"For the last 30 years, we have had state-corporate policies specifically designed—specifically designed, not accidentally—to enrich and empower a tiny sector of the population, one percent—in fact, one-tenth of one percent. That’s the basic source of the extreme inequality. Tax policies, rules of corporate governance, a whole mass of policies, have been very explicitly designed to achieve this end—deregulation and so on. Well, for most of the population, that’s meant pretty much stagnation over a long period. Now, people have been getting by, by sharply increasing the number of work hours, far beyond Europe, by debt, by asset inflation like the recent housing bubble. But those things can’t last.
And as soon as Obama came into office, he came in in the midst of the worst crisis since the Depression. In fact, Ben Bernanke, we know from recent testimony that was released, head of the Fed, said it was even worse than the banking crisis in 1929. So there was a real crisis. Who did he pick to patch up the crisis? The people who had created it, the Robert Rubin gang, Larry Summers, Timothy Geithner, basically the people who were responsible for the policies that led to the crisis. And it’s not surprising. I mean, Obama’s primary constituency was financial institutions. They were the core of the funding for his campaign. They expect to be paid back. And they were. They were paid back by coming out richer and more powerful than they were before the crisis that they created.
Meanwhile, the population, much of the population, is literally in depression. If you look at the unemployment figures, among the top few percent, maybe 10, 20 percent, unemployment is not particularly high. In fact, it’s rather low. When you go down to the bottom of the income ladder, you know, the lower quintiles, unemployment is at Depression levels. In manufacturing industry, it is at Depression levels.
And it’s different from the Depression. In the Depression, which I’m old enough to remember, it was very severe. My own family was mostly unemployed working class. But there was a sense of hopefulness. Something is—we can do something. There’s CIO organizing. There’s sitdown strikes, that compelled New Deal measures, which were helpful and hopeful. And there was a sense that somehow we’ll get out of this, that we’re in it together, we can work together, we can get out of it. That’s not true now. Now there’s a general atmosphere of hopelessness, despair, anger and deep irrationality. That’s a very dangerous mix. Hatred of foreigners, you know, a mix of attitudes which is volatile and dangerous, quite different from the mood in the Depression.
But the same governing principle applies: as long as the population is—accepts what’s going on, is directing their anger against teachers, you know, firemen, policemen, pensions and so on, as long as they’re directing their anger there, and not against us, the rulers, everything’s under control, everything’s fine. Until it erupts. Well, it hasn’t erupted here yet, and if it does erupt, it might not be at a constructive direction, given the nature of what’s happening in the country now. But yes, those Egyptian lessons should be taken to heart. We can see clearly what people can do under conditions of serious duress and repression far beyond anything that we face, but they’re doing it. If we don’t do it, the outcome could be quite ugly."