BILL MOYERS:
Welcome. My guest Arthur C. Brooks says the
compassionate conservatism once touted by
George W. Bush is making a comeback. Now,
if you've been listening to the heated rhetoric
on the right toward poor people, government,
immigrants, and liberals, that may come as
a surprise. But Mr. Brooks is being taken
seriously by influential conservatives in
government, business, and the media. In “Commentary”
magazine he called on conservative leaders
to articulate "a positive social-justice agenda."
And just last week, in “The New York Times,”
under the headline, “Love People, Not Pleasure,”
Arthur Brooks wrote that while "money relieves
suffering in cases of true material need [...] when
money becomes an end in itself, it can bring
misery, too."
That message has some people scratching their
heads, coming as it does from the president
of the American Enterprise Institute, that
venerable conservative Washington think tank
funded by some 1200 donors, including the
likes of Exxon Mobil, the American Petroleum
Institute, the Walton Family Foundation – that’s
Wal-Mart – the pharmaceutical industry,
and the chairman of the Carlyle Group – that’s
the global private equity firm with the touch
of King Midas. It is not love that gives these
powers their clout in Washington – it is
money.
So what's this former professor of the French
horn (yes, the French horn) up to? And how
did he reach the top of the conservative pecking
order in Washington? For one thing, by teaching
business, government, and economics for years
at Syracuse University. For another, by writing
ten books -- this is the most recent: “The
Road to Freedom: How to Win the Fight for
Free Enterprise.” And for yet another, by
his own pilgrimage to understand how it is
that human beings are more than the sum of
their material appetites. Last year, he went
to India to meet with one of the great spiritual
shepherds of our time – prompting the very
materialistic Vanity Fair magazine to ask:
“Why Was the Dalai Lama Hanging Out with
the Right-Wing American Enterprise Institute?”
A good question, given that this year the
Dalai Lama paid his own visit to Arthur Brooks
at the American Enterprise Institute in Washington.
Arthur Brooks, welcome.
ARTHUR C. BROOKS:
Thank you, Bill.
BILL MOYERS:
Why the Dalai Lama? What were you seeking?
ARTHUR C. BROOKS:
The Dalai Lama is a representative of human
consciousness. He's somebody who transcends
a lot of the materialistic pressures. He's
also the most respected religious figure today
in the world. Whether anybody likes that or
not, it's the truth. He's somebody who thinks
about the truth, notwithstanding the political
realities that are going on around the world.
And we wanted to talk to him about many of
the controversies that we're seeing today,
about how consciousness, free enterprise politics,
how it all interacts.
BILL MOYERS:
And he called you the spiritual leader of
the capitalist people?
ARTHUR C. BROOKS:
Well, one of the guests, I guess, at one of
our events said that.
BILL MOYERS:
How do you reconcile his socialism with your
capitalism?
ARTHUR C. BROOKS:
Well, I asked the Dalai Lama that and-- when
we were in Dharamsala. And it was a wonderful
visit. I went to see him in his monastery
where he's been living in exile since being
expelled from Tibet by the Chinese communists
in 1959.
And I went and visited with him. I meditated
with his monks for the morning and then in
the afternoon we were talking. And he said
basically, you love free enterprise. I said,
that's right, Your Holiness. And he said,
I am a Marxist. And I thought, uh-oh. But
he continued. He said, but I do not believe
in forced sharing by government. I believe
in voluntary sharing as the basis of human
morality. And there's nothing that describes
my point of view about this world better than
that.
BILL MOYERS:
But here's the enigmatic part of Arthur Brooks.
You know, love does not make Washington go
around.
ARTHUR C. BROOKS:
Right.
BILL MOYERS:
It does not bring home the bacon. The tax
subsidies. The loopholes. The special privileges.
It doesn't grease the revolving door that
is the source of so much of the wealth there.
To get those things people have-- need money.
ARTHUR C. BROOKS:
Yes.
BILL MOYERS:
And use money. So many of the people listening
to us right now are going to be, as I said,
scratching their heads and say, how can Arthur
Brooks be comfortable in an environment where
money is the prime, if not sole, instrument
of consolidating the power of the rich and
privileged, the corporations, in Washington
today? Does that create any tension in him?
