PAYOFF FOR A LOT OF INVESTMENT
THAT THE WEALTHY MADE IN THE
REPUBLICAN PARTY OVER A VERY
LONG PERIOD OF TIME, AND THEY
WERE THE PRIME BENEFICIARIES
OF IT.
THERE WAS ESSENTIALLY NO
ECONOMIC IMPACT AT ALL EXCEPT
THAT IT INCREASED THE DEFICIT.
Narrator: THE BUSH TAX CUTS
HAVE ADDED OVER $2.9 TRILLION
TO THE NATIONAL DEBT.
PAUL RYAN'S PROPOSED TAX CUTS
WOULD ADD ANOTHER $4.6 TRILLION
IN DEBT OVER THE NEXT 10 YEARS.
WHAT'S HARD TO UNDERSTAND ABOUT
THIS RELENTLESS PUSH TO CUT
TAXES FOR THE RICH IS THAT THEY
ALREADY HAVE SO MUCH MORE THAN
THE REST OF US.
IN 1965, C.E.O.s MADE ABOUT
20 TIMES AS MUCH AS THE AVERAGE
WORKER.
TODAY, BY THE MOST CONSERVATIVE
ESTIMATE, THAT NUMBER IS 231.
SO WHAT'S GOING ON HERE?
ARE C.E.O.s GETTING PAID MORE
BECAUSE THEY DESERVE IT?
MEET ANOTHER RESIDENT OF
740 PARK -- JOHN THAIN,
THE HIGHEST-PAID C.E.O. IN 2007.
THAIN'S APARTMENT IS ACTUALLY
MY PERSONAL FAVORITE FOR IF I
COULD LIVE AT 740 PARK.
IT'S A LITTLE, TINY JEWEL-BOX
DUPLEX.
IT'S GOT FOUR EXPOSURES, AND
IT'S ON THE CENTRAL PARK SIDE
OF THE BUILDING.
Narrator: THAIN HAD BEEN
A SENIOR EXECUTIVE AT
GOLDMAN SACHS AND SERVED
AS C.E.O. OF THE NEW YORK
STOCK EXCHANGE BEFORE BECOMING
THE HEAD OF THE INVESTMENT BANK
MERRILL LYNCH.
IN 2008, AS LOSSES WERE SOARING
AND HIS COMPANY STOCK WAS
PLUMMETING, THAIN WAS BUSY
WITH A $1.2-MILLION OFFICE
RENOVATION.
YOU SPENT MORE THAN A MILLION
DOLLARS RENOVATING YOUR OFFICE.
IS THIS TRUE?
IT WAS MY OFFICE.
IT WAS TWO CONFERENCE ROOMS,
AND IT WAS A RECEPTION AREA,
BUT IT IS CLEAR TO ME IN TODAY'S
WORLD THAT IT WAS A MISTAKE.
I APOLOGIZED FOR SPENDING THAT
MONEY ON THOSE THINGS.
Narrator: WHILE THAIN WAS
BUSY PICKING CHAIRS, RUGS, AND
WASTEBASKETS, MERRILL AND THE
OTHER INVESTMENT BANKS HELP
BRING DOWN THE GLOBAL ECONOMY.
WALL STREET HAS BEEN TURNED
UPSIDE DOWN.
THE COLLAPSE OF ONE
INVESTMENT BANK, THE TAKEOVER
OF ANOTHER.
$29 BILLION TO HELP
JP MORGAN...
$85 BILLION TO BAIL OUT
THE INSURANCE GIANT A.I.G.
Narrator: WALL STREET WAS
RESCUED BY U.S. TAXPAYERS, NOT
ONLY THROUGH BAILOUTS, BUT ALSO
THROUGH GOVERNMENT LOANS THAT
CARRIED VIRTUALLY NO INTEREST.
I'M CONFIDENT THAT THIS
RESCUE PLAN, ALONG WITH OTHER
MEASURES TAKEN BY THE
TREASURY DEPARTMENT AND
THE FEDERAL RESERVE, WILL BEGIN
TO RESTORE STRENGTH AND
STABILITY TO AMERICA'S FINANCIAL
SYSTEM AND OVERALL ECONOMY.
Narrator: MEANWHILE, UNDER
PRESIDENTS BUSH AND OBAMA,
MILLIONS OF MIDDLE-CLASS
AMERICAN HOMEOWNERS FACING
FORECLOSURE RECEIVED ONLY A TINY
FRACTION OF THE BAILOUTS GIVEN
TO WEALTHY BANKERS.
IN THE END, MERRILL LYNCH
SUFFERED OVER $27 BILLION IN
LOSSES UNDER THAIN'S LEADERSHIP
AND WAS SOLD TO BANK OF AMERICA.
BUT THAT DIDN'T STOP THAIN FROM
HANDING OUT $3.6 BILLION IN
PERFORMANCE BONUSES TO MERRILL
EXECUTIVES.
THE BONUSES WERE PAID EVEN AS
MERRILL SUFFERED $15 BILLION IN
LOSSES.
IF YOU LIVE IN A WORLD WHERE
EVERYONE YOU KNOW IS CHASING
HUGE SUMS OF MONEY EVERY DAY,
AND THEIR MORALITY IS DETERMINED
BY WHAT IT'S NECESSARY TO DO TO
GET RICHER AND RICHER AND
RICHER, YOU'RE NOT GOING TO HAVE
THE SAME MORAL CONSTRUCTS
AFFECTING YOUR BEHAVIOR.
WHEN SOMEONE WAS MADE TO BE
RICH, EVEN IN A VERY BASIC GAME
OF MONOPOLY, THEY BECOME MORE
SELF-CENTERED, MORE DOMINANT,
AND LESS SENSITIVE TO HOW THEIR
BEHAVIOR IS AFFECTING THE OTHER
PERSON.
AS WEALTH BECOMES INCREASINGLY
CONCENTRATED IN THE HANDS OF
A SELECT GROUP OF INDIVIDUALS,
WE'RE SEEING THEM BECOME MORE
AND MORE INSULAR FROM THE REST
OF SOCIETY.
WHEN I STARTED AT 740, I WAS
LIKE, "THIS IS GREAT, YOU KNOW?
COME AROUND TO CHRISTMASTIME,
I'M GOT $1,000 FROM EACH
RESIDENT, YOU KNOW, BECAUSE
THEY ARE MULTIBILLIONAIRES."
BUT IT'S NOT THAT WAY.
THESE GUYS ARE BUSINESSMEN.
THEY KNOW WHAT THE GOING RATE
IS.
THEY'RE NOT GOING TO GIVE YOU
ANYTHING MORE THAN THAT.
THE CHEAPEST PERSON OVERALL
WAS DAVID KOCH.
WE WOULD LOAD UP HIS TRUCKS,
TWO VANS USUALLY, EVERY WEEKEND
FOR THE HAMPTONS -- YOU KNOW,
I MEAN MULTIPLE TRIPS, MULTIPLE
GUYS IN AND OUT, IN AND OUT,
HEAVY BAGS.
WE WOULD NEVER GET A TIP FROM
MR. KOCH.
WE WOULD NEVER GET A SMILE FROM
MR. KOCH -- $50 CHECK FOR
CHRISTMAS.
A CHECK?
A CHECK, TOO, YEAH.
I MEAN, AT LEAST YOU COULD GIVE
US CASH.
IT SEEMED THAT KIDS BETWEEN 12
AND 15, THEY REALIZED THAT THEY
WERE BILLIONAIRES.
UP TILL THAT AGE, THEY'D COME IN
FROM SOCCER PRACTICE.
YOU KNOW, YOU'D HAVE SPECIFIC
HIGH FIVES THAT YOU'D GIVE THEM.
YOU'D BE THEIR BUDDY.
BUT WHEN THEY GET OLDER, THE
KIDS WOULD SUDDENLY COME DOWN
TO THE LOBBY AND THEY'D JUST BE
DIFFERENT PEOPLE.
THEY'D WALK PAST YOU, AND THEY'D
HAVE A DIFFERENT WALK.
THEY WALKED LIKE THEIR DAD
SUDDENLY.
THEIR PARENTS MUST HAVE SAT THEM
DOWN AND SAID, YOU KNOW, "THIS
IS HOW YOUR LIFE IS, YOU KNOW?
YOU'RE A BILLIONAIRE, AND
THEY'RE YOUR DOORMEN, AND
THEY'RE YOUR HOUSEKEEPERS, AND
THEY'RE YOUR DRIVERS, AND
THEY'RE NOT IMPORTANT,"
YOU KNOW?
JUST BECAUSE YOU'RE RICH
DOESN'T MAKE YOU SMART.
JUST BECAUSE YOU'RE RICH DOESN'T
MAKE YOU CULTURED.
JUST BECAUSE YOU'RE RICH DOESN'T
MAKE YOU REFINED.
BEING RICH MEANS YOUR RICH.
SOME RICH PEOPLE ARE JUST DICKS.
STEPHEN SCHWARZMAN UNLEASHED
A DISGUSTING COMPARISON OVER
THE ADMINISTRATION'S EFFORT
TO INCREASE TAXES.
HE SAID...
IN THOUSANDS OF DIFFERENT
PEOPLE THAT WE'VE STUDIED ACROSS
THE COUNTRY, THE MORE YOU HAVE,
THE MORE ENTITLED AND DESERVING
OF THOSE THINGS YOU FEEL, AND
THAT MIGHT ACCOUNT, IN PART, FOR
THE VITRIOL THAT YOU SEE WHEN
PEOPLE FEEL LIKE THEIR
PRIVILEGED POSITION IS BEING
UNDERMINED BY OTHERS.
SINCE WHEN IN THIS COUNTRY
WAS IT OKAY TO DEMONIZE SUCCESS?
THE FREE-ENTERPRISE SYSTEM
IS UNDER ATTACK.
BACK TO THE OLD POPULIST
DEMONIZE THE RICH.
YOU KNOW, THE REPUBLICANS
ARE ALWAYS COMPLAINING ABOUT
THE DEMOCRATS PLAYING CLASS
WARFARE.
THE DEMOCRATIC PARTY'S GONNA
HAVE TO STOP BASHING THE RICH.
BUT THEY DO IT THEMSELVES
BY, FOR EXAMPLE, THEY'RE ALWAYS
QUICK TO POINT OUT THAT
SOMETHING LIKE HALF OF ALL
PEOPLE WHO FILE INDIVIDUAL
INCOME-TAX RETURNS HAVE EITHER
A ZERO OR A NEGATIVE TAX
LIABILITY.
WE HAVE A SYSTEM TODAY IN
THE UNITED STATES WHERE 45%
OF AMERICANS DON'T PAY ANY
INCOME TAX.
YOU HAVE TO HAVE SKIN IN
THE GAME.
Narrator: NO SKIN IN THE
GAME?
FOR THE BILLIONAIRES AT
740 PARK, IT'S SAFE TO SAY
THAT PAYING TAXES HAS NO
MEANINGFUL IMPACT ON WHETHER
THEY CAN PUT FOOD ON THE
TABLE, KEEP THEIR FAMILIES
HEALTHY, OR SEND THEIR KIDS
TO COLLEGE.
BUT ON THE OTHER PARK AVENUE,
SKIN IN THE GAME HAS A MORE
LITERAL MEANING.
IT STARTS AT BIRTH.
INFANT MORTALITY IN THE
UNITED STATES IS ALREADY
HIGHER THAN ALMOST EVERY
OTHER DEVELOPED COUNTRY, BUT
IN PARTS OF THE SOUTH BRONX,
IT'S EVEN WORSE.
HERE INFANTS ARE FOUR TIMES MORE
LIKELY TO DIE THAN THEY ARE IN
THE WEALTHY NEIGHBORHOODS ACROSS
THE RIVER.
AS FOR THE TAX CONTRIBUTIONS
OF AMERICA'S POOR, PEOPLE WHO
LIVE IN POVERTY HAVE SKIN IN
THAT GAME, TOO.
OVER 45% OF THE PEOPLE IN
THIS COUNTRY DON'T PAY INCOME
TAXES AT ALL, AND WE HAVE TO
QUESTION WHETHER THAT'S FAIR.
THOSE ARE PEOPLE WHO DON'T
PAY INCOME TAXES, OKAY?
IT INCLUDES ALL ELDERLY WOMEN
LIVING ALONE WHO JUST HAVE
ENOUGH SOCIAL SECURITY.
THEY DON'T EVEN DECLARE IT.
IT INCLUDES DISABLED PEOPLE WHO
DON'T HAVE EARNINGS.
BUT ALL THOSE PEOPLE PAY PAYROLL
TAXES, SALES TAXES, PROPERTY
TAXES.
STATE AND LOCAL TAXES,
GASOLINE TAXES, LIQUOR TAXES.
THIS IS RIDICULOUS TO SAY
LOW-INCOME PEOPLE DON'T PAY
TAXES.
THEY DO PAY TAXES, AND THEY PAY
A LOT OF THEM.
THEY'VE MANAGED TO TAKE THE
RESENTMENT OF THE MIDDLE CLASS,
WHICH HAS ACTUALLY BEEN QUITE
ECONOMICALLY SQUEEZED OVER
THE LAST COUPLE DECADES, AND
TURN THEIR RESENTMENT AGAINST
THE PEOPLE BENEATH THEM.
I THINK WE'RE REACHING
A TIPPING POINT.
WE'RE COMING CLOSE TO A TIPPING
POINT IN AMERICA WHERE WE MIGHT
HAVE A NET MAJORITY OF TAKERS
VERSUS MAKERS IN SOCIETY.
IT'S REALLY, YOU KNOW, LIKE
A MAGICIAN TRYING TO POINT
PEOPLE IN A DIFFERENT DIRECTION
SO THEY WON'T NOTICE WHAT'S
REALLY GOING ON.
IF YOU CAN TAKE THE
RESENTMENT OF THE MIDDLE CLASS
AND POINT IT DOWNWARD RATHER
THAN HAVING IT POINT UPWARD
TO THE PEOPLE ON THE TOP
OF THE 1% WHO ARE REALLY
WALKING AWAY RICHER THAN EVER,
THEN YOU CAN SUCCEED
POLITICALLY, AND I THINK THEY'VE
BEEN VERY GOOD AT THAT.
YOU KNOW, THE POOR ARE NOT
VERY WELL-REPRESENTED IN OUR
SYSTEM OF GOVERNMENT, I'M
AFRAID.
WHY IS THAT DO YOU THINK?
WELL, I THINK ONE REASON I
THINK HAS A LOT TO DO WITH
THE DECLINE OF THE UNIONS.
THROUGHOUT THE '30s AND '40s
AND '50s, THE UNIONS WERE
THE VANGUARD IN PUSHING FOR
SOCIAL LEGISLATION THAT WOULD
HELP THE LOWER CLASSES IN
GENERAL.
Narrator: UNIONS ARE PERHAPS
THE ONLY ORGANIZATIONS WITH
SIGNIFICANT FINANCIAL AND
POLITICAL CLOUT THAT ACTUALLY
REPRESENT THE WORKING CLASS.
SINCE THE LATE '70s, CORPORATE
INTERESTS HAVE BEEN EXTREMELY
SUCCESSFUL AT LIMITING THE POWER
OF UNIONS.
ONLY PUBLIC-SECTOR UNIONS HAVE
SHOWN SIGNS OF GROWTH, AND THE
KOCH BROTHERS HAVE PUT THEIR
FINANCIAL MUSCLE BEHIND AN
EFFORT TO DESTROY THEM.
WISCONSIN IS GROUND ZERO.
I THINK IT'S GONNA DETERMINE
LARGELY WHETHER OR NOT THE
PAMPERED NATURE OF THESE PUBLIC
EMPLOYEE UNIONS IS FINALLY
REINED IN.
IF YOU, LIKE DAVID KOCH
CONTROLS KOCH, WANT TO TAKE OVER
AMERICAN POLITICS, YOU'RE GONNA
WANT TO KNOCK OUT WHATEVER THE
ORGANIZED FORCES ARE ON THE
OTHER SIDE.
DISCHARGE THE DUTIES...
Narrator: ON JANUARY 3, 2011,
SCOTT WALKER BECAME GOVERNOR
OF WISCONSIN.
HE HAD RECEIVED SIGNIFICANT
FINANCIAL SUPPORT FROM THE
KOCH BROTHERS.
CONGRATULATIONS, GOVERNOR.
[ CHEERS AND APPLAUSE ]
THE NATIONAL CONSERVATIVE
MOVEMENT WANTED A PETRI DISH,
AND WE WERE THAT, AND HE WAS
MORE THAN WILLING TO DO WHAT
THEY WANTED AND NOT THE PEOPLE
OF WISCONSIN.
GOOD MORNING.
All: GOOD MORNING.
Narrator: WALKER QUICKLY
INTRODUCED A BILL TO BALANCE
THE STATE'S BUDGET, BUT IT
DISGUISED A MUCH BROADER AGENDA.
THE GOVERNMENT COMMUNITY
SAID, "LOOK, YOU GUYS GOT A
GREAT DEAL ON YOUR PENSION.
