[PEN-L:9414] Sanders vs. Greenspan

[Michael Eisenscher <meisenscher@xxxxxxxxxxx>]

> TO:	Vermont Individuals and Organizations
>FROM: Philip Fiermonte, Outreach Coordinator, Congressman Sanders'
>       Office
>DATE:   April 7, 1997
>RE:	  Greenspan Meets Bernie
>
>Thought the following would be of interest to you. `
>
>
>The Federal Document Clearing House
>
>                                     TRANSCRIPT
>                                   March 05, 1997
>                                 COMMITTEE HEARING
>                       U.S. REPRESENTATIVE MIKE CASTLE (R-DE)
>                                      CHAIRMAN
>           DOMESTIC AND INTERNATIONAL MONETARY POLICY SUBCOMMITTEE OF
>THE  HOUSE BANKING AND FINANCIAL SERVICES COMMITTEE  WASHINGTON, D.C.
>HOLDS HEARING ON THE FEDERAL RESERVE'S MONETARY POLICY

>             COPYRIGHT 1997 BY FEDERAL DOCUMENT CLEARING HOUSE, INC.
>SUBCOMMITTEE ON DOMESTIC AND INTERNATIONAL MONETARY POLICY  OF THE HOUSE
>BANKING AND FINANCIAL SERVICES COMMITTEE HOLDS  HEARING ON THE STATE OF
>THE U.S. ECONOMY

>SANDERS:  Thank you, Mr. Chairman, and welcome, Mr.
>     Greenspan. And thank you for joining us today.
>
>        Like Mr. Frank, I have respect for you personally.  I have
>     very, very strong disagreements with your policy.  It's
>     incomprehensible to me that President Clinton would have
>     reappointed you, in fact.
>
>        Mr. Greenspan, like every American, you are entitled to your
>     political views.  And according to newspaper reports over the
>     years, you have made political contributions to Jesse Helms, to
>     George Bush, to Bob Dole.  You served on the committee to
>     re-elect or elect President Reagan, as I understand it.  And of
>     course, you worked as a key economic adviser for President's
>     Nixon and President Ford.
>
>        And I respect that.  There's nothing wrong with it.  We're
>     all entitled to our points of view.
>
>        In 1985, and I understand it, you served as a consultant to
>     many in the savings and loan industry.  According to Time
>     magazine, you suffered your -- quote -- ``greatest embarrassment
>in 1985 when, as a private
>economist, you wrote letters to
>     regulators in Congress endorsing Charles Keating and his Lincoln
>     Savings and Loan.  Lincoln subsequently collapsed at a cost to
>     taxpayers of $2.6 billion, and Keating landed in jail'' -- end
>     of quote.  That was from Time magazine.
>
>        You also served as a consultant for 15 other savings and
>     loans, 14 of whom eventually failed.
>
>        In your confirmation hearings one year ago, despite the fact
>     that the minimum wage of $4.25 is at its lowest point in 40
>     years, millions of people were working for $4.25 an hour, you
>     noted your opposition to raising the minimum wage.
>        This January, you told the Senate Budget Committee that --
>     quote -- ``the appropriate capital gains tax rate is zero'' --
>     end of quote. Currently, many Senate Republicans are calling for
>     a capital gains tax cut.
>
>        According to the Center on Budget and Policy priorities, 70
>     percent of the benefits of that tax cut will go to households
>     earning over $100,000 a year.  And their proposal is far more
>limited than your proposal
>suggests.
>
>        Mr. Greenspan, I will grand you consistency in your support
>     for trickle-down economics.  In your career up to today, it is
>     clear that you have advocated tax and monetary policies which
>     have benefited the very richest Americans while at the same time
>     your views reflect policies that come down very heavy on the
>     middle class, the working class and low-income people.
>
>        In 1983, you were appointed to chair, as I understand it, the
>     Social Security Commission.  Under your leadership, the highly
>     regressive payroll taxes increased by about $200 billion.  You
>     chose to solve the Social Security crisis by raising the payroll
>     tax on working Americans while at the same time, as an economic
>     adviser, you advocated huge tax decreases for the richest people
>     in America.
>
>        Now currently, as others have suggested, you are a proponent
>     of reducing the consumer price index.  Like Mr. Kennedy, I have
>     neighbors and friends and elderly people who are trying to
>     survive on $7,000 or $8,000 a year.   And I regard it as horrendous
>and vulgar, to be frank
>with
>     you, that there are people in government who want to balance the
>     budget on the weakest and most vulnerable people in this
>     society, and then advocate huge tax breaks for the richest
>     people in this country, as you continuously do.