ARTHUR C. BROOKS:
Money always creates tension in me and it
creates tension in our political system and
it creates tension in all people of good will.
The fact of the matter is it should create
tension with-- we should have an uneasy relationship
with material prosperity. An uneasy relationship
with power. But we can also use it at the
government level to alleviate poverty for
our poorest citizens. This is one of the reasons
that I recommend that conservatives declare
peace on the safety net for the truly poor.
But not for others.
BILL MOYERS:
What does that mean?
ARTHUR C. BROOKS:
That means basically we have a concept of
the safety net that is either, in comic book
form: we're against it because it creates
dependency and it's always wrong, on one hand.
Or it's a good thing and we should expand
it to include everybody. Upper middle class
people, crony corporations, people who haven't
earned particular benefits or who actually
aren't in need. Neither one of those extremes
is something that we should embrace.
BILL MOYERS:
So help me understand this. Tax laws favor
capital over labor, giving capital gains a
lower rate than many people who earn ordinary
income. Bankruptcy laws allow companies to
reorganize but not college students burdened
by huge debt. The minimum wage is losing ground,
losing value, while CEO pay is, as you know,
going through the roof again and again. Is
this compassionate conservatism at work?
ARTHUR C. BROOKS:
There is a lot of lacking compassion in the
American economy, and every institution, or,
for that matter, in any economy around the
world, but you have to take each one of these
things-- these are not comparable situations.
So I'll give you an example. Minimum wage.
Now, the problem with the minimum wage is
not that we're worried about the expenses
it's going to create for businesses. The problem
with the minimum wage is that it hurts the
people it's supposed to help. It's a perfect
way to give a raise to my teenage children.
It's the worst way to try to wipe out the
unemployment scourge that we have in this
country. We don't have a low wage problem.
We have an unemployment problem in the bottom
50 percent. America has left the bottom behind.
And we have a conspiracy. We have a left wing
politically that talks about solutions, but
has no implementable answers that actually
help poor people. And we have a right wing
that technically-- that traditionally doesn't
even talk about poverty.
When you have that kind of a conspiracy it's
the poor who lose out. And if the only thing
that we can come up with is a command and
control law that tells businesses they have
to pay more, as opposed to all the great ideas
- an expansion of the earned income tax credit,
wage subsidies that make work pay that don't
destroy jobs, then--
BILL MOYERS:
I'm with--
BILL MOYERS:
I'm with you on the earned income tax credit.
ARTHUR C. BROOKS:
For sure.
BILL MOYERS:
One of the best means of getting money to
people who need it. But is there any better
way of creating jobs than putting money into
the hands of people who spend it immediately?
Middle class, working poor, poor people? And
so a raise in the minimum wage has been shown,
in some studies, to actually make people better
off and stimulate the economy--
ARTHUR C. BROOKS:
Very little. Very little. The best way-- if
you want to create jobs you need policies
of economic growth. And furthermore, you know,
economic growth that reaches all the way to
the bottom of the income distribution. The
crisis in the American economy today, Bill,
is that we have economic growth that's concentrated
in the top 10 percent.
The stock market run up that's come about
because of loose money that makes interest
rates effectively zero, that blows up equity
markets. The stock market has increased by
125 percent since Barack Obama took over as
president. 81 percent of those gains has gone
into the pocket of the top 10 percent of the
income distribution. In the meantime, food
stamp recipiency is up by 50 percent. From
32 million Americans to 48 million Americans.
You remember John Edwards was-- I mean--
BILL MOYERS:
I think I do remember John Edwards.
ARTHUR C. BROOKS:
I know. I know. We go back and--
BILL MOYERS:
A meteor in the sky.
ARTHUR C. BROOKS:
He's usually kind of, you know, the punch
line to a right wing joke. But John Edwards
had one idea, which was that we were becoming
two Americas. He was right. He was just early.
He just didn't see the plutocratic tour de
force. That's the crisis.
BILL MOYERS:
He was also late. Michael Harrington and many
others--
ARTHUR C. BROOKS:
Yeah, I know.