YOU DON'T PAY ANYTHING FOR YOUR
PENSION, AND IT'S A GOOD
PENSION, SO YOU SHOULD PAY 5%."
HALF OF WHAT THE OVERALL
CONTRIBUTION IS, WHICH IS ABOUT
5.8%.
OKAY.
COMPARED TO OTHER PLACES THAT
I SEE, OKAY.
HE SAID, "YOU SHOULD PAY MORE
FOR YOUR HEALTHCARE."
WE'RE ASKING FOR A HEALTHCARE
PREMIUM CONTRIBUTION OF JUST
ABOUT 12 1/2%.
WE HAD A GOOD DEAL ON
HEALTHCARE, OKAY.
WE REMOVED HEALTHCARE AND
PENSION CONTRIBUTIONS FROM
COLLECTIVE BARGAINING.
THEY SAID, "WAIT A MINUTE.
NOW WE DON'T WANT ANY MORE
COLLECTIVE BARGAINING."
AND WE WENT, WHOA, WAIT A
MINUTE.
STOP.
YOU CAN'T DO THAT.
Narrator: WALKER'S
LEGISLATION WAS A SURPRISE
ATTACK ON THE POLITICAL POWER
OF PUBLIC-SECTOR UNIONS AND
THEIR ABILITY TO NEGOTIATE ON
BEHALF OF WORKERS.
TAKE AWAY COLLECTIVE
BARGAINING, AND WHAT DOES A
PERSON THAT'S MAKING, LET'S SAY,
$7 TO $9 AN HOUR AT UNIVERSITY
OF WISCONSIN HOSPITAL SERVING
LUNCH -- WHAT VOICE WILL THEY
HAVE IN THE WORKPLACE?
Narrator: WITHIN DAYS, THE
LARGEST UNIONS ANNOUNCED THAT
THEY WERE WILLING TO MAKE
SACRIFICES THAT WOULD HELP
SAVE THE STATE MONEY, BUT
THEY WOULDN'T GIVE UP THEIR
COLLECTIVE-BARGAINING RIGHTS.
THE UNIONS AND THE DEMOCRATS
HAVE SAID THEY'RE WILLING TO
TAKE THE CONCESSIONS ON WAGE
AND HEALTH BENEFITS, THEY'RE
WILLING TO TAKE ABOUT AN 8%
PAY CUT, BUT THEY SIMPLY DON'T
WANT YOU TO TAKE AWAY THEIR
COLLECTIVE-BARGAINING RIGHTS.
WHAT WE'RE ASKING FOR
REALISTICALLY IS SOMETHING THAT
NEARLY EVERY OTHER PERSON IN
THIS STATE AND EVERY OTHER
PERSON ACROSS THIS COUNTRY
IS PAYING A WHOLE LOT MORE FOR
WHEN IT COMES TO RETIREMENT
AND HEALTHCARE --
GOVERNOR, THEY ALREADY SAID
THEY'RE WILLING TO GIVE UP
ON THE PENSIONS AND ON
THE HEALTHCARE.
THEY ALREADY SAID THAT.
THEY'VE ALREADY MADE THOSE
CONCESSIONS.
BUT THAT'S A RED HERRING.
BUT YOU CAN SAY ANYTHING IN
THE MIDST OF THE DEBATE.
THEN WE REALLY KNEW IT WAS
NOT ABOUT FIXING A BUDGET AT
ALL.
IT WAS ABOUT BREAKING UNIONS
AND BREAKING THE POLITICAL POWER
THAT UNIONS HAVE.
GOVERNOR WALKER'S AGENDA
IS A NATIONAL AGENDA.
I MEAN, AND IT'S SEATED AND IT
IS WELL-FUNDED BY THE KOCH
BROTHERS.
[ INDISTINCT CHANTING ]
[ MILITARY-STYLE DRUMBEATS
PLAY ]
Narrator: FOR MORE THAN
A YEAR, WISCONSIN BECAME
A BATTLEGROUND.
PRO-UNION PROTESTORS OCCUPIED
THE STATEHOUSE FOR MORE THAN
TWO WEEKS.
THEY GATHERED OVER A MILLION
SIGNATURES TO FORCE A RECALL
ELECTION TO GET WALKER REMOVED.
THE UNIONS SPENT MILLIONS
FIGHTING FOR THEIR SURVIVAL.
BUT WEALTHY INTERESTS OUTSIDE
THE STATE SPENT FAR MORE.
THE BIGGEST SINGLE SOURCE
OF MONEY WAS
AMERICANS FOR PROSPERITY,
WHICH HAS SPENT OVER $10 MILLION
TO SUPPORT SCOTT WALKER.
TODAY WE HAVE MORE ACTIVISTS
IN OUR WISCONSIN A.F.P. CHAPTER
THAN THERE ARE MEMBERS OF THE
WISCONSIN TEACHERS UNION.
WE HAVE A VERY STRONG, VIBRANT
OPERATION THERE.
WALKER HAS PAINTED TEACHERS
AND OTHER PUBLIC UNION EMPLOYEES
AS THE HAVES AND THE PRIVATE
SECTOR AS THE HAVE-NOTS.
IF THE PUBLIC SCHOOLTEACHERS
THINK THEY HAVE IT SO ROUGH,
QUIT AND FIND ANOTHER LINE
OF WORK.
I THINK McDONALD'S IS HIRING.
THE MADISON FIREFIGHTERS
UNION, YOU ARE SUPPOSED TO BE
OUR HEROES.
YOU'RE NOT HEROES.
CAN WE JUST GET TO THE POINT
WHERE WE CAN START TELLING THESE
WHINERS TO GO TO HELL?
SO YOU SEE PEOPLE WHO MAYBE
DON'T HAVE THE BENEFITS, AND
INSTEAD OF SAYING TO THEMSELVES,
"YEAH, WE SHOULD HAVE THAT,
TOO," IT'S "YOU SHOULDN'T HAVE
THAT."
WHAT THEY'RE TRYING TO DO IS
REALLY SQUASH YOU SO THAT THEY
CAN HAVE THAT MUCH MORE POWER
AND YOU CAN HAVE THAT MUCH LESS
VOICE.
IT'S TEACHERS WHOSE PAY HAS
BEEN REDUCED AGAINST THE KOCH
BROTHERS.
IT'S NOT A REALLY FAIR FIGHT.
[ TELEPHONE RINGS ]
HI, THIS IS SCOTT WALKER.
SCOTT? DAVID KOCH.
HOW ARE YOU?
HOW ARE YOU, DAVID?
I'M GOOD. AND YOURSELF?
I'M VERY WELL.
A LITTLE DISHEARTENED BY THE
SITUATION THERE, BUT, UH, WHAT'S
THE LATEST?
UH, WE'LL ANNOUNCE THURSDAY,
AND WE'LL PROBABLY GET 5,000 TO
6,000 STATE WORKERS WHO WILL GET
AT-RISK NOTICES FOR LAYOFFS.
BEAUTIFUL, BEAUTIFUL.
GOT TO CRUSH THAT UNION.
AND JUST KIND OF PASS THE
MESSAGE ON TO THESE GUYS IF THEY
THINK I'M CAVING, THEY'VE BEEN
ASLEEP FOR THE LAST EIGHT YEARS
'CAUSE WE DON'T BUDGE.
GODDAMN RIGHT.
BUT, UH, WHAT WE WERE THINKING
ABOUT THE CROWDS WAS -- WAS
PLANTING SOME TROUBLEMAKERS.
YOU KNOW, WE THOUGHT ABOUT
THAT.
MY ONLY GUT REACTION TO THAT
WOULD BE, LET THEM PROTEST ALL
THEY WANT.
SOONER OR LATER THE MEDIA STOPS
FINDING THEM INTERESTING.
THE NEXT QUESTION, I TALK
TO KASICH EVERY DAY.
YOU KNOW, JOHN'S GOT TO STAND
FIRM IN OHIO.
I THINK WE DO THE SAME THING
WITH RICK SCOTT IN FLORIDA.
I THINK SNYDER, IF HE GOT A
LITTLE MORE SUPPORT, PROBABLY
COULD DO THAT IN MICHIGAN.
YOU START GOING DOWN THE LIST,
A LOT OF US NEW GOVERNORS GOT
ELECTED TO DO SOMETHING BIG.
YOU'RE THE FIRST DOMINO.
YEP. THIS IS OUR MOMENT.
THIS IS OUR TIME TO CHANGE
THE COURSE OF HISTORY.
Narrator: IN PLACES LIKE
WISCONSIN, THE DOORS OF
OPPORTUNITY FOR THOSE IN THE
LOWER RUNGS OF SOCIETY ARE
CLOSING QUICKLY.
WE ARE IN VERY REAL DANGER
THAT THE AMERICAN DREAM IS
SLIPPING FROM THE GRASP OF
THE NEXT GENERATION.
Narrator: THIS CHARITY EVENT
IS A MOMENT FOR WEALTHY
NEW YORKERS TO GIVE SOME
OF THEIR FORTUNES TO THE POOR.
OVER THE LAST DECADE,
STEPHEN SCHWARZMAN HAS GIVEN
OVER $7 MILLION TO NEW YORK'S
INNER-CITY SCHOLARSHIP FUND.
I WORRY THAT THE SOCIAL
FABRIC OF AMERICA IS BEING
RIPPED PURPOSEFULLY BY PEOPLE
WHO ARE TAKING ADVANTAGE OF
INDIVIDUALS WHO ARE SUFFERING.
Narrator: MR. SCHWARZMAN
APPEARS TO BE SYMPATHETIC TO
THOSE WHO ARE LIVING IN POVERTY,
BUT ODDLY, FOR ONE OF AMERICA'S
GREATEST CAPITALISTS, HE DOESN'T
SEEM TO UNDERSTAND THAT, UNLIKE
MONOPOLY, REAL CAPITALISM IS
A GAME THAT'S PLAYED FOR KEEPS.
FOR EVERY BIG WINNER, THERE ARE
LOTS OF LOSERS.
WEALTH IS CREATED, BUT SO IS
POVERTY.
WITHOUT POPULAR DEMOCRACY,
ALL THE GAINS OF OUR ECONOMY
WILL GO TO THE TOP.
[ Chanting ] SHOW ME WHAT
DEMOCRACY LOOKS LIKE!
[ Chanting ] THIS IS WHAT
DEMOCRACY LOOKS LIKE!
[ INDISTINCT CHANTING ]
I'M FROM MICHIGAN.
THIS IS WHERE OUR MONEY IS.
PEOPLE LOST THEIR HOMES IN
THE BANKING AND MORTGAGE CRISIS,
AND IT WENT HERE.
THERE'S NOTHING WRONG WITH
BEING RICH.
GOD WANTS ALL HIS CHILDREN
TO BE RICH, BUT DON'T BE RICH
AND AT A PLACE WHERE YOU AIN'T
THINKING ABOUT ANYBODY ELSE.
THEY FEEL THEY NEED NOT
$10 BILLION, BUT $20 BILLION
OF WEALTH.
THEY GET THAT EXTRA WEALTH BY
TWISTING POLITICS, BUYING
POLITICIANS.
AMERICA BECAME A PLACE WHERE
MONEY BUYS EVERYTHING.
Narrator: THE RICH ARE OFTEN
HELD UP AS SHINING EXAMPLES OF
WHAT'S POSSIBLE IN AMERICA...
PROOF THAT ANYONE CAN MAKE IT.
BUT IS THERE STILL A BRIDGE
TO ECONOMIC OPPORTUNITY IN
OUR COUNTRY?
WHEN WE LOOK AT THE RIVER THAT
SEPARATES THE TWO PARK AVENUES,
DO WE SEE A CHANNEL TO
PROSPERITY FOR EVERYONE?
OR A BARRIER THAT PREVENTS
THE POOR FROM CROSSING?
AS LONG AS OUR POLITICAL LEADERS
DEPEND ON THE RICH TO WIN
ELECTIONS AND STAY IN OFFICE,
THEY WILL WRITE LAWS TO PROTECT
THE CASTLES OF WEALTH AND POWER
ON THE OTHER SIDE OF THIS RIVER,
A RIVER THAT HAS BECOME A DEEP
AND FORBIDDING MOAT.
PLAYS ]
[ CLASSICAL MUSIC PLAYS ]
Narrator: THIS STRETCH
OF PARK AVENUE ON THE
UPPER EAST SIDE OF MANHATTAN
IS THE WEALTHIEST NEIGHBORHOOD
IN NEW YORK CITY.
THIS IS WHERE THE PEOPLE AT
THE TOP OF THE LADDER LIVE...
THE UPPER CRUST...
THE ULTRA RICH.
BUT THIS STREET IS ABOUT A LOT
MORE THAN MONEY.
IT'S ABOUT POLITICAL POWER.
THE RICH HERE HAVEN'T JUST USED
THEIR MONEY TO BUY FANCY CARS,
PRIVATE JETS, AND MANSIONS.
THEY'VE ALSO USED IT TO RIG
THE GAME IN THEIR FAVOR.
OVER THE LAST 30 YEARS, THEY'VE
ENJOYED UNPRECEDENTED PROSPERITY
FROM A SYSTEM THAT THEY
INCREASINGLY CONTROL.
BUT IF YOU HEAD NORTH FOR ABOUT
10 MINUTES, THIS PARK AVENUE
COMES TO AN END AT
THE HARLEM RIVER.
ON THE OTHER SIDE OF THE WATER,
THERE IS ANOTHER PARK AVENUE.
THIS IS THE SOUTH BRONX,
HOME TO AMERICA'S POOREST
CONGRESSIONAL DISTRICT.
[ SIREN WAILS ]
THERE ARE 700,000 PEOPLE IN THIS
DISTRICT.
ALMOST 40% OF THEM LIVE IN
POVERTY, MAKING LESS THAN $40
A DAY.
FROM HERE, THE LAST 30 YEARS
HAVE LOOKED VERY DIFFERENT THAN
THE VIEW FROM MANHATTAN'S
PARK AVENUE.
PEOPLE HERE HAVE SEEN THEIR
WAGES FALL AND THE COST OF
ALMOST EVERYTHING ELSE GO
THROUGH THE ROOF.
THEY'VE LOST THEIR JOBS IN
A RECESSION CAUSED BY BANKERS
ACROSS THE RIVER.
THEY'VE WATCHED THEIR CHILDREN
STRUGGLE AND FAIL IN SCHOOLS,
AND THEY'VE ENDED UP EVEN WORSE
OFF THAN THEY WERE A GENERATION
AGO.
BUT AMERICA IS STILL A LAND
OF OPPORTUNITY, ISN'T IT?
A PLACE WHERE ANYONE CAN MAKE
IT TO THE TOP IF THEY'RE WILLING
TO WORK HARD AND SET THEIR
SIGHTS HIGH.
THAT'S WHAT MAKES THIS COUNTRY
GREAT.
ISN'T THAT WHAT WE TELL
OURSELVES?
BUT IN TODAY'S AMERICA, WHAT ARE
THE CHANCES THAT SOMEONE WHO
STARTS THEIR LIFE ON THIS
PARK AVENUE WILL END UP LIVING
ON THIS PARK AVENUE?
[ CLASSICAL MUSIC FINALE PLAYS ]
[ UP-TEMPO MUSIC PLAYS ]
LET'S IMAGINE THAT YOU'RE
INVITED TO A GAME OF MONOPOLY,
AND YOU ARRIVE AT THIS GAME TO
FIND OUT THAT ALL OF THE
PROPERTY'S BEEN DIVIDED UP,
ALL OF THE MONEY'S ALREADY BEEN
HANDED OUT, BUT YOU'RE TOLD,
"HEY, GO AHEAD AND SIT DOWN,
PLAY THE GAME.
WE'RE GONNA GIVE YOU A CHANCE
TO PLAY JUST LIKE EVERYONE
ELSE"?
THERE ARE SOME IN SOCIETY THAT
HAVE A LOT OF ACCESS, A LOT
OF SOCIAL MOBILITY, A LOT OF
RESOURCES TO DO THE THINGS THAT
THEY WANT AS OPPOSED TO OTHER
PEOPLE WHO ARE MORE
DISADVANTAGED, MORE
UNDERPRIVILEGED, DON'T HAVE
THE SAME LEVELS OF RESOURCES.
Narrator: PAUL PIFF IS
A SOCIAL PSYCHOLOGIST AT
THE UNIVERSITY OF CALIFORNIA,
BERKELEY, WHO STUDIES THE
PSYCHOLOGY OF WEALTH
AND THE CONSEQUENCES OF
INEQUALITY IN OUR SOCIETY.
I READ ABOUT AN EXPERIMENT HE
CONDUCTED, AND IT CAUGHT MY
INTEREST.
♪ COME ON ♪
♪ LET'S PLAY MONOPOLY ♪
♪ CASH FUN AND RITZY PROPERTY ♪
OH, YEAH, YEAH.
Narrator: MONOPOLY FIRST
BECAME A HIT DURING
THE GREAT DEPRESSION.
IT'S A GAME OF RUTHLESS,
DOG-EAT-DOG CAPITALISM.
