WEBVTT 00:00:01.509 --> 00:00:03.825 So a friend of mine who's a political scientist, 00:00:03.825 --> 00:00:05.428 he told me several months ago 00:00:05.428 --> 00:00:07.496 exactly what this month would be like. 00:00:07.496 --> 00:00:10.410 He said, you know, there's this fiscal cliff coming, 00:00:10.410 --> 00:00:14.016 it's going to come at the beginning of 2013. 00:00:14.016 --> 00:00:16.776 Both parties absolutely need to resolve it, 00:00:16.776 --> 00:00:19.601 but neither party wants to be seen as the first to resolve it. 00:00:19.601 --> 00:00:23.818 Neither party has any incentive to solve it a second before it's due, 00:00:23.818 --> 00:00:26.438 so he said, December, you're just going to see lots of 00:00:26.438 --> 00:00:29.658 angry negotiations, negotiations breaking apart, 00:00:29.658 --> 00:00:32.407 reports of phone calls that aren't going well, 00:00:32.407 --> 00:00:34.569 people saying nothing's happening at all, 00:00:34.569 --> 00:00:37.115 and then sometime around Christmas or New Year's, 00:00:37.115 --> 00:00:39.723 we're going to hear, "Okay, they resolved everything." 00:00:39.723 --> 00:00:44.311 He told me that a few months ago. He said he's 98 percent positive they're going to resolve it, 00:00:44.311 --> 00:00:46.745 and I got an email from him today saying, all right, 00:00:46.745 --> 00:00:50.724 we're basically on track, but now I'm 80 percent positive 00:00:50.724 --> 00:00:52.400 that they're going to resolve it. NOTE Paragraph 00:00:52.400 --> 00:00:54.944 And it made me think. I love studying 00:00:54.944 --> 00:00:56.937 these moments in American history 00:00:56.937 --> 00:01:00.837 when there was this frenzy of partisan anger, 00:01:00.837 --> 00:01:03.978 that the economy was on the verge of total collapse. NOTE Paragraph 00:01:03.978 --> 00:01:08.218 The most famous early battle was Alexander Hamilton 00:01:08.218 --> 00:01:11.779 and Thomas Jefferson over what the dollar would be 00:01:11.779 --> 00:01:14.100 and how it would be backed up, with Alexander Hamilton 00:01:14.100 --> 00:01:17.344 saying, "We need a central bank, the First Bank of the United States, 00:01:17.344 --> 00:01:19.143 or else the dollar will have no value. 00:01:19.143 --> 00:01:20.768 This economy won't work," 00:01:20.768 --> 00:01:23.177 and Thomas Jefferson saying, "The people won't trust that. 00:01:23.177 --> 00:01:26.965 They just fought off a king. They're not going to accept some central authority." 00:01:26.965 --> 00:01:32.487 This battle defined the first 150 years of the U.S. economy, 00:01:32.487 --> 00:01:36.137 and at every moment, different partisans saying, 00:01:36.137 --> 00:01:38.325 "Oh my God, the economy's about to collapse," 00:01:38.325 --> 00:01:40.474 and the rest of us just going about, spending our bucks 00:01:40.474 --> 00:01:43.698 on whatever it is we wanted to buy. NOTE Paragraph 00:01:43.698 --> 00:01:46.431 To give you a quick primer on where we are, 00:01:46.431 --> 00:01:48.210 a quick refresher on where we are. 00:01:48.210 --> 00:01:50.774 So the fiscal cliff, I was told 00:01:50.774 --> 00:01:53.240 that that's too partisan a thing to say, 00:01:53.240 --> 00:01:56.662 although I can't remember which party it's supporting or attacking. 00:01:56.662 --> 00:01:59.023 People say we should call it the fiscal slope, 00:01:59.023 --> 00:02:01.069 or we should call it an austerity crisis, 00:02:01.069 --> 00:02:03.455 but then other people say, no, that's even more partisan. 00:02:03.455 --> 00:02:06.232 So I just call it the self-imposed, self-destructive 00:02:06.232 --> 00:02:10.929 arbitrary deadline about resolving an inevitable problem. 