BILL MOYERS:
--had said, look what's happening.
ARTHUR C. BROOKS:
It's true. It's true. He’s-- now we see
it. And now we see what we need to do. Economic
growth that reaches all the way to the bottom.
The minimum wage doesn't do it. Free money
doesn't do it. Only the free enterprise system
that has a bias for the poor is going to get
that done.
BILL MOYERS:
But our economy is growing faster than Canada's
and northern Europe's. And yet more-- less
of that is going to everyday workers than
it is in Canada and Europe. How do you explain
that?
ARTHUR C. BROOKS:
The reason is because our economic growth
is concentrated in the top fifth of the income
distribution in this country. So what happens
is you have effectively 5 or 6 percent economic
growth for guys like you and me. It's party
time. But the rest of the economy is somewhere
1 to 2 percent growth and the whole bottom
half is zero. That's what's going on in America
today. It's concentrated only on favoring
those at the very top. And that's because
of very bad public policy.
BILL MOYERS:
I would suggest that one of the problems is
that it is that over 70 percent of the wealth
in this country is owned by the top. And they
are doing everything they can, both to preserve,
perpetuate and increase that wealth without
following Arthur Brooks's advice and sharing
it downstream.
ARTHUR C. BROOKS:
Man, I wish it were true that that were the
real problem. I wish it were, because if it
were, we could decide together that we could
go to Washington and we could try to increase
taxes and have more redistribution and solve
the problem. But Bill, it's not.
Look, tax revenues this year are the highest
in inflation-adjusted terms in American history.
But do you believe that we could do something
big like the interstate highway system today
in America? You know we couldn't. We couldn't
do it. With any amount of time. We can't do
it because we have this rabbit warren of expanding
government that makes it impossible with any
amount of money to actually help citizens.
That's the problem. It's not that rich people
are getting richer. It's that we can't do
things with the money.
BILL MOYERS:
With due respect, many businesses today are
thriving on desperate workers. It's not just
that government is corrupted or is too big.
For example, workers at Target, McDonald's,
Wal-Mart, need food stamps to survive. Let's
just take Wal-Mart.
ARTHUR C. BROOKS:
Okay.
BILL MOYERS:
Made over $17 billion in profits last year,
about $12,000 per employee. Yet Wal-Mart pays
their employees so little that the average
Wal-Mart worker depends on about $4,000 per
year in taxpayer assistance. Food stamps,
and other programs. You and I and every taxpayer
in the country, including the Wal-Mart workers
are subsidizing the company for paying its
workers so little, to the tune of about $6.2
billion. That's not morally right, is it?
And it's not government's fault.
ARTHUR C. BROOKS:
You know, the idea that these are dead-end
jobs is not correct. The truth of the matter
is that I started out in a dead-end job, I
bet you started out in a dead-end job, and
what we have an obligation to do as a society
is to not to force an organization like Wal-Mart
to change their wage structure, because you
know what they'll do.
I mean, in America today, we have a 36 percent
African American teenage unemployment rate.
We could make it 44 percent by forcing through
these market signals. Or we could band together
and say, what are we going to do? And that's
why you and I agree on the earned income tax
credit expansion and other wage subsidies
to make work pay.
BILL MOYERS:
But I'm speaking here about issues of justice.
The four Walton heirs together made nearly
$30 billion from their personal investments
last year. Not envious, that's just a fact.
That doesn't strike me as compassionate conservatism.
ARTHUR C. BROOKS:
Well, what-- wait, wait--
BILL MOYERS:
And instead of providing--
ARTHUR C. BROOKS:
Why conservatism?
BILL MOYERS:
Well, they're conservatives. But instead of
providing a living wage for its workers, the
company spent $7.6 billion on stock buyouts
in order to further boost the value of the
owner's stockholdings. I mean, Wal-Mart even
profits from food stamps. They process them.
They have 18 percent of the SNAP market, which
means they're making money from the food stamps
that their workers need and get from you and
me in order to--
ARTHUR C. BROOKS:
But no, we--
BILL MOYERS:
--support them.
