[Script Info] Title: [Events] Format: Layer, Start, End, Style, Name, MarginL, MarginR, MarginV, Effect, Text Dialogue: 0,0:00:01.49,0:00:04.24,Default,,0000,0000,0000,,(dramatic music) Dialogue: 0,0:00:34.12,0:00:35.05,Default,,0000,0000,0000,,- I'm Mary Ann Mason, Dialogue: 0,0:00:35.05,0:00:36.57,Default,,0000,0000,0000,,I'm the Dean of the Graduate Division, Dialogue: 0,0:00:36.57,0:00:39.01,Default,,0000,0000,0000,,and I'm pleased, along\Nwith the Graduate Council, Dialogue: 0,0:00:39.01,0:00:42.74,Default,,0000,0000,0000,,to present Elizabeth Warren,\Nwho is this year's speaker Dialogue: 0,0:00:42.74,0:00:45.81,Default,,0000,0000,0000,,in the Jefferson Memorial Lecture series. Dialogue: 0,0:00:45.81,0:00:47.99,Default,,0000,0000,0000,,As a condition of this bequest, Dialogue: 0,0:00:47.99,0:00:50.46,Default,,0000,0000,0000,,we're obligated to tell\Nyou how the endowment Dialogue: 0,0:00:50.46,0:00:53.83,Default,,0000,0000,0000,,supporting the lectures\Ncame to UC Berkeley. Dialogue: 0,0:00:53.83,0:00:57.50,Default,,0000,0000,0000,,The Jefferson Memorial Lectures\Nwere established in 1944 Dialogue: 0,0:00:57.50,0:01:00.58,Default,,0000,0000,0000,,through a bequest from\NElizabeth Bonestell, Dialogue: 0,0:01:00.58,0:01:03.20,Default,,0000,0000,0000,,and her husband, Cutler L. Bonestell. Dialogue: 0,0:01:03.20,0:01:05.30,Default,,0000,0000,0000,,A prominent San Francisco couple, Dialogue: 0,0:01:05.30,0:01:07.82,Default,,0000,0000,0000,,the Bonestells cared deeply for history, Dialogue: 0,0:01:07.82,0:01:10.67,Default,,0000,0000,0000,,and had hoped that the lectures\Nwould encourage students, Dialogue: 0,0:01:10.67,0:01:13.28,Default,,0000,0000,0000,,faculty, visiting scholars and others Dialogue: 0,0:01:13.28,0:01:16.61,Default,,0000,0000,0000,,to study the legacy of Thomas Jefferson Dialogue: 0,0:01:16.61,0:01:20.96,Default,,0000,0000,0000,,and to explore the values\Ninherent in American democracy. Dialogue: 0,0:01:20.96,0:01:24.70,Default,,0000,0000,0000,,Past lecturers, Ambassador\NJeane Kirkpatrick, Dialogue: 0,0:01:24.70,0:01:27.56,Default,,0000,0000,0000,,Senator Alan Simpson,\NRepresentative Thomas Foley, Dialogue: 0,0:01:27.56,0:01:30.71,Default,,0000,0000,0000,,Walter LaFeber and\NArchibald Cox have delivered Dialogue: 0,0:01:30.71,0:01:33.84,Default,,0000,0000,0000,,Jefferson Memorial Lectures\Non early American history Dialogue: 0,0:01:33.84,0:01:37.31,Default,,0000,0000,0000,,about Jefferson himself and\Non American institutions Dialogue: 0,0:01:37.31,0:01:41.88,Default,,0000,0000,0000,,and policies in economics,\Neducation and the law. Dialogue: 0,0:01:41.88,0:01:44.26,Default,,0000,0000,0000,,And now a few words\Nabout Elizabeth Warren. Dialogue: 0,0:01:44.26,0:01:47.65,Default,,0000,0000,0000,,One of America's leading\Ncommentators on consumer issues Dialogue: 0,0:01:47.65,0:01:51.63,Default,,0000,0000,0000,,and the law, Elizabeth Warren\Nhas been an outspoken critic Dialogue: 0,0:01:51.63,0:01:53.87,Default,,0000,0000,0000,,of America's credit economy, Dialogue: 0,0:01:53.87,0:01:56.58,Default,,0000,0000,0000,,which she has linked to the\Ncontinuing rise in bankruptcy Dialogue: 0,0:01:56.58,0:01:58.16,Default,,0000,0000,0000,,among the middle class. Dialogue: 0,0:01:58.16,0:01:59.93,Default,,0000,0000,0000,,No one in the audience, I'm sure. Dialogue: 0,0:01:59.93,0:02:02.77,Default,,0000,0000,0000,,Her critical analysis of\NCongress's latest revision Dialogue: 0,0:02:02.77,0:02:05.04,Default,,0000,0000,0000,,of America's national bankruptcy law Dialogue: 0,0:02:05.04,0:02:07.53,Default,,0000,0000,0000,,has received wide attention in the media Dialogue: 0,0:02:07.53,0:02:10.44,Default,,0000,0000,0000,,as well as in academic and policy circles. Dialogue: 0,0:02:10.44,0:02:13.26,Default,,0000,0000,0000,,At Harvard Law School,\NWarren's courses include Dialogue: 0,0:02:13.26,0:02:16.73,Default,,0000,0000,0000,,contract law, bankruptcy\Nand commercial law. Dialogue: 0,0:02:16.73,0:02:19.24,Default,,0000,0000,0000,,She said recently that\Nshe has spent decades Dialogue: 0,0:02:19.24,0:02:22.43,Default,,0000,0000,0000,,writing in academic books and\Nteaching an entire generation Dialogue: 0,0:02:22.43,0:02:25.13,Default,,0000,0000,0000,,of law students about the rules of money. Dialogue: 0,0:02:25.13,0:02:28.96,Default,,0000,0000,0000,,Those rules include the formal\Nstatutes of commercial law, Dialogue: 0,0:02:28.96,0:02:30.56,Default,,0000,0000,0000,,the policies inherent in them, Dialogue: 0,0:02:30.56,0:02:33.50,Default,,0000,0000,0000,,and the ethical problems\Nthat they can produce. Dialogue: 0,0:02:33.50,0:02:35.63,Default,,0000,0000,0000,,Warren is a frequent\Ncontributor to articles in Dialogue: 0,0:02:35.63,0:02:37.83,Default,,0000,0000,0000,,The New York Times, The Washington Post, Dialogue: 0,0:02:37.83,0:02:41.50,Default,,0000,0000,0000,,and Women's eNews, and her\Ncommentary appears regularly Dialogue: 0,0:02:41.50,0:02:43.84,Default,,0000,0000,0000,,on National Public Radio's news program, Dialogue: 0,0:02:43.84,0:02:45.39,Default,,0000,0000,0000,,All Things Considered, Dialogue: 0,0:02:45.39,0:02:48.32,Default,,0000,0000,0000,,and on the internet forum,\NThe Huffington Post. Dialogue: 0,0:02:48.32,0:02:51.58,Default,,0000,0000,0000,,After earning a BS from the\NUniversity of Houston in 1970, Dialogue: 0,0:02:51.58,0:02:52.99,Default,,0000,0000,0000,,Warren was awarded a J.D. Dialogue: 0,0:02:52.99,0:02:56.66,Default,,0000,0000,0000,,from Rutgers University-Newark in 1976. Dialogue: 0,0:02:56.66,0:03:00.13,Default,,0000,0000,0000,,She joined the faculty of\NHarvard University in 1992 Dialogue: 0,0:03:00.13,0:03:01.33,Default,,0000,0000,0000,,and has served as the Dialogue: 0,0:03:01.33,0:03:04.68,Default,,0000,0000,0000,,Leo Gottlieb Professor of Law since 1995. Dialogue: 0,0:03:04.68,0:03:06.53,Default,,0000,0000,0000,,Prior to Harvard, Warren taught at Dialogue: 0,0:03:06.53,0:03:08.37,Default,,0000,0000,0000,,the University of Pennsylvania Law School, Dialogue: 0,0:03:08.37,0:03:09.77,Default,,0000,0000,0000,,the University of Texas Law School, Dialogue: 0,0:03:09.77,0:03:11.56,Default,,0000,0000,0000,,the University of Houston Law Center, Dialogue: 0,0:03:11.56,0:03:14.15,Default,,0000,0000,0000,,the University of Michigan,\Nand Rutgers School of Law. Dialogue: 0,0:03:14.15,0:03:16.83,Default,,0000,0000,0000,,Warren has channeled her\Nexpertise in commercial law Dialogue: 0,0:03:16.83,0:03:20.10,Default,,0000,0000,0000,,into numerous other\Nprofessional activities. Dialogue: 0,0:03:20.10,0:03:21.51,Default,,0000,0000,0000,,She acted as chief adviser Dialogue: 0,0:03:21.51,0:03:23.61,Default,,0000,0000,0000,,to the National Bankruptcy\NReview Commission Dialogue: 0,0:03:23.61,0:03:26.16,Default,,0000,0000,0000,,from 1995 to '97. Dialogue: 0,0:03:26.16,0:03:27.76,Default,,0000,0000,0000,,She served three terms on Dialogue: 0,0:03:27.76,0:03:29.60,Default,,0000,0000,0000,,the Federal Judicial Center Committee Dialogue: 0,0:03:29.60,0:03:33.19,Default,,0000,0000,0000,,on Judicial Education, 1990 to '99, Dialogue: 0,0:03:33.19,0:03:36.68,Default,,0000,0000,0000,,and since 1995, Warren has\Nbeen the United States advisor Dialogue: 0,0:03:36.68,0:03:40.26,Default,,0000,0000,0000,,to the Transnational Insolvency Project. Dialogue: 0,0:03:40.26,0:03:43.12,Default,,0000,0000,0000,,In presenting its nomination\Nof Professor Warren Dialogue: 0,0:03:43.12,0:03:45.37,Default,,0000,0000,0000,,for the lectureship,\Nthe selection committee Dialogue: 0,0:03:45.37,0:03:47.93,Default,,0000,0000,0000,,spoke of Warren's\Nprominence as a commentator Dialogue: 0,0:03:47.93,0:03:51.52,Default,,0000,0000,0000,,in public discourse on bankruptcy\Nand other consumer issues. Dialogue: 0,0:03:51.52,0:03:53.92,Default,,0000,0000,0000,,A scholar of great originality Dialogue: 0,0:03:53.92,0:03:56.87,Default,,0000,0000,0000,,and insight into commercial\Nlaw and a law teacher Dialogue: 