October 31st, 2011
05:08 PM ET

Sachs versus Ferguson on Occupy Wall Street

On GPS this weekend, historian Niall Ferguson squared off against economist Jeff Sachs on occupy Wall Street. Here's a transcript of what they had to say (you can also watch the lively debate in the video above):

Fareed Zakaria: Jeff, you were at Occupy Wall Street. You've in a sense lent it support. Why do you do that? What do you think is going on there?

Jeffrey Sachs: Well, I think they have a basically correct message that when they say "we are the 99 percent," that they're reflecting the fact that the top one percent not only ran away with the prize economically in the last 30 years, but also took the power, manipulated it, twisted it, broke the law. Brought the world economy to its knees actually, and it's time to correct things. And I think that that's what Occupy Wall Street is really about. The fact that every marquee firm on Wall Street broke the law in a major way, it's now paying a series of fines. Some people are going to jail. People are disgusted about this.

Fareed Zakaria: But isn't what has caused the one percent or five percent of the top to do well, these very broad forces of technology, the information revolution which have empowered global knowledge workers, which have empowered capital rather than labor? So if it's all these much bigger structural forces, is it going to be remedied by some kind of political solution like a Buffett tax?

Jeffrey Sachs: I don't think it is all that. I think that markets caused a widening of inequalities in just about every high-income country. But some governments did something constructive about it, where starting in 1981 the U.S. government amplified this in quite reckless ways.

Because when Ronald Reagan came to office, rather than saying we have globalization, we have competition, we now have to do something about our skills, our technology and so forth, he said that government is not the solution to our problems. Government is the problem. It was a fateful call. And this is the path that we've been on for 30 years of dismantling that part of our social institution which – institutions which could actually help with job training, help with education, help with science and technology in a more effective way.

But more than that, Wall Street didn't just gain from globalization, it has been completely reckless. They gamed the system. They packed toxic assets. They sold them to unwitting investors. They let the hedge funds bet against them. And the SEC is finally calling them to account.

But the public is disgusted because after that happened, lo and behold, the next thing is that they begged for bailouts; they got the bailouts. The moment they got the bailouts, they said, "Leave us alone", "deregulate", "free markets". So they're completely hypocritical in this behavior.

We want everything of ours until we need help, then we want your help, once we get your help, then we want everything again. And it's that kind of impunity that has brought people out around this country deeply angry.

Niall Ferguson: Well, first of all, I think it's important to avoid criminalizing one percent of the population which you just did, Jeff. I mean, there's no question that major financial institutions have been fined and rightly so. But to turn that into an indictment of three million people seems to me –

Seems to me actually rather reckless. And having watched what you said at Occupy Wall Street, I have to say I thought you overstepped the mark and ceased to be an academic and became a demagogue at that point.

Jeffrey Sachs: Whoa, Niall. You're the one who said that this –

Niall Ferguson: No, let me – no, let me finish, Jeff.

Jeffrey Sachs: The last time bankers came close to ruling America –

Niall Ferguson: Hang on, hang on. I let you have – I let you have your say.

Jeffrey Sachs: No, don't call me names like this.

Niall Ferguson: This is a demagoguic argument especially for somebody who knows that the principal driver of inequality has actually been globalization, not malpractice by Wall Street.

The second part of your argument is that banks misbehaved in Europe, too. I mean, those countries that did not go down the Reagan route have got banks that are insolvent, banks that were guilty of incompetence and malpractice.

So you argued that this was something specific to the United States. And the faults of – and the faults of Ronald Reagan.

Jeffrey Sachs: Of course it was.

FERGUSON: Just a second. The banks in Europe are in just as big a mess but they didn't go down the Reagan route. So it's not only bad economics, but it seems to me it's bad history and certainly bad politics.

Jeffrey Sachs: Let's talk what I said and what is important here. And what I've said is that in a society that is so unequal as ours and where the very top has abused the system repeatedly in the banks, the CEOs of this country taking home take-home pay hundreds of times their workers' pay, unlike any other part of the world, the hedge funds and the banks got unbelievable terms of the deal to get capital gains taxes, carried interest down to 15 percent tax rates. So outrageous compared to what the rest of America bears.

Niall Ferguson: You can't believe that this is the reason why the bottom quintile of the population is in poverty and has very limited social mobility. That's nothing to do with what happens on Wall Street, as you well know. The real problem that we have in this country, it seems to me, is declining social mobility, and not enough is said about that.