>
>        Now I would like to ask you, and later on, maybe you can
>     respond to that.  I don't know where you get your information
>     from.  I go, and as I'm sure many of my colleagues do, we talk
>     to elderly people who are trying to make it.  They can't afford
>     their prescription drugs.
>
>        In my state, it gets 20 below zero.  Elderly people can't
>     afford to heat their homes.  Maybe you'll tell this committee
>     the last time you have sat in a room with low-income senior
>     citizens and ask them how they're going to survive if they lose
>     $100 a year in their Social Security benefits?
>
>     SANDERS:  What kind of pain they go through now, trying to
>     survive on $7,000 or $8,000 a year.
>
>        Mr. Greenspan, the United States of America today, not all
>     through your work but through the help of a lot of other people,
>     both parties, has the most unfair distribution of wealth and
>     income in the world, in the industrialized world.
>
>        The richest 1 percent of the population own 42 percent of the
>     wealth, more than the bottom 90 percent. In the last 20 years,
>     that unfair distribution of wealth has become even worse.  I
>would ask you, in your
>comments, to tell us what we can do to
>     equalize wealth in this country so that we don't have such an
>     unfair distribution of wealth.
>
>        You talk about economic growth.  Between 1983 and 1989, 62
>     percent of the increased wealth in this country went to the
>     richest 1 percent.  You can have all the growth that you want,
>     but the middle class continues to shrink.
>
>        People in my state are working two and three jobs just to
>     survive, because their wages have not kept pace with inflation.
>
>
>        And I want to ask you what your policies are doing for the
>     middle class, for the working class, for low-income people,
>     rather than the wealthy people, who I think you end up
>     representing?
>
>        Thank you, Mr. Chairman.  CASTLE:  Thank you very much, Mr.
>Sanders.
>  Mr. Kanjorski, do you wish to follow that, sir?
>
>        KANJORSKI:  I guess I have to apologize for my colleagues'
>     inability to be direct.
>
>        (LAUGHTER)
>
>
>        METCALF:  Thank you, Mr. Chairman.
>
>        CASTLE:  Thank you, Mr. Metcalf.  Ms. Maloney.
>
>
>  Oh, excuse me.  I'm sorry.  The gentleman from Vermont.  I
>     apologize.
>
>        SANDERS:  I may be an independent, Mr. Chairman, but -- geez.
>
>        (LAUGHTER)
>
>        Thank you,
>        XXX  you, Mr. Chairman.
>
>        SANDERS:  Mr. Greenspan, the wealthiest 1 percent of
>     Americans now own 42 percent of the nation's wealth, more than
>     the bottom 90 percent.  In 1976, the wealthiest 1 percent owned
>     19 percent of the wealth.  So we've seen the upper 1 percent
>     more than double the percentage of the wealth in this country
>     that they own.
>
>        Does this concern you, the fact that we today have, by far,
>     the most unequal distribution of wealth and income in the
>     industrialized world?  A -- does it concern you?  And B -- what
>     do you intend to do about it?
>
>        And I have a number of questions to ask you, so I'd
>     appreciate it if your answers could be brief.
>
>        GREENSPAN:  Yes, the answer is it does concern me.  It's not
>     clear to me what monetary policy can do to alter that in any
>     material way.
>
>
>  SANDERS:  OK.  Mr. Greenspan, from what I just heard a moment
>     ago, you talked that, from your point of view, the economy is
>     doing, quote/unquote, ``very well.''  Did I hear you correctly?
>
>        GREENSPAN:  That is correct.
>
>        SANDERS:  I'd love to take you to the state of Vermont, where
>     you can talk to working families where workers are working two
>     or three jobs trying to pay their bills, where women who would
>     prefer to stay home with the kids are now being forced to work,
>     where jobs in our economy which used to pay $15 an hour in
>     manufacturing are now paying $5 an hour working for McDonald's.
>
>        But more importantly, during the past 20 years, we have seen
>     a decline in wages or stagnation for 80 percent of all American
>     families, while the people on top have never had it so good.
>     Twenty years ago, American workers were the best compensated in
>     the world. Today, we rank 13th in the world.