♪ PASSING GO ♪
Narrator: TRUE TO THE
AMERICAN DREAM, EVERYONE HAS AN
EQUAL OPPORTUNITY, STARTING WITH
THE SAME AMOUNT OF MONEY AND
THE SAME CHANCE TO SUCCEED.
WINNING IS A MIX OF LUCK AND
SKILL.
FOR HIS EXPERIMENT, PIFF RIGGED
THE GAME BY GIVING ONE PLAYER
A HUGE ADVANTAGE.
SO THERE ARE TWO PLAYERS.
THEY DON'T KNOW EACH OTHER.
YOU FLIP A COIN TO DETERMINE
YOUR POSITION.
SO IT'S RANDOM, ALMOST LIKE YOUR
EMERGENCE INTO THE WORLD IS
RANDOM -- WHETHER YOU LAND IN
THIS FAMILY OR THIS OTHER
FAMILY.
IF YOU WERE THE RICH PERSON,
YOU GOT A LOT MORE MONEY.
YOU GOT TWO TIMES AS MUCH MONEY.
WHEN YOU PASS GO, YOU COLLECT
$200.
YOU GET TO ROLL BOTH DICE,
SO YOU'RE ALLOWED TO MOVE AROUND
THE BOARD QUICKER.
[ LAUGHS ]
NOW, IF YOU'RE ON THE LOW
END, WE REALLY HIT YOU HARD.
YOU GOT HALF THE MONEY.
WHEN YOU PASSED GO, YOU
COLLECTED HALF THE SALARY.
YOU ONLY GOT TO ROLL ONE DIE,
SO YOU'RE MOVING AROUND THE
BOARD VERY, VERY SLOWLY AS
THE OTHER PERSON'S JUST WHIZZING
AROUND YOU, COLLECTING $200
EVERY COUPLE OF TURNS.
Narrator: EVEN IN A GAME
THAT'S OPENLY RIGGED, THE RICH
PLAYERS INEVITABLY EXHIBIT A
SENSE OF ENTITLEMENT.
THEY GOBBLE UP MORE OF THE
CAREFULLY PLACED PRETZELS.
THEY COME TO BELIEVE THAT THEY
DESERVE TO WIN.
[ CHUCKLES ]
Narrator: AND THEY SHOW NO
CONCERN FOR THE MISFORTUNE OF
THE POOR PLAYERS EVEN THOUGH
THE POOR PLAYERS DON'T STAND
THE SLIGHTEST CHANCE OF WINNING.
THE IDEA OF THE
AMERICAN DREAM IS THAT
EVERYONE'S GOT AN EQUAL
OPPORTUNITY.
YOU JUST GOT TO DECIDE TO PLAY.
BUT, IN FACT, THERE ARE LARGE
GROUPS OF PEOPLE THAT EXPERIENCE
THE GAME AS UNFAIR.
THE OPPORTUNITY'S NOT THERE.
ALL THE RULES HAVE BEEN DECIDED.
THE PROPERTY'S ALREADY BEEN
BOUGHT UP AND THE MONEY'S
ALREADY IN THE HANDS OF
THE OTHER PLAYERS.
GET A REBOUND.
GO! GO!
FIRST TIME FOR EVERYTHING.
THAT'S MY GOAL.
I'M MICHAEL JORDAN.
I'M KOBE.
I-I-I'M RAY ALLEN!
ALMOST ALL FAMILIES START OUT
WITH WANTING THE SAME THINGS
FOR THEIR CHILDREN.
THEY WANT THEM TO BE SAFE,
THEY WANT THEM TO BE HAPPY,
AND THEY WANT THEM TO BE
SUCCESSFUL AND HEALTHY.
BUT EVEN BEFORE BIRTH, SO MANY
KIDS START THAT RACE BEHIND.
THEY COME INTO A NEIGHBORHOOD
THAT'S UNSAFE.
[ SIREN WAILS ]
MAYBE THEY'RE IN AN
OVERCROWDED APARTMENT.
THEY DON'T HAVE HEALTHY
NUTRITION.
THEY MIGHT HAVE MEDICAL ISSUES
THAT AREN'T BEING ADDRESSED.
I WOULD SAY THEIR NUMBER-ONE
CHALLENGE IS JUST A LACK OF
OPPORTUNITIES IN GENERAL.
Narrator: IN PARTS OF THE
SOUTH BRONX, UNEMPLOYMENT HAS
REACHED 19%, AND MANY FAMILIES
STRUGGLE JUST TO PUT FOOD ON
THE TABLE.
PASTOR COLIN DUNKLEY AND HIS
WIFE, APRIL, RUN A FOOD PANTRY
IN THE SOUTH BRONX THAT FEEDS
ABOUT 200 STRUGGLING FAMILIES
EVERY WEEK.
I LIKE HELPING PEOPLE.
I LIKE SERVING THE PEOPLE,
I LIKE HELPING THE PEOPLE.
IF THERE'S SOMETHING WE COULD
DO TO BLESS THEM, THAT'S WHAT
WE'RE GONNA DO.
SOMETIME WE GET THE LITTLE
SIPPY CAPRI SUN JUICES.
WE'LL PUT THOSE IN A BAG FOR
THE KIDS.
Narrator: BUT THEY DON'T HAVE
NEARLY ENOUGH TO MEET THE
DEMAND.
WHEN WE VISITED, THEY RAN OUT
OF FOOD IN 15 MINUTES.
[ INDISTINCT TALKING ]
THERE IS NO MORE FOOD AT THIS
TIME.
YOU CAN COME BACK NEXT MONDAY
AT 2:00.
WHAT DO I DO?
THAT'S IT, MOMMY.
THAT'S IT.
NO, SIR, I'M SORRY -- NO MORE.
OKAY, OKAY.
IT IS VERY, VERY HARD TO PULL
YOURSELF OUT OF EXTREME POVERTY
IN THE UNITED STATES.
IT ALMOST NEVER HAPPENS.
THIS RUNS COMPLETELY COUNTER
TO WHAT PEOPLE'S NOTION OF
AMERICA HAS BEEN FOR A VERY LONG
TIME.
WE THINK OF OURSELVES AS
THE LAND OF OPPORTUNITY.
MOBILITY IN THE UNITED STATES
LAGS MOST OTHER ADVANCED
INDUSTRIAL DEMOCRACIES.
WHEN I WAS GROWING UP, THE
IMAGE OF AMERICA, THE SELF-IMAGE
WAS OF A VAST MIDDLE-CLASS
COUNTRY.
OF COURSE, THERE WAS A SMALL
RICH GROUP AND THERE WERE SOME
POOR, BUT AMERICA PRIDED ITSELF
AND UNDERSTOOD THAT ITS HEALTH
WAS BECAUSE OF A VAST MIDDLE
CLASS.
WE'RE NOT THAT KIND OF SOCIETY
ANYMORE.
Narrator: THERE'S ALWAYS BEEN
A GAP BETWEEN THE WEALTHIEST IN
OUR SOCIETY AND EVERYONE ELSE.
BUT IN THE LAST 30 YEARS,
SOMETHING CHANGED.
THAT GAP BECAME
THE GRAND CANYON.
THE INCOMES OF PEOPLE AT
THE LOWER END STAGNATED.
A DISPROPORTIONATE AMOUNT OF
THE GROWTH IN THE ECONOMY HAS
ACCRUED TO THOSE AT THE UPPER
END.
Narrator: THIS IS WHAT
AMERICA'S ECONOMIC PIE LOOKED
LIKE IN THE DECADES AFTER
WORLD WAR II.
INCOME GAINS WERE SHARED BY
EVERYONE WITH BIG PORTIONS GOING
TO AVERAGE AMERICANS.
BUT SINCE THE LATE 1970s,
THE BOTTOM 90% HAVE SEEN THEIR
SHARE OF THE PIE COMPLETELY
DEVOURED BY THE TOP 1%.
THE WEALTHY ARE GETTING AN
ENORMOUS PERCENTAGE OF ALL OF
THE GAINS IN THE ENTIRE ECONOMY.
WHEN I TALK ABOUT THE WEALTHY,
I'M TALKING ABOUT LIKE IN THE
THOUSANDS OF PEOPLE.
Narrator: THOUSANDS MIGHT BE
OVERSTATING IT.
AS OF 2010, ONLY 400 OF THE
RICHEST AMERICANS CONTROLLED
MORE WEALTH THAN THE BOTTOM HALF
OF AMERICAN HOUSEHOLDS.
THAT'S 150 MILLION PEOPLE.
THE QUESTION IS, WHAT ARE THE
PEOPLE AT THE TOP GONNA DO WITH
ALL THAT MONEY?
THERE IS A LITTLE TINY GROUP,
AND IT'S PROBABLY 1% OF THE 1%.
THOSE PEOPLE ARE CONCENTRATED
IN A VERY SMALL NUMBER OF
PLACES.
NEW YORK HAS BEEN ONE OF THOSE
PLACES SINCE THE EARLY
19th CENTURY.
IT HAS BEEN A WORLD CITY WITH
WORLD-CLASS FORTUNES, AND IT HAS
BEEN A MAGNET FOR PEOPLE WHO
LIVE IN THE 1% OF THE 1%.
I WAS IN A TAXI GOING DOWN
FIFTH AVENUE, LOOKING FOR
THE RICHEST APARTMENT BUILDING
IN NEW YORK.
THERE WERE ABOUT 10 BUILDINGS
THAT WERE ON THE INITIAL LIST.
740 PARK BECAME THE EPICENTER
OF THE PEOPLE WHO RULED THE
WORLD -- TRULY THE MASTERS OF
THE UNIVERSE.
THEY ALL LIVED AT 740 PARK.
IT WAS KNOWN BEFORE MY BOOK
AS THE ROCKEFELLER BUILDING,
BUT, IN FACT, ROCKEFELLER WAS
NOT ONE OF THE ORIGINAL PEOPLE
IN THE BUILDING.
IT WAS BUILT BY JACKIE KENNEDY'S
GRANDFATHER JAMES T. LEE
IN A CONSORTIUM WITH A GROUP
OF THE PEOPLE WHO WERE
CONSIDERED TO BE RESPONSIBLE
FOR THE MARKET CRASH OF 1929
AND THE DEPRESSION THAT
FOLLOWED, AND THEN IT BECAME
KIND OF THE STANDARD OIL
BUILDING.
IT WAS A BUILDING WHERE LOTS
OF STANDARD OIL EXECUTIVES
AND THEIR FRIENDS ALL LIVED.
IT WAS TRULY CONSIDERED
THE HOLY GRAIL FOR A CERTAIN
KIND OF WEALTHY NEW YORKER.
NOW THE LARGEST CATEGORY IN
740 PARK ARE HEDGE FUND GUYS,
AND THEY'RE THE PEOPLE WITH
THE MOST MONEY NOW.
THEY'RE THE EQUIVALENT OF
THE OIL PEOPLE FROM THE '30s.
THESE GUYS RULED THE WORLD,
YOU KNOW.
THEY ARE MULTIBILLIONAIRES
OF, YOU KNOW, THE C.E.O.s
OF THE MAJOR CORPORATIONS IN
THE WORLD.
Narrator: THIS DOORMAN ONCE
WORKED AT 740 PARK AVENUE.
HE AGREED TO BE INTERVIEWED
UNDER THE CONDITION THAT WE HIDE
HIS FACE AND ALTER HIS VOICE.
TO WORK AT 740, YOU REALLY
NEED TO KNOW SOMEBODY WITHIN
THE BUSINESS.
YOU KNOW, YOU'RE WORKING AT
THE TOP BUILDING IN THE WORLD.
IT'S ONLY 31 UNITS.
IT'S NOT A LOT OF RESIDENTS,
BUT THEY'RE HIGH-TEMPERED,
AND, YOU KNOW, YOU HAVE TO HAVE
A THICK SKIN TO WORK THERE.
YOU'RE GONNA BE DEALING WITH
DETESTABLE PEOPLE, AND YOU'RE
GONNA BE DEALING WITH
BILLIONAIRES.
YOU NEED TO KNOW EVERYTHING
ABOUT THE RESIDENTS -- WHAT TIME
THEY WAKE UP TO GO TO
WALL STREET, WHOSE CAR'S WHICH,
WHO LIKES TO GET THEIR OWN DOOR,
WHO GETS IN THE PASSENGER SEAT,
WHO GETS IN THE BACKSEAT.
YOU KNOW, THESE THINGS DON'T
SEEM LIKE A BIG THING TO ME AND
YOU, BUT EVEN A MINOR MISHAP,
AND, YOU KNOW, YOU'LL BE FIRED
STRAIGHTAWAY.
YOU'VE GOT JOHN THAIN,
THE C.E.O. WHO PRESIDED OVER
THE DOWNFALL OF MERRILL LYNCH.
EZRA MERKIN, WHO WAS THE FEEDER
TO BERNIE MADOFF.
DAVID KOCH, WHO IS THE RICHEST
PERSON IN THE BUILDING.
THEN, OF COURSE,
STEVE SCHWARZMAN, THE POSTER
CHILD OF CAPITALISTIC GREED
IN THE LAST 10 YEARS.
Narrator: BILLIONAIRE
STEPHEN SCHWARZMAN, ONE OF
THE KINGS OF PRIVATE EQUITY,
LIVES IN 740 PARK'S MOST
EXTRAVAGANT APARTMENT.
SCHWARZMAN WAS A MANAGING
DIRECTOR AT LEHMAN BROTHERS
BEFORE CO-FOUNDING THE
BLACKSTONE GROUP.
HE IS ONE OF THE MOST PROMINENT
C.E.O.s WHEN IT COMES TO
LOBBYING FOR TAX POLICIES
THAT FAVOR THE ULTRA RICH.
HE WAS A STRANGE GUY,
MR. SCHWARZMAN.
THANK YOU FOR THE OPPORTUNITY
TO ADDRESS THE 66th ANNUAL
ALFRED E. SMITH
MEMORIAL FOUNDATION DINNER.
WE CALL IT OCCUPY WALDORF.
[ LAUGHTER ]
HE SEEMED TO BE OUT OF
THE PUBLIC EYE, BUT THEN THESE
LITTLE SPURTS WHERE HE'D HAVE
A 60th BIRTHDAY PARTY, HE HAD
ROD STEWART PLAY, AND IT WAS ALL
OVER THE PAPERS, AND HE HAD
A REPLICA OF HIS APARTMENT BUILT
IN THIS HOTEL, AND IT WAS JUST
COMPLETELY RIDICULOUS.
HE'D HAVE HIS ANNUAL
CHRISTMAS PARTY, AND HE'D HAVE
25 CHRISTMAS TREES COME IN --
THESE MASSIVE CHRISTMAS TREES.
25 CHRISTMAS TREES?
YEAH.
I MEAN, EVERY ROOM WOULD GET
A CHRISTMAS TREE AND BE FULLY
DECORATED.
STEVE SCHWARZMAN LIVES IN
THE APARTMENT THAT HAD
PREVIOUSLY BEEN OWNED BY
JOHN D. ROCKEFELLER JR.
IT'S A SPRAWLING APARTMENT.
IT'S 37 ROOMS.
LAVISH BEYOND YOUR WILDEST
IMAGINING -- YOU KNOW, 20,000
SQUARE FEET.
Narrator: SCHWARZMAN PAID
JUST UNDER $30 MILLION FOR THIS
APARTMENT -- POCKET CHANGE FOR
A WALL STREET TYCOON WORTH
OVER $5 BILLION.
IF A FEW PEOPLE, YOU KNOW,
DO REALLY WELL, WHY IS THAT SUCH
A BIG DEAL?
ISN'T THAT JUST PROOF OF THE
AMERICAN DREAM -- YOU WORK HARD
AND YOU'RE SUCCESSFUL?
WE AS A SOCIETY HAVE VERY
COMPLEX VIEWS ABOUT ECONOMIC
INEQUALITY.
AMERICANS ARE NOT OF THE VIEW
THAT ALL INEQUALITIES OF WEALTH
OR INCOME ARE UNJUST, AND,
IN FACT, THEY THINK IF YOU WORK
HARDER, IF YOU SEIZE
OPPORTUNITIES, THEN YOU SHOULD
BE ABLE TO GET AHEAD.
Narrator: JACOB HACKER IS
A POLITICAL SCIENTIST AT YALE
AND THE CO-AUTHOR OF
"WINNER-TAKE-ALL POLITICS,"
WHICH ARGUES THAT THIS
EXTRAORDINARY ACCUMULATION
OF WEALTH AT THE TOP ISN'T
JUST ABOUT HARD WORK.
IT'S ABOUT WEALTHY INTERESTS
USING THE POLITICAL SYSTEM
TO RIG THE RULES IN THEIR FAVOR.
THERE'S BEEN A REINFORCING
CYCLE.
THOSE AT THE TOP HAVE DONE WELL.
THEY'VE INVESTED IN POLICIES
THAT ARE FAVORABLE TO THEM, AND
THEY'VE DONE EVEN BETTER, AND
THEN THEY'VE TURNED A LOT OF
THAT MONEY BACK INTO POLITICS.