Jeffrey Sachs: Well, I write a great deal about it. And the big difference of social mobility –

Niall Ferguson: Right. And what is the principal of –

Jeffrey Sachs: The big difference of social mobility in this country is the lack of public financing for early childhood development, for daycare, for preschool, for early cognitive development, for nutrition programs, for decent schools, unlike all of the rest of the high-income world. We do not help the poor. And that's why our social mobility has come to the lowest level of any of the high-income countries.

And we are 10 or 15 percentage points lower in government revenues to help for that. And I'm asking in the book for just a few percentage points and some decency at the top that they start paying their taxes at a decent rate so that we can actually pay for preschool and pay for childcare. And that's what low social mobility is about, Niall.

Niall Ferguson: But when you look at the quality of public education in this country, you can't simply attribute its low quality to a lack of funding. And I think there's a legitimate argument that the biggest obstacle to social mobility in this country right now is not the fat cats of Wall Street, whom I do not rush to defend, but the teachers unions, who make it almost impossible to improve public school in cities like New York where we are today.

Fareed Zakaria: But would you comment on Jeff's basic point which is, you know, yes, it's not true that the gap has been produced entirely because of government policy, but that you could use government policy and government resources to help in various ways. Education may be one part of it, child nutrition would be another part of it. You know, and that that becomes impossible because you're taxing at 14 percent and spending at 23 percent?

Niall Ferguson: So a major problem here is that the projects of transforming the United States into something more like a European country does imply significant increase in taxation as well as in expenditure. And there are two obstacles to this. One, it's very clear that this would not be timely given the situation that the economy finds itself in. And two, most Americans don't believe that that is going to deliver the kind of improvement that they would like to see in education.

Look how the federal government fares and the programs that it does spend a lot of money on. Health care, social security, I mean, it's already insolvent with its provision through Medicare. This is one of the hugest unfunded liabilities in the world. And the answer that Jeff has to the U.S. problem is let's create an even bigger federal spending program on public education. I mean, it's just not credible, Jeff.

Jeffrey Sachs: Niall, you're confusing so many issues. My point is that if we are going to be decent and competitive, we have to invest in it. That's paying the price of civilization. That costs money. The fact that the United States collects in total revenues at all levels of government right now about 27 percent of national income compared with 35 percent and above in other countries is the gap of decency right now where –

Fareed Zakaria: But it's also the gap you're saying of competitiveness. Now, the path to competitiveness for you is a larger government that spends more, correct?

SACHS: If it invests properly, of course.

Niall Ferguson: You can understand why people might be skeptical about that.

Jeffrey Sachs: I'm talking about investment in education. I'm talking about investment in job skills. I'm talking about investment in science and technology. Talking about investment in 21st century infrastructure. And we've been for 30 years demonizing government. We've been demonizing taxation. We have neglected to understand that a proper economy runs on two pillars, a market and government. And until we come back to that basic level of understanding that we need a mixed economy, not just a market economy, we'll continue to fail.

Niall Ferguson: Well, I'm sure the Chinese are listening to this debate with glee thinking, well, there are still academics in the west who think that the route to salvation is to expand the role of the state because that's certainly not what is happening in China. It is not what is happening in India. It is not what is happening in Brazil. The most dynamic economies in the world today are the ones which are promoting market reforms and reining in the rule of the state, which in those countries grew hypertrophically in the 20th century and that is a big problem in Jeff Sachs' argument.

Jeffrey Sachs: Thank you for the lecture. But the catching up phenomenon is quite different from the problems that the United States or other high income societies face right now, and for us –

Niall Ferguson: The problem is the falling behind phenomenon.

Jeffrey Sachs: - and for us to be able to have high prosperity at the living standards we want, we need training, we need education, we need infrastructure, we need governments that can pay for that.

Niall Ferguson: But you forgot and we need higher progressive taxation on the private sector, because that's the most important part -

Jeffrey Sachs: And we need the rich to pay their way, absolutely. Because they've run away with the prize. And they've run away with the prize -

Niall Ferguson: There's a simplification.

Fareed Zakaria: Unfortunately –

Jeffrey Sachs: That's part of the solution, stop calling it just one thing, Niall.

Fareed Zakaria: All right. I don't think – I think this is one of the rare cases where I was superfluous as a moderator. Jeff Sachs, Niall Ferguson, thank you very much.

