Obama on why income inequality has skyrocketed

Key Takeaways

how have we gotten to a point where we can have high corporate profits when businesses can be doing so well but the workers don't necessarily share in that Prosperity well this has been a at least a three decade long Trend now there are a whole bunch of reasons for that some of it has to do with technology and entire sector is being eliminated travel agents bank tellers uh a lot of middle management a lot of it has to do with globalization the rest of the world 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 uh workers in a tougher position so some people who just control enormous amounts of wealth you we don't resent success on the other hand just as a practical matter you know you're going to have problems making sure that we're investing enough in in the common good uh to be able to move uh move forward does this put us in a place long term where redistribution becomes in a sense a positive good in and of itself well yeah that's that's always been the case though I I don't think that's entirely new I mean the fact of the matter is is that relative to our post-war history uh taxes now are not particularly high or particularly Progressive compared to what they were say in the late 50s or 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 the teachers P are paid enough the market will not cover those things uh 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 uh the pie was broadly shared took place before government even got involved if you have stronger unions then you had higher wages if you had a 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 and to be seen as a good corporate citizen today what you have is quarterly earning reports uh you have compensation levels for CEOs that uh are tied directly to those uh quarterly earnings you've got International Capital that is demanding short-term profits and so what happens is that a lot of the distributional questions that that used to be uh handled in the marketplace through decent wages or health care or defined benefit pension plans those things all uh are eliminated and the average employee the average worker doesn't feel any benefit [Music] oh