Narrator: TO UNDERSTAND HOW
BIG MONEY RIGS THE RULES IN
WASHINGTON, I SOUGHT OUT THE
POSTER CHILD FOR POLITICAL
CORRUPTION, FORMER LOBBYIST
JACK ABRAMOFF.
A FEW YEARS AGO, I MADE A FILM
VERY CRITICAL OF JACK.
NOW AFTER SPENDING NEARLY FOUR
YEARS IN FEDERAL PRISON FOR
CONSPIRACY TO BRIBE PUBLIC
OFFICIALS, HE'S TOURING
THE COUNTRY TRYING TO PROMOTE
REFORM.
I WISH I COULD TELL YOU THAT
IN THE MIDST OF ALL OF MY
LOBBYING ACTIVITY, I CAME TO
AN EPIPHANY, BUT I DIDN'T.
IT, UNFORTUNATELY FOR ME,
REQUIRED MY DEMISE.
JACK ABRAMOFF HAS PLED GUILTY
TO FEDERAL CORRUPTION CHARGES.
BUT EVENTUALLY I DECIDED
TO LOOK HONESTLY AT THE PAST
ACTIVITIES I ENGAGED IN.
I ALSO SYSTEMICALLY LOOKED AT
THE OVERALL PICTURE AND REALIZED
THE SYSTEM ITSELF WAS REALLY
BADLY IN DISREPAIR.
♪ I'M JUST A BILL ♪
♪ YES, I'M ONLY A BILL ♪
♪ AND I'M SITTING HERE ON
CAPITOL HILL ♪
Narrator: THIS
SCHOOLHOUSE ROCK VIDEO FROM
1975 IS STILL USED TO TEACH
MANY AMERICANS ABOUT HOW THEIR
GOVERNMENT IS SUPPOSED TO WORK.
SOME FOLKS BACK HOME DECIDED
THEY WANTED A LAW PASSED, SO
THEY CALLED THEIR LOCAL
CONGRESSMAN, AND HE SAID,
"YOU'RE RIGHT.
THERE OUGHT TO BE A LAW."
THEN HE SAT DOWN AND WROTE ME
OUT AND INTRODUCED ME TO
CONGRESS, AND I BECAME A BILL.
IT WAS VERY CUTE, BUT IT'S
NOT WHAT GOES ON IN WASHINGTON.
THE BILL IS VERY RARELY --
I WOULD SAY NEVER TYPED UP
BY THE CONGRESSMAN AFTER HEARING
FROM A DIVERSE GROUP OF
CITIZENS.
YOU KNOW, THE STAFF ARE BUSY,
THE CONGRESSMEN ARE BUSY, SO
THEY FREQUENTLY PASS AND STILL
AVAIL THEMSELVES OF THE
SERVICES, LET'S CALL THEM,
OF THE LOBBYISTS TO WRITE
THESE BILLS.
THE LOBBYISTS WILL BRING IN
THE EXACT DRAFT OF WHAT THEY
WANT BECAUSE THEY WANT TO MAKE
SURE IT IS EXACTLY WHAT THEY
NEED.
NOW, AS A LOBBYIST, WHAT WAS
YOUR LEVERAGE IN TERMS OF
GETTING MEMBERS TO SPONSOR THE
BILLS THAT YOU HAD WRITTEN?
A LOBBYIST NEEDS TO GET
TO THE DECISION-MAKER, THE
CONGRESSMAN OR THE STAFF, AND
THAT INVOLVES, UNFORTUNATELY,
FINANCIAL CONVEYANCES.
ONE OF THE DIRTY LITTLE
SECRETS IN WASHINGTON TODAY
IS HOW MUCH TIME MEMBERS OF
THE HOUSE AND SENATE SPEND
EVERY WEEK -- NOT JUST IN
THE ELECTION SEASON, BUT ALL
THE TIME, YEAR-ROUND, ON THE
TELEPHONE ASKING PEOPLE FOR
MONEY.
IT'S BEGGING FOR MONEY.
IT'S A SAD SPECTACLE.
WHEN YOU HAVE CAMPAIGNS THAT
ARE COSTING TENS OF MILLIONS
OF DOLLARS, THE PEOPLE WHO HAVE
THE MONEY WANT SOMETHING BACK.
MONEY IS BEING USED TO BUY
RESULTS.
THAT IS THE PROBLEM.
THAT'S HOW I USED MONEY.
I KNOW WHAT I WAS DOING.
Narrator: SO WHEN DID THIS
ALL BEGIN?
WHEN DID BIG MONEY TAKE CONTROL
OF WASHINGTON?
IT REALLY HAS TO DO WITH
THE MOBILIZATION OF BUSINESS
THAT OCCURRED IN THE MID 1970s.
BECAUSE OF RALPH NADER AND OTHER
CORPORATE REFORMERS, BUSINESS
WAS PUSHED BACK STRONGLY ON
THE DEFENSIVE.
AIR AND WATER POLLUTION
CONTROL, SAFER CARS AND
HIGHWAYS, AND MANY, MANY BETTER
WAYS OF DOING THINGS.
WE'RE A RICH COUNTRY, BUT WE'RE
NOT DISTRIBUTING IT FOR OUR
MAJOR PUBLIC NEEDS.
RALPH NADER, A DEEPLY, DEEPLY
HATED FIGURE BY CORPORATE
AMERICA IN THOSE DAYS.
IT SCARED THEM TO DEATH.
AND WHAT DID BUSINESS DO?
WELL, THEY FOLLOWED THE
PRESCRIPTION OF THE FUTURE
SUPREME COURT JUSTICE
LEWIS POWELL, WHO WROTE AN
INFLUENTIAL MEMO FOR THE
CHAMBER OF COMMERCE SAYING
THAT BUSINESS NEEDED TO
ORGANIZE.
BUSINESSMEN OF THE WORLD,
UNITE.
Narrator: LEWIS POWELL,
A CORPORATE LAWYER FOR THE
TOBACCO INDUSTRY, WAS APPOINTED
TO THE SUPREME COURT BY
RICHARD NIXON IN 1972.
PRIOR TO JOINING THE COURT,
POWELL SENT A CONFIDENTIAL
MEMO TO THE U.S. CHAMBER OF
COMMERCE.
IN IT, POWELL TARGETED
RALPH NADER AS THE BIGGEST ENEMY
OF AMERICAN BUSINESS AND
DESCRIBED A ROAD MAP FOR THE
CORPORATE TAKEOVER OF AMERICAN
PUBLIC INSTITUTIONS.
IT CALLED FOR BIG CORPORATIONS
TO BECOME MORE AGGRESSIVE IN
MOLDING AMERICAN POLITICS AND
LAW.
CORPORATE AMERICA HEEDED THAT
CALL.
YOU SAW AN ENORMOUS BUILD-UP
DURING THE 1970s IN CORPORATE
LOBBYING POWER.
THEY INVESTED ENORMOUS NEW
SUMS IN POLITICS.
THEY STARTED TO CHANGE THEIR
STRATEGIES, MOVING FROM
NEW YORK, IN THE CASE OF ONE
BIG BUSINESS ORGANIZATION, TO
WASHINGTON, DEVELOPING PERSONAL
RELATIONSHIPS BETWEEN C.E.O.s
AND POLITICIANS.
Narrator: THE RESULT WAS
A SHIFT FROM POLICIES THAT
BENEFITED THE MIDDLE CLASS
AND POOR TO POLICIES THAT
FAVORED WEALTHY INTERESTS.
IN 1978 AND BEYOND, YOU GET
A MAJOR DEFEAT FOR ORGANIZED
LABOR, A DEFEAT OF AN EFFORT
TO LINK THE MINIMUM WAGE TO
GENERAL WAGE INFLATION SO THAT
THE MINIMUM WAGE WOULDN'T JUST
ERODE OVER TIME.
YOU GET THE PASSAGE OF MASSIVE
TAX CUTS FOR THE RICH, INCLUDING
A BIG REDUCTION ON CAPITAL-GAINS
TAX RATE.
LOBBYING WAS A
$400-MILLION-A-YEAR INDUSTRY
IN THE 1980s, AND IT'S ABOUT
A $4-BILLION INDUSTRY TODAY.
WASHINGTON IS ALMOST OWNED
AND OPERATED BY THE U.S.
CORPORATE SECTOR AT THIS POINT.
THERE ARE SO MANY BILLIONS OF
DOLLARS OF SPENDING ON LOBBYING.
THERE ARE SO MANY LOBBYISTS
THAT ARE IN THE ROOM WRITING
THE REGS, WRITING THE LAWS
RIGHT NOW.
THERE IS SO MUCH FINANCING
OF POLITICAL CAMPAIGNS.
THERE ARE SO MANY BOUGHT
POLITICIANS.
Narrator: OUR CIVICS BOOKS
TELL US THAT THE PRESIDENT
IS THE MOST POWERFUL PERSON
IN THE WORLD AND THAT SPECIAL
INTERESTS MUST GO TO WASHINGTON
TO PETITION THE GOVERNMENT.
BUT WHEN IT COMES TIME TO RAISE
MONEY, OUR PRESIDENTS GO HAT
IN HAND TO THE PEOPLE WHO
REALLY HAVE THE POWER.
IN 2007, PRESIDENT
GEORGE W. BUSH MADE
A PILGRIMAGE TO
STEVE SCHWARZMAN'S APARTMENT
TO ASK FOR MONEY FOR THE
REPUBLICAN NATIONAL COMMITTEE.
THE SECRET SERVICE WERE
COMING FOR, I WOULD SAY, THREE
TO FOUR MONTHS BEFORE THE ACTUAL
VISIT, AND THEY WOULD COME EVERY
WEEK JUST TO CHECK UP, LOOK
AROUND THE BUILDING.
THEY DID BACKGROUND CHECKS ON US
FOR SURE.
THEY HAD THE SHARPSHOOTERS OUT.
THEY BROUGHT MR. BUSH TO
MR. SCHWARZMAN'S APARTMENT.
HE SPENT MAYBE 15 MINUTES OUT,
AND THAT'S IT.
WHY DID JOHN DILLINGER ROB
BANKS?
THAT'S WHERE THE MONEY IS.
WELL, 740 PARK IS WHERE THE
MONEY IS, AND IN THIS DAY AND
AGE, ANY CANDIDATE WHO DIDN'T GO
TO 740 PARK WOULD PROBABLY BE
FOOLISH.
I'M MITT ROMNEY.
I BELIEVE IN AMERICA.
AND I'M RUNNING FOR PRESIDENT
OF THE UNITED STATES.
[ CHEERS AND APPLAUSE ]
ROMNEY HAS A PRIVATE MEETING
ON PARK AVENUE WITH PROMINENT
C.E.O.s EAGER FOR CHANGE IN
WASHINGTON.
MITT ROMNEY WENT TO KISS
MR. SCHWARZMAN'S RING AND MEET
SOME OF HIS FRIENDS AND NO DOUBT
COLLECT A FEW CHECKS.
WHAT MAKES HIM GOOD FOR
THE COUNTRY?
MITT -- HE'S A NATURAL LEADER
AND HE'S ACCESSIBLE.
HE LISTENS TO WHAT YOU SAY.
AND WHAT ARE YOU TELLING HIM
ABOUT WHAT NEEDS TO BE DONE?
WELL, WE HAD A NICE MEETING
ABOUT THREE WEEKS AGO FOR AN
HOUR, AND WHAT I TELL HIM STAYS
WITH ME.
[ LAUGHS ] OKAY.
FAIR ENOUGH.
BUT I'M NOT SHY.
THEY CAN INFLUENCE THE
WRITING OF LAWS, THE
IMPLEMENTATION OF REGULATION,
THE DEGREE TO WHICH THE TAX CODE
TILTS TOWARDS BUSINESS AND THOSE
AT THE TOP VERSUS ORDINARY
WORKING AMERICANS.
Narrator: A PERFECT EXAMPLE
OF THE INFLUENCE THAT A SMALL
GROUP OF BILLIONAIRES CAN HAVE
ON THE GOVERNMENT IS SOMETHING
IN THE TAX CODE CALLED THE
CARRIED INTEREST PROVISION.
IT ALLOWS HEDGE FUND AND
PRIVATE EQUITY MANAGERS LIKE
STEVE SCHWARZMAN TO PAY A 15%
TAX RATE ON THEIR INCOME EVEN
THOUGH, UNLIKE NORMAL CAPITAL
GAINS, THEY'RE NOT REQUIRED
TO RISK THEIR OWN MONEY.
WHEN IT'S EXPLAINED TO
PEOPLE, THEY THINK IT'S CRAZY.
THE MOST HIGHLY PAID FINANCIAL
EXECUTIVES GET TAXED AT A RATE
LOWER THAN YOUR MOM-AND-POP
GROCERY.
IT IS IN THE TAX CODE BECAUSE
OF THE INCREDIBLY EFFECTIVE
LOBBYING OF THE FINANCIAL
INDUSTRY.
OKAY, IT WAS A QUESTION ABOUT
CARRIED INTEREST BEING TAXED
AT A LOWER RATE.
WE SORT OF LOOK AT THIS AS SORT
OF AN ISSUE THAT'S NOW IN THE
POLITICAL WORLD, AND, YOU KNOW,
IT WILL BE SOLVED IN THAT WORLD.
WE DON'T HAVE MUCH OF A SAY IN
THAT.
SCHWARZMAN WENT TO
CAPITOL HILL YESTERDAY AND STOOD
OUTSIDE THE SENATE CHAMBER
LOBBYING SENATORS.
SCHWARZMAN WAS THERE TO FIGHT
AGAINST HIGHER TAXES ON
SO-CALLED CARRIED INTEREST.
FROM 2006 ON, EVERY
DEMOCRATIC LEADER AND PRESIDENT,
IN THE CASE OF PRESIDENT OBAMA,
HAS SAID, "WE'RE GONNA GET RID
OF THIS."
LET'S ASK HEDGE FUND MANAGERS
TO STOP PAYING TAXES THAT ARE
LOWER ON THEIR RATES THAN THEIR
SECRETARIES.
AND THEN MAGICALLY IT MANAGES
TO SURVIVE.
BEFORE YOU KNOW IT, THE
CONGRESSIONAL SESSION HAS ENDED,
AND, OH, MY GOD, WE RAN OUT OF
TIME.
WE DIDN'T GET TO IT.
WE'LL DO IT NEXT TIME.
IT APPEARS THE DEMOCRATS HAVE
COMPLETED THEIR TAKEOVER OF
CAPITOL HILL.
Narrator: EVEN WHEN THE
DEMOCRATS CONTROLLED BOTH HOUSES
OF CONGRESS, THEY COULDN'T CLOSE
THE CARRIED INTEREST LOOPHOLE.
THE QUESTION IS WHY?
IT PASSED THE HOUSE TWICE,
BUT IN THE SENATE, THE
HEDGE FUNDS HAD A PAL IN
CHARLES SCHUMER OF NEW YORK,
THE SENATOR FROM WALL STREET
AS HE WAS KNOWN FOR MANY YEARS.
Narrator: CHARLES SCHUMER
IS ONE OF THE MOST POWERFUL
SENATORS IN THE COUNTRY AND HAS
RAISED MORE CAMPAIGN MONEY FROM
THE FINANCIAL INDUSTRY THAN ANY
OTHER DEMOCRAT CURRENTLY SERVING
IN CONGRESS.
SCHUMER BECAME FAMOUS FOR
HIS ABILITY TO GAIN WALL STREET
DOLLARS.
THAT'S WHY HE WAS ELEVATED
WITHIN THE DEMOCRATIC LEADERSHIP
IS BECAUSE HE WAS SUCH AN
EFFECTIVE FUNDRAISER.
SCHUMER IN THAT PERIOD WAS
THE CHAIRMAN OF THE SENATE
DEMOCRATIC CAMPAIGN COMMITTEE,
WHICH YOU GOT TO GIVE THE GUY
CREDIT.
HE TURNED THIS INTO AN ABSOLUTE
MONEY MACHINE.
Narrator: SCHUMER HELPED
THE DEMOCRATIC PARTY RAISE
RECORD AMOUNTS FROM WALL STREET,
AND IN JUNE 2007, AS THE SENATE
WAS CONSIDERING LEGISLATION TO
CLOSE THE CARRIED INTEREST
LOOPHOLE, SCHUMER WENT ON
A FUNDRAISING FRENZY.
IN THAT ONE MONTH, HE RAISED
MORE THAN $1 MILLION FROM
HEDGE FUNDS AND PRIVATE EQUITY
FIRMS LIKE BLACKSTONE.
THE CARRIED INTEREST BILL NEVER
SAW THE LIGHT OF DAY.
SCHUMER JUST BURIED THE IDEA.
IT NEVER CAME UP FOR A VOTE IN
A COMMITTEE OR ON THE FLOOR
OF THE SENATE.
IT JUST DISAPPEARED.
WELL, I BELIEVE THAT INCOME
EQUALITY, JOBS, THE ECONOMY HAS
BEEN THE ISSUE FOR A LONG TIME.