0,0:03:56.87,0:03:59.52,Default,,0000,0000,0000,,and lecturer of exceptional distinction. Dialogue: 0,0:03:59.52,0:04:02.55,Default,,0000,0000,0000,,According to committee\Nchair Harry N. Scheiber, Dialogue: 0,0:04:02.55,0:04:04.84,Default,,0000,0000,0000,,the Riesenfeld Professor\Nof Law and History, Dialogue: 0,0:04:04.84,0:04:07.04,Default,,0000,0000,0000,,"At a time when the social safety net Dialogue: 0,0:04:07.04,0:04:09.79,Default,,0000,0000,0000,,"is no longer taken for\Ngranted by Americans, Dialogue: 0,0:04:09.79,0:04:11.73,Default,,0000,0000,0000,,"its unremitting attack in Washington Dialogue: 0,0:04:11.73,0:04:13.64,Default,,0000,0000,0000,,"and many state capitals, Dialogue: 0,0:04:13.64,0:04:15.69,Default,,0000,0000,0000,,"Elizabeth Warren's unique importance Dialogue: 0,0:04:15.69,0:04:17.72,Default,,0000,0000,0000,,"as a researcher and writer, Dialogue: 0,0:04:17.72,0:04:19.95,Default,,0000,0000,0000,,"concerned with changing\Nincome distribution Dialogue: 0,0:04:19.95,0:04:22.98,Default,,0000,0000,0000,,"and the imperiled condition\Nof the nation's social welfare Dialogue: 0,0:04:22.98,0:04:25.34,Default,,0000,0000,0000,,"makes this lecture one\Nof special importance Dialogue: 0,0:04:25.34,0:04:27.22,Default,,0000,0000,0000,,"to the campus community." Dialogue: 0,0:04:27.22,0:04:29.85,Default,,0000,0000,0000,,I should say personally that\NI read her book last year, Dialogue: 0,0:04:29.85,0:04:31.44,Default,,0000,0000,0000,,"The Two-Income Trap", Dialogue: 0,0:04:31.44,0:04:33.58,Default,,0000,0000,0000,,and I would put it among my very favorites Dialogue: 0,0:04:33.58,0:04:36.41,Default,,0000,0000,0000,,of policy books that both made sense Dialogue: 0,0:04:36.41,0:04:38.10,Default,,0000,0000,0000,,and are going to change policy. Dialogue: 0,0:04:38.10,0:04:39.71,Default,,0000,0000,0000,,So it gives me very great pleasure Dialogue: 0,0:04:39.71,0:04:41.65,Default,,0000,0000,0000,,to welcome Elizabeth Warren. Dialogue: 0,0:04:41.65,0:04:44.81,Default,,0000,0000,0000,,(audience applauding) Dialogue: 0,0:04:55.90,0:04:58.30,Default,,0000,0000,0000,,- Thank you, Dean Mason. Dialogue: 0,0:04:58.30,0:05:01.92,Default,,0000,0000,0000,,Thank you, members of\Nthe Berkeley faculty, Dialogue: 0,0:05:01.92,0:05:04.24,Default,,0000,0000,0000,,Berkeley students and Berkeley friends. Dialogue: 0,0:05:04.24,0:05:07.89,Default,,0000,0000,0000,,It's an honor to be invited\Nto give the Jefferson Lecture, Dialogue: 0,0:05:07.89,0:05:09.58,Default,,0000,0000,0000,,especially following the footsteps Dialogue: 0,0:05:09.58,0:05:12.14,Default,,0000,0000,0000,,of such esteemed people. Dialogue: 0,0:05:12.14,0:05:15.02,Default,,0000,0000,0000,,And it's also a particular\Npleasure to be here. Dialogue: 0,0:05:15.02,0:05:19.48,Default,,0000,0000,0000,,I appreciate the hospitality,\Nit has been extraordinary, Dialogue: 0,0:05:19.48,0:05:21.01,Default,,0000,0000,0000,,and the good weather, Dialogue: 0,0:05:21.01,0:05:23.90,Default,,0000,0000,0000,,since I was on a plane\Nthat had to be de-iced Dialogue: 0,0:05:23.90,0:05:25.44,Default,,0000,0000,0000,,before it could take off, Dialogue: 0,0:05:26.46,0:05:28.58,Default,,0000,0000,0000,,it really does seem that\NI've landed in heaven. Dialogue: 0,0:05:28.58,0:05:33.15,Default,,0000,0000,0000,,So it's a special treat to be here today. Dialogue: 0,0:05:33.15,0:05:34.48,Default,,0000,0000,0000,,I want to say, Dialogue: 0,0:05:34.48,0:05:37.50,Default,,0000,0000,0000,,I like to talk about the\Nthings that I care about Dialogue: 0,0:05:37.50,0:05:39.62,Default,,0000,0000,0000,,and that I'm passionate about, Dialogue: 0,0:05:39.62,0:05:42.82,Default,,0000,0000,0000,,and I only get nervous about the fact that Dialogue: 0,0:05:42.82,0:05:45.42,Default,,0000,0000,0000,,I may not tell you all the\Nthings that I want to make sure Dialogue: 0,0:05:45.42,0:05:47.80,Default,,0000,0000,0000,,that you know and I may\Nnot be able to say it Dialogue: 0,0:05:47.80,0:05:50.02,Default,,0000,0000,0000,,as clearly or distinctly, Dialogue: 0,0:05:50.02,0:05:52.22,Default,,0000,0000,0000,,because I want you to hear these things, Dialogue: 0,0:05:52.22,0:05:55.59,Default,,0000,0000,0000,,but today, I feel a special anxiety Dialogue: 0,0:05:55.59,0:05:59.63,Default,,0000,0000,0000,,as I get ready to do this because\Nthe only two conversations Dialogue: 0,0:05:59.63,0:06:02.42,Default,,0000,0000,0000,,that I have had running\Nthroughout the day today Dialogue: 0,0:06:02.42,0:06:05.46,Default,,0000,0000,0000,,have been how appalling\Nit is to use PowerPoints, Dialogue: 0,0:06:07.50,0:06:10.70,Default,,0000,0000,0000,,and about boring lectures and\Nfalling asleep during them. Dialogue: 0,0:06:10.70,0:06:15.70,Default,,0000,0000,0000,,So having my confidence\Nboosted before I came in here, Dialogue: 0,0:06:15.94,0:06:19.82,Default,,0000,0000,0000,,I will approach this somewhat gingerly. Dialogue: 0,0:06:21.36,0:06:25.21,Default,,0000,0000,0000,,What I wanted to talk about\Ntoday is I wanted to start Dialogue: 0,0:06:25.21,0:06:30.21,Default,,0000,0000,0000,,by talking about what I\Nthink is the single most Dialogue: 0,0:06:30.78,0:06:35.06,Default,,0000,0000,0000,,important economic\Nshift of the second half Dialogue: 0,0:06:35.06,0:06:38.17,Default,,0000,0000,0000,,of the 20th century in the United States, Dialogue: 0,0:06:38.17,0:06:42.70,Default,,0000,0000,0000,,and that is that millions of mothers Dialogue: 0,0:06:42.70,0:06:46.10,Default,,0000,0000,0000,,poured into the full-time paid workforce. Dialogue: 0,0:06:47.37,0:06:49.82,Default,,0000,0000,0000,,A woman in 1970 Dialogue: 0,0:06:53.04,0:06:56.85,Default,,0000,0000,0000,,who had a 16 year old child Dialogue: 0,0:06:56.85,0:07:01.11,Default,,0000,0000,0000,,was less likely to be in the workforce Dialogue: 0,0:07:01.11,0:07:05.34,Default,,0000,0000,0000,,than a woman in 2003 Dialogue: 0,0:07:05.34,0:07:09.81,Default,,0000,0000,0000,,who had a six month old child at home. Dialogue: 0,0:07:09.81,0:07:13.60,Default,,0000,0000,0000,,It was a profound shift in America. Dialogue: 0,0:07:13.60,0:07:16.50,Default,,0000,0000,0000,,The median family in America, Dialogue: 0,0:07:16.50,0:07:19.60,Default,,0000,0000,0000,,a married couple family in America, Dialogue: 0,0:07:19.60,0:07:23.45,Default,,0000,0000,0000,,went over a 30-year\Nperiod, median, middle, Dialogue: 0,0:07:23.45,0:07:27.60,Default,,0000,0000,0000,,from being a one-income household\Nto a two-income household, Dialogue: 0,0:07:27.60,0:07:29.78,Default,,0000,0000,0000,,a significant shift. Dialogue: 0,0:07:29.78,0:07:34.60,Default,,0000,0000,0000,,And so if we had known,\Nlet's say, 30 years ago, Dialogue: 0,0:07:35.80,0:07:39.71,Default,,0000,0000,0000,,35 years ago, we've been\Nsitting here in 1970, Dialogue: 0,0:07:39.71,0:07:42.33,Default,,0000,0000,0000,,and as part of the Jefferson Lecture, Dialogue: 0,0:07:42.33,0:07:44.11,Default,,0000,0000,0000,,I'd had my crystal ball and I'd said, Dialogue: 0,0:07:44.11,0:07:48.07,Default,,0000,0000,0000,,"Here's what's going to\Nhappen over the next 30 years. Dialogue: 0,0:07:48.07,0:07:50.08,Default,,0000,0000,0000,,"Mothers are going to\Npour into the workforce, Dialogue: 0,0:07:50.08,0:07:51.64,Default,,0000,0000,0000,,"take on full-time work, Dialogue: 0,0:07:51.64,0:07:53.13,Default,,0000,0000,0000,,"they're gonna get better education, Dialogue: 0,0:07:53.13,0:07:54.41,Default,,0000,0000,0000,,"they're gonna have more work experience, Dialogue: 0,0:07:54.41,0:07:55.76,Default,,0000,0000,0000,,"their incomes are going to rise. Dialogue: 0,0:07:55.76,0:07:57.72,Default,,0000,0000,0000,,"They won't get all the\Nway to where men are, Dialogue: 0,0:07:57.72,0:08:00.09,Default,,0000,0000,0000,,"but they're gonna make\Nsubstantial advances." Dialogue: 0,0:08:00.09,0:08:03.05,Default,,0000,0000,0000,,Now let's speculate on what\Nthe family will look like Dialogue: 0,0:08:03.05,0:08:08.05,Default,,0000,0000,0000,,30 years hence, that\Nis, in 2000, 2005, 2007. Dialogue: 