00:02:10.929 --> 00:02:14.556 And this is what the inevitable problem looks like. 00:02:14.556 --> 00:02:18.914 So this is a projection of U.S. debt as a percentage 00:02:18.914 --> 00:02:21.276 of our overall economy, of GDP. 00:02:21.276 --> 00:02:24.644 The light blue dotted line represents 00:02:24.644 --> 00:02:26.773 the Congressional Budget Office's best guess 00:02:26.773 --> 00:02:30.848 of what will happen if Congress really doesn't do anything, 00:02:30.848 --> 00:02:34.364 and as you can see, sometime around 2027, 00:02:34.364 --> 00:02:36.652 we reach Greek levels of debt, 00:02:36.652 --> 00:02:39.540 somewhere around 130 percent of GDP, 00:02:39.540 --> 00:02:42.900 which tells you that some time in the next 20 years, 00:02:42.900 --> 00:02:45.270 if Congress does absolutely nothing, 00:02:45.270 --> 00:02:48.944 we're going to hit a moment where the world's investors, 00:02:48.944 --> 00:02:50.545 the world's bond buyers, are going to say, 00:02:50.545 --> 00:02:53.335 "We don't trust America anymore. We're not going to lend them any money, 00:02:53.335 --> 00:02:55.374 except at really high interest rates." 00:02:55.374 --> 00:02:58.240 And at that moment our economy collapses. 00:02:58.240 --> 00:03:00.089 But remember, Greece is there today. 00:03:00.089 --> 00:03:03.991 We're there in 20 years. We have lots and lots of time 00:03:03.991 --> 00:03:06.212 to avoid that crisis, 00:03:06.212 --> 00:03:09.907 and the fiscal cliff was just one more attempt 00:03:09.907 --> 00:03:13.444 at trying to force the two sides to resolve the crisis. NOTE Paragraph 00:03:13.444 --> 00:03:16.852 Here's another way to look at exactly the same problem. 00:03:16.852 --> 00:03:19.796 The dark blue line is how much the government spends. 00:03:19.796 --> 00:03:23.253 The light blue line is how much the government gets in. 00:03:23.253 --> 00:03:26.013 And as you can see, for most of recent history, 00:03:26.013 --> 00:03:29.645 except for a brief period, we have consistently spent 00:03:29.645 --> 00:03:32.845 more than we take in. Thus the national debt. 00:03:32.845 --> 00:03:36.724 But as you can also see, projected going forward, 00:03:36.724 --> 00:03:39.740 the gap widens a bit and raises a bit, 00:03:39.740 --> 00:03:41.789 and this graph is only through 2021. 00:03:41.789 --> 00:03:45.452 It gets really, really ugly out towards 2030. NOTE Paragraph 00:03:45.452 --> 00:03:49.577 And this graph sort of sums up what the problem is. 00:03:49.577 --> 00:03:52.666 The Democrats, they say, well, this isn't a big deal. 00:03:52.666 --> 00:03:56.784 We can just raise taxes a bit and close that gap, 00:03:56.784 --> 00:03:59.040 especially if we raise taxes on the rich. 00:03:59.040 --> 00:04:01.663 The Republicans say, hey, no, no, we've got a better idea. 00:04:01.663 --> 00:04:03.102 Why don't we lower both lines? 00:04:03.102 --> 00:04:07.057 Why don't we lower government spending and lower government taxes, 00:04:07.057 --> 00:04:10.506 and then we'll be on an even more favorable 00:04:10.506 --> 00:04:12.985 long-term deficit trajectory? 00:04:12.985 --> 00:04:17.564 And behind this powerful disagreement between 00:04:17.564 --> 00:04:19.344 how to close that gap, 00:04:19.344 --> 00:04:22.729 there's the worst kind of cynical party politics, 00:04:22.729 --> 00:04:28.102 the worst kind of insider baseball, lobbying, all of that stuff, 00:04:28.102 --> 00:04:32.363 but there's also this powerfully interesting, 00:04:32.363 --> 00:04:34.796 respectful disagreement between 00:04:34.796 --> 00:04:38.323 two fundamentally different economic philosophies. NOTE Paragraph 00:04:38.323 --> 00:04:43.146 And I like to think, when I picture how Republicans 00:04:43.146 --> 00:04:48.277 see the economy, what I picture is just some amazingly 00:04:48.277 --> 00:04:51.588 well-engineered machine, some perfect machine. 