SCHUMER CONSISTENTLY SAYS,
"OH, I DON'T THINK THIS IS
A GOOD PROVISION.
WE NEED TO CHANGE IT."
ARE YOU WILLING TO VOTE TO
GET RID OF THE CARRIED INTEREST
PROVISION WHICH ALLOWS PEOPLE
LIKE MITT TO MAKE THAT KIND
OF TAX BREAK?
YES.
"BUT WE NEED TO MAKE SURE
THAT EVERY POSSIBLE GROUP THAT
MIGHT GET A SIMILAR KIND OF
PREFERENTIAL TAX TREATMENT
IS ALSO DEALT WITH."
BUT ANY CARRIED INTEREST,
WHETHER IT'S VENTURE CAPITAL OR
OIL AND GAS OR ANYTHING ELSE...
HE'S BASICALLY SAYING,
YOU KNOW, "WE NEED TO OVERHAUL
THE WHOLE TAX CODE," WHICH,
OF COURSE GUARANTEES THAT YOU'LL
NEVER REACH AGREEMENT.
EVERY SENATOR PAYS ATTENTION
TO THE INDUSTRIES WITH BIG
FOOTPRINTS IN THEIR STATES,
AS THEY SHOULD.
Narrator: IN DEFENDING THIS
LOOPHOLE, SENATOR SCHUMER OFTEN
SAYS HE'S MERELY REPRESENTING
HIS CONSTITUENTS, THE BANKERS.
BUT WHAT ABOUT HIS OTHER
CONSTITUENTS -- POLICE OFFICERS,
NURSES, FIREMEN?
THEY HELP TO SAVE THE LIVES
OF NEW YORKERS, INCLUDING
HEDGE FUND MANAGERS, YET THE
SENATOR FROM NEW YORK DOESN'T
THINK IT'S UNFAIR THAT A VETERAN
FIREMAN CAN PAY NEARLY DOUBLE
THE TAX RATE OF A HEDGE FUND
BILLIONAIRE.
CHUCK SCHUMER IS THINKING,
"I NEED TO MAKE SURE THAT I
REPRESENT THESE DEEP-POCKETED
WALL STREET INTERESTS IF I WANT
MY PARTY AND ME TO BE
SUCCESSFUL," AND THAT, I THINK,
IS A PERFECT EXAMPLE OF THE WAY
IN WHICH MONEY TALKS IN AMERICAN
POLITICS TODAY.
Narrator: AND NOBODY'S MONEY
TALKS LOUDER THAN DAVID KOCH.
THIS RIGHT-WING OIL TYCOON WITH
A FORTUNE OF $25 BILLION IS
THE RICHEST RESIDENT OF
740 PARK AVENUE.
DAVID AND HIS BROTHER CHARLES
RUN KOCH INDUSTRIES, ONE OF THE
LARGEST PRIVATELY OWNED
COMPANIES IN THE WORLD.
THEY MAKE THINGS LIKE
DIXIE CUPS, BRAWNY PAPER TOWELS,
LYCRA, AND STAINMASTER CARPET.
BUT THEIR MOST PROFITABLE
BUSINESS IS OIL AND GAS, WHICH
HELPS KOCH INDUSTRIES BRING IN
OVER $100 BILLION IN ANNUAL
REVENUES.
TOGETHER THE KOCH BROTHERS
MAY HAVE SPENT MORE MONEY TO
INFLUENCE AMERICAN POLITICS THAN
ANYONE ELSE IN THE COUNTRY.
THEY BASICALLY ARE
UNPRECEDENTED.
THEY INFLUENCE AMERICAN POLITICS
ON A COMPLETELY DIFFERENT
DIMENSION THAN ANYBODY ELSE.
♪ THE MINUTE YOU WALKED
IN THE JOINT ♪
♪ I COULD SEE YOU WERE A MAN
OF DISTINCTION ♪
♪ A REAL BIG SPENDER ♪
MILLIONS OF DOLLARS TO
REPUBLICAN POLITICIANS.
MORE THAN $50 MILLION,
FOR EXAMPLE, TO LOBBY IN
WASHINGTON SINCE 2006.
♪ GOOD-LOOKING ♪
♪ SO REFINED ♪
♪ SAY, WOULDN'T YOU LIKE TO KNOW
WHAT'S GOING ON IN MY MIND? ♪
AS MUCH AS $200 MILLION OF
THEIR OWN MONEY THIS YEAR TO
HELP DEFEAT PRESIDENT OBAMA.
♪ HEY, BIG SPENDER ♪
♪ SPEND ♪
♪ A LITTLE TIME WITH ME ♪
THEY ARE JUST, YOU KNOW, AN
INCREDIBLE DYNASTY STORY IN
AMERICA.
IN 1927, THE FATHER, FRED KOCH,
CAME UP WITH SOME METHOD FOR
REFINING OIL THAT WAS BETTER
THAN THE METHOD THAT WAS BEING
USED.
THE MAJOR OIL COMPANIES
SUPPOSEDLY BLOCKED HIM BECAUSE
THEY HAD A MONOPOLY ON THEIR OWN
PROCESS, AND SO HE TOOK HIS
METHOD TO RUSSIA.
♪ GLORY ♪
AND HE BASICALLY SET UP
THE OIL BUSINESS FOR THE
SOVIET UNION.
HE BECAME A VIRULENT
ANTICOMMUNIST.
HE CAME BACK TO AMERICA, HAVING
SEEN THE HORRORS OF STALIN,
AND HE BEGAN TO SEE THE
UNITED STATES GOVERNMENT,
PARTICULARLY ANYTHING
PROGRESSIVE IN THE UNITED STATES
GOVERNMENT, AS THE BEGINNING
OF SOME SORT OF SOCIALIST AND
COMMUNIST TAKEOVER.
SO THAT'S THE MILIEU IN WHICH
THE KOCH BROTHERS GREW UP, AND
THEY WERE TAUGHT FROM A VERY
EARLY AGE BIG GOVERNMENT IS
BAD.
IN 1980, DAVID KOCH ACTUALLY RAN
FOR VICE PRESIDENT ON THE
LIBERTARIAN TICKET.
THEY COUNT ON GROWING
SYMPATHY FOR THEIR PARTY'S
SINGLE GOAL -- FREEDOM FROM
GOVERNMENT.
HE DID ABYSMALLY.
THE LIBERTARIAN TICKET GOT
1% OF THE VOTE IN AMERICA
IN 1980.
WHAT THEY LEARNED FROM THAT
IS THEY HAD TO FIGURE OUT
ANOTHER WAY TO GET THEIR IDEAS
TO BECOME INFLUENTIAL.
Narrator: SO THE KOCHS
DECIDED TO USE THEIR MONEY
TO ADVANCE THEIR AGENDA.
THEY GAVE GENEROUSLY TO
POLITICAL CANDIDATES, BUT, MORE
IMPORTANTLY, THEY INVESTED
HEAVILY IN GROUPS THAT COULD
BRING THEIR ANTIGOVERNMENT IDEAS
INTO THE MAINSTREAM.
THE BROTHERS GAVE MILLIONS TO
RIGHT-WING THINK TANKS, AND
CHARLES EVEN FOUNDED ONE, THE
LIBERTARIAN CATO INSTITUTE.
GOVERNMENT'S TOO BIG, AND
IT'S GETTING BIGGER, AND WE
DON'T WANT TO ENCOURAGE BIGGER
GOVERNMENT.
TAKE THE KEYS TO THE LIQUOR
CABINET AWAY FROM THE
ALCOHOLICS.
Narrator: THE KOCHS ALSO
WROTE OUT ENORMOUS CHECKS TO
UNIVERSITIES TO SUPPORT PROGRAMS
THAT WOULD PROMOTE DEREGULATION
AND FREE-MARKET ECONOMICS.
THEIR FREE-MARKET IDEOLOGY,
THEY ARGUE, IS JUST ABOUT
PRINCIPLE, BUT THERE ARE MANY,
MANY AREAS IN WHICH THEIR
BUSINESS INTERESTS BUTT INTO
REGULATIONS.
Narrator: ENVIRONMENTAL
REGULATIONS HAVE BEEN ESPECIALLY
BAD FOR THE KOCHS' BOTTOM LINE,
AND THEY'VE BEEN SLAPPED WITH
NUMEROUS FINES FROM THE
ENVIRONMENTAL PROTECTION AGENCY.
WE ARE TALKING ABOUT MILLIONS
OF GALLONS OF CRUDE OIL BEING
RELEASED INTO THE ENVIRONMENT.
Narrator: IN 2000,
KOCH INDUSTRIES HAD TO PAY
A $30-MILLION FINE FOR ITS ROLE
IN OVER 300 OIL SPILLS.
AT THE TIME, IT WAS THE LARGEST
CIVIL PENALTY IN THE E.P.A.'s
HISTORY.
WHEN YOU MAKE BUSINESSES LESS
COMPETITIVE BECAUSE THEY'RE
HAVING TO DEAL WITH REGULATIONS
FROM THE
ENVIRONMENTAL PROJECTION AGENCY
AND OTHER UNELECTED
BUREAUCRACIES, INSTEAD OF
CREATING JOBS AND INSTEAD OF
BEING ABLE TO COMPETE WITH OUR
FOREIGN COMPETITORS, WE KNOW IT
KILLS JOBS.
Narrator: THIS IS
TIM PHILLIPS, THE HEAD
OF THE KOCH BROTHERS'
LATEST VENTURE,
AMERICANS FOR PROSPERITY.
WE'RE GENUINELY FIGHTING
TO PRESERVE AND EXPAND ECONOMIC
FREEDOM, WHICH WE BELIEVE IS
THE BEST WAY TO GIVE FOLKS FROM
EVERY WALK OF LIFE PROSPERITY
AND A SHOT AT A BETTER LIFE.
Narrator: THROUGH
AMERICANS FOR PROSPERITY,
THE KOCHS HAVE PROVIDED
TREMENDOUS FINANCIAL BACKING
TO THE TEA PARTY MOVEMENT BY
ORGANIZING RALLIES AND PROTESTS,
FLYING IN BIG-NAME GUEST
SPEAKERS...
DON'T TAX US ANYMORE!
Narrator: ...AND FLOODING
THE AIRWAVES WITH ADVERTISING.
PEOPLE WERE LOOKING AT THE
TEA PARTY MOVEMENT AS THIS SORT
OF SPONTANEOUS COMBUSTION AND
THIS GRASSROOTS THING THAT JUST
EXPLODED, AND WHAT IT REALLY
WAS, WAS SOMETHING THAT WAS
BEING FED BY LIBERTARIAN
BILLIONAIRES.
WE WANT THE MAXIMUM FREEDOM
TO LAUNCH BUSINESSES, CREATE
OPPORTUNITY, AND EXPAND
PROSPERITY.
WE DESIRE A TAX CODE THAT DOES
NOT PUNISH HARD WORK OR CRUSH
THE ENTREPRENEURIAL SPIRIT THAT
MAKES AMERICA UNIQUE IN THE
WORLD.
THEY HAVE THIS IDEOLOGY
OF THE FREE MARKET AND HOW
MAKING MONEY EQUALS FREEDOM,
AND IF YOU LISTEN TO THE
TEA PARTY RHETORIC, YOU HEAR
EXACTLY THE SAME PHRASES.
OUR SIDE, THE SIDE YOU'RE ON
TODAY IS THE SIDE, FRANKLY, OF
FREEDOM.
YEAH!
[ CHEERS AND APPLAUSE ]
THEY'RE CHANTING "LIBERTY"
AND CHANTING "NO MORE TAXES."
FREEDOM, LIBERTY, AND PEOPLE
WAKING UP TO THE FACT THAT THIS
IS OUR COUNTRY, AND IT'S UP TO
US TO TAKE IT BACK.
OUR RIGHTS ARE BEING TAKEN
AWAY LITTLE BY LITTLE.
Narrator: BUT WHAT KIND
OF FREEDOM IS
AMERICANS FOR PROSPERITY
TALKING ABOUT?
IS IT FREEDOM FOR EVERYONE OR
JUST FOR BILLIONAIRES WHO WANT
FREEDOM FROM TAXES, THE FREEDOM
TO POLLUTE, AND FREEDOM FROM ANY
RESPONSIBILITY TO THE REST OF
SOCIETY.
TO ANSWER THAT QUESTION, JUST GO
TO ONE OF THEIR RALLIES WHERE
YOU'RE LIKELY TO SEE SIGNS
PROMOTING A ONCE DISCREDITED
PHILOSOPHER AND NOVELIST, WHO'S
RECENTLY FOUND A NEW AUDIENCE.
HERE IN THE UNITED STATES,
PERHAPS THE MOST CHALLENGING AND
UNUSUAL NEW PHILOSOPHY HAS BEEN
FORGED BY A NOVELIST AYN RAND.
MISS RAND'S POINT OF VIEW IS
STILL COMPARATIVELY UNKNOWN
IN AMERICA, BUT IF IT EVER DID
TAKE HOLD, IT WOULD
REVOLUTIONIZE OUR LIVES.
I'M OPPOSED TO ALL FORMS OF
CONTROL.
I AM FOR AN ABSOLUTE
LAISSEZ-FAIRE, FREE, UNREGULATED
ECONOMY.
AYN RAND WROTE A SERIES OF
NOVELS THAT HAD BECOME A KIND
OF TOUCHSTONE FOR CONTEMPORARY
REPUBLICAN POLITICIANS, MOST
NOTABLY "ATLAS SHRUGGED."
THERE'S ATLAS.
HE HOLDS THE WORLD ON HIS
SHOULDERS.
WHAT IF ATLAS SHRUGGED?
PICTURE THIS.
AN ANTI-UTOPIA SOCIETY THAT
COLLAPSES UNDER GOVERNMENT
CONTROL.
DOES THAT SOUND FAMILIAR?
IT SHOULD.
IT'S AYN RAND'S STORY OF
"ATLAS SHRUGGED," AND NOW IT'S
A MOVIE, ONE VERY POPULAR WITH
TEA PARTY MEMBERS.
Narrator: "ATLAS SHRUGGED"
IS ABOUT AN AMERICA WHERE
BUSINESSES ARE REGULATED,
THE RICH PAY TAXES, AND THE
GOVERNMENT TRIES TO HELP THE
MIDDLE CLASS AND THE POOR.
IN OTHER WORDS, A DOOMSDAY
SCENARIO.
VIOLENCE AND CRIME ARE
SKYROCKETING.
Narrator: IN RAND'S WORLD,
ANYONE WHO NEEDS A LITTLE HELP
IN LIFE IS A MOOCHER OR A
PARASITE, AND ANYONE WHO WANTS
TO HELP OTHERS IS A VILLAIN.
HER HEROES ARE PROUD TO BE
AS SELFISH AS POSSIBLE.
YOU REALLY DON'T CARE ABOUT
HELPING THE UNDERPRIVILEGED,
DO YOU?
NO, PHILLIP, I DON'T.
THERE ARE STATEMENTS BY
JOHN GALT, THE CHARACTER IN
"ATLAS SHRUGGED," THAT IF YOU
SO MUCH AS SMILE AT THE POOR
PERSON, IF YOU GIVE HIM PENNIES,
YOU PUT THE WORLD ON A PATH OF
DESTRUCTION.
Narrator: FINALLY, THE
C.E.O.s OF AMERICA GET SICK
AND TIRED OF LIVING UNDER
A GOVERNMENT THAT NO LONGER
CATERS TO THEM, AND THEY DECIDE
TO GO ON STRIKE.
WHAT ARE YOU SELLING, PAL?
NOTHING.
I'M SIMPLY OFFERING A SOCIETY
THAT CULTIVATES INDIVIDUAL
ACHIEVEMENT.
Narrator: THEY HEAD OFF INTO
THE MOUNTAINS AND START A NEW
SOCIETY, ONE WHERE THERE IS
NO GOVERNMENT.
"ATLAS SHRUGGED" IS TOLD AS
A HORROR STORY, A NIGHTMARISH
VISION OF WHAT WOULD HAPPEN
TO OUR COUNTRY IF WEALTHY
AMERICANS LIKE DAVID KOCH AND
STEVE SCHWARZMAN JUST LEFT US
TO FEND FOR OURSELVES.
NOOOOOO!
YEAH, WE SUPPORT IT.
WE HAD SCREENINGS AROUND THE
COUNTRY, AND WE LIKE THAT STORY
TO BE OUT THERE, AND WE LIKE
THE IDEAS TO BE OUT THERE, AND
WE CERTAINLY BELIEVE AND SHARE
MANY OF THE PRINCIPLES AND
VALUES THAT BOOK WAS BASED ON,
THE INHERENT MORALITY OF
CAPITALISM.
YOU DO NOT LIKE THE ALTRUISM
BY WHICH WE LIVE.
WELL, SAY THAT I DON'T LIKE
IS TOO WEAK A WORD.
I CONSIDER IT EVIL.
THE APPEAL OF AYN RAND IS
THAT, YOU KNOW, IT'S BASICALLY
THE GORDON GEKKO MESSAGE --
"GREED IS GOOD."