0,0:08:08.29,0:08:10.17,Default,,0000,0000,0000,,Well the first thing\NI would have estimated Dialogue: 0,0:08:10.17,0:08:12.32,Default,,0000,0000,0000,,is that people would\Nstop living in suburbs Dialogue: 0,0:08:12.32,0:08:13.20,Default,,0000,0000,0000,,that are far out. Dialogue: 0,0:08:13.20,0:08:15.68,Default,,0000,0000,0000,,I would have guessed\Neveryone would live close in, Dialogue: 0,0:08:15.68,0:08:18.11,Default,,0000,0000,0000,,that no mother of a six month old child Dialogue: 0,0:08:18.11,0:08:21.12,Default,,0000,0000,0000,,would commute an hour\Nand 40 minutes to work. Dialogue: 0,0:08:21.12,0:08:22.69,Default,,0000,0000,0000,,I would have been, of course, Dialogue: 0,0:08:22.69,0:08:25.73,Default,,0000,0000,0000,,very wrong in that first estimate. Dialogue: 0,0:08:25.73,0:08:29.36,Default,,0000,0000,0000,,The second thing I would\Nhave guessed is that families Dialogue: 0,0:08:29.36,0:08:31.93,Default,,0000,0000,0000,,will be very wealthy. Dialogue: 0,0:08:32.92,0:08:37.56,Default,,0000,0000,0000,,They're going to have\Nlots of savings, no debt, Dialogue: 0,0:08:38.61,0:08:40.71,Default,,0000,0000,0000,,and plenty of vacations, right? Dialogue: 0,0:08:40.71,0:08:42.37,Default,,0000,0000,0000,,If you've got two people in the workforce, Dialogue: 0,0:08:42.37,0:08:44.41,Default,,0000,0000,0000,,there's gonna be a lot of extra income. Dialogue: 0,0:08:44.41,0:08:46.28,Default,,0000,0000,0000,,They're gonna be secure, Dialogue: 0,0:08:46.28,0:08:47.27,Default,,0000,0000,0000,,there won't be a lot of bankruptcy, Dialogue: 0,0:08:47.27,0:08:49.21,Default,,0000,0000,0000,,there won't be a lot of default, Dialogue: 0,0:08:49.21,0:08:51.10,Default,,0000,0000,0000,,nobody's gonna be dealing\Nwith debt collectors, Dialogue: 0,0:08:51.10,0:08:55.34,Default,,0000,0000,0000,,that's what it's gonna\Nlook like come the new era. Dialogue: 0,0:08:55.34,0:08:56.80,Default,,0000,0000,0000,,So let's see what happened. Dialogue: 0,0:08:56.80,0:08:58.21,Default,,0000,0000,0000,,This is all inflation adjusted, Dialogue: 0,0:08:58.21,0:08:59.04,Default,,0000,0000,0000,,everything I'm gonna do today Dialogue: 0,0:08:59.04,0:09:00.62,Default,,0000,0000,0000,,is gonna be inflation adjusted, Dialogue: 0,0:09:00.62,0:09:03.70,Default,,0000,0000,0000,,so we can just make that\Nassumption as we go forward. Dialogue: 0,0:09:03.70,0:09:06.90,Default,,0000,0000,0000,,This is what happened to median\Nincome for married families Dialogue: 0,0:09:06.90,0:09:08.60,Default,,0000,0000,0000,,and this is gonna be my period Dialogue: 0,0:09:08.60,0:09:10.59,Default,,0000,0000,0000,,to the extent the data permitted. Dialogue: 0,0:09:10.59,0:09:14.89,Default,,0000,0000,0000,,It's basically gonna be one\Ngeneration, 1970 to 1971, Dialogue: 0,0:09:14.89,0:09:16.05,Default,,0000,0000,0000,,to 2005, 2006. Dialogue: 0,0:09:17.26,0:09:19.81,Default,,0000,0000,0000,,What happened in a single generation, Dialogue: 0,0:09:19.81,0:09:22.32,Default,,0000,0000,0000,,from your mom and dad to you, okay, Dialogue: 0,0:09:22.32,0:09:23.97,Default,,0000,0000,0000,,is what we're talking about here. Dialogue: 0,0:09:23.97,0:09:27.87,Default,,0000,0000,0000,,And you see how income\Ngoes up for families. Dialogue: 0,0:09:27.87,0:09:29.50,Default,,0000,0000,0000,,But there was an underlying message Dialogue: 0,0:09:29.50,0:09:31.26,Default,,0000,0000,0000,,that was not nearly so good, Dialogue: 0,0:09:31.26,0:09:35.41,Default,,0000,0000,0000,,and that is income went\Nup for married couples, Dialogue: 0,0:09:35.41,0:09:38.54,Default,,0000,0000,0000,,but the green line, the one underneath, Dialogue: 0,0:09:38.54,0:09:43.21,Default,,0000,0000,0000,,you notice that income for\Nmales, fully employed males, Dialogue: 0,0:09:43.21,0:09:45.25,Default,,0000,0000,0000,,in fact, didn't rise at all. Dialogue: 0,0:09:45.25,0:09:46.96,Default,,0000,0000,0000,,And if you actually look at the numbers, Dialogue: 0,0:09:46.96,0:09:48.69,Default,,0000,0000,0000,,a fully employed male today, Dialogue: 0,0:09:48.69,0:09:50.91,Default,,0000,0000,0000,,once we had adjusted for inflation, Dialogue: 0,0:09:50.91,0:09:55.91,Default,,0000,0000,0000,,makes about $800 less than his\Nfather made a generation ago, Dialogue: 0,0:09:56.90,0:09:59.29,Default,,0000,0000,0000,,talking about median earners here. Dialogue: 0,0:09:59.29,0:10:02.04,Default,,0000,0000,0000,,Okay, so what that begins to tell us Dialogue: 0,0:10:02.04,0:10:06.07,Default,,0000,0000,0000,,is the first part of the\Nstory, family income rose, Dialogue: 0,0:10:06.07,0:10:09.08,Default,,0000,0000,0000,,but as I said, it was rising only Dialogue: 0,0:10:09.08,0:10:11.03,Default,,0000,0000,0000,,because women were going\Ninto the workforce. Dialogue: 0,0:10:11.03,0:10:16.03,Default,,0000,0000,0000,,In other words, the bump\Nwe got is not a bump Dialogue: 0,0:10:16.53,0:10:17.82,Default,,0000,0000,0000,,on top of the bump we were getting Dialogue: 0,0:10:17.82,0:10:20.21,Default,,0000,0000,0000,,because men were also earning\Nmore over this period of time Dialogue: 0,0:10:20.21,0:10:22.79,Default,,0000,0000,0000,,as they had been in the\Nseven years that preceded, Dialogue: 0,0:10:22.79,0:10:25.25,Default,,0000,0000,0000,,but is a bump that comes only because Dialogue: 0,0:10:25.25,0:10:28.75,Default,,0000,0000,0000,,they put a second worker\Ninto the workforce. Dialogue: 0,0:10:28.75,0:10:31.11,Default,,0000,0000,0000,,All right, but my prediction\Nshould still hold. Dialogue: 0,0:10:31.11,0:10:33.41,Default,,0000,0000,0000,,After all, families are getting richer Dialogue: 0,0:10:33.41,0:10:35.92,Default,,0000,0000,0000,,in the sense of more income over time. Dialogue: 0,0:10:36.97,0:10:38.48,Default,,0000,0000,0000,,What happened? Dialogue: 0,0:10:38.48,0:10:41.80,Default,,0000,0000,0000,,Savings went down in\Nthis same time period. Dialogue: 0,0:10:41.80,0:10:46.18,Default,,0000,0000,0000,,So the one-income family\Nin 1970 was putting away Dialogue: 0,0:10:46.18,0:10:49.40,Default,,0000,0000,0000,,about 11% of their take-home pay. Dialogue: 0,0:10:49.40,0:10:51.83,Default,,0000,0000,0000,,Think about it, week after\Nweek, month after month, Dialogue: 0,0:10:51.83,0:10:54.06,Default,,0000,0000,0000,,they're putting away about 11%. Dialogue: 0,0:10:54.06,0:10:59.06,Default,,0000,0000,0000,,By the year 2006, you notice\Nthe line goes below zero. Dialogue: 0,0:10:59.62,0:11:02.83,Default,,0000,0000,0000,,This is a concept only\NAlan Greenspan would love, Dialogue: 0,0:11:02.83,0:11:04.34,Default,,0000,0000,0000,,negative savings. Dialogue: 0,0:11:04.34,0:11:08.81,Default,,0000,0000,0000,,The American family\Ntoday puts away nothing, Dialogue: 0,0:11:08.81,0:11:11.95,Default,,0000,0000,0000,,and frankly has been putting away nothing Dialogue: 0,0:11:11.95,0:11:14.00,Default,,0000,0000,0000,,for the last five or six years. Dialogue: 0,0:11:14.00,0:11:16.76,Default,,0000,0000,0000,,There's nothing there,\Nthere is no savings. Dialogue: 0,0:11:16.76,0:11:20.44,Default,,0000,0000,0000,,So savings didn't go\Nup the way I predicted. Dialogue: 0,0:11:20.44,0:11:25.07,Default,,0000,0000,0000,,Oh, but something went up,\Nand that's revolving debt. Dialogue: 0,0:11:25.07,0:11:26.04,Default,,0000,0000,0000,,I picked revolving debt, Dialogue: 0,0:11:26.04,0:11:27.27,Default,,0000,0000,0000,,I could have picked any of them, Dialogue: 0,0:11:27.27,0:11:29.85,Default,,0000,0000,0000,,revolving debt just\Nbasically means credit cards Dialogue: 0,0:11:29.85,0:11:32.49,Default,,0000,0000,0000,,where you can carry a balance outstanding. Dialogue: 0,0:11:32.49,0:11:33.70,Default,,0000,0000,0000,,We could have picked consumer debt, Dialogue: 0,0:11:33.70,0:11:36.97,Default,,0000,0000,0000,,which would also include\Ncar loans and payday loans Dialogue: 0,0:11:36.97,0:11:39.35,Default,,0000,0000,0000,,and a few other kinds of debt, Dialogue: 0,0:11:39.35,0:11:40.18,Default,,0000,0000,0000,,we could have included mortgage, Dialogue: 