Ezra Klein: How have we gotten to a point
where we can have high corporate profits, and businesses can be doing so well, but the
workers don’t necessarily share in that prosperity? Barack Obama: Well this has been at least
a 3-decade long trend. Now there are a whole bunch of reasons for that. Some of that has
to do with technology and entire sectors being eliminated. Travel agents, bank tellers, a
lot of middle management. A lot of it has to do with globalization. The rest of the
world is catching up. Post-World War II, we had just some enormous structural advantages
because our competitors had been devastated by war, and we had also made investments that
put us ahead of the curve, whether in education or infrastructure. Those advantages went away
at the same time as workers increasingly had less leverage because of changes in labor
laws. You combine all that stuff, and it’s put workers in a tougher position. So some
people who just control enormous amounts of wealth — we don’t resent their success. On the other hand, just as a practical matter, you’re going to have problems making sure that we’re investing
enough in the common good to be able to move forward. Ezra Klein: Does this put us in a place long
term where redistribution becomes, in a sense, a positive good in and of itself? Barak Obama: That’s always been the case.
I don’t think that’s entirely new. I mean, the fact of the matter is is that relative
to our post-war history, taxes now are not particularly high or particularly progressive
compared to what they were, say in the late 50s or the 60s. There’s always been this notion
that for a country to thrive, there are some things, as Lincoln said, that we do better
together than we can do for ourselves, whether that’s building roads, or setting up, you
know, effective power grids, or making sure that we’ve got high-quality public education
and that teachers are paid enough. The market will not cover those things and we’ve got
to do them together. Basic research falls in that category. So that’s always been true.
I think that part of what’s changed is that a lot of that burden for making sure that
the pie was broadly shared took place before government even got involved. If you had stronger
unions, then you had higher wages. If you had a corporate culture that felt a sense
of place and commitment, so that the CEO, they felt a real affinity for the community
to reinvest in that community and to be seen as a good corporate citizen. Today what you
have is quarterly earning reports. You have compensation levels for CEOs that are tied
directly to those quarterly earnings. You’ve got international capital that is demanding
short-term profits, and so what happens is that a lot of distributional questions that
used to be handled in the marketplace through decent wages or health care or defined benefit
pension plans — those things are all eliminated and the average employee, the average worker
doesn’t feel any benefit.