Post by:
Topics: Protests

« Previous entry
soundoff (100 Responses)
  1. 온라인카지노

    celebrate

    https://nextsetup88.com

    November 25, 2020 at 1:10 pm |
  2. Bryangnr

    Fauci evaluations within european Vaccine

    Deborah Roberts: when it concerns vaccines. the ussr reports immediately that barefoot running has by chance emerge with a vaccine so, That it will start inoculating this type of this. any idea what about that? you think they may have really built this method vaccine? and also just how around are we within the nation to totally putting Chinese dating sites something what exactly is do we begin to eliminate the problem?

    medical professional. Anthony Fauci: to tell the truth, air cleaner will add, employing a vaccine, Deborah, And exhibiting that her vaccine has been safe and effective are two different things. we've got half a dozen in excess vaccines. in order that, whether everyone wanting to take the potential risk of negatively affecting most people or providing them with some thing does not work properly, we might start off by that way, you'll know, monday in the event that we i thought i'd! but that is not the actual way in it really works.

    then, hopefully, although i've not over heard any other proof of to make me atmosphere that's the case, lets hope the Russians has in fact, Definitively validated an vaccine will secure and efficient. I very suspect that may they want succesfully done. But that is what it looks like people need to comprehend immediately after pay attention announcements inside offshore alternatively in which Russians have a vaccine / or] you are giving a vaccine and folks repeat, "explanation really isn't each of our us residents taking because, now, considering that you'll find a way of accomplishing information during this region which people like safety and we efficaciousness.

    November 25, 2020 at 7:32 pm |
  3. 온라인카지노

    courage

    https://nextsetup88.com

    November 27, 2020 at 2:30 am |
  4. Johnyien

    conveniences human growth hormone

    whether the egg cell genuinely sent by means of the hair foillicle, the particular charmdate scam follicle will become a follicular cysts. normally but, they are destructive not to mention are encouraged to vanish after a couple of monthly period situations.

    problems in the region of artificial sweetners work for 80 85 per cent considering all of food item authorised to your federal drug administration. there is certainly certainly healthy statistical signs which usually back links aspartame if you want to cancers of the breast. america Cancer the society information illustrate any cancers of the breast instances already have bending considering that 1981, your current year artificial sweetners appeared to be modern casino authorized,recognised in the package foodstuffs chemical.

    in view that human growth hormone releasers tend to be critical in increasing the creation of HGH through the perfect glandular, will help you in re instating capabilities pertaining to youngsters. to paraphrase, it again amply manages some of those subjects and it induce maturing. It looks to weight loss, defenses reinvigorating, building muscle tissue and even fighting with each other acne scars. besides this, it is usually effective towards selling stronger-hitting bone fragments as it helps with lime storage including at a more costly age.

    these people simple bicep muscle-building activities permit me to actually engage great biceps durable with the modestly heavy weights. if you main focus your time and effort on re-training with heavy weights in a uniform location, your primary body can regrow!

    As with anything that you choose to place quite simply body, You leads to be helpful to speak with a doctor in advance, notably if you are on any kind drugs or result in an ongoing state level.

    a persons lifestyle off shoot has the advantages of metabolic aspects as an example, raising the lime scale retention; growth and additionally increases area mineralization, escalating muscle mass and as a consequence energizes robust development internal organs. it reduces carbohydrates ingestion from inside the lean meats, supports care of pancreatic islets in addition to energizes the immune system.

    uncooked can be another injections which will be adequate to the chasing a highest quality hgh growth hormone injection. it is really to select from inside the form of capsules properly in opportunity. Deco is typically equivalent style of treatment.

    and also by 1999, simply just three temporary numerous years just after visual acuity wellness and fitness content spinner off from trek, that were there be the actual top real business owners worldwide. of 2001, vision wellness settled its actual shops with an recently manufactured resource in about lagoon generators, Wisconsin.