0,0:11:40.18,0:11:43.04,Default,,0000,0000,0000,,and we would have gotten\Nmuch the same picture. Dialogue: 0,0:11:43.04,0:11:46.46,Default,,0000,0000,0000,,Revolving debt is a\Npercentage of annual income. Dialogue: 0,0:11:46.46,0:11:49.01,Default,,0000,0000,0000,,Notice there's supposed to be\Nsome decimal points in there Dialogue: 0,0:11:49.01,0:11:50.00,Default,,0000,0000,0000,,that aren't showing up very well, Dialogue: 0,0:11:50.00,0:11:52.40,Default,,0000,0000,0000,,I don't know what happened in\Nthe translation of the program Dialogue: 0,0:11:52.40,0:11:57.02,Default,,0000,0000,0000,,but basically in 1970, the\Nmedian family in America Dialogue: 0,0:11:57.02,0:12:02.02,Default,,0000,0000,0000,,was carrying about 1.4%\Nof its annual income Dialogue: 0,0:12:02.14,0:12:05.28,Default,,0000,0000,0000,,in revolving debt, store charges. Dialogue: 0,0:12:05.28,0:12:08.94,Default,,0000,0000,0000,,So there was a tiny little\Nfraction on average. Dialogue: 0,0:12:08.94,0:12:13.94,Default,,0000,0000,0000,,By the year 2005, the median\Nfamily is carrying about 15% Dialogue: 0,0:12:15.60,0:12:18.75,Default,,0000,0000,0000,,of its annual income in revolving debt, Dialogue: 0,0:12:18.75,0:12:21.05,Default,,0000,0000,0000,,okay, just true there at the average. Dialogue: 0,0:12:21.05,0:12:25.13,Default,,0000,0000,0000,,So savings have gone down,\Nrevolving debt has gone up, Dialogue: 0,0:12:25.13,0:12:27.21,Default,,0000,0000,0000,,and it gives us this picture, Dialogue: 0,0:12:27.21,0:12:29.39,Default,,0000,0000,0000,,if we put the whole thing together here. Dialogue: 0,0:12:29.39,0:12:32.07,Default,,0000,0000,0000,,And that is the left side, 1972, Dialogue: 0,0:12:32.07,0:12:35.27,Default,,0000,0000,0000,,the family, blue, is saving 11% Dialogue: 0,0:12:35.27,0:12:37.93,Default,,0000,0000,0000,,and carrying debt about 1.4%. Dialogue: 0,0:12:39.03,0:12:42.36,Default,,0000,0000,0000,,By the year 2005, is\Ncarrying credit card debt Dialogue: 0,0:12:42.36,0:12:47.04,Default,,0000,0000,0000,,equal to one in every seven\Ndollars that it earns, 15.6%, Dialogue: 0,0:12:47.04,0:12:50.65,Default,,0000,0000,0000,,and its savings rate is negative,\Neight tenths of a percent. Dialogue: 0,0:12:50.65,0:12:55.65,Default,,0000,0000,0000,,So think about what that means. Dialogue: 0,0:12:55.87,0:12:59.97,Default,,0000,0000,0000,,That means, over the last 30\Nyears, in terms of a shift, Dialogue: 0,0:12:59.97,0:13:03.76,Default,,0000,0000,0000,,the family spent everything\Nthat mom's income Dialogue: 0,0:13:03.76,0:13:06.06,Default,,0000,0000,0000,,added to the family fisc, Dialogue: 0,0:13:06.06,0:13:08.76,Default,,0000,0000,0000,,spent everything they used to save, Dialogue: 0,0:13:08.76,0:13:12.00,Default,,0000,0000,0000,,that 11% that they used to put away, Dialogue: 0,0:13:12.00,0:13:16.70,Default,,0000,0000,0000,,and went into debt another\N15% of income on top of that. Dialogue: 0,0:13:16.70,0:13:18.84,Default,,0000,0000,0000,,They spent it all. Dialogue: 0,0:13:20.05,0:13:22.40,Default,,0000,0000,0000,,Now, whoops, I'll do it a little faster, Dialogue: 0,0:13:22.40,0:13:24.46,Default,,0000,0000,0000,,what did they spend it on? Dialogue: 0,0:13:24.46,0:13:26.58,Default,,0000,0000,0000,,This was the question that really drove me Dialogue: 0,0:13:26.58,0:13:29.45,Default,,0000,0000,0000,,in my research over the last few years. Dialogue: 0,0:13:29.45,0:13:30.98,Default,,0000,0000,0000,,Where do they spend the money? Dialogue: 0,0:13:30.98,0:13:34.04,Default,,0000,0000,0000,,Because what's interesting here is that Dialogue: 0,0:13:34.04,0:13:35.71,Default,,0000,0000,0000,,everybody has an answer on this one. Dialogue: 0,0:13:35.71,0:13:38.08,Default,,0000,0000,0000,,People can tell me exactly\Nwhat they spent it on, Dialogue: 0,0:13:38.08,0:13:43.08,Default,,0000,0000,0000,,people are sure, and so\NI started to find out. Dialogue: 0,0:13:43.39,0:13:46.49,Default,,0000,0000,0000,,The federal government has\Nactually been keeping data Dialogue: 0,0:13:46.49,0:13:49.54,Default,,0000,0000,0000,,on how Americans spend their money. Dialogue: 0,0:13:49.54,0:13:51.48,Default,,0000,0000,0000,,This is done through\Nthe Commerce Department, Dialogue: 0,0:13:51.48,0:13:52.31,Default,,0000,0000,0000,,large parts of this, Dialogue: 0,0:13:52.31,0:13:54.01,Default,,0000,0000,0000,,and some of it's due to\Nthe Labor Department, Dialogue: 0,0:13:54.01,0:13:56.53,Default,,0000,0000,0000,,they've been keeping this\Nfor more than a century Dialogue: 0,0:13:56.53,0:14:01.53,Default,,0000,0000,0000,,so that you can look at data\Non canned meat consumption Dialogue: 0,0:14:02.48,0:14:06.52,Default,,0000,0000,0000,,going back to the late\N1800s and early 1900s. Dialogue: 0,0:14:06.52,0:14:08.83,Default,,0000,0000,0000,,You can check out alcohol consumption, Dialogue: 0,0:14:08.83,0:14:11.13,Default,,0000,0000,0000,,you can check out cracker consumption, Dialogue: 0,0:14:11.13,0:14:12.37,Default,,0000,0000,0000,,it's not all about food, Dialogue: 0,0:14:12.37,0:14:15.44,Default,,0000,0000,0000,,it's about cars and rugs and furniture Dialogue: 0,0:14:15.44,0:14:17.17,Default,,0000,0000,0000,,and all sorts of things\Nthat the government has been Dialogue: 0,0:14:17.17,0:14:18.37,Default,,0000,0000,0000,,collecting data on. Dialogue: 0,0:14:18.37,0:14:21.91,Default,,0000,0000,0000,,So I found this source for all the data, Dialogue: 0,0:14:21.91,0:14:23.71,Default,,0000,0000,0000,,right down the bottom in that list, Dialogue: 0,0:14:23.71,0:14:26.97,Default,,0000,0000,0000,,I don't know what the type\Nis called, like .01 type, Dialogue: 0,0:14:27.99,0:14:29.87,Default,,0000,0000,0000,,it tells what the government office is Dialogue: 0,0:14:29.87,0:14:32.78,Default,,0000,0000,0000,,that's responsible for this\Nand if you have any questions, Dialogue: 0,0:14:32.78,0:14:36.02,Default,,0000,0000,0000,,what you're looking for, so\Nglory be to the internet, Dialogue: 0,0:14:36.02,0:14:40.08,Default,,0000,0000,0000,,found a phone number and\Nfound a live human being who, Dialogue: 0,0:14:40.08,0:14:41.56,Default,,0000,0000,0000,,and I started trying to ask about Dialogue: 0,0:14:41.56,0:14:42.95,Default,,0000,0000,0000,,how you could stabilize this stuff, Dialogue: 0,0:14:42.95,0:14:43.81,Default,,0000,0000,0000,,and look at it over time, Dialogue: 0,0:14:43.81,0:14:46.09,Default,,0000,0000,0000,,we all understand how you\Ncould do inflation adjustment, Dialogue: 0,0:14:46.09,0:14:48.77,Default,,0000,0000,0000,,he said something about,\NI said something that, Dialogue: 0,0:14:48.77,0:14:51.99,Default,,0000,0000,0000,,"Can you disaggregate this so\Nthat you can look at families Dialogue: 0,0:14:51.99,0:14:54.47,Default,,0000,0000,0000,,"matched for family size?" Dialogue: 0,0:14:54.47,0:14:56.28,Default,,0000,0000,0000,,That's really the question here. Dialogue: 0,0:14:56.28,0:14:59.90,Default,,0000,0000,0000,,And the guy said, "Well", he said, Dialogue: 0,0:14:59.90,0:15:03.87,Default,,0000,0000,0000,,"I guess if you cared,\NI could run the data." Dialogue: 0,0:15:04.81,0:15:09.31,Default,,0000,0000,0000,,And, all of a sudden, my little\Nheart starts beating faster Dialogue: 0,0:15:09.31,0:15:11.62,Default,,0000,0000,0000,,and I'm panting into the phone and I said, Dialogue: 0,0:15:11.62,0:15:13.23,Default,,0000,0000,0000,,"You can actually run the data?" Dialogue: 0,0:15:13.23,0:15:14.06,Default,,0000,0000,0000,,And he said, "Yeah." Dialogue: 0,0:15:14.06,0:15:16.12,Default,,0000,0000,0000,,He said, "What kind of family\Ndo you want to look at?" Dialogue: 0,0:15:16.12,0:15:19.26,Default,,0000,0000,0000,,And I said, "I want to look\Nat a mom, dad and two kids", Dialogue: 0,0:15:19.26,0:15:20.64,Default,,0000,0000,0000,,because we have such variations, Dialogue: 0,0:15:20.64,0:15:23.64,Default,,0000,0000,0000,,there's so many more one\Nperson family households now Dialogue: 0,0:15:23.64,0:15:26.97,Default,,0000,0000,0000,,and variations, "I want to look\Nat a mom, dad and two