00:04:51.588 --> 00:04:56.066 Unfortunately, I picture it made in Germany or Japan, 00:04:56.066 --> 00:04:58.919 but this amazing machine that's constantly scouring 00:04:58.919 --> 00:05:04.015 every bit of human endeavor and taking resources, 00:05:04.015 --> 00:05:06.364 money, labor, capital, machinery, 00:05:06.364 --> 00:05:10.614 away from the least productive parts and towards the more productive parts, 00:05:10.614 --> 00:05:12.210 and while this might cause temporary dislocation, 00:05:12.210 --> 00:05:15.704 what it does is it builds up the more productive areas 00:05:15.704 --> 00:05:18.334 and lets the less productive areas fade away and die, 00:05:18.334 --> 00:05:21.110 and as a result the whole system is so much more efficient, 00:05:21.110 --> 00:05:23.448 so much richer for everybody. 00:05:23.448 --> 00:05:27.361 And this view generally believes that there is a role for government, 00:05:27.361 --> 00:05:30.181 a small role, to set the rules so people aren't lying 00:05:30.181 --> 00:05:32.430 and cheating and hurting each other, 00:05:32.430 --> 00:05:35.734 maybe, you know, have a police force and a fire department 00:05:35.734 --> 00:05:38.734 and an army, but to have a very limited reach 00:05:38.734 --> 00:05:41.734 into the mechanisms of this machinery. NOTE Paragraph 00:05:41.734 --> 00:05:45.910 And when I picture how Democrats and Democratic-leaning 00:05:45.910 --> 00:05:48.878 economists picture this economy, 00:05:48.878 --> 00:05:51.434 most Democratic economists are, you know, they're capitalists, 00:05:51.434 --> 00:05:54.174 they believe, yes, that's a good system a lot of the time. 00:05:54.174 --> 00:05:58.294 It's good to let markets move resources to their more productive use. 00:05:58.294 --> 00:06:02.210 But that system has tons of problems. 00:06:02.210 --> 00:06:04.539 Wealth piles up in the wrong places. 00:06:04.539 --> 00:06:08.813 Wealth is ripped away from people who shouldn't be called unproductive. 00:06:08.813 --> 00:06:11.681 That's not going to create an equitable, fair society. 00:06:11.681 --> 00:06:14.553 That machine doesn't care about the environment, 00:06:14.553 --> 00:06:16.619 about racism, about all these issues 00:06:16.619 --> 00:06:19.417 that make this life worse for all of us, 00:06:19.417 --> 00:06:22.496 and so the government does have a role to take resources 00:06:22.496 --> 00:06:25.777 from more productive uses, or from richer sources, 00:06:25.777 --> 00:06:28.445 and give them to other sources. 00:06:28.445 --> 00:06:33.500 And when you think about the economy through these two different lenses, 00:06:33.500 --> 00:06:37.558 you understand why this crisis is so hard to solve, 00:06:37.558 --> 00:06:41.547 because the worse the crisis gets, the higher the stakes are, 00:06:41.547 --> 00:06:44.315 the more each side thinks they know the answer 00:06:44.315 --> 00:06:47.668 and the other side is just going to ruin everything. NOTE Paragraph 00:06:47.668 --> 00:06:50.803 And I can get really despairing. I've spent a lot 00:06:50.803 --> 00:06:53.866 of the last few years really depressed about this, 00:06:53.866 --> 00:06:56.915 until this year, I learned something that 00:06:56.915 --> 00:07:00.395 I felt really excited about. I feel like it's really good news, 00:07:00.395 --> 00:07:03.256 and it's so shocking, I don't like saying it, because I think 00:07:03.256 --> 00:07:04.761 people won't believe me. 00:07:04.761 --> 00:07:06.079 But here's what I learned. 00:07:06.079 --> 00:07:08.499 The American people, taken as a whole, 00:07:08.499 --> 00:07:11.699 when it comes to these issues, to fiscal issues, 00:07:11.699 --> 00:07:15.422 are moderate, pragmatic centrists. 