ARTHUR C. BROOKS:
Well, we're glad they can take food stamps,
aren't we?
BILL MOYERS:
What?
ARTHUR C. BROOKS:
Aren't we glad that people can cash their
food stamps--
BILL MOYERS:
Absolutely. But, I mean, Wal-Mart--
ARTHUR C. BROOKS:
You're pointing out the irony, you're not
protesting the policy, right--
BILL MOYERS:
Yeah, right.
ARTHUR C. BROOKS:
No, I understand. Now I think we should agree
not to be envious of the Waltons. I think
Sam Walton did created a great company.
BILL MOYERS:
Absolutely.
ARTHUR C. BROOKS:
And I love it when people go, he came from
nothing. He was the American success story.
And I don't begrudge his right to actually
pass on money to his heirs.
BILL MOYERS:
Nor do I.
ARTHUR C. BROOKS:
As a matter of fact, you know, you could look
at the tremendous wealth of the whole 1 percent,
and you distribute that among the population,
it would be $7,000 per American. It--
BILL MOYERS:
It just--
ARTHUR C. BROOKS:
It wouldn't--
BILL MOYERS:
Do it among your workers.
ARTHUR C. BROOKS:
Yeah.
BILL MOYERS:
I mean, just distribute more of the profits
among the workers who have to depend on you
and me for the food stamps they get to survive
while working at Wal-Mart.
ARTHUR C. BROOKS:
Well, but do we know the philanthropy of the
Walton family? I mean, do we--
BILL MOYERS:
Well, there's--
ARTHUR C. BROOKS:
I mean, that's a wonderful thing. And--
BILL MOYERS:
As a--
ARTHUR C. BROOKS:
That's what we're trying to do.
BILL MOYERS:
Are you suggesting, I don't think you're suggesting
that we should admire their philanthropy when
they're not paying their workers a living
wage.
ARTHUR C. BROOKS:
No. I'm suggesting that the markets in the
United States, given the fact that we have
not prepared workers for the modern economy,
that we have an insufficient education infrastructure
that’s leaving the poor behind, at least
there are jobs, and I want public policies
that make those jobs pay more.
The idea somehow that Wal-Mart can suddenly
take the whole-- take the profit margin in
a publicly traded corporation and spread the
money around in this way, or even worse, if
we decide to go to Washington and do it by
fiat, can you imagine? Can you imagine the
crony capitalists--
BILL MOYERS:
Well, no, no, no, no. Just pay your workers.
I mean, it would seem to me that compassionate
conservatism would take some of those exorbitant
profits that come in no small part because
they're subsidized by you and me, the taxpayer,
because the Waltons won't pay them sufficiently
and spend that on paying their workers a better
wage.
ARTHUR C. BROOKS:
So this is not a public policy argument--
BILL MOYERS:
No, no, it's not.
ARTHUR C. BROOKS:
--at all.
BILL MOYERS:
It's capitalism.
ARTHUR C. BROOKS:
It--
BILL MOYERS:
It's business. You represent a lot of business
representatives in there. I mean, if you took
the leadership on this, there's no telling
what kind of revolution you could spark.
ARTHUR C. BROOKS:
Well, we're talking about-- and not just paying
people more, what we actually can do all together--
BILL MOYERS:
I am.
ARTHUR C. BROOKS:
--to be fighting for--
BILL MOYERS:
Let-- pay them and let them live as they want
to live. Don't try to put--
ARTHUR C. BROOKS:
So you're a big fan of Hobby Lobby, for example,
because they pay-- the minimum that they pay
per worker is $15 per hour--
BILL MOYERS:
I admire their employment policies.
ARTHUR C. BROOKS:
Right--
BILL MOYERS:
I disagree with the fact that the owner's
religious beliefs should trump the rights
of women to what they need in contraception
or want in contraception. But that's a different--
I'm talking about capitalism, Arthur. I'm
not talking about government. And the fact
of the matter is, capitalism has captured
government so we can't do the things that
you're talking about--
ARTHUR C. BROOKS:
Well, capitalism is capital-- it's the antithesis
of capitalism that's captured government.
BILL MOYERS:
How so?