kids." Dialogue: 0,0:15:26.97,0:15:29.05,Default,,0000,0000,0000,,That will help me stabilize both on age Dialogue: 0,0:15:29.05,0:15:31.38,Default,,0000,0000,0000,,and family composition. Dialogue: 0,0:15:31.38,0:15:34.96,Default,,0000,0000,0000,,"I want to look at a mom, dad\Nand two kids in the 1970s, Dialogue: 0,0:15:34.96,0:15:39.83,Default,,0000,0000,0000,,"1970, 1971, and I want to\Nlook at a mom, dad and two kids Dialogue: 0,0:15:39.83,0:15:42.76,Default,,0000,0000,0000,,"in 2003", and I'm trying\Nto gather these data, Dialogue: 0,0:15:42.76,0:15:44.76,Default,,0000,0000,0000,,and I want to compare them. Dialogue: 0,0:15:44.76,0:15:46.67,Default,,0000,0000,0000,,We lump together some expenses, Dialogue: 0,0:15:46.67,0:15:48.12,Default,,0000,0000,0000,,and I want to be able to\Ncompare them over time, Dialogue: 0,0:15:48.12,0:15:49.22,Default,,0000,0000,0000,,we'll adjust for inflation, Dialogue: 0,0:15:49.22,0:15:51.04,Default,,0000,0000,0000,,and figure out how much\Nmore people are spending. Dialogue: 0,0:15:51.04,0:15:52.05,Default,,0000,0000,0000,,He said, "Great." Dialogue: 0,0:15:52.05,0:15:53.42,Default,,0000,0000,0000,,So he said, "What's the\Nfirst one you want to do? Dialogue: 0,0:15:53.42,0:15:54.25,Default,,0000,0000,0000,,"What's the first run?" Dialogue: 0,0:15:54.25,0:15:55.11,Default,,0000,0000,0000,,Because you gotta test this stuff out see Dialogue: 0,0:15:55.11,0:15:57.52,Default,,0000,0000,0000,,to see if you're getting it\Nright, and I said, "Clothes, Dialogue: 0,0:15:57.52,0:15:59.48,Default,,0000,0000,0000,,"how much money are people\Nspending on clothes today?" Dialogue: 0,0:15:59.48,0:16:03.60,Default,,0000,0000,0000,,Because all I ever hear about\Nour designer toddler outfits, Dialogue: 0,0:16:04.82,0:16:09.60,Default,,0000,0000,0000,,the Gap, $200 sneakers, Dialogue: 0,0:16:09.60,0:16:12.01,Default,,0000,0000,0000,,all of the fancy things that people are Dialogue: 0,0:16:12.01,0:16:13.91,Default,,0000,0000,0000,,spending on themselves and\Ntheir children in terms of, Dialogue: 0,0:16:13.91,0:16:16.23,Default,,0000,0000,0000,,we have a closet full, and look, Dialogue: 0,0:16:16.23,0:16:17.73,Default,,0000,0000,0000,,I think this is probably why. Dialogue: 0,0:16:17.73,0:16:19.71,Default,,0000,0000,0000,,I can't get a parking place at the mall. Dialogue: 0,0:16:19.71,0:16:22.47,Default,,0000,0000,0000,,All the dressing rooms are always full. Dialogue: 0,0:16:22.47,0:16:25.98,Default,,0000,0000,0000,,So it must be that we're\Nspending too much on clothing. Dialogue: 0,0:16:25.98,0:16:29.88,Default,,0000,0000,0000,,So he calls me back when\Nhe gets the first data runs Dialogue: 0,0:16:29.88,0:16:31.91,Default,,0000,0000,0000,,and emails them and he says, "Okay", Dialogue: 0,0:16:31.91,0:16:33.24,Default,,0000,0000,0000,,he said, "I've got your number." Dialogue: 0,0:16:33.24,0:16:35.35,Default,,0000,0000,0000,,And I said, "Good, what's the number?" Dialogue: 0,0:16:35.35,0:16:37.68,Default,,0000,0000,0000,,And he said, "32%." Dialogue: 0,0:16:37.68,0:16:39.80,Default,,0000,0000,0000,,And I said, "So they're\Nspending 32% more?" Dialogue: 0,0:16:39.80,0:16:42.86,Default,,0000,0000,0000,,And he said, "No, they're\Nspending 32% less today Dialogue: 0,0:16:42.86,0:16:44.81,Default,,0000,0000,0000,,"than they spent a generation ago", Dialogue: 0,0:16:44.81,0:16:46.49,Default,,0000,0000,0000,,in inflation adjusted dollars. Dialogue: 0,0:16:46.49,0:16:48.77,Default,,0000,0000,0000,,And of course, it's like\None of these things, Dialogue: 0,0:16:48.77,0:16:51.54,Default,,0000,0000,0000,,the first, I have to tell\Nyou, this is really awful, Dialogue: 0,0:16:51.54,0:16:53.43,Default,,0000,0000,0000,,the first eight times I talked with him Dialogue: 0,0:16:53.43,0:16:56.27,Default,,0000,0000,0000,,after he gave me this one, I\Nknew he had the numbers wrong. Dialogue: 0,0:16:56.27,0:16:58.72,Default,,0000,0000,0000,,Finally, we ran this six\Ndifferent ways 'til Christmas, Dialogue: 0,0:16:58.72,0:17:01.18,Default,,0000,0000,0000,,I finally believe that\Nthe numbers were right, Dialogue: 0,0:17:01.18,0:17:02.55,Default,,0000,0000,0000,,and then we start to thinking, Dialogue: 0,0:17:02.55,0:17:03.94,Default,,0000,0000,0000,,well, you know, it makes sense. Dialogue: 0,0:17:03.94,0:17:06.08,Default,,0000,0000,0000,,Everybody shops at discount today, Dialogue: 0,0:17:06.08,0:17:08.26,Default,,0000,0000,0000,,nobody pays full price\Nin a department store, Dialogue: 0,0:17:08.26,0:17:11.08,Default,,0000,0000,0000,,we import a lot more of our\Nclothes than we used to, Dialogue: 0,0:17:11.08,0:17:13.78,Default,,0000,0000,0000,,men don't wear expensive\Nsuits, except for my husband, Dialogue: 0,0:17:15.07,0:17:17.52,Default,,0000,0000,0000,,people don't wear leather shoes, Dialogue: 0,0:17:17.52,0:17:20.36,Default,,0000,0000,0000,,little children wear sandals\Nand go barefoot a lot, Dialogue: 0,0:17:20.36,0:17:21.87,Default,,0000,0000,0000,,on and on and on. Dialogue: 0,0:17:21.87,0:17:26.06,Default,,0000,0000,0000,,And so the numbers hold that\Nclothing expenses for a family Dialogue: 0,0:17:26.06,0:17:26.89,Default,,0000,0000,0000,,climbed up to 32%. Dialogue: 0,0:17:26.89,0:17:29.12,Default,,0000,0000,0000,,So, okay, food, let's do food, Dialogue: 0,0:17:29.12,0:17:31.84,Default,,0000,0000,0000,,and let's be sure to put in eating out, Dialogue: 0,0:17:31.84,0:17:34.81,Default,,0000,0000,0000,,because we all know with\Nmom not at home anymore, Dialogue: 0,0:17:34.81,0:17:36.85,Default,,0000,0000,0000,,it's gotta be that families\Nare spending a fortune Dialogue: 0,0:17:36.85,0:17:38.69,Default,,0000,0000,0000,,on eating out, and besides that, Dialogue: 0,0:17:38.69,0:17:41.14,Default,,0000,0000,0000,,in 1972, nobody ate kiwis, Dialogue: 0,0:17:41.14,0:17:43.83,Default,,0000,0000,0000,,and nobody paid for water, right? Dialogue: 0,0:17:43.83,0:17:47.25,Default,,0000,0000,0000,,And my grandparents would\Nbe appalled by this, right? Dialogue: 0,0:17:47.25,0:17:51.27,Default,,0000,0000,0000,,So how much more is today's\Nfamily spending on food Dialogue: 0,0:17:51.27,0:17:52.71,Default,,0000,0000,0000,,than they spent a generation ago? Dialogue: 0,0:17:52.71,0:17:54.70,Default,,0000,0000,0000,,Same sort of matching,\Nincluding eating out, Dialogue: 0,0:17:54.70,0:17:58.95,Default,,0000,0000,0000,,and the answer is they're\Nspending 18% less on food Dialogue: 0,0:17:58.95,0:18:01.25,Default,,0000,0000,0000,,than they spent a generation ago. Dialogue: 0,0:18:02.63,0:18:07.18,Default,,0000,0000,0000,,And once again, welcome to\Nthe world of big-box stores Dialogue: 0,0:18:08.09,0:18:10.01,Default,,0000,0000,0000,,where people are buying\Non very thin margins, Dialogue: 0,0:18:10.01,0:18:12.69,Default,,0000,0000,0000,,supermarkets, people eat a lot more pasta Dialogue: 0,0:18:12.69,0:18:15.41,Default,,0000,0000,0000,,and they eat a lot less\Nmeat than they used to, Dialogue: 0,0:18:15.41,0:18:18.75,Default,,0000,0000,0000,,there are lots of reasons\Nthat it's actually gone down Dialogue: 0,0:18:18.75,0:18:21.22,Default,,0000,0000,0000,,in terms of what we spend on food. Dialogue: 0,0:18:21.22,0:18:23.57,Default,,0000,0000,0000,,Okay, so, I'm beginning\Nto get the hang of this, Dialogue: 0,0:18:23.57,0:18:26.36,Default,,0000,0000,0000,,I said, "Appliances, nobody\Nhad an espresso machine Dialogue: 0,0:18:26.36,0:18:28.82,Default,,0000,0000,0000,,"a generation ago, nobody had\Na separate popcorn popper, Dialogue: 0,0:18:28.82,0:18:30.02,Default,,0000,0000,0000,,"no one had a microwave oven." Dialogue: 0,0:18:30.02,0:18:32.73,Default,,0000,0000,0000,,And by the way, for each of these, Dialogue: 0,0:18:32.73,0:18:35.07,Default,,0000,0000,0000,,one of the fun parts of\Nbeing able to do research, Dialogue: 0,0:18:35.07,0:18:36.03,Default,,0000,0000,0000,,can't do this in a lecture, Dialogue: 0,0:18:36.03,0:18:37.81,Default,,0000,0000,0000,,you can't burden the lecture with this, Dialogue: 