00:07:15.422 --> 00:07:17.687 And I know that's hard to believe, that the American people 00:07:17.687 --> 00:07:19.120 are moderate, pragmatic centrists. 00:07:19.120 --> 00:07:21.701 But let me explain what I'm thinking. NOTE Paragraph 00:07:21.701 --> 00:07:24.998 When you look at how the federal government spends money, 00:07:24.998 --> 00:07:27.572 so this is the battle right here, 00:07:27.572 --> 00:07:30.265 55 percent, more than half, is on Social Security, 00:07:30.265 --> 00:07:32.633 Medicare, Medicaid, a few other health programs, 00:07:32.633 --> 00:07:35.652 20 percent defense, 19 percent discretionary, 00:07:35.652 --> 00:07:37.558 and six percent interest. 00:07:37.558 --> 00:07:42.276 So when we're talking about cutting government spending, 00:07:42.276 --> 00:07:44.282 this is the pie we're talking about, 00:07:44.282 --> 00:07:47.869 and Americans overwhelmingly, and it doesn't matter 00:07:47.869 --> 00:07:51.402 what party they're in, overwhelmingly like 00:07:51.402 --> 00:07:53.841 that big 55 percent chunk. 00:07:53.841 --> 00:07:55.833 They like Social Security. They like Medicare. 00:07:55.833 --> 00:07:59.361 They even like Medicaid, even though that goes to the poor and indigent, 00:07:59.361 --> 00:08:01.785 which you might think would have less support. 00:08:01.785 --> 00:08:05.736 And they do not want it fundamentally touched, 00:08:05.736 --> 00:08:09.927 although the American people are remarkably comfortable, 00:08:09.927 --> 00:08:12.839 and Democrats roughly equal to Republicans, 00:08:12.839 --> 00:08:17.604 with some minor tweaks to make the system more stable. NOTE Paragraph 00:08:17.604 --> 00:08:20.365 Social Security is fairly easy to fix. 00:08:20.365 --> 00:08:24.149 The rumors of its demise are always greatly exaggerated. 00:08:24.149 --> 00:08:26.443 So gradually raise Social Security retirement age, 00:08:26.443 --> 00:08:28.816 maybe only on people not yet born. 00:08:28.816 --> 00:08:31.241 Americans are about 50/50, 00:08:31.241 --> 00:08:33.237 whether they're Democrats or Republicans. NOTE Paragraph 00:08:33.237 --> 00:08:35.589 Reduce Medicare for very wealthy seniors, 00:08:35.589 --> 00:08:38.910 seniors who make a lot of money. Don't even eliminate it. Just reduce it. 00:08:38.910 --> 00:08:43.925 People generally are comfortable with it, Democrats and Republicans. NOTE Paragraph 00:08:43.925 --> 00:08:46.232 Raise medical health care contributions? 00:08:46.232 --> 00:08:48.661 Everyone hates that equally, but Republicans 00:08:48.661 --> 00:08:51.333 and Democrats hate that together. NOTE Paragraph 00:08:51.333 --> 00:08:54.447 And so what this tells me is, when you look at 00:08:54.447 --> 00:08:58.277 the discussion of how to resolve our fiscal problems, 00:08:58.277 --> 00:09:05.662 we are not a nation that's powerfully divided on the major, major issue. 00:09:05.662 --> 00:09:08.943 We're comfortable with it needing some tweaks, but we want to keep it. 00:09:08.943 --> 00:09:11.738 We're not open to a discussion of eliminating it. NOTE Paragraph 00:09:11.738 --> 00:09:16.024 Now there is one issue that is hyper-partisan, 00:09:16.024 --> 00:09:19.506 and where there is one party that is just spend, spend, spend, 00:09:19.506 --> 00:09:21.389 we don't care, spend some more, 00:09:21.389 --> 00:09:23.295 and that of course is Republicans 00:09:23.295 --> 00:09:25.275 when it comes to military defense spending. 00:09:25.275 --> 00:09:27.770 They way outweigh Democrats. 00:09:27.770 --> 00:09:32.565 The vast majority want to protect military defense spending. 00:09:32.565 --> 00:09:34.786 That's 20 percent of the budget, 00:09:34.786 --> 00:09:38.469 and that presents a more difficult issue. 