ARTHUR C. BROOKS:
You see, this is the problem. When markets
work, you actually don't have a free path
for the well-connected to get their favors
through the government. Government circumvents
competition. Basically, you're one of two
kinds of people. Either you believe in winning
competition, or you believe in shutting it
down. In Washington, in the confluence of
corporate interests, and power in the state,
we’ve become a country that's dedicated
in the seat of power of shutting down competition.
And that's the actual problem. So capitalism--
BILL MOYERS:
But monopolies are a huge problem.
ARTHUR C. BROOKS:
I mean it’s-- bring in more capitalism.
BILL MOYERS:
Listen, Wal-Mart's not alone. There was a
study last year. The National Employment Law
Project and the University of California Berkeley
reporting that fast food companies cost taxpayers
another $7 billion a year in public assistance
for underpaid workers with McDonald's accounting
for $1.2 billion of that. And over 50 percent
of fast food workers rely on one or more public
programs. How about that?
ARTHUR C. BROOKS:
Well, the one thing that we could do to deal
with that is increase the minimum wage, which
would of course throw people out of work who
are the most marginalized members of the workforce.
And they would be entirely on the public dole
at that point. That would be-- I guess you'd
probably--
BILL MOYERS:
Throw them out because the owners would not
want to pay them the higher minimum wage.
ARTHUR C. BROOKS:
Again, if we ask owners either through the
government by fiat or through moral suasion
to increase the amount that they're paying
to workers, artificially, not according to
market forces, artificially, what will happen?
They will lower the size of their work forces
as sure as we're sitting here. Again, the
problem in America, I understand that some
people don't make enough. I completely understand
that. Which is why I want policies--
BILL MOYERS:
A lot of people don't make it.
ARTHUR C. BROOKS:
That's why I want policies that make work
pay. But the bigger problem is the employment
crisis. We have an employment-- a workforce
participation rate that's the same as it was
in the bad old days of the Carter Administration.
We've gone backwards, Bill. And that's completely
concentrated among the poor. You have 17 percent
of working-age men who are not institutionalized
not working. Not studying. Totally idle. This
is a crisis. It's the zero, one, working,
not working part that's a problem. That's
what we have to deal with first. And if you
don't create more jobs with more economic
growth, with less regulation, you're not going
to solve that. You can basically put more
people into government dependence and hurt
them or you can find ways to actually use
public policies to make work pay.
BILL MOYERS:
But name one public policy that you would
think-- that you think would help make work
profitable.
ARTHUR C. BROOKS:
Make work profitable for-- make work pay?
BILL MOYERS:
Make work pay for the worker.
ARTHUR C. BROOKS:
Okay, okay. Right--
BILL MOYERS:
One idea.
ARTHUR C. BROOKS:
Okay, one policy. Right now, we've talked
about it tangentially a little bit which is
the earned income tax credit. It's an expensive
policy, it's hard to administer, it costs
taxpayer money, it's a great policy.
BILL MOYERS:
It is, absolutely--
ARTHUR C. BROOKS:
It's a great policy. Now, the problem is,
it excludes single men. Especially those who
have non-custodial parenting relationships
with their children. It excludes them. These
are the people who are most marginalized in
the workforce today. These are the people
who are most vulnerable. We need to expand
it to include those people. We need to expand
it such that people who are working, working
honestly. As they say, as politicians like
to say, they're working hard and playing by
the rules, which they are, they actually can
make a living. We can solve this problem,
Bill. We don't have to have by fiat telling
Wal-Mart to pay $3, and $4, and $5 an hour
more. And throw more people into welfare,
no, no, no, no. And more people into homelessness
when they lose their jobs. We can solve this
with the expansion of the EITC or any of the
other wage subsidy ideas.
BILL MOYERS:
But don't you think the big capitalist, the
big owners have a moral and an economic obligation
to their workers to help them make a living
that is sufficient for their families?