0,0:18:37.81,0:18:39.86,Default,,0000,0000,0000,,but it's to get all the quotes, Dialogue: 0,0:18:40.70,0:18:43.81,Default,,0000,0000,0000,,to get Robert Frank and Julie\NScherer and all these people Dialogue: 0,0:18:43.81,0:18:45.08,Default,,0000,0000,0000,,who are explaining why Americans Dialogue: 0,0:18:45.08,0:18:46.63,Default,,0000,0000,0000,,are in so much financial trouble, Dialogue: 0,0:18:46.63,0:18:48.39,Default,,0000,0000,0000,,and each time of course\Nthey're explaining about Dialogue: 0,0:18:48.39,0:18:49.94,Default,,0000,0000,0000,,how much we spend on clothing, Dialogue: 0,0:18:49.94,0:18:51.52,Default,,0000,0000,0000,,how much we're spending on food, Dialogue: 0,0:18:51.52,0:18:53.07,Default,,0000,0000,0000,,and how much we're spending on appliances. Dialogue: 0,0:18:53.07,0:18:56.23,Default,,0000,0000,0000,,So yeah, just in your own\Nmind, pack all those in. Dialogue: 0,0:18:56.23,0:18:58.05,Default,,0000,0000,0000,,And of course, you know where I'm going. Dialogue: 0,0:18:58.05,0:19:03.05,Default,,0000,0000,0000,,52% less on appliances than\Nthey spent a generation ago. Dialogue: 0,0:19:03.40,0:19:05.70,Default,,0000,0000,0000,,And you get the rest of the pattern. Dialogue: 0,0:19:05.70,0:19:09.78,Default,,0000,0000,0000,,Per car average, yeah,\Nwe can talk about SUVs, Dialogue: 0,0:19:09.78,0:19:14.58,Default,,0000,0000,0000,,the size of a living room\Nand Corinthian leather Dialogue: 0,0:19:14.58,0:19:16.24,Default,,0000,0000,0000,,or whatever it is you think, Dialogue: 0,0:19:17.14,0:19:19.16,Default,,0000,0000,0000,,with televisions in the back, Dialogue: 0,0:19:19.16,0:19:23.81,Default,,0000,0000,0000,,the reality is the per car\Ncost of owning a car in America Dialogue: 0,0:19:23.81,0:19:26.66,Default,,0000,0000,0000,,has gone down 24% in 30 years. Dialogue: 0,0:19:26.66,0:19:28.10,Default,,0000,0000,0000,,Principle reason for it, Dialogue: 0,0:19:28.10,0:19:30.83,Default,,0000,0000,0000,,Americans today keep a car\Nmore than two years longer Dialogue: 0,0:19:30.83,0:19:33.25,Default,,0000,0000,0000,,than they kept it 30 years ago, Dialogue: 0,0:19:33.25,0:19:36.00,Default,,0000,0000,0000,,and repair costs have\Ndropped significantly. Dialogue: 0,0:19:36.00,0:19:39.32,Default,,0000,0000,0000,,So the per car, this is\Nwhat people really spend, Dialogue: 0,0:19:39.32,0:19:42.23,Default,,0000,0000,0000,,not what they projected might have spent, Dialogue: 0,0:19:42.23,0:19:43.80,Default,,0000,0000,0000,,have gone down dramatically. Dialogue: 0,0:19:43.80,0:19:45.90,Default,,0000,0000,0000,,Whoop, I'm getting a little fast here. Dialogue: 0,0:19:45.90,0:19:47.60,Default,,0000,0000,0000,,So the question is, Dialogue: 0,0:19:47.60,0:19:49.67,Default,,0000,0000,0000,,it's a little trigger-happy\Nwith this thing, Dialogue: 0,0:19:49.67,0:19:53.58,Default,,0000,0000,0000,,so the question is if all\Nthose things went down, Dialogue: 0,0:19:53.58,0:19:57.00,Default,,0000,0000,0000,,if clothing and food and\Nappliances and cars went down, Dialogue: 0,0:19:57.00,0:19:58.33,Default,,0000,0000,0000,,and by the way, I could and a lot of this Dialogue: 0,0:19:58.33,0:19:59.82,Default,,0000,0000,0000,,with a lot more consumer goods, Dialogue: 0,0:19:59.82,0:20:04.82,Default,,0000,0000,0000,,electronics went up, surprise,\Nsurprise, 300 bucks, okay? Dialogue: 0,0:20:04.82,0:20:08.45,Default,,0000,0000,0000,,Dog food went up, baby food went down, Dialogue: 0,0:20:08.45,0:20:12.86,Default,,0000,0000,0000,,cigarettes went down, liquor\Nwent up, we should watch that, Dialogue: 0,0:20:12.86,0:20:15.48,Default,,0000,0000,0000,,dry cleaning went down. Dialogue: 0,0:20:15.48,0:20:20.34,Default,,0000,0000,0000,,The point is there's\Neither wash or a negative Dialogue: 0,0:20:20.34,0:20:22.94,Default,,0000,0000,0000,,in terms of kind of ordinary consumption, Dialogue: 0,0:20:22.94,0:20:25.83,Default,,0000,0000,0000,,the idea that we are an\Nover-consuming society, Dialogue: 0,0:20:25.83,0:20:28.67,Default,,0000,0000,0000,,what most people talk about\Nwhen they're consuming. Dialogue: 0,0:20:28.67,0:20:31.48,Default,,0000,0000,0000,,So where is the family spending more money Dialogue: 0,0:20:31.48,0:20:32.89,Default,,0000,0000,0000,,than they spent a generation ago? Dialogue: 0,0:20:32.89,0:20:36.20,Default,,0000,0000,0000,,Well, let's start with a\Nthree-bedroom, one-bath house, Dialogue: 0,0:20:36.20,0:20:39.28,Default,,0000,0000,0000,,that the median income\Nfamily is paying for. Dialogue: 0,0:20:40.17,0:20:43.30,Default,,0000,0000,0000,,And there it is, inflation\Nadjusted dollars, Dialogue: 0,0:20:43.30,0:20:48.30,Default,,0000,0000,0000,,a 76% increase in what a\Nfamily spends on a mortgage. Dialogue: 0,0:20:49.22,0:20:51.58,Default,,0000,0000,0000,,That's the mortgage payment,\Nmonth in, month out. Dialogue: 0,0:20:51.58,0:20:52.95,Default,,0000,0000,0000,,Now think about that. Dialogue: 0,0:20:52.95,0:20:57.08,Default,,0000,0000,0000,,We have much lower mortgage\Nrates than we had 30 years ago, Dialogue: 0,0:20:57.08,0:20:59.14,Default,,0000,0000,0000,,for those of you who are\Nold enough to remember, Dialogue: 0,0:20:59.14,0:21:01.52,Default,,0000,0000,0000,,but the difference is when\Nyou take out a mortgage Dialogue: 0,0:21:01.52,0:21:05.13,Default,,0000,0000,0000,,for much more money, the low interest rate Dialogue: 0,0:21:05.13,0:21:08.21,Default,,0000,0000,0000,,will not make up for that difference. Dialogue: 0,0:21:08.21,0:21:10.61,Default,,0000,0000,0000,,And I want to emphasize here, Dialogue: 0,0:21:10.61,0:21:14.82,Default,,0000,0000,0000,,the median sized house that\Nwe're talking about here Dialogue: 0,0:21:14.82,0:21:17.28,Default,,0000,0000,0000,,did grow slightly in this period. Dialogue: 0,0:21:17.28,0:21:22.28,Default,,0000,0000,0000,,It grew from 5.8 rooms to 6.1 rooms. Dialogue: 0,0:21:22.41,0:21:25.30,Default,,0000,0000,0000,,So this is not about, and on average, Dialogue: 0,0:21:25.30,0:21:28.87,Default,,0000,0000,0000,,this family, this median family either Dialogue: 0,0:21:28.87,0:21:32.03,Default,,0000,0000,0000,,picked up a second bathroom\Nor a third bedroom, Dialogue: 0,0:21:32.03,0:21:33.11,Default,,0000,0000,0000,,but not both. Dialogue: 0,0:21:34.08,0:21:35.49,Default,,0000,0000,0000,,So for those of you who want to say, Dialogue: 0,0:21:35.49,0:21:38.20,Default,,0000,0000,0000,,"Oh but I've driven by the McMansions", Dialogue: 0,0:21:38.20,0:21:42.01,Default,,0000,0000,0000,,"everybody has to have granite\Ncountertops and spa bathrooms Dialogue: 0,0:21:42.01,0:21:43.55,Default,,0000,0000,0000,,"and media rooms, I've seen them, Dialogue: 0,0:21:43.55,0:21:44.95,Default,,0000,0000,0000,,"I've seen them, I've seen them", Dialogue: 0,0:21:44.95,0:21:47.37,Default,,0000,0000,0000,,and compare that with Levittown, Dialogue: 0,0:21:47.37,0:21:49.12,Default,,0000,0000,0000,,which is more than 30 years ago, Dialogue: 0,0:21:49.12,0:21:52.08,Default,,0000,0000,0000,,but to give the idea, all that tells us Dialogue: 0,0:21:52.08,0:21:55.13,Default,,0000,0000,0000,,is that the new housing market has shifted Dialogue: 0,0:21:55.13,0:21:57.00,Default,,0000,0000,0000,,from the entry level house, Dialogue: 0,0:21:57.00,0:22:01.07,Default,,0000,0000,0000,,which is what was being built\Nin the 1950s and 1960s to, Dialogue: 0,0:22:01.07,0:22:03.49,Default,,0000,0000,0000,,on average, when you\Nbuy a new house today, Dialogue: 0,0:22:03.49,0:22:06.40,Default,,0000,0000,0000,,it is your third to fourth house purchase, Dialogue: 0,0:22:06.40,0:22:08.08,Default,,0000,0000,0000,,that is, you've moved up and moved up Dialogue: 0,0:22:08.08,0:22:10.05,Default,,0000,0000,0000,,until you can afford this bigger house, Dialogue: 0,0:22:10.05,0:22:12.04,Default,,0000,0000,0000,,in other words, housing is not being built Dialogue: 0,0:22:12.04,0:22:14.33,Default,,0000,0000,0000,,for 70% of American families, Dialogue: 0,0:22:14.33,0:22:17.20,Default,,0000,0000,0000,,it's being built for the top\N20% of American