THAT IDEOLOGY IS APPEALING,
I SUPPOSE, IF YOU HAVE A
TREMENDOUS AMOUNT OF MONEY.
YOU MIGHT FEEL GUILTY,
OTHERWISE.
HOW DOES YOUR PHILOSOPHY
TRANSLATE ITSELF INTO THE WORLD
OF POLITICS?
WE BELIEVE THAT AMERICA
DESERVES A CHOICE OF TWO
FUTURES.
WE BELIEVE...
Narrator: PAUL RYAN RECEIVES
MORE MONEY FROM THE KOCH
BROTHERS THAN ANY OTHER MEMBER
OF CONGRESS.
HE IS ALSO THE COUNTRY'S MOST
POWERFUL POLITICIAN TO PUBLICLY
EMBRACE THE PHILOSOPHY OF
AYN RAND.
BY RUNNING ON HIS ANTIGOVERNMENT
VIEWS, THIS REPUBLICAN FROM
WISCONSIN BECAME A TEA PARTY
FAVORITE, A POWERFUL MEMBER
OF CONGRESS, AND A CANDIDATE
FOR HIGH OFFICE.
JOIN ME IN WELCOMING THE NEXT
PRESIDENT OF THE UNITED STATES,
PAUL RYAN.
VICE PRESIDENT OF THE
UNITED STATES.
[ LAUGHS ]
WE WILL RESTORE THE GREATNESS
OF THIS COUNTRY.
IT IS OUR DUTY TO SAVE THE
AMERICAN DREAM FOR OUR CHILDREN.
WHAT KIND OF PEOPLE DO WE WANT
TO BE?
Narrator: WITH HIS RISE TO
PROMINENCE, RYAN HAS DENIED HIS
AFFECTION FOR AYN RAND, BUT
HISTORY TELLS A DIFFERENT STORY.
I JUST WANT TO SPEAK TO YOU
A LITTLE BIT ABOUT AYN RAND AND
WHAT SHE MEANT TO ME IN MY LIFE
AND THE FIGHT WE'RE ENGAGED HERE
IN CONGRESS.
I GREW UP READING AYN RAND, AND
IT TAUGHT ME QUITE A BIT ABOUT
WHO I AM AND WHAT MY VALUE
SYSTEMS ARE AND WHAT MY BELIEFS
ARE.
THE REASON I GOT INVOLVED IN
PUBLIC SERVICE, BY AND LARGE,
IF I HAD TO CREDIT ONE THINKER,
ONE PERSON, IT WOULD BE
AYN RAND.
YOU BELIEVE THAT THERE SHOULD
BE NO RIGHT BY THE GOVERNMENT TO
TAX.
YOU BELIEVE THAT THERE SHOULD BE
NO SUCH THING AS WELFARE
LEGISLATION, UNEMPLOYMENT
COMPENSATION.
IT'S INSPIRED ME SO MUCH THAT
IT'S REQUIRED READING IN MY
OFFICE FOR ALL MY INTERNS AND
MY STAFF.
WE START WITH "ATLAS SHRUGGED."
HOW DO WE BUILD ROADS,
SANITATION FACILITIES,
HOSPITALS, SCHOOLS?
I BELIEVE IN PRIVATE ROADS,
PRIVATE POST OFFICES, PRIVATE
SCHOOLS.
IT'S SO IMPORTANT THAT WE GO
BACK TO OUR ROOTS TO LOOK AT
AYN RAND'S VISION, HER WRITINGS
TO SEE WHAT OUR GIRDING,
UNDERGROUNDING PRINCIPLES ARE.
WE HAVE TO GO BACK TO AYN RAND.
OUR PLAN TAKES POWER AWAY FROM
WASHINGTON AND GIVES IT BACK
TO THE INDIVIDUAL.
Narrator: WHILE IN CONGRESS,
RYAN PUT AYN RAND'S PHILOSOPHY
INTO PRACTICE THROUGH A PLAN
HE CALLED
"THE PATH TO PROSPERITY."
IT WAS A BUDGET PROPOSAL THAT
WOULD DRAMATICALLY CUT
GOVERNMENT PROGRAMS TO THE POOR
WHILE HANDING OUT AN EVEN BIGGER
TAX CUT FOR THE RICH.
I THINK THAT
"THE PATH TO PROSPERITY"
THAT CHAIRMAN RYAN AND HIS
COMMITTEE HAVE PUT TOGETHER
IS A BLUEPRINT FOR AMERICA'S
FUTURE.
Narrator: "THE PATH TO
PROSPERITY" PASSED THE HOUSE
OF REPRESENTATIVES IN MARCH
OF 2012.
IT NOW APPEARS TO BE AT THE
HEART OF THE ECONOMIC PHILOSOPHY
OF THE REPUBLICAN PARTY.
MITT ROMNEY AND I WILL TAKE
THE RIGHT STEPS IN THE RIGHT
TIME TO GET US BACK ON THE RIGHT
TRACK.
WHAT DO YOU THINK OF RYAN'S
BUDGET FRAMEWORK?
OH, I THINK IT'S RIDICULOUS
ON THE FACE OF IT.
HE'S PROPOSING A $10-TRILLION
TAX CUT AS PART OF HIS
DEFICIT-REDUCTION PLAN, AND
OBVIOUSLY IF YOU'RE GONNA CUT
TAXES BY $10 TRILLION, YOU'VE
GOT TO CUT SPENDING BY EVEN MORE
THAN $10 TRILLION.
EVERY PROGRAM YOU CAN POSSIBLY
THINK OF FROM ROADS TO EDUCATION
TO ENERGY WOULD BE MORE OR LESS
ABOLISHED IF YOU'RE GONNA TAKE
SERIOUSLY THE NUMBERS THAT HE
HAS PUT FORWARD.
THE IDEA THAT THERE'S
LEGITIMATE ECONOMICS BEHIND THIS
IS ABSURD.
CONSERVATIVES THROUGHOUT THE
AGES HAVE NEVER SPOKEN LIKE
PAUL RYAN.
MILTON FRIEDMAN TALKED ABOUT
NEGATIVE INCOME TAX AND
GUARANTEED INCOMES FOR THE POOR.
FRIEDRICH HAYEK, WHO WAS ONE
OF THE ACMES OF FREE-MARKET
ECONOMICS, TALKED ABOUT THE NEED
OF SOCIETIES TO GUARANTEE
MINIMUM STANDARDS AND PROVIDE
HEALTHCARE.
SO THERE'S CLEARLY AN
IDEOLOGY INVOLVED HERE.
THEY ACTUALLY WANT TO USE TAX
POLICY TO EVISCERATE GOVERNMENT
PROGRAMS.
IF WE TRY TO GO DOWN THE PATH
WHERE WE PUT THE GOVERNMENT IN
THE PLACE TO EQUALIZE THE
RESULTS OF PEOPLE'S LIVES, WHERE
WE TRY TO EQUALIZE OUTCOMES,
WE'LL ALL BE MORE EQUALLY
MISERABLE.
[ LIGHT LAUGHTER ]
RATHER LET'S FOCUS ON EQUALITY
OF OPPORTUNITY.
MY MOM USED TO SAY TO ME,
"SON, IT DON'T MATTER WHERE YOU
BEGAN.
WHAT MATTERS IS WHERE YOU END.
YOU LIVE IN THE UNITED STATES
OF AMERICA," AND THAT'S
SOMETHING THAT I THINK IS AN
INHERENTLY MORAL THING ABOUT
AMERICA.
IT GIVES YOU A CHANCE TO MAKE
IT.
MUCH OF WHAT THEY SAY IS
ABOUT PROVIDING OPPORTUNITY
TO MAKE MONEY TO EVERYBODY
EQUALLY.
THAT'S WHAT THEY WOULD ARGUE
ABOUT, AND IT DOESN'T SEEM TO
ACCEPT THE POSSIBILITY THAT IF
YOU'RE POOR ENOUGH AND YOUR
SCHOOLING IS BAD ENOUGH THAT YOU
DON'T REALLY HAVE AN OPPORTUNITY
TO COMPETE.
[ INDISTINCT CONVERSATIONS ]
Narrator: ALMOST EVERYONE
AGREES THAT EDUCATION IS THE KEY
TO UPWARD MOBILITY.
FOR PEOPLE STARTING AT THE
BOTTOM OF THE LADDER, A COLLEGE
DEGREE CAN QUADRUPLE THEIR
CHANCES OF MAKING IT TO THE TOP.
BUT COLLEGE IS INCREASINGLY OUT
OF REACH.
THE COST HAS GONE UP OVER 500%
SINCE 1980.
MEANWHILE, WITHOUT A COLLEGE
DEGREE, IT'S HARDER THAN EVER
TO GET A JOB.
IF YOU ONLY HAVE A HIGH-SCHOOL
DIPLOMA, THERE'S A 7-IN-10
CHANCE THAT YOU DON'T HAVE
FULL-TIME WORK AT ALL.
IT'S A CRUEL IRONY THAT THE
U.S. ECONOMY HAS A DESPERATE
NEED FOR SKILLED LABOR IN
MANUFACTURING, HIGH-TECH,
AND HEALTH INDUSTRIES.
BUT THERE AREN'T ENOUGH
QUALIFIED WORKERS TO FILL THOSE
JOBS.
EVEN WITH 12 MILLION AMERICANS
UNABLE TO FIND WORK, TRAINING
AND EDUCATION PROGRAMS ARE BEING
SLASHED BY BOTH PARTIES IN FAVOR
OF TAX CUTS FOR THE RICH.
I FIND IT HARD TO BE AN
OPTIMIST RIGHT NOW FOR PEOPLE
WHOM I CARE ABOUT AND PEOPLE
WHO THE POVERTY INSTITUTE CARES
ABOUT, PEOPLE WHO WANT TO
SUPPORT THEIR FAMILIES THROUGH
WORK AND CAN'T.
Narrator: TODAY ONE IN SEVEN
AMERICANS RECEIVES FOOD STAMPS.
MORE THAN HALF OF THOSE PEOPLE
ARE CHILDREN AND ELDERLY.
41% OF RECIPIENTS LIVE IN
WORKING HOUSEHOLDS.
A JOB IS NO LONGER ENOUGH TO
KEEP AMERICANS OUT OF POVERTY.
FOR THE PEOPLE THAT THINK,
"OKAY, THEY DON'T NEED ANYTHING.
THEY DON'T NEED A HANDOUT.
THEY SHOULD JUST GO GET A JOB."
YES, AS SOON AS THEY CREATE JOBS
FOR PEOPLE TO GET THEM, THEN
GREAT.
I'M PRETTY SURE THEY'LL BE
THERE.
THERE'S NOTHING.
SO WHAT DO YOU DO WHEN THERE'S
NOTHING?
THAT'S WHERE THE SAFETY NET
COMES IN.
Narrator: BUT IT'S NOT JUST
THE POOR WHO ARE STRUGGLING IN
AMERICA.
IN PAUL RYAN'S HOME STATE OF
WISCONSIN, MANY RESIDENTS WHO
WERE ONCE MIDDLE CLASS NOW HAVE
A HARD TIME MEETING THEIR BASIC
NEEDS.
IN THE WELL-TO-DO COUNTY OF
WAUKESHA, OVER 6,000 PEOPLE
USE THIS FOOD PANTRY EVERY
MONTH.
WE DO HEAR A LOT FROM PEOPLE,
YOU KNOW, "WHY DO YOU NEED A
FOOD PANTRY IN WAUKESHA COUNTY?
THERE'S NO WAY THAT SHOULD BE
NECESSARY."
WE'RE SEEING MORE INDIVIDUALS
AND FAMILIES THAT HAVE HIGH
EDUCATION LEVELS AND
PROFESSIONAL TRAINING MORE SO
THAN ANY OTHER TIME IN OUR
HISTORY, PEOPLE WHO, BECAUSE
OF DIFFERENT FACTORS IN THE
ECONOMY RIGHT NOW HAVE LOST
THEIR JOB OR HAVE HAD REDUCTIONS
IN INCOME.
SO ACCESS TO FREE FOOD IS ABOUT
THE ONLY WAY THAT THEY CAN
STRETCH THEIR MONETARY
RESOURCES.
THE VEGETABLE WITH BEEF.
MY HUSBAND LOST HIS JOB, AND SO
WE ARE WORKING OFF ONE INCOME,
AND WE ALSO HAVE A 6-YEAR-OLD
WHO HAS A MEDICAL CONDITION,
SO IT GETS A LITTLE EXPENSIVE
WITH THAT, AS WELL.
I WOULD SAY IF WE DIDN'T HAVE
IT, WE PROBABLY WOULDN'T GET
A LOT OF THE THINGS THAT WE
NEED.
WHEN YOU'RE ON UNEMPLOYMENT,
YOU'RE SUPPOSED TO APPLY FOR
WORK TWO PLACES A WEEK, AND I
WAS APPLYING, LIKE, EVERY DAY.
I RAN OUT OF PLACES TO APPLY TO.
I WOULD APPLY EVEN AT
McDONALD'S.
THEY NEVER EVEN CALLED ME BACK.
I'M HOPING OUR POLITICIANS ARE
SMART ENOUGH TO KEEP THESE
PROGRAMS.
WHAT WORRIES ME IS WHEN THEY SAY
THEY WANT TO CUT GOVERNMENT
SPENDING.
I'M THINKING LOW-INCOME HOUSING
'CAUSE IT'S ALL A WASTE TO THEM,
BUT I DON'T THINK THEY REALIZE
HOW ESSENTIAL IT IS TO US.
YOU KNOW, THEY MAKE MONEY.
THEY DON'T HAVE TO WORRY ABOUT
THAT, AND 9 TIMES OUT OF 10,
THEY'VE COME FROM WEALTHY
BACKGROUNDS.
THEY HAVE NO CLUE WHAT IT'S LIKE
TO BE THIS, AND UNTIL YOU BEEN
THERE, IT'S A WHOLE DIFFERENT
BALL GAME.
WHEN I WAS WORKING THE CORNER
GRILL AT McDONALD'S ON THE
INTERSTATE IN JANESVILLE AS
A KID, WHEN I WAS DETASSLING
CORN, WHEN I WAITED TABLES
TO PAY BACK MY STUDENT LOANS,
I DIDN'T THINK OF MYSELF AS
STUCK IN SOME CLASS.
I THOUGHT OF MYSELF ON THE WAY
TO OPPORTUNITY.
THAT'S WHAT THIS COUNTRY'S ALL
ABOUT.
[ CHEERS AND APPLAUSE ]
Narrator: YET PAUL RYAN'S
BUDGET PROPOSAL WOULD CUT
THE FOOD-STAMP PROGRAM BY
$134 BILLION OVER THE NEXT
10 YEARS, WHICH COULD SHRED
THE SAFETY NET FOR 8 MILLION
PEOPLE.
[ LAUGHS ]
I APPRECIATE IT.
I'VE GOT SOME BIBLES.
THANK YOU VERY MUCH.
[ ENGINE TURNS OVER ]
Narrator: IN APRIL 2012,
THE U.S. CONFERENCE OF
CATHOLIC BISHOPS URGED CONGRESS
TO PROTECT FOOD STAMPS.
BISHOPS SUGGESTED THAT IF
SPENDING CUTS WERE NECESSARY,
THEY SHOULD BE MADE TO
GOVERNMENT SUBSIDIES FOR RICH
AGRICULTURAL COMPANIES INSTEAD
OF TAKING FOOD FROM HUNGRY
CHILDREN, POOR FAMILIES,
AND VULNERABLE SENIORS.
OUR NATION IS APPROACHING
A TIPPING POINT.
WE'RE AT A MOMENT WHERE IF
GOVERNMENT'S GROWTH IS LEFT
UNCHECKED AND UNCHALLENGED,
AMERICA'S BEST CENTURY WILL BE
CONSIDERED OUR PAST CENTURY.
THIS IS A FUTURE IN WHICH WE
WILL TRANSFORM OUR SOCIAL
SAFETY NET INTO A HAMMOCK.
YOU CAN PAUL RYAN TALK ABOUT
HIS HAMMOCK.
THIS HAMMOCK -- THE AVERAGE
BENEFIT IN WISCONSIN WAS $246
A MONTH LAST YEAR FOR TWO
PEOPLE, ABOUT $350 FOR FOUR.
IS THAT ENOUGH FOR YOU TO SAY,
"AH, PUT MY FEET UP ON A
HAMMOCK.
YOU KNOW, I GOT THESE FOOD
STAMPS."
FEEDING PEOPLE IS SOMETHING THAT
THIS COUNTRY CAN AFFORD TO DO
AND SHOULD BE ABLE TO DO.
THAT'S NOT A HAMMOCK.
AND IF YOU TRY TO RAISE OUR
TAXES AND TRAMPLE ON OUR
LIBERTIES, WE'RE EITHER GOING TO
BEAT YOU OR MAKE YOUR LIFE
MISERABLE!
[ CHEERS AND APPLAUSE ]
THE GOVERNMENT HAS BEEN
STARVED OF FUNDS.