ARTHUR C. BROOKS:
I think that people should examine exactly
what their motives are. And I will and personally
I do and so do you, we talk to people in every
sphere of life how they should treat their
fellow men and women. Now, I also understand
economics enough to understand that it either
through law or moral suasion, when people
start to pay more than the market dictates,
the demand for labor will decrease and the
people who will be hurt the worst, who are
most likely to be thrown out of jobs are the
people who are most marginalized to begin
with. That's the reason we need other ways
of doing this.
BILL MOYERS:
Would you concede, or would you agree that
democracy in our system is meant to be a brake,
B-R-A-K-E, on rampant greed and power?
ARTHUR C. BROOKS:
No. Our system morally is supposed to use
capitalism in a way that's healthy, where
people don't cheat each other, where people
treat each other with principles of brotherhood.
See, this is important for conservatives to
remember as well as liberals. But especially
conservatives, that the architect of our modern
understanding of capitalism is Adam Smith.
Adam Smith understood that it doesn't matter
what your political system is. It doesn't
matter what your economic system is if people
cheat each other. If people are not honest,
if people do not believe in global brotherhood,
if there's not transparency, if you don't
believe in these moral ideals, you could be
a socialist, you could be a capitalist, you
could live in a fiefdom of some kind, it doesn't
matter. People who are impoverished and people
who lack power are going to lose out. This
is something that we need to remember. We
need a moral reformation in this country.
BILL MOYERS:
That's one side of the equation. But people
also need referees. They need government to
prevent those who don't play by the moral--
ARTHUR C. BROOKS:
Absolutely.
BILL MOYERS:
--rule--
ARTHUR C. BROOKS:
Absolutely. You need--
BILL MOYERS:
--to live up to their obligation.
ARTHUR C. BROOKS:
You know, somebody-- muggers are bad. And--
BILL MOYERS:
Well, you--
ARTHUR C. BROOKS:
--inside traders are bad.
BILL MOYERS:
And you need an SEC--
ARTHUR C. BROOKS:
Exactly right.
BILL MOYERS:
--and an FTC.
ARTHUR C. BROOKS:
Again, Adam Smith said that markets fail.
Markets fail because of monopoly, because
of externalities like pollution, they fail
because of public goods like the need for
an army and a police force. They also fail
because of what economists call asymmetric
information. Which is another one of-- way
of saying that I know more than you do and
I can exploit you. And I can exploit you because
I coerce you with a tip of a gun or I exploit
you because I use insider information and
I use it to my own gain. Those are market
failures. That's why we need the government
as well as a well-functioning, reliable safety
net for the poor. Absolutely.
BILL MOYERS:
But how do we get good public policy when
Congress is under the thumb of the big donors
who contribute to their election or their
re-election?
ARTHUR C. BROOKS:
Well, for one thing, I don't want to make
it so stark. It's not true that every member
of Congress is under the thumb of businessmen
or capitalists or public sector unions or
good guys on the right or the left or any
place in between. I know a lot of people in
Congress who are very serious about their
independence, number one.
Number two, it's in the hands of citizens
to demand a representative government. Look,
we can get this. The problem that we have
is that we have a little bit of a conspiracy
between right and left now to have people
who are really tending to be more part of
the machine. What happens when citizens rebel
and they say, we're only going to hire politicians
who refuse to stay more than three terms in
Congress, for example?
What happens when we have people who truly
are moral populists? That would be an interesting
thing. Now that's the big opportunity for
the Republican Party today. That's the big
opportunity. Why? Because you had somebody
who said he was going to fight for the people,
and things didn't, in my estimation, work
out so great over the past few years. Republicans
could come screaming out of the gate going
forward and say, we're the ones who will fight
for the poor. We're the ones who will fight
for workers. You might not agree with what
we're going-- how we're going to do it, but
let me tell you, you will not doubt what's
on our hearts. That means we need a more--
a new kind of moral climate for the future
leaders.
BILL MOYERS:
We'll continue this conversation online. Arthur
Brooks, thank you very much for being with
me.
ARTHUR C. BROOKS:
Thank you, Bill. It's been an honor.
BILL MOYERS:
At our website, BillMoyers.com, we want to
hear your thoughts about my conversation with
Arthur Brooks. So please share them with us.
That’s at BillMoyers.com. I’ll see you
there and I’ll see you here, next time.