    November 27, 2020 at 5:46 am |
  5. ed meds

    erectile deficiency
    erectile function cocaine abuse
    do erectile pumps work

    November 28, 2020 at 3:37 am |
  6. 바카라사이트

    best-known

    https://nextsetup88.com

    November 28, 2020 at 7:34 pm |
  7. find out here electrician contractor

    It’s in point of fact a great and useful piece of information. I am glad that you simply shared this helpful information with us. Please keep us informed like this. Thank you for sharing.

    https://BobJohnsonblog398.com/

    December 3, 2020 at 8:51 am |
  8. 온라인카지노

    appreciative

    https://cabelas.cc

    December 9, 2020 at 12:13 am |
  9. https://www.whatifknits.com/2009/01/just-when-i-seem-to-have-things-under-control/

    authoritative

    https://nextsetup88.com

    December 11, 2020 at 4:04 am |
  10. detectives privados alcalá de henares

    detectives privados fuenlabrada

    https://www.argadetectives.com/detectives-velez-malaga.html

    December 11, 2020 at 8:42 pm |
  11. 카지노사이트

    calming

    https://cabelas.cc

    December 15, 2020 at 6:31 am |
  12. FLOYD

    The Hybrid MLM OTO 1, 2, 3, 4, 5 Get The 5 OTO Links With Discount And Huge Bonuses Here Hybrid MLM OTO – OTOs’ Links Grab Hybrid MLM OTO Links below ” Important ” Buy Front-End Befor OTOs to work good with you. Get Them From Below
    https://otoslinks.com/
    oto linkssendly otomightee otoclickad oto

    December 15, 2020 at 11:54 am |
  13. Inam Ul Haq

    https://coinsandwhich.blogspot.com/2020/12/stacker-oto-what-is-stacker.html
    https://coinsandwhich.blogspot.com/2020/12/rush-oto-1-2-3-4-5-all-five-otos-links.html
    https://coinsandwhich.blogspot.com/2020/12/alibuilder-dropship-plus-oto-1-2-3-otos.html
    https://coinsandwhich.blogspot.com/2020/12/2020-super-bundle-oto-1-2-3-4-otos.html

    December 15, 2020 at 11:55 am |
  14. Bud Schustrich

    I do not even know how I finished up here, however I believed this put up was good. I don’t recognise who you might be but certainly you’re going to a famous blogger for those who are not already Good luck!

    http://6dollarmillion.xyz

    December 20, 2020 at 4:21 pm |
    • al7addad

      nice مروان الحداد

      December 21, 2020 at 11:25 am |
  15. al7addad

    https://www.al7addad.com/

    December 21, 2020 at 11:25 am |
  16. earn passive income in autopilot

    Imagine getting hundreds of people flooding your inbox on autopilot, This is made thanks to traffic conveyed on autopilot over various “viral tiers”. 100 commissions of up to 900+ dollars DAILY. More details: https://bit.ly/2YfQFcC

    https://bit.ly/2YfQFcC

    December 26, 2020 at 9:04 am |
  17. Ulysses Rotchford

    Are there any good poetry sites that you know of so that I can have an account that has lots of space to type out stories/poems on? Or do you know of any writing sites at all that I could post blogs on, sort of like having a whole website to myself?.

    https://www.instagram.com/katekdesigns

    December 27, 2020 at 12:12 am |
  18. Lucas

    Jordan

    https://nextsetup88.com/퍼스트카지노

    December 27, 2020 at 1:01 am |
  19. Henry

    Theo

    https://nextsetup88.com/코인카지노

    December 28, 2020 at 3:38 am |
  20. Michael

    Waylon

    https://nextsetup88.com

    December 30, 2020 at 8:27 pm |
  21. jhone

    https://ar-android.com/

    January 3, 2021 at 12:55 pm |
  22. Tatum Bussink

    I sign into my Tumblr account, and switch the dashboard from my main blog to the secondary blog, then I go to Account > Preferences > Customize your blog, but then it just takes me to the customization page for my main blog. Any way to customize my secondary blog, or should I just create a second account altogether?.

    https://www.linkedin.com/in/kmkowalsky/

    January 6, 2021 at 5:59 pm |
  23. Aidan

    I was more than happy to find this web site. I wanted to thank you for ones time just for this wonderful read!!
    I definitely liked every bit of it and I have
    you book-marked to look at new things on your blog.

    my web-site ... พรพิรุณ ฉัตรกรณ์สกุล

    January 8, 2021 at 12:39 am |
  24. Stephen health

    The term “children ” to allude to bunches of people from the time of birth to their 18th birthday. Overviews and other information sources employ varying age ranges, and the committee recognizes that, from a formative point of view, there’s no correct age at which childhood closes. So, the complete children health guidance is necessary for every family and nation.
    https://healthynaturalfitness.com/complete-children-health-guidance-2021/

    January 8, 2021 at 3:57 am |
  25. 우리카지노

    우리카지노

    https://cabelas.cc

    January 10, 2021 at 5:35 am |
1 2 3

Post a comment

You must be logged in to post a comment.

« Previous entry