00:09:38.469 --> 00:09:41.394 I should also note that the [discretionary] spending, 00:09:41.394 --> 00:09:43.528 which is about 19 percent of the budget, 00:09:43.528 --> 00:09:45.898 that is Democratic and Republican issues, 00:09:45.898 --> 00:09:48.266 so you do have welfare, food stamps, other programs 00:09:48.266 --> 00:09:50.300 that tend to be popular among Democrats, 00:09:50.300 --> 00:09:53.265 but you also have the farm bill and all sorts of Department of Interior 00:09:53.265 --> 00:09:56.210 inducements for oil drilling and other things, 00:09:56.210 --> 00:09:59.825 which tend to be popular among Republicans. NOTE Paragraph 00:09:59.825 --> 00:10:03.149 Now when it comes to taxes, there is more disagreement. 00:10:03.149 --> 00:10:05.013 That's a more partisan area. 00:10:05.013 --> 00:10:08.407 You have Democrats overwhelmingly supportive 00:10:08.407 --> 00:10:12.456 of raising the income tax on people who make 250,000 dollars a year, 00:10:12.456 --> 00:10:17.696 Republicans sort of against it, although if you break it out by income, 00:10:17.696 --> 00:10:22.389 Republicans who make less than 75,000 dollars a year like this idea. 00:10:22.389 --> 00:10:26.744 So basically Republicans who make more than 250,000 dollars a year don't want to be taxed. 00:10:26.744 --> 00:10:30.000 Raising taxes on investment income, you also see 00:10:30.000 --> 00:10:32.864 about two thirds of Democrats but only one third of Republicans 00:10:32.864 --> 00:10:36.663 are comfortable with that idea. NOTE Paragraph 00:10:36.663 --> 00:10:39.688 This brings up a really important point, which is that 00:10:39.688 --> 00:10:42.304 we tend in this country to talk about Democrats 00:10:42.304 --> 00:10:44.115 and Republicans and think there's this little group 00:10:44.115 --> 00:10:46.480 over there called independents that's, what, two percent? 00:10:46.480 --> 00:10:48.592 If you add Democrats, you add Republicans, 00:10:48.592 --> 00:10:50.086 you've got the American people. 00:10:50.086 --> 00:10:53.032 But that is not the case at all. 00:10:53.032 --> 00:10:58.177 And it has not been the case for most of modern American history. 00:10:58.177 --> 00:11:01.994 Roughly a third of Americans say that they are Democrats. 00:11:01.994 --> 00:11:04.843 Around a quarter say that they are Republicans. 00:11:04.843 --> 00:11:09.323 A tiny little sliver call themselves libertarians, or socialists, 00:11:09.323 --> 00:11:12.010 or some other small third party, 00:11:12.010 --> 00:11:17.217 and the largest block, 40 percent, say they're independents. 00:11:17.217 --> 00:11:20.138 So most Americans are not partisan, 00:11:20.138 --> 00:11:22.306 and most of the people in the independent camp 00:11:22.306 --> 00:11:25.997 fall somewhere in between, so even though we have 00:11:25.997 --> 00:11:29.557 tremendous overlap between the views on these fiscal issues 00:11:29.557 --> 00:11:31.853 of Democrats and Republicans, 00:11:31.853 --> 00:11:35.645 we have even more overlap when you add in the independents. 00:11:35.645 --> 00:11:38.885 Now we get to fight about all sorts of other issues. 00:11:38.885 --> 00:11:40.998 We get to hate each other on gun control 00:11:40.998 --> 00:11:43.278 and abortion and the environment, 00:11:43.278 --> 00:11:46.150 but on these fiscal issues, these important fiscal issues, 00:11:46.150 --> 00:11:49.982 we just are not anywhere nearly as divided as people say. NOTE Paragraph 00:11:49.982 --> 00:11:52.014 And in fact, there's this other group of people 00:11:52.014 --> 00:11:55.352 who are not as divided as people might think, 00:11:55.352 --> 00:11:57.365 and that group is economists. 00:11:57.365 --> 00:12:02.668 I talk to a lot of economists, and back in the '70s 00:12:02.668 --> 00:12:05.766 and '80s it was ugly being an economist. 