>
>        In 1973, the average American worker earned $445 a week.  And
>     20 years later, in '93, that worker was making $373 a week.
>     Please tell the working people of Vermont and the working people of
>this country how the
>economy is doing so good for them as
>     opposed to the very rich who have never had it so good.
>
>        GREENSPAN:  Congressman, at any time throughout our history,
>     there have always been areas in our economy which are doing far
>     less well than others.  All we can measure is the average
>     changes, and I can suggest to you that in terms of the average
>     changes, the economy by any measure which we have available to
>     us is doing well.
>
>
>        SANDERS:  But Mr. Greenspan, isn't the concept average change
>     totally meaningless?  If you make $1 million a year and I make
>     $10,000 a year, on average, we're making a little bit less than
>     $500,000 a year.  You're doing very well.  I'm dead broke.
>
>        And doesn't this whole ``on average'' concept perpetuate a
>     fraud when the vast majority of the people in this country have
>     seen a decline in their wages, working longer hours, when the
>     new jobs that are being created are terribly low-wage jobs?  So
>     what are we talking about average?   GREENSPAN:  Well...
>
>        SANDERS:  If the rich are getting richer...
>
>        GREENSPAN:  ... first of all...
>
>        SANDERS:  ... that distorts the whole figure.
>
>        GREENSPAN:  ... let me question your data.  It is not true
>     that the vast majority of people have lower wages at this stage.
>
>        SANDERS:  You question the statistics that I gave you?
>
>        GREENSPAN:  I do.  I do, indeed.
>
>        SANDERS:  What do you believe?  Do you believe that the
>     working people of this country have seen higher wages?
>
>
>        GREENSPAN:  No, I'm just saying you said the vast majority.
>
>        SANDERS:  That's right.
>
>        GREENSPAN:  That's an number which means 60, 70 percent?
>
>        SANDERS:  I have said that in 1973, the average American
>     worker earned $445 a week.  Twenty years later, that worker was
>     making $373. That 80 percent of our working people have seen a
>     significant decline, 68 percent.
>   GREENSPAN:  You are using BLS's payroll employment figure and
>     the average hourly earnings -- the average weekly earnings
>     that's associated with that.  That figure is questionable, I
>     must tell you that.
>
>        SANDERS:  Why do you think it is questionable, sir?
>
>        GREENSPAN:  Well, it's questionable basically because of the
>     fact that those data are not produced in an appropriate sample.
>     The employment figures are, but not the wages, and they're not
>     revised.
>
>        SANDERS:  Let me ask...
>
>        GREENSPAN:  Let me just say this.  The Bureau of Census has
>     got alternate data, which they do on a more scientific basis,
>     which are far less pessimistic than those stats.
>
>        SANDERS:  The Labor Department -- I believe it was the Labor
>     Department came out recently with statistics which says if the
>     high school graduates who are entering the labor market, for
>     young men, the wages are 30 percent less than they were 15 years
>ago.  For women, I believe
>it was 27 percent less.
>
>        Significant drop in wages for high school graduates.  Is that
>     also not a good figure?
>
>        GREENSPAN:  No, I can believe that figure.
>
>        SANDERS:  Well, given that reality and given perhaps the
>     reality -- what about the figure that the inflation-adjusted
>     median income for young families -- who are doing worse than
>     older families -- with children, young families with children,
>     headed by persons younger than 30, plunged 32 percent between
>     1973 and 1990?
>
>        Meanwhile, we have seen a proliferation of billionaires going
>     from 12 to 135 from 1982 to today.  Do you really deny that
>     while the
>
>     wealthiest people in this country have never had it so good, the
>     vast majority of the people have seen a decline in their
>     standard of living?  GREENSPAN:  The Consumer Price Index, which is
>employed to
>     deflate those data, are -- is precisely the index which I've
>     been arguing is mis-specified.  If you make the appropriate
>     adjustments, that trend, the decline disappears.  Nonetheless, I
>     grant you that it's pretty stagnant.
>
>        SANDERS:  I would simply say -- I would welcome you -- please
>     give me a ring.  You come to the state of Vermont with me, and I
>     will take you around our state.  And I would love to hear the
>     response when you tell the working families of our state that
>     the economy is doing very well.
>
>        It is it not doing well for the middle class, for the working
>     class.  Maybe, doing well for upper-income people, but not for
>     the vast majority of the people.
>
>        Mr. Chairman, thank you very much.  Thank you, Mr. Greenspan.