WE'RE AT ABOUT THE LOWEST TAX
COLLECTION AS A SHARED NATIONAL
INCOME IN OUR MODERN HISTORY.
WE CAN'T EVEN PAY FOR THE MOST
BASIC PUBLIC SERVICES RIGHT NOW.
WE CAN'T KEEP OUR SCHOOLS
FUNCTIONING, WE CAN'T KEEP OUR
ROADS INTACT.
TAXES ARE THE PRICE YOU PAY FOR
CIVILIZATION, AND IF YOU DON'T
PAY TAXES, YOU DON'T GET
CIVILIZATION.
IT'S AS SIMPLE AS THAT.
Narrator: BY THAT MEASURE,
OUR CIVILIZATION IS IN TROUBLE.
GENERAL ELECTRIC MADE
$5 BILLION IN U.S. PROFITS LAST
YEAR, BUT CLAIMED A $3.3-BILLION
TAX CREDIT.
Narrator: THESE DAYS, SOME OF
THE NATION'S MOST PROFITABLE
COMPANIES ARE PAYING LITTLE OR
NO TAXES AT ALL.
THANKS TO TAX BREAKS, LOOPHOLES,
AND CLEVER ACCOUNTING, THE
TAX RATE CORPORATIONS ACTUALLY
PAY IS AT AN ALL-TIME LOW.
THE SAME THING IS TRUE FOR
PERSONAL INCOME TAXES,
ESPECIALLY FOR THE ULTRA RICH.
TAX RATES FOR MILLIONAIRES HAVE
DROPPED MORE THAN 25% IN THE
LAST TWO DECADES, AND FOR A
HANDFUL OF EXTREMELY WEALTHY
INDIVIDUALS AT THE TOP, TAXES
HAVE FALLEN BY ALMOST 50%.
A BIG PART OF THAT DIP IS
BECAUSE OF THE TAX CUT SIGNED
INTO LAW BY PRESIDENT
GEORGE W. BUSH.
BUSH SLASHED THE CAPITAL GAINS
RATE ON INVESTMENTS TO 15%,
NEARLY HALF WHAT THE RATE WAS
UNDER RONALD REAGAN.
BUT EVEN THOUGH THE RICH GOT
MOST OF THE BENEFITS, THE
ARGUMENT WAS THAT THESE TAX CUTS
WOULD BE GOOD FOR ALL OF US.
IF YOU HAVE ZERO CAPITAL
GAINS IN TERMS OF THE TAX CODE,
YOU'RE GONNA SEE BILLIONS OF
DOLLARS POUR INTO INVESTMENT,
BILLIONS OF DOLLARS OPEN UP NEW
FACTORIES, BILLIONS OF DOLLARS
INVEST IN NEW TECHNOLOGY, AND
WE'RE CERTAINLY GONNA HAVE THE
MOST DYNAMIC ECONOMY IN THE
WORLD.
[ CHEERS AND APPLAUSE ]
Narrator: IT'S A THEORY
AYN RAND WOULD LOVE.
YOU HAVE TO MAKE SURE THAT
THE RICH ARE HAPPY SO THEY DON'T
GO ON STRIKE.
WELL, THAT'S THE ARGUMENT,
BUT YOU DON'T REALLY SEE ANY
ACTUAL ECONOMIC EVIDENCE TO
PROVE THAT.
THE REPUBLICANS MADE ALL THESE
ARGUMENTS BACK IN 2003 THAT IF
WE CUT TAXES ON DIVIDENDS AND
CAPITAL GAINS AND REDUCE THE TOP
TAX RATE ON THE WEALTHY, WE'LL
GET THIS EXPLOSION OF INVESTMENT
AND GROWTH AND JOBS.
YOU CAN LOOK UP THE DATA FOR
YOURSELF, BUT I CERTAINLY DON'T
REMEMBER ANY BIG INCREASE IN
GROWTH AFTER 2003.
YOU KNOW, MY JOB IS,
I'M A VENTURE CAPITALIST.
WHAT I DO IS I INVEST IN SMALL,
TYPICALLY HIGH-TECHNOLOGY
COMPANIES WITH THE OBJECTIVE
OF HELPING THEM GROW AND
HOPEFULLY HAVING THEM GROW
A LOT.
Narrator: GARRETT GRUENER IS
A MILLIONAIRE BUSINESSMAN AND
A MEMBER OF THE
PATRIOTIC MILLIONAIRES
FOR FISCAL STRENGTH, A GROUP
THAT ADVOCATES RAISING TAXES
ON PEOPLE LIKE HIMSELF.
THE REPUBLICANS ARGUE THAT AS
YOU REDUCE MARGINAL TAXES, YOU
INCENT PEOPLE TO MAKE THE SORTS
OF INVESTMENT THAT I'VE MADE.
IN FACT, THAT HAS NOT BEEN MY
EXPERIENCE AT ALL.
I HAVE LITERALLY NOT ONCE EVER
LOOKED AT MARGINAL TAX RATES
AS A REASON TO MAKE OR NOT MAKE
AN INVESTMENT.
THE BUSH TAX CUTS WERE THE
PAYOFF FOR A LOT OF INVESTMENT
THAT THE WEALTHY MADE IN THE
REPUBLICAN PARTY OVER A VERY
LONG PERIOD OF TIME, AND THEY
WERE THE PRIME BENEFICIARIES
OF IT.
THERE WAS ESSENTIALLY NO
ECONOMIC IMPACT AT ALL EXCEPT
THAT IT INCREASED THE DEFICIT.
Narrator: THE BUSH TAX CUTS
HAVE ADDED OVER $2.9 TRILLION
TO THE NATIONAL DEBT.
PAUL RYAN'S PROPOSED TAX CUTS
WOULD ADD ANOTHER $4.6 TRILLION
IN DEBT OVER THE NEXT 10 YEARS.
WHAT'S HARD TO UNDERSTAND ABOUT
THIS RELENTLESS PUSH TO CUT
TAXES FOR THE RICH IS THAT THEY
ALREADY HAVE SO MUCH MORE THAN
THE REST OF US.
IN 1965, C.E.O.s MADE ABOUT
20 TIMES AS MUCH AS THE AVERAGE
WORKER.
TODAY, BY THE MOST CONSERVATIVE
ESTIMATE, THAT NUMBER IS 231.
SO WHAT'S GOING ON HERE?
ARE C.E.O.s GETTING PAID MORE
BECAUSE THEY DESERVE IT?
MEET ANOTHER RESIDENT OF
740 PARK -- JOHN THAIN,
THE HIGHEST-PAID C.E.O. IN 2007.
THAIN'S APARTMENT IS ACTUALLY
MY PERSONAL FAVORITE FOR IF I
COULD LIVE AT 740 PARK.
IT'S A LITTLE, TINY JEWEL-BOX
DUPLEX.
IT'S GOT FOUR EXPOSURES, AND
IT'S ON THE CENTRAL PARK SIDE
OF THE BUILDING.
Narrator: THAIN HAD BEEN
A SENIOR EXECUTIVE AT
GOLDMAN SACHS AND SERVED
AS C.E.O. OF THE NEW YORK
STOCK EXCHANGE BEFORE BECOMING
THE HEAD OF THE INVESTMENT BANK
MERRILL LYNCH.
IN 2008, AS LOSSES WERE SOARING
AND HIS COMPANY STOCK WAS
PLUMMETING, THAIN WAS BUSY
WITH A $1.2-MILLION OFFICE
RENOVATION.
YOU SPENT MORE THAN A MILLION
DOLLARS RENOVATING YOUR OFFICE.
IS THIS TRUE?
IT WAS MY OFFICE.
IT WAS TWO CONFERENCE ROOMS,
AND IT WAS A RECEPTION AREA,
BUT IT IS CLEAR TO ME IN TODAY'S
WORLD THAT IT WAS A MISTAKE.
I APOLOGIZED FOR SPENDING THAT
MONEY ON THOSE THINGS.
Narrator: WHILE THAIN WAS
BUSY PICKING CHAIRS, RUGS, AND
WASTEBASKETS, MERRILL AND THE
OTHER INVESTMENT BANKS HELP
BRING DOWN THE GLOBAL ECONOMY.
WALL STREET HAS BEEN TURNED
UPSIDE DOWN.
THE COLLAPSE OF ONE
INVESTMENT BANK, THE TAKEOVER
OF ANOTHER.
$29 BILLION TO HELP
JP MORGAN...
$85 BILLION TO BAIL OUT
THE INSURANCE GIANT A.I.G.
Narrator: WALL STREET WAS
RESCUED BY U.S. TAXPAYERS, NOT
ONLY THROUGH BAILOUTS, BUT ALSO
THROUGH GOVERNMENT LOANS THAT
CARRIED VIRTUALLY NO INTEREST.
I'M CONFIDENT THAT THIS
RESCUE PLAN, ALONG WITH OTHER
MEASURES TAKEN BY THE
TREASURY DEPARTMENT AND
THE FEDERAL RESERVE, WILL BEGIN
TO RESTORE STRENGTH AND
STABILITY TO AMERICA'S FINANCIAL
SYSTEM AND OVERALL ECONOMY.
Narrator: MEANWHILE, UNDER
PRESIDENTS BUSH AND OBAMA,
MILLIONS OF MIDDLE-CLASS
AMERICAN HOMEOWNERS FACING
FORECLOSURE RECEIVED ONLY A TINY
FRACTION OF THE BAILOUTS GIVEN
TO WEALTHY BANKERS.
IN THE END, MERRILL LYNCH
SUFFERED OVER $27 BILLION IN
LOSSES UNDER THAIN'S LEADERSHIP
AND WAS SOLD TO BANK OF AMERICA.
BUT THAT DIDN'T STOP THAIN FROM
HANDING OUT $3.6 BILLION IN
PERFORMANCE BONUSES TO MERRILL
EXECUTIVES.
THE BONUSES WERE PAID EVEN AS
MERRILL SUFFERED $15 BILLION IN
LOSSES.
IF YOU LIVE IN A WORLD WHERE
EVERYONE YOU KNOW IS CHASING
HUGE SUMS OF MONEY EVERY DAY,
AND THEIR MORALITY IS DETERMINED
BY WHAT IT'S NECESSARY TO DO TO
GET RICHER AND RICHER AND
RICHER, YOU'RE NOT GOING TO HAVE
THE SAME MORAL CONSTRUCTS
AFFECTING YOUR BEHAVIOR.
WHEN SOMEONE WAS MADE TO BE
RICH, EVEN IN A VERY BASIC GAME
OF MONOPOLY, THEY BECOME MORE
SELF-CENTERED, MORE DOMINANT,
AND LESS SENSITIVE TO HOW THEIR
BEHAVIOR IS AFFECTING THE OTHER
PERSON.
AS WEALTH BECOMES INCREASINGLY
CONCENTRATED IN THE HANDS OF
A SELECT GROUP OF INDIVIDUALS,
WE'RE SEEING THEM BECOME MORE
AND MORE INSULAR FROM THE REST
OF SOCIETY.
WHEN I STARTED AT 740, I WAS
LIKE, "THIS IS GREAT, YOU KNOW?
COME AROUND TO CHRISTMASTIME,
I'M GOT $1,000 FROM EACH
RESIDENT, YOU KNOW, BECAUSE
THEY ARE MULTIBILLIONAIRES."
BUT IT'S NOT THAT WAY.
THESE GUYS ARE BUSINESSMEN.
THEY KNOW WHAT THE GOING RATE
IS.
THEY'RE NOT GOING TO GIVE YOU
ANYTHING MORE THAN THAT.
THE CHEAPEST PERSON OVERALL
WAS DAVID KOCH.
WE WOULD LOAD UP HIS TRUCKS,
TWO VANS USUALLY, EVERY WEEKEND
FOR THE HAMPTONS -- YOU KNOW,
I MEAN MULTIPLE TRIPS, MULTIPLE
GUYS IN AND OUT, IN AND OUT,
HEAVY BAGS.
WE WOULD NEVER GET A TIP FROM
MR. KOCH.
WE WOULD NEVER GET A SMILE FROM
MR. KOCH -- $50 CHECK FOR
CHRISTMAS.
A CHECK?
A CHECK, TOO, YEAH.
I MEAN, AT LEAST YOU COULD GIVE
US CASH.
IT SEEMED THAT KIDS BETWEEN 12
AND 15, THEY REALIZED THAT THEY
WERE BILLIONAIRES.
UP TILL THAT AGE, THEY'D COME IN
FROM SOCCER PRACTICE.
YOU KNOW, YOU'D HAVE SPECIFIC
HIGH FIVES THAT YOU'D GIVE THEM.
YOU'D BE THEIR BUDDY.
BUT WHEN THEY GET OLDER, THE
KIDS WOULD SUDDENLY COME DOWN
TO THE LOBBY AND THEY'D JUST BE
DIFFERENT PEOPLE.
THEY'D WALK PAST YOU, AND THEY'D
HAVE A DIFFERENT WALK.
THEY WALKED LIKE THEIR DAD
SUDDENLY.
THEIR PARENTS MUST HAVE SAT THEM
DOWN AND SAID, YOU KNOW, "THIS
IS HOW YOUR LIFE IS, YOU KNOW?
YOU'RE A BILLIONAIRE, AND
THEY'RE YOUR DOORMEN, AND
THEY'RE YOUR HOUSEKEEPERS, AND
THEY'RE YOUR DRIVERS, AND
THEY'RE NOT IMPORTANT,"
YOU KNOW?
JUST BECAUSE YOU'RE RICH
DOESN'T MAKE YOU SMART.
JUST BECAUSE YOU'RE RICH DOESN'T
MAKE YOU CULTURED.
JUST BECAUSE YOU'RE RICH DOESN'T
MAKE YOU REFINED.
BEING RICH MEANS YOUR RICH.
SOME RICH PEOPLE ARE JUST DICKS.
STEPHEN SCHWARZMAN UNLEASHED
A DISGUSTING COMPARISON OVER
THE ADMINISTRATION'S EFFORT
TO INCREASE TAXES.
HE SAID...
IN THOUSANDS OF DIFFERENT
PEOPLE THAT WE'VE STUDIED ACROSS
THE COUNTRY, THE MORE YOU HAVE,
THE MORE ENTITLED AND DESERVING
OF THOSE THINGS YOU FEEL, AND
THAT MIGHT ACCOUNT, IN PART, FOR
THE VITRIOL THAT YOU SEE WHEN
PEOPLE FEEL LIKE THEIR
PRIVILEGED POSITION IS BEING
UNDERMINED BY OTHERS.
SINCE WHEN IN THIS COUNTRY
WAS IT OKAY TO DEMONIZE SUCCESS?
THE FREE-ENTERPRISE SYSTEM
IS UNDER ATTACK.
BACK TO THE OLD POPULIST
DEMONIZE THE RICH.
YOU KNOW, THE REPUBLICANS
ARE ALWAYS COMPLAINING ABOUT
THE DEMOCRATS PLAYING CLASS
WARFARE.
THE DEMOCRATIC PARTY'S GONNA
HAVE TO STOP BASHING THE RICH.
BUT THEY DO IT THEMSELVES
BY, FOR EXAMPLE, THEY'RE ALWAYS
QUICK TO POINT OUT THAT
SOMETHING LIKE HALF OF ALL
PEOPLE WHO FILE INDIVIDUAL
INCOME-TAX RETURNS HAVE EITHER
A ZERO OR A NEGATIVE TAX
LIABILITY.
WE HAVE A SYSTEM TODAY IN
THE UNITED STATES WHERE 45%
OF AMERICANS DON'T PAY ANY
INCOME TAX.
YOU HAVE TO HAVE SKIN IN
THE GAME.
Narrator: NO SKIN IN THE
GAME?
FOR THE BILLIONAIRES AT
740 PARK, IT'S SAFE TO SAY
THAT PAYING TAXES HAS NO
MEANINGFUL IMPACT ON WHETHER
THEY CAN PUT FOOD ON THE
TABLE, KEEP THEIR FAMILIES
HEALTHY, OR SEND THEIR KIDS
TO COLLEGE.
BUT ON THE OTHER PARK AVENUE,
SKIN IN THE GAME HAS A MORE
LITERAL MEANING.
IT STARTS AT BIRTH.
INFANT MORTALITY IN THE
UNITED STATES IS ALREADY
HIGHER THAN ALMOST EVERY
OTHER DEVELOPED COUNTRY, BUT
IN PARTS OF THE SOUTH BRONX,
IT'S EVEN WORSE.
HERE INFANTS ARE FOUR TIMES MORE
LIKELY TO DIE THAN THEY ARE IN
THE WEALTHY NEIGHBORHOODS ACROSS
THE RIVER.
AS FOR THE TAX CONTRIBUTIONS
OF AMERICA'S POOR, PEOPLE WHO
LIVE IN POVERTY HAVE SKIN IN
THAT GAME, TOO.
OVER 45% OF THE PEOPLE IN
THIS COUNTRY DON'T PAY INCOME
TAXES AT ALL, AND WE HAVE TO
QUESTION WHETHER THAT'S FAIR.
THOSE ARE PEOPLE WHO DON'T
PAY INCOME TAXES, OKAY?