00:12:05.766 --> 00:12:08.941 You were in what they called the saltwater camp, 00:12:08.941 --> 00:12:13.555 meaning Harvard, Princeton, MIT, Stanford, Berkeley, 00:12:13.555 --> 00:12:16.523 or you were in the freshwater camp, University of Chicago, 00:12:16.523 --> 00:12:17.975 University of Rochester. 00:12:17.975 --> 00:12:20.971 You were a free market capitalist economist 00:12:20.971 --> 00:12:23.104 or you were a Keynesian liberal economist, 00:12:23.104 --> 00:12:25.279 and these people didn't go to each other's weddings, 00:12:25.279 --> 00:12:27.171 they snubbed each other at conferences. 00:12:27.171 --> 00:12:30.180 It's still ugly to this day, but in my experience, 00:12:30.180 --> 00:12:33.781 it is really, really hard to find an economist under 40 00:12:33.781 --> 00:12:37.805 who still has that kind of way of seeing the world. 00:12:37.805 --> 00:12:40.757 The vast majority of economists -- it is so uncool 00:12:40.757 --> 00:12:43.598 to call yourself an ideologue of either camp. 00:12:43.598 --> 00:12:46.119 The phrase that you want, if you're a graduate student 00:12:46.119 --> 00:12:48.646 or a postdoc or you're a professor, 00:12:48.646 --> 00:12:51.623 a 38-year-old economics professor, is, "I'm an empiricist. 00:12:51.623 --> 00:12:53.167 I go by the data." 00:12:53.167 --> 00:12:55.571 And the data is very clear. 00:12:55.571 --> 00:12:59.592 None of these major theories have been completely successful. 00:12:59.592 --> 00:13:01.240 The 20th century, the last hundred years, 00:13:01.240 --> 00:13:04.191 is riddled with disastrous examples 00:13:04.191 --> 00:13:07.863 of times that one school or the other tried to explain 00:13:07.863 --> 00:13:10.183 the past or predict the future 00:13:10.183 --> 00:13:12.069 and just did an awful, awful job, 00:13:12.069 --> 00:13:17.258 so the economics profession has acquired some degree of modesty. 00:13:17.258 --> 00:13:20.852 They still are an awfully arrogant group of people, I will assure you, 00:13:20.852 --> 00:13:23.729 but they're now arrogant about their impartiality, 00:13:23.729 --> 00:13:30.520 and they, too, see a tremendous range of potential outcomes. NOTE Paragraph 00:13:30.520 --> 00:13:35.620 And this nonpartisanship is something that exists, 00:13:35.620 --> 00:13:37.359 that has existed in secret 00:13:37.359 --> 00:13:39.075 in America for years and years and years. 00:13:39.075 --> 00:13:43.039 I've spent a lot of the fall talking to the three major 00:13:43.039 --> 00:13:46.935 organizations that survey American political attitudes: 00:13:46.935 --> 00:13:48.489 Pew Research, 00:13:48.489 --> 00:13:52.137 the University of Chicago's National Opinion Research Center, 00:13:52.137 --> 00:13:54.985 and the most important but the least known 00:13:54.985 --> 00:13:57.960 is the American National Election Studies group 00:13:57.960 --> 00:14:02.306 that is the world's longest, most respected poll of political attitudes. 00:14:02.306 --> 00:14:04.268 They've been doing it since 1948, 00:14:04.268 --> 00:14:07.755 and what they show consistently throughout 00:14:07.755 --> 00:14:12.202 is that it's almost impossible to find Americans 00:14:12.202 --> 00:14:15.363 who are consistent ideologically, 00:14:15.363 --> 00:14:19.099 who consistently support, "No we mustn't tax, 00:14:19.099 --> 00:14:21.779 and we must limit the size of government," 00:14:21.779 --> 00:14:25.479 or, "No, we must encourage government to play a larger role 00:14:25.479 --> 00:14:29.475 in redistribution and correcting the ills of capitalism." 00:14:29.475 --> 00:14:31.353 Those groups are very, very small. 