Fusion senior editor Felix Salmon sat down with Democratic presidential candidate Sen. Bernie Sanders in Los Angeles last Wednesday, the day after the first Democratic presidential debate, to talk about economic policy.
That day, at least, fresh off his strong performance in front of 15 million people, Sanders was not in policy-wonk mode. Instead, he had one big message that he wanted to convey: The rich and powerful have far too much control of America, and it’s time the country was run not for them but for the 99%.
Q: Thank you for doing this. As an Englishman, I’m glad to see proud socialists running for president. Do you believe in redistribution of wealth?
A: Yeah. I think what’s happened is that there has been mass redistribution of wealth in this country for the last 30 years. The problem is it’s gone from the middle class to the top one-tenth of 1%. And I think we have to redistribute it back to working families and the middle class so that they can have a decent standard of living.
Q: So we’ll take the wealth from the rich and redistribute it to the middle classes?
A: It’s a little more complicated than that. But what we have seen in the last 30 years is the percentage of wealth owned by the top one-tenth of 1% double—double!—while the percentage of wealth owned by the middle class has significantly shrunk to the tune of many trillions of dollars. And we have to deal with that.
Q: So would you believe in a wealth tax?
A: A variety of a wealth tax. What I certainly do believe is that we have to have a strong estate tax so that when billionaires pass on, they don’t leave all of their money to their kids and perpetuate a very distorted class society. I believe we have to end these tax havens that exist in the Cayman Islands and elsewhere by which large corporations make billions of dollars a year in profits and just stash their money there and don’t pay a nickel in federal taxes. I think we need a progressive income tax so that we don’t have a situation where—as Warren Buffett reminds us—billionaires end up paying an effective tax rate lower than truck drivers or nurses. So I think there is a lot to be done in making our tax system fairer. And that’s based on the fact that today almost all of the new income and wealth being created is going to the top 1%.
Q: In terms of a system which has given the income and the wealth to the privileged, and being able to turn that around—do you believe in reparations at all?
A: No. The issue right now is this is what I do believe in: I believe that we have got to raise the minimum wage in the country to a living wage, which I think is $15 an hour over the next several years. Real unemployment in this country is over 10%, which means to me that we have to create millions of decent-paying jobs, and we can do that most effectively by rebuilding our crumbling infrastructure, by hiring teachers and not by firing teachers. We need pay equity for women workers, who should not be making 79 cents on the dollar compared to men. We need to especially focus on youth unemployment because Hispanic youth unemployment in this country is 36% and underemployment. African-American unemployment and underemployment is 51%. We end up having more people in jail than any other country on earth. So I think I would rather invest in jobs and education, rather than jails and incarceration.
Q: So you’re investing in youth jobs, you’re investing in infrastructure. Who’s your treasury secretary who’s going to be driving all this?
A: Well, there are a lot of great people out there, but I’ll tell you who it’s not. It’s not going to be some guy who worked on Wall Street representing the major financial institutions in this country. Under Democratic administrations and Republican administrations, those are the guys who, by and large, have held major financial positions—major positions in the Treasury Department.
Q: So no Bob Rubin in your administration?
A: Let me be—OK, you got the scoop on this: Bob Rubin will not be my secretary of treasury. And you can quote me on that.
Q: I wasn’t expecting that he would be. But you believe in postal banking?
A: Yeah, I think that’s a great idea. In fact, I just spoke to a postal union this morning. I want to see our post office be reinvigorated. And one of the ways that I think we can help not only the U.S. Postal Service, but help a lot of low-income people—if you are a low-income person, it is, depending upon where you live, very difficult to find normal banking. Banks don’t want you. And what people are forced to do is go to payday lenders who charge outrageously high interest rates. You go to check-cashing places, which rip you off. And, yes, I think that the postal service, in fact, can play an important role in providing modest types of banking service to folks who need it.
Q: So Walmart should get a banking license as well, for the same reason?
A: Well right now we’re focusing on the U.S. Postal Service.
Q: Walmart’s a great bank in Mexico.
A: Right now in the United States we’re focusing on the U.S. Postal Service.
Q: So in terms of banking, you last night talked a lot about bringing back Glass-Steagall, repealing Gramm-Leach-Bliley. What’s the purpose for that? You want to break up the banks. What’s the reason for that?
A: If you’re talking about creating an economy that works for the middle class and not just the top 1%, I think we have to rethink our current financial system and the way Wall Street functions. What we want are financial institutions who know the communities in which they function, who are prepared to make affordable loans to small and medium-sized businesses so that they can grow and create jobs. What we have right now is a situation where the largest six financial institutions in this country, Wall Street companies, have assets about equivalent to about 60% of the GDP of the United States of America. They issue two-thirds of the credit cards, about 35% of the mortgages, they are extraordinarily big. And in fact, the top three are much bigger today than they were when we bailed them out because they were too big to fail. So bottom line here is you want financial institutions who are part of the communities. Not, as is currently the case, on Wall Street—an island unto itself whose only purpose in life is to make as much money as it can for itself, no matter how they do it.
Q: So it sounds to me you’re not really or even mainly talking about just separating commercial banking from investment banking as we had in Glass-Steagall, but you’re talking about breaking up the banks along geographic grounds so that they become much more—
A: It’s not geographic. We’re talking about re-establishing Glass-Steagall, and you’re looking at a guy who as a member of the House Financial Committee—Services Committee—was a leader in the opposition of deregulating banks and in opposition to ending Glass-Steagall. So I think we do want to bring back Glass-Steagall, but we want to go further.
Q: But you voted for the Commodity Futures Modernization Act, which was the big deregulation.
A: Yeah, I know. Of the many, many votes that I cast. I was a leader. I think the record is very clear in doing that. OK, how are we doing here? Because we have to get going fairly soon.
Q: OK, talk to me very quickly, then, about the financial transactions tax. Is that just a way of raising revenue or did stock market speculation—was that part of the crisis?
A: It deals with both issues. It will damper excessive speculation on Wall Street, which is not a good thing. But at the same time it will raise very substantial sums of revenue, and what we have done is targeted that revenue to make certain that young people, in this country, will be able to go public colleges and universities tuition-free.
Q: Let me ask you about the currency manipulation that you say China is doing. You want to impose a fee on that? How does that work?
A: Well, what I want to do is to deal with the reality that today we have a massive trade deficit with China. And you’re looking at a guy who helped lead—unsuccessfully, unfortunately—the effort, the permanent normal trade relations with China. So what I think is we have to rethink our trade relations with China, which are now grossly working against the interest of American workers. What we have seen in recent years is a significant reduction in the number of manufacturing jobs in this country—factories being shut down and then being sent to China. And that has got to end.
Q: If you want to save manufacturing and improve exports, that means the dollar’s too strong, right? We need a weaker dollar?
A: Well, what it means is we need a trade policy in this country which works for American workers.
Q: As opposed to international workers? Because if it helps international workers—
A: It’s not that we don’t care about international workers. We need trade agreements that work for all workers and not just the CEOs of large corporations. OK, thank you very much.