IT INCLUDES ALL ELDERLY WOMEN
LIVING ALONE WHO JUST HAVE
ENOUGH SOCIAL SECURITY.
THEY DON'T EVEN DECLARE IT.
IT INCLUDES DISABLED PEOPLE WHO
DON'T HAVE EARNINGS.
BUT ALL THOSE PEOPLE PAY PAYROLL
TAXES, SALES TAXES, PROPERTY
TAXES.
STATE AND LOCAL TAXES,
GASOLINE TAXES, LIQUOR TAXES.
THIS IS RIDICULOUS TO SAY
LOW-INCOME PEOPLE DON'T PAY
TAXES.
THEY DO PAY TAXES, AND THEY PAY
A LOT OF THEM.
THEY'VE MANAGED TO TAKE THE
RESENTMENT OF THE MIDDLE CLASS,
WHICH HAS ACTUALLY BEEN QUITE
ECONOMICALLY SQUEEZED OVER
THE LAST COUPLE DECADES, AND
TURN THEIR RESENTMENT AGAINST
THE PEOPLE BENEATH THEM.
I THINK WE'RE REACHING
A TIPPING POINT.
WE'RE COMING CLOSE TO A TIPPING
POINT IN AMERICA WHERE WE MIGHT
HAVE A NET MAJORITY OF TAKERS
VERSUS MAKERS IN SOCIETY.
IT'S REALLY, YOU KNOW, LIKE
A MAGICIAN TRYING TO POINT
PEOPLE IN A DIFFERENT DIRECTION
SO THEY WON'T NOTICE WHAT'S
REALLY GOING ON.
IF YOU CAN TAKE THE
RESENTMENT OF THE MIDDLE CLASS
AND POINT IT DOWNWARD RATHER
THAN HAVING IT POINT UPWARD
TO THE PEOPLE ON THE TOP
OF THE 1% WHO ARE REALLY
WALKING AWAY RICHER THAN EVER,
THEN YOU CAN SUCCEED
POLITICALLY, AND I THINK THEY'VE
BEEN VERY GOOD AT THAT.
YOU KNOW, THE POOR ARE NOT
VERY WELL-REPRESENTED IN OUR
SYSTEM OF GOVERNMENT, I'M
AFRAID.
WHY IS THAT DO YOU THINK?
WELL, I THINK ONE REASON I
THINK HAS A LOT TO DO WITH
THE DECLINE OF THE UNIONS.
THROUGHOUT THE '30s AND '40s
AND '50s, THE UNIONS WERE
THE VANGUARD IN PUSHING FOR
SOCIAL LEGISLATION THAT WOULD
HELP THE LOWER CLASSES IN
GENERAL.
Narrator: UNIONS ARE PERHAPS
THE ONLY ORGANIZATIONS WITH
SIGNIFICANT FINANCIAL AND
POLITICAL CLOUT THAT ACTUALLY
REPRESENT THE WORKING CLASS.
SINCE THE LATE '70s, CORPORATE
INTERESTS HAVE BEEN EXTREMELY
SUCCESSFUL AT LIMITING THE POWER
OF UNIONS.
ONLY PUBLIC-SECTOR UNIONS HAVE
SHOWN SIGNS OF GROWTH, AND THE
KOCH BROTHERS HAVE PUT THEIR
FINANCIAL MUSCLE BEHIND AN
EFFORT TO DESTROY THEM.
WISCONSIN IS GROUND ZERO.
I THINK IT'S GONNA DETERMINE
LARGELY WHETHER OR NOT THE
PAMPERED NATURE OF THESE PUBLIC
EMPLOYEE UNIONS IS FINALLY
REINED IN.
IF YOU, LIKE DAVID KOCH
CONTROLS KOCH, WANT TO TAKE OVER
AMERICAN POLITICS, YOU'RE GONNA
WANT TO KNOCK OUT WHATEVER THE
ORGANIZED FORCES ARE ON THE
OTHER SIDE.
DISCHARGE THE DUTIES...
Narrator: ON JANUARY 3, 2011,
SCOTT WALKER BECAME GOVERNOR
OF WISCONSIN.
HE HAD RECEIVED SIGNIFICANT
FINANCIAL SUPPORT FROM THE
KOCH BROTHERS.
CONGRATULATIONS, GOVERNOR.
[ CHEERS AND APPLAUSE ]
THE NATIONAL CONSERVATIVE
MOVEMENT WANTED A PETRI DISH,
AND WE WERE THAT, AND HE WAS
MORE THAN WILLING TO DO WHAT
THEY WANTED AND NOT THE PEOPLE
OF WISCONSIN.
GOOD MORNING.
All: GOOD MORNING.
Narrator: WALKER QUICKLY
INTRODUCED A BILL TO BALANCE
THE STATE'S BUDGET, BUT IT
DISGUISED A MUCH BROADER AGENDA.
THE GOVERNMENT COMMUNITY
SAID, "LOOK, YOU GUYS GOT A
GREAT DEAL ON YOUR PENSION.
YOU DON'T PAY ANYTHING FOR YOUR
PENSION, AND IT'S A GOOD
PENSION, SO YOU SHOULD PAY 5%."
HALF OF WHAT THE OVERALL
CONTRIBUTION IS, WHICH IS ABOUT
5.8%.
OKAY.
COMPARED TO OTHER PLACES THAT
I SEE, OKAY.
HE SAID, "YOU SHOULD PAY MORE
FOR YOUR HEALTHCARE."
WE'RE ASKING FOR A HEALTHCARE
PREMIUM CONTRIBUTION OF JUST
ABOUT 12 1/2%.
WE HAD A GOOD DEAL ON
HEALTHCARE, OKAY.
WE REMOVED HEALTHCARE AND
PENSION CONTRIBUTIONS FROM
COLLECTIVE BARGAINING.
THEY SAID, "WAIT A MINUTE.
NOW WE DON'T WANT ANY MORE
COLLECTIVE BARGAINING."
AND WE WENT, WHOA, WAIT A
MINUTE.
STOP.
YOU CAN'T DO THAT.
Narrator: WALKER'S
LEGISLATION WAS A SURPRISE
ATTACK ON THE POLITICAL POWER
OF PUBLIC-SECTOR UNIONS AND
THEIR ABILITY TO NEGOTIATE ON
BEHALF OF WORKERS.
TAKE AWAY COLLECTIVE
BARGAINING, AND WHAT DOES A
PERSON THAT'S MAKING, LET'S SAY,
$7 TO $9 AN HOUR AT UNIVERSITY
OF WISCONSIN HOSPITAL SERVING
LUNCH -- WHAT VOICE WILL THEY
HAVE IN THE WORKPLACE?
Narrator: WITHIN DAYS, THE
LARGEST UNIONS ANNOUNCED THAT
THEY WERE WILLING TO MAKE
SACRIFICES THAT WOULD HELP
SAVE THE STATE MONEY, BUT
THEY WOULDN'T GIVE UP THEIR
COLLECTIVE-BARGAINING RIGHTS.
THE UNIONS AND THE DEMOCRATS
HAVE SAID THEY'RE WILLING TO
TAKE THE CONCESSIONS ON WAGE
AND HEALTH BENEFITS, THEY'RE
WILLING TO TAKE ABOUT AN 8%
PAY CUT, BUT THEY SIMPLY DON'T
WANT YOU TO TAKE AWAY THEIR
COLLECTIVE-BARGAINING RIGHTS.
WHAT WE'RE ASKING FOR
REALISTICALLY IS SOMETHING THAT
NEARLY EVERY OTHER PERSON IN
THIS STATE AND EVERY OTHER
PERSON ACROSS THIS COUNTRY
IS PAYING A WHOLE LOT MORE FOR
WHEN IT COMES TO RETIREMENT
AND HEALTHCARE --
GOVERNOR, THEY ALREADY SAID
THEY'RE WILLING TO GIVE UP
ON THE PENSIONS AND ON
THE HEALTHCARE.
THEY ALREADY SAID THAT.
THEY'VE ALREADY MADE THOSE
CONCESSIONS.
BUT THAT'S A RED HERRING.
BUT YOU CAN SAY ANYTHING IN
THE MIDST OF THE DEBATE.
THEN WE REALLY KNEW IT WAS
NOT ABOUT FIXING A BUDGET AT
ALL.
IT WAS ABOUT BREAKING UNIONS
AND BREAKING THE POLITICAL POWER
THAT UNIONS HAVE.
GOVERNOR WALKER'S AGENDA
IS A NATIONAL AGENDA.
I MEAN, AND IT'S SEATED AND IT
IS WELL-FUNDED BY THE KOCH
BROTHERS.
[ INDISTINCT CHANTING ]
[ MILITARY-STYLE DRUMBEATS
PLAY ]
Narrator: FOR MORE THAN
A YEAR, WISCONSIN BECAME
A BATTLEGROUND.
PRO-UNION PROTESTORS OCCUPIED
THE STATEHOUSE FOR MORE THAN
TWO WEEKS.
THEY GATHERED OVER A MILLION
SIGNATURES TO FORCE A RECALL
ELECTION TO GET WALKER REMOVED.
THE UNIONS SPENT MILLIONS
FIGHTING FOR THEIR SURVIVAL.
BUT WEALTHY INTERESTS OUTSIDE
THE STATE SPENT FAR MORE.
THE BIGGEST SINGLE SOURCE
OF MONEY WAS
AMERICANS FOR PROSPERITY,
WHICH HAS SPENT OVER $10 MILLION
TO SUPPORT SCOTT WALKER.
TODAY WE HAVE MORE ACTIVISTS
IN OUR WISCONSIN A.F.P. CHAPTER
THAN THERE ARE MEMBERS OF THE
WISCONSIN TEACHERS UNION.
WE HAVE A VERY STRONG, VIBRANT
OPERATION THERE.
WALKER HAS PAINTED TEACHERS
AND OTHER PUBLIC UNION EMPLOYEES
AS THE HAVES AND THE PRIVATE
SECTOR AS THE HAVE-NOTS.
IF THE PUBLIC SCHOOLTEACHERS
THINK THEY HAVE IT SO ROUGH,
QUIT AND FIND ANOTHER LINE
OF WORK.
I THINK McDONALD'S IS HIRING.
THE MADISON FIREFIGHTERS
UNION, YOU ARE SUPPOSED TO BE
OUR HEROES.
YOU'RE NOT HEROES.
CAN WE JUST GET TO THE POINT
WHERE WE CAN START TELLING THESE
WHINERS TO GO TO HELL?
SO YOU SEE PEOPLE WHO MAYBE
DON'T HAVE THE BENEFITS, AND
INSTEAD OF SAYING TO THEMSELVES,
"YEAH, WE SHOULD HAVE THAT,
TOO," IT'S "YOU SHOULDN'T HAVE
THAT."
WHAT THEY'RE TRYING TO DO IS
REALLY SQUASH YOU SO THAT THEY
CAN HAVE THAT MUCH MORE POWER
AND YOU CAN HAVE THAT MUCH LESS
VOICE.
IT'S TEACHERS WHOSE PAY HAS
BEEN REDUCED AGAINST THE KOCH
BROTHERS.
IT'S NOT A REALLY FAIR FIGHT.
[ TELEPHONE RINGS ]
HI, THIS IS SCOTT WALKER.
SCOTT? DAVID KOCH.
HOW ARE YOU?
HOW ARE YOU, DAVID?
I'M GOOD. AND YOURSELF?
I'M VERY WELL.
A LITTLE DISHEARTENED BY THE
SITUATION THERE, BUT, UH, WHAT'S
THE LATEST?
UH, WE'LL ANNOUNCE THURSDAY,
AND WE'LL PROBABLY GET 5,000 TO
6,000 STATE WORKERS WHO WILL GET
AT-RISK NOTICES FOR LAYOFFS.
BEAUTIFUL, BEAUTIFUL.
GOT TO CRUSH THAT UNION.
AND JUST KIND OF PASS THE
MESSAGE ON TO THESE GUYS IF THEY
THINK I'M CAVING, THEY'VE BEEN
ASLEEP FOR THE LAST EIGHT YEARS
'CAUSE WE DON'T BUDGE.
GODDAMN RIGHT.
BUT, UH, WHAT WE WERE THINKING
ABOUT THE CROWDS WAS -- WAS
PLANTING SOME TROUBLEMAKERS.
YOU KNOW, WE THOUGHT ABOUT
THAT.
MY ONLY GUT REACTION TO THAT
WOULD BE, LET THEM PROTEST ALL
THEY WANT.
SOONER OR LATER THE MEDIA STOPS
FINDING THEM INTERESTING.
THE NEXT QUESTION, I TALK
TO KASICH EVERY DAY.
YOU KNOW, JOHN'S GOT TO STAND
FIRM IN OHIO.
I THINK WE DO THE SAME THING
WITH RICK SCOTT IN FLORIDA.
I THINK SNYDER, IF HE GOT A
LITTLE MORE SUPPORT, PROBABLY
COULD DO THAT IN MICHIGAN.
YOU START GOING DOWN THE LIST,
A LOT OF US NEW GOVERNORS GOT
ELECTED TO DO SOMETHING BIG.
YOU'RE THE FIRST DOMINO.
YEP. THIS IS OUR MOMENT.
THIS IS OUR TIME TO CHANGE
THE COURSE OF HISTORY.
Narrator: IN PLACES LIKE
WISCONSIN, THE DOORS OF
OPPORTUNITY FOR THOSE IN THE
LOWER RUNGS OF SOCIETY ARE
CLOSING QUICKLY.
WE ARE IN VERY REAL DANGER
THAT THE AMERICAN DREAM IS
SLIPPING FROM THE GRASP OF
THE NEXT GENERATION.
Narrator: THIS CHARITY EVENT
IS A MOMENT FOR WEALTHY
NEW YORKERS TO GIVE SOME
OF THEIR FORTUNES TO THE POOR.
OVER THE LAST DECADE,
STEPHEN SCHWARZMAN HAS GIVEN
OVER $7 MILLION TO NEW YORK'S
INNER-CITY SCHOLARSHIP FUND.
I WORRY THAT THE SOCIAL
FABRIC OF AMERICA IS BEING
RIPPED PURPOSEFULLY BY PEOPLE
WHO ARE TAKING ADVANTAGE OF
INDIVIDUALS WHO ARE SUFFERING.
Narrator: MR. SCHWARZMAN
APPEARS TO BE SYMPATHETIC TO
THOSE WHO ARE LIVING IN POVERTY,
BUT ODDLY, FOR ONE OF AMERICA'S
GREATEST CAPITALISTS, HE DOESN'T
SEEM TO UNDERSTAND THAT, UNLIKE
MONOPOLY, REAL CAPITALISM IS
A GAME THAT'S PLAYED FOR KEEPS.
FOR EVERY BIG WINNER, THERE ARE
LOTS OF LOSERS.
WEALTH IS CREATED, BUT SO IS
POVERTY.
WITHOUT POPULAR DEMOCRACY,
ALL THE GAINS OF OUR ECONOMY
WILL GO TO THE TOP.
[ Chanting ] SHOW ME WHAT
DEMOCRACY LOOKS LIKE!
[ Chanting ] THIS IS WHAT
DEMOCRACY LOOKS LIKE!
[ INDISTINCT CHANTING ]
I'M FROM MICHIGAN.
THIS IS WHERE OUR MONEY IS.
PEOPLE LOST THEIR HOMES IN
THE BANKING AND MORTGAGE CRISIS,
AND IT WENT HERE.
THERE'S NOTHING WRONG WITH
BEING RICH.
GOD WANTS ALL HIS CHILDREN
TO BE RICH, BUT DON'T BE RICH
AND AT A PLACE WHERE YOU AIN'T
THINKING ABOUT ANYBODY ELSE.
THEY FEEL THEY NEED NOT
$10 BILLION, BUT $20 BILLION
OF WEALTH.
THEY GET THAT EXTRA WEALTH BY
TWISTING POLITICS, BUYING
POLITICIANS.
AMERICA BECAME A PLACE WHERE
MONEY BUYS EVERYTHING.
Narrator: THE RICH ARE OFTEN
HELD UP AS SHINING EXAMPLES OF
WHAT'S POSSIBLE IN AMERICA...
PROOF THAT ANYONE CAN MAKE IT.
BUT IS THERE STILL A BRIDGE
TO ECONOMIC OPPORTUNITY IN
OUR COUNTRY?
WHEN WE LOOK AT THE RIVER THAT
SEPARATES THE TWO PARK AVENUES,
DO WE SEE A CHANNEL TO
PROSPERITY FOR EVERYONE?
OR A BARRIER THAT PREVENTS
THE POOR FROM CROSSING?
AS LONG AS OUR POLITICAL LEADERS
DEPEND ON THE RICH TO WIN
ELECTIONS AND STAY IN OFFICE,
THEY WILL WRITE LAWS TO PROTECT
THE CASTLES OF WEALTH AND POWER
ON THE OTHER SIDE OF THIS RIVER,
A RIVER THAT HAS BECOME A DEEP
AND FORBIDDING MOAT.