00:14:31.353 --> 00:14:34.349 The vast majority of people, they pick and choose, 00:14:34.349 --> 00:14:36.913 they see compromise and they change over time 00:14:36.913 --> 00:14:39.446 when they hear a better argument or a worse argument. 00:14:39.446 --> 00:14:42.807 And that part of it has not changed. 00:14:42.807 --> 00:14:46.760 What has changed is how people respond to vague questions. 00:14:46.760 --> 00:14:49.358 If you ask people vague questions, like, 00:14:49.358 --> 00:14:52.350 "Do you think there should be more government or less government?" 00:14:52.350 --> 00:14:56.664 "Do you think government should" — especially if you use loaded language -- 00:14:56.664 --> 00:14:59.143 "Do you think the government should provide handouts?" 00:14:59.143 --> 00:15:01.072 Or, "Do you think the government should redistribute?" 00:15:01.072 --> 00:15:03.673 Then you can see radical partisan change. 00:15:03.673 --> 00:15:06.367 But when you get specific, when you actually ask 00:15:06.367 --> 00:15:10.407 about the actual taxing and spending issues under consideration, 00:15:10.407 --> 00:15:13.015 people are remarkably centrist, 00:15:13.015 --> 00:15:15.880 they're remarkably open to compromise. NOTE Paragraph 00:15:15.880 --> 00:15:19.665 So what we have, then, when you think about the fiscal cliff, 00:15:19.665 --> 00:15:24.191 don't think of it as the American people fundamentally 00:15:24.191 --> 00:15:26.367 can't stand each other on these issues 00:15:26.367 --> 00:15:27.922 and that we must be ripped apart 00:15:27.922 --> 00:15:30.244 into two separate warring nations. 00:15:30.244 --> 00:15:36.170 Think of it as a tiny, tiny number of ancient economists 00:15:36.170 --> 00:15:40.016 and misrepresentative ideologues have captured the process. 00:15:40.016 --> 00:15:42.592 And they've captured the process through familiar ways, 00:15:42.592 --> 00:15:45.544 through a primary system which encourages 00:15:45.544 --> 00:15:47.776 that small group of people's voices, 00:15:47.776 --> 00:15:49.881 because that small group of people, 00:15:49.881 --> 00:15:52.953 the people who answer all yeses or all noes 00:15:52.953 --> 00:15:55.360 on those ideological questions, 00:15:55.360 --> 00:15:57.967 they might be small but every one of them has a blog, 00:15:57.967 --> 00:16:01.721 every one of them has been on Fox or MSNBC in the last week. 00:16:01.721 --> 00:16:04.874 Every one of them becomes a louder and louder voice, 00:16:04.874 --> 00:16:07.006 but they don't represent us. 00:16:07.006 --> 00:16:10.107 They don't represent what our views are. NOTE Paragraph 00:16:10.107 --> 00:16:11.913 And that gets me back to the dollar, 00:16:11.913 --> 00:16:15.138 and it gets me back to reminding myself that 00:16:15.138 --> 00:16:17.148 we know this experience. 00:16:17.148 --> 00:16:18.793 We know what it's like 00:16:18.793 --> 00:16:24.148 to have these people on TV, in Congress, 00:16:24.148 --> 00:16:26.875 yelling about how the end of the world is coming 00:16:26.875 --> 00:16:30.101 if we don't adopt their view completely, 00:16:30.101 --> 00:16:32.095 because it's happened about the dollar 00:16:32.095 --> 00:16:34.098 ever since there's been a dollar. 00:16:34.098 --> 00:16:37.992 We had the battle between Jefferson and Hamilton. 00:16:37.992 --> 00:16:42.662 In 1913, we had this ugly battle over the Federal Reserve, 00:16:42.662 --> 00:16:46.536 when it was created, with vicious, angry arguments 00:16:46.536 --> 00:16:48.408 over how it would be constituted, 00:16:48.408 --> 00:16:50.185 and a general agreement that the way it was constituted 00:16:50.185 --> 00:16:53.092 was the worst possible compromise, 00:16:53.092 --> 00:16:56.452 a compromise guaranteed to destroy this valuable thing, 00:16:56.452 --> 00:16:58.809 this dollar, but then everyone agreeing, okay, 00:16:58.809 --> 00:17:01.320 so long as we're on the gold standard, it should be okay. 00:17:01.320 --> 00:17:03.370 The Fed can't mess it up so badly. 