You spoke at Occupy events here in L.A. and in the Bay Area. What has the Occupy movement accomplished?
"Class" used to be a dirty word in "classless" America, right?
Polls show most Americans today don't believe their children are going to live as well as they do. A large percentage feel the game is rigged against them. Upward mobility is now far more difficult to achieve. So the issue of class has emerged as very real and very tangible. For most of us, the America we knew was one in which anyone could make it with enough gumption and guts and drive. We truly believed that America was a place where there were no class distinctions, although we saw the plight of the poor, particularly poor minorities. What's new is this sense that a relatively small number of people have rigged the game or loaded the dice in such a way that their positions of power and privilege are entrenched.
We think of ourselves as a nation that practices democratic capitalism, but sometimes capitalism and democracy pull in opposite directions.
Essentially, every time the excesses of capitalism threaten to destroy it, we save capitalism from itself. We did it in the Progressive era, we did it in the New Deal, and hopefully we are at least beginning to do it now. Ironically, it's progressives and Democrats who take the lead in saving capitalism from itself.
The question is how bad things have to get before average people begin mobilizing. Sometimes we revert to third parties. Sometimes we take over dominant parties, as the tea partyers have done. Sometimes we make such a ruckus, as we did with civil rights and Vietnam, that we force change. These movements must always start at the grass-roots, and they always start with moral outrage. The tea partyers focus on government, and the Occupiers focus on Wall Street and big corporations. The source of the moral outrage is very similar.
One reason I love teaching so much is that I'm in contact with young people who, most of them, want to change the world.
Is Washington today an impossible nut to crack?
Every time I go to Washington, I'm struck by how many people are there for the right reasons. Most could have an easier life and could make more money doing something else. Most [are] there because they're deeply committed to changing the country.
You and former Wyoming Republican Sen. Alan Simpson are good friends; what happened to cross-party relationships like that?
Newt Gingrich. When Gingrich came to town as speaker, he brought in a group of people who were far more ideological and frankly unpleasant. The tone of Washington changed abruptly in January of 1995.
When I testified [before Congress as Labor secretary], members of [both parties ] would have good questions. Disagreements would be respectful and friendly. But beginning in January of 1995, I'd be treated very differently. One question I got was "Mr. Secretary, are you a socialist?"'
I had never seen anything like it, and remember, I [came] to Washington in 1967. It was as if a dark cloud had descended over Washington and it's still there. I blame Gingrich -- not entirely, but he led the charge.
You were born in Scranton, Pa., the setting for the mock-workplace TV show "The Office." How does that show look to an economist?
I think "The Office" is very funny. What I take away beyond the humor is the realization that there's as much stupidity and bureaucracy in the private sector is as there is in the public!
The economy we had in the 1950s -- it doesn't look like that will be back in our future.
We can't go backward, but the economy of the 1950s, '60s and early '70s was far more equal, and America grew faster in those years on average than it's grown since. If you look at Germany over the last 10 years, until the past year, you see rapid growth combined with a far more equal distribution of [the] gains and very high wages going to average working people. What's the secret? Two things: Germany has focused intensively on public education, particularly skills that are relevant for the new high-tech world economy; and secondly, Germany has a much stronger labor movement than the United States.