00:17:03.370 --> 00:17:07.507 But then we got off the gold standard for individuals 00:17:07.507 --> 00:17:09.921 during the Depression and we got off the gold standard 00:17:09.921 --> 00:17:14.019 as a source of international currency coordination 00:17:14.019 --> 00:17:16.251 during Richard Nixon's presidency. 00:17:16.251 --> 00:17:20.224 Each of those times, we were on the verge of complete collapse. 00:17:20.224 --> 00:17:22.378 And nothing happened at all. 00:17:22.378 --> 00:17:24.316 Throughout it all, the dollar has been 00:17:24.316 --> 00:17:26.624 one of the most long-standing, 00:17:26.624 --> 00:17:28.759 stable, reasonable currencies, 00:17:28.759 --> 00:17:30.926 and we all use it every single day, 00:17:30.926 --> 00:17:33.951 no matter what the people screaming about tell us, 00:17:33.951 --> 00:17:36.995 no matter how scared we're supposed to be. NOTE Paragraph 00:17:36.995 --> 00:17:40.940 And this long-term fiscal picture that we're in right now, 00:17:40.940 --> 00:17:44.869 I think what is most maddening about it is, 00:17:44.869 --> 00:17:48.808 if Congress were simply able 00:17:48.808 --> 00:17:51.181 to show not that they agree with each other, 00:17:51.181 --> 00:17:54.461 not that they're able to come up with the best possible compromise, 00:17:54.461 --> 00:17:57.543 but that they are able to just begin the process 00:17:57.543 --> 00:18:02.024 towards compromise, we all instantly are better off. 00:18:02.024 --> 00:18:06.158 The fear is that the world is watching. 00:18:06.158 --> 00:18:09.615 The fear is that the longer we delay any solution, 00:18:09.615 --> 00:18:11.403 the more the world will look to the U.S. 00:18:11.403 --> 00:18:15.023 not as the bedrock of stability in the global economy, 00:18:15.023 --> 00:18:18.598 but as a place that can't resolve its own fights, 00:18:18.598 --> 00:18:22.424 and the longer we put that off, the more we make the world nervous, 00:18:22.424 --> 00:18:24.207 the higher interest rates are going to be, 00:18:24.207 --> 00:18:26.911 the quicker we're going to have to face a day 00:18:26.911 --> 00:18:29.018 of horrible calamity. 00:18:29.018 --> 00:18:32.582 And so just the act of compromise itself, 00:18:32.582 --> 00:18:34.483 and sustained, real compromise, 00:18:34.483 --> 00:18:36.297 would give us even more time, 00:18:36.297 --> 00:18:39.259 would allow both sides even longer to spread out the pain 00:18:39.259 --> 00:18:41.894 and reach even more compromise down the road. NOTE Paragraph 00:18:41.894 --> 00:18:45.006 So I'm in the media. I feel like my job to make this happen 00:18:45.006 --> 00:18:49.299 is to help foster the things that seem to lead to compromise, 00:18:49.299 --> 00:18:53.411 to not talk about this in those vague and scary terms 00:18:53.411 --> 00:18:54.972 that do polarize us, 00:18:54.972 --> 00:18:57.581 but to just talk about it like what it is, 00:18:57.581 --> 00:18:59.524 not an existential crisis, 00:18:59.524 --> 00:19:04.497 not some battle between two fundamentally different religious views, 00:19:04.497 --> 00:19:07.099 but a math problem, a really solvable math problem, 00:19:07.099 --> 00:19:09.175 one where we're not all going to get what we want 00:19:09.175 --> 00:19:13.130 and one where, you know, there's going to be a little pain to spread around. 00:19:13.130 --> 00:19:16.645 But the more we address it as a practical concern, 00:19:16.645 --> 00:19:18.156 the sooner we can resolve it, 00:19:18.156 --> 00:19:21.623 and the more time we have to resolve it, paradoxically. 00:19:21.623 --> 00:19:26.607 Thank you. (Applause)