families, Dialogue: 0,0:22:17.20,0:22:18.31,Default,,0000,0000,0000,,that's what we see when we see Dialogue: 0,0:22:18.31,0:22:20.32,Default,,0000,0000,0000,,the new construction that's underway. Dialogue: 0,0:22:20.32,0:22:23.04,Default,,0000,0000,0000,,For the average family today, Dialogue: 0,0:22:23.04,0:22:25.68,Default,,0000,0000,0000,,they are about 50% more\Nlikely to be in a house Dialogue: 0,0:22:25.68,0:22:27.57,Default,,0000,0000,0000,,more than 25 years old Dialogue: 0,0:22:27.57,0:22:31.10,Default,,0000,0000,0000,,and have all of the attendant\Nexpenses for maintenance, Dialogue: 0,0:22:31.10,0:22:35.65,Default,,0000,0000,0000,,but just looking at the\Nmortgage, 76% more for a mortgage Dialogue: 0,0:22:35.65,0:22:37.79,Default,,0000,0000,0000,,than they had a generation ago. Dialogue: 0,0:22:37.79,0:22:40.65,Default,,0000,0000,0000,,Okay, well what's the next\None they spent money on? Dialogue: 0,0:22:40.65,0:22:42.04,Default,,0000,0000,0000,,Health insurance. Dialogue: 0,0:22:42.04,0:22:44.13,Default,,0000,0000,0000,,This is my family that's healthy. Dialogue: 0,0:22:44.98,0:22:49.16,Default,,0000,0000,0000,,And my family, because\NI've loaded the dice here, Dialogue: 0,0:22:49.16,0:22:52.52,Default,,0000,0000,0000,,that's lucky enough to have an employer Dialogue: 0,0:22:52.52,0:22:54.25,Default,,0000,0000,0000,,who sponsors health insurance, Dialogue: 0,0:22:54.25,0:22:57.22,Default,,0000,0000,0000,,so I'm gonna make an\Napples-to-apples comparison Dialogue: 0,0:22:57.22,0:23:00.76,Default,,0000,0000,0000,,of employer-sponsored health insurance, Dialogue: 0,0:23:00.76,0:23:03.35,Default,,0000,0000,0000,,how much more two does today's family pay? Dialogue: 0,0:23:03.35,0:23:08.12,Default,,0000,0000,0000,,And the answer is they pay 74%\Nin inflation adjusted dollars Dialogue: 0,0:23:08.12,0:23:10.94,Default,,0000,0000,0000,,more than they did a generation ago. Dialogue: 0,0:23:10.94,0:23:13.92,Default,,0000,0000,0000,,Third one, cars, increase of 52%. Dialogue: 0,0:23:13.92,0:23:15.48,Default,,0000,0000,0000,,Okay, Warren, how did you get cars Dialogue: 0,0:23:15.48,0:23:17.12,Default,,0000,0000,0000,,both above the line and below the line? Dialogue: 0,0:23:17.12,0:23:22.03,Default,,0000,0000,0000,,Well, I teach commercial\Nlaw, but the answer is, Dialogue: 0,0:23:22.03,0:23:25.51,Default,,0000,0000,0000,,the median family with two\Npeople in the workforce Dialogue: 0,0:23:25.51,0:23:27.40,Default,,0000,0000,0000,,has moved from being a one-car family Dialogue: 0,0:23:27.40,0:23:29.23,Default,,0000,0000,0000,,to being a two-car family. Dialogue: 0,0:23:29.23,0:23:30.59,Default,,0000,0000,0000,,Families living out in the suburbs, Dialogue: 0,0:23:30.59,0:23:32.31,Default,,0000,0000,0000,,even if they keep a parent at home Dialogue: 0,0:23:32.31,0:23:34.83,Default,,0000,0000,0000,,can't get by on one car much of the time, Dialogue: 0,0:23:34.83,0:23:36.57,Default,,0000,0000,0000,,they've got to have two cars Dialogue: 0,0:23:36.57,0:23:38.58,Default,,0000,0000,0000,,in order to be able to get to the doctor, Dialogue: 0,0:23:38.58,0:23:40.58,Default,,0000,0000,0000,,to be able to get to the grocery store. Dialogue: 0,0:23:40.58,0:23:43.73,Default,,0000,0000,0000,,So families spend more\Nbecause they have more cars Dialogue: 0,0:23:43.73,0:23:45.64,Default,,0000,0000,0000,,than they used to have. Dialogue: 0,0:23:45.64,0:23:49.02,Default,,0000,0000,0000,,Fourth-biggest, remember, I've\Ngot my mom, dad and two kids Dialogue: 0,0:23:49.02,0:23:50.46,Default,,0000,0000,0000,,and of course the big difference was Dialogue: 0,0:23:50.46,0:23:52.07,Default,,0000,0000,0000,,mom was at home a generation ago, Dialogue: 0,0:23:52.07,0:23:56.10,Default,,0000,0000,0000,,today she is out in the\Nworkforce is childcare. Dialogue: 0,0:23:56.10,0:23:59.11,Default,,0000,0000,0000,,Now I put childcare at a 100% increase. Dialogue: 0,0:23:59.11,0:24:01.92,Default,,0000,0000,0000,,In fact, you may remember from third grade Dialogue: 0,0:24:01.92,0:24:03.73,Default,,0000,0000,0000,,that you can't divide by zero, Dialogue: 0,0:24:03.73,0:24:06.39,Default,,0000,0000,0000,,so I could have picked 1,000% or 1%, Dialogue: 0,0:24:06.39,0:24:07.76,Default,,0000,0000,0000,,or whatever I wanted to pick here, Dialogue: 0,0:24:07.76,0:24:10.84,Default,,0000,0000,0000,,it is a new expense picked\Nup by the two-income family Dialogue: 0,0:24:10.84,0:24:13.71,Default,,0000,0000,0000,,that was simply not there\Nfor the one-income family. Dialogue: 0,0:24:13.71,0:24:17.89,Default,,0000,0000,0000,,And we have one more\Nexpense, and it's taxes. Dialogue: 0,0:24:17.89,0:24:21.99,Default,,0000,0000,0000,,What's happened with taxes is\Nthat progressive tax system, Dialogue: 0,0:24:21.99,0:24:24.85,Default,,0000,0000,0000,,as mildly progressive as it is, Dialogue: 0,0:24:24.85,0:24:28.56,Default,,0000,0000,0000,,the first dollar that the\Nsecond earner earns is taxed Dialogue: 0,0:24:28.56,0:24:31.24,Default,,0000,0000,0000,,after the last dollar of the first earner, Dialogue: 0,0:24:31.24,0:24:34.71,Default,,0000,0000,0000,,so it means that the tax\Nrate for this economic unit Dialogue: 0,0:24:34.71,0:24:39.38,Default,,0000,0000,0000,,has gone out by about 25%\Nin this period of time. Dialogue: 0,0:24:39.38,0:24:43.04,Default,,0000,0000,0000,,Okay, so there it is, downs and ups. Dialogue: 0,0:24:43.04,0:24:44.99,Default,,0000,0000,0000,,And I hope there are two\Nthings you notice about Dialogue: 0,0:24:44.99,0:24:46.47,Default,,0000,0000,0000,,the downs and ups. Dialogue: 0,0:24:46.47,0:24:50.95,Default,,0000,0000,0000,,The first one is the downs\Nfrankly are all smaller purchases Dialogue: 0,0:24:50.95,0:24:54.09,Default,,0000,0000,0000,,than the ups are, and that's bad news. Dialogue: 0,0:24:54.09,0:24:58.28,Default,,0000,0000,0000,,And the second is the downs\Nare all flexible purchases, Dialogue: 0,0:24:58.28,0:25:01.01,Default,,0000,0000,0000,,that is, lose your job, get sick, Dialogue: 0,0:25:01.01,0:25:04.48,Default,,0000,0000,0000,,have a tough month with various expenses, Dialogue: 0,0:25:04.48,0:25:06.07,Default,,0000,0000,0000,,you cut back on the downs, Dialogue: 0,0:25:06.07,0:25:07.85,Default,,0000,0000,0000,,don't buy appliances this month, Dialogue: 0,0:25:07.85,0:25:10.47,Default,,0000,0000,0000,,cut back on food, it's\Nnot that you quit eating, Dialogue: 0,0:25:10.47,0:25:11.74,Default,,0000,0000,0000,,but you know, there's a difference between Dialogue: 0,0:25:11.74,0:25:13.64,Default,,0000,0000,0000,,macaroni and cheese and steak. Dialogue: 0,0:25:13.64,0:25:16.96,Default,,0000,0000,0000,,Families have flexibility in\Nall the things that shrunk, Dialogue: 0,0:25:16.96,0:25:19.90,Default,,0000,0000,0000,,they shrunk the things\Nwhere flexibility is, Dialogue: 0,0:25:19.90,0:25:21.22,Default,,0000,0000,0000,,but look at those other expenses, Dialogue: 0,0:25:21.22,0:25:24.60,Default,,0000,0000,0000,,those other expenses are big,\Nfixed, relentless expenses. Dialogue: 0,0:25:24.60,0:25:27.24,Default,,0000,0000,0000,,And so this gets to what I think of Dialogue: 0,0:25:27.24,0:25:32.24,Default,,0000,0000,0000,,as the heart of what my research\Nis about up to this point Dialogue: 0,0:25:32.95,0:25:35.87,Default,,0000,0000,0000,,and that is what these families look like, Dialogue: 0,0:25:35.87,0:25:38.36,Default,,0000,0000,0000,,and I do look at this the\Nway a commercial lawyer does, Dialogue: 0,0:25:38.36,0:25:40.55,Default,,0000,0000,0000,,if this were a little business, Dialogue: 0,0:25:40.55,0:25:42.49,Default,,0000,0000,0000,,what these families look at. Dialogue: 0,0:25:42.49,0:25:47.37,Default,,0000,0000,0000,,The single income family\Nback in the early 1970s Dialogue: 0,0:25:47.37,0:25:48.60,Default,,0000,0000,0000,,earned less money, Dialogue: 0,0:25:48.60,0:25:50.37,Default,,0000,0000,0000,,that's the first thing\Nyou'll notice here, right? Dialogue: 0,0:25:50.37,0:25:52.81,Default,,0000,0000,0000,,They're making about $32,000. Dialogue: 0,0:25:52.81,0:25:56.07,Default,,0000,0000,0000,,This is all inflation\Nadjusted dollars again. Dialogue: 0,0:25:56.07,0:25:57.55,Default,,0000,0000,0000,,And you notice, of course, Dialogue: 0,0:25:57.55,0:25:59.43,Default,,0000,0000,0000,,they're making a whole lot more money, Dialogue: 0,0:25:59.43,0:26:01.70,Default,,0000,0000,0000,,making about $63,000, Dialogue: 0,0:26:01.70,0:26:04.30,Default,,0000,0000,0000,,about $73,000 in the early 2000s. Dialogue: 0,0:26:06.78,0:26:09.65,Default,,0000,0000,0000,,But notice those five\Nexpenses that I gave you Dialogue: 0,0:26:09.65,0:26:13.56,Default,,0000,0000,0000,,on the preceding chart,\Nthat's the part that's in red. Dialogue: 0,0:26:13.56,0:26:18.54,Default,,0000,0000,0000,,The early family is spending\Nright at half its income Dialogue: 0,0:26:18.54,0:26:20.27,Default,,0000,0000,0000,,on these big fixed expenses, Dialogue: 0,0:26:20.27,0:26:23.35,Default,,0000,0000,0000,,these expenses that are\Nvery difficult to cut down, Dialogue: 0,0:26:23.35,0:26:25.19,Default,,0000,0000,0000,,to trim back, to cope with. Dialogue: 0,0:26:26.04,0:26:29.55,Default,,0000,0000,0000,,And that family, by the early 2000s, Dialogue: 0,0:26:29.55,0:26:33.50,Default,,0000,0000,0000,,has committed three\Nquarters of their income Dialogue: 0,0:26:33.50,0:26:38.50,Default,,0000,0000,0000,,in order to meet those\Nfive basic expenses. Dialogue: 0,0:26:38.53,0:26:43.53,Default,,0000,0000,0000,,In fact, you'll notice the math\Nwe've done here, the family, Dialogue: 0,0:26:43.87,0:26:46.87,Default,,0000,0000,0000,,the two-income family,\Nthe mom, dad and two kids, Dialogue: 0,0:26:46.87,0:26:48.67,Default,,0000,0000,0000,,the prototype of the family\Nthat's supposed to be Dialogue: 0,0:26:48.67,0:26:50.33,Default,,0000,0000,0000,,working in America, Dialogue: 0,0:26:50.33,0:26:52.83,Default,,0000,0000,0000,,the one that's supposed\Nto be making it all, Dialogue: 0,0:26:52.83,0:26:56.37,Default,,0000,0000,0000,,by the time they pay\Ntheir five basic expenses, Dialogue: 0,0:26:57.29,0:27:01.83,Default,,0000,0000,0000,,they have less money left\Nover, fewer total dollars, Dialogue: 0,0:27:01.83,0:27:05.07,Default,,0000,0000,0000,,than their one-income\Nparents had a generation ago. Dialogue: 0,0:27:06.02,0:27:08.81,Default,,0000,0000,0000,,And now from the point of view\Nof a commercial law scholar, Dialogue: 0,0:27:08.81,0:27:12.14,Default,,0000,0000,0000,,if I were simply looking at\Nthem and these were businesses, Dialogue: 0,0:27:12.14,0:27:14.83,Default,,0000,0000,0000,,this is, Business A is on the the far side Dialogue: 0,0:27:14.83,0:27:17.50,Default,,0000,0000,0000,,and Business B is on the\Nnear side, I'd say, well, Dialogue: 0,0:27:17.50,0:27:20.05,Default,,0000,0000,0000,,Business B is gonna go\Nbroke a lot more often Dialogue: 0,0:27:20.05,0:27:24.97,Default,,0000,0000,0000,,than Business A because they\Nhave so much less flexibility, Dialogue: 0,0:27:24.97,0:27:28.50,Default,,0000,0000,0000,,so much more debt, they're\Nmuch more deeply leveraged, Dialogue: 0,0:27:28.49,0:27:31.63,Default,,0000,0000,0000,,and they're gonna have more\Nof a harder time economically. Dialogue: 0,0:27:31.63,0:27:36.63,Default,,0000,0000,0000,,And in fact, that's about what's\Nhappened to these families. Dialogue: 0,0:27:36.79,0:27:41.15,Default,,0000,0000,0000,,So there's the heart, now I\Nwant to shift this a little bit Dialogue: 0,0:27:41.15,0:27:43.65,Default,,0000,0000,0000,,to say that's the economics\Nof what's happened. Dialogue: 0,0:27:43.65,0:27:45.02,Default,,0000,0000,0000,,We've seen it on the income side, Dialogue: 0,0:27:45.02,0:27:46.45,Default,,0000,0000,0000,,we've seen what happened\Non the expense side, Dialogue: 0,0:27:46.45,0:27:49.28,Default,,0000,0000,0000,,and we've seen what it did\Nto the American budget, Dialogue: 0,0:27:49.28,0:27:53.71,Default,,0000,0000,0000,,how it changed and made this\Na riskier economic unit, Dialogue: 0,0:27:53.71,0:27:56.42,Default,,0000,0000,0000,,but now what I want to do\Nis I want to press on how Dialogue: 0,0:27:56.42,0:28:01.42,Default,,0000,0000,0000,,this family in the 2000s\Nfaces in fact even more risk Dialogue: 0,0:28:02.10,0:28:04.41,Default,,0000,0000,0000,,than these numbers suggest. Dialogue: 0,0:28:04.41,0:28:06.10,Default,,0000,0000,0000,,All right, first part,\Nlet's think about it Dialogue: 0,0:28:06.10,0:28:07.67,Default,,0000,0000,0000,,from the income side. Dialogue: 0,0:28:07.67,0:28:12.67,Default,,0000,0000,0000,,The family of the early 2000s\Nnow has to have two incomes Dialogue: 0,0:28:14.16,0:28:16.10,Default,,0000,0000,0000,,in order to keep its health insurance, Dialogue: 0,0:28:16.10,0:28:20.39,Default,,0000,0000,0000,,to make its house payment,\Nto keep its cars on the road. Dialogue: 0,0:28:21.74,0:28:24.39,Default,,0000,0000,0000,,That means, just statistically speaking, Dialogue: 0,0:28:24.39,0:28:28.47,Default,,0000,0000,0000,,if the risk of losing your job\Nhad stayed exactly the same Dialogue: 0,0:28:28.47,0:28:31.82,Default,,0000,0000,0000,,over the last generation,\Nthe family on the right Dialogue: 0,0:28:31.82,0:28:35.23,Default,,0000,0000,0000,,has twice the risk of\Nthe family on the left Dialogue: 0,0:28:35.23,0:28:37.54,Default,,0000,0000,0000,,of not being able to make\Nthe mortgage payment. Dialogue: 0,0:28:37.54,0:28:39.82,Default,,0000,0000,0000,,Yes, they've diversified,\Nthey won't go to zero, Dialogue: 0,0:28:39.82,0:28:40.79,Default,,0000,0000,0000,,but the point is, they won't have enough Dialogue: 0,0:28:40.79,0:28:42.76,Default,,0000,0000,0000,,to make the mortgage payment. Dialogue: 0,0:28:42.76,0:28:46.33,Default,,0000,0000,0000,,So what we've got now\Nis we've got families Dialogue: 0,0:28:46.33,0:28:49.21,Default,,0000,0000,0000,,who don't have to bring in 52 checks Dialogue: 0,0:28:49.21,0:28:52.45,Default,,0000,0000,0000,,in order to be able to make\Nthe monthly mortgage payment, Dialogue: 0,0:28:52.45,0:28:54.73,Default,,0000,0000,0000,,they got to bring in 104. Dialogue: 0,0:28:54.73,0:28:59.20,Default,,0000,0000,0000,,And if either of them loses their job, Dialogue: 0,0:28:59.20,0:29:00.43,Default,,0000,0000,0000,,they don't make the mortgage payment, Dialogue: 0,0:29:00.43,0:29:02.27,Default,,0000,0000,0000,,they're flat out of luck. Dialogue: 0,0:29:02.27,0:29:03.61,Default,,0000,0000,0000,,Let me say this another way, Dialogue: 0,0:29:03.61,0:29:05.30,Default,,0000,0000,0000,,'cause I want to give it one more twist. Dialogue: 0,0:29:05.30,0:29:09.31,Default,,0000,0000,0000,,The family on the left has\Nhas a hidden resource here. Dialogue: 0,0:29:09.31,0:29:12.74,Default,,0000,0000,0000,,They have another worker,\Nthe added worker effect. Dialogue: 0,0:29:12.74,0:29:16.42,Default,,0000,0000,0000,,If dad, and that's how it\Nusually was, loses his job Dialogue: 0,0:29:16.42,0:29:20.49,Default,,0000,0000,0000,,or has a heart attack and can't\Ngo to work for three months, Dialogue: 0,0:29:20.49,0:29:22.52,Default,,0000,0000,0000,,the family on the left has\Nsomebody they can send in Dialogue: 0,0:29:22.52,0:29:23.67,Default,,0000,0000,0000,,to the workforce. Dialogue: 0,0:29:23.67,0:29:26.50,Default,,0000,0000,0000,,Now she doesn't make as\Nmuch money as she does Dialogue: 0,0:29:26.50,0:29:27.71,Default,,0000,0000,0000,,by the year 2000, Dialogue: 0,0:29:27.71,0:29:28.89,Default,,0000,0000,0000,,she doesn't have as much education, Dialogue: 0,0:29:28.89,0:29:31.06,Default,,0000,0000,0000,,she doesn't have as much\Non-the-job training, Dialogue: 0,0:29:31.06,0:29:32.44,Default,,0000,0000,0000,,but, and here's the key, Dialogue: 0,0:29:32.44,0:29:34.45,Default,,0000,0000,0000,,every dollar she earns is a new dollar. Dialogue: 0,0:29:34.45,0:29:37.35,Default,,0000,0000,0000,,It's an unbudgeted\Ndollar that was not part Dialogue: 0,0:29:37.35,0:29:38.88,Default,,0000,0000,0000,,of what they originally had. Dialogue: 0,0:29:38.88,0:29:40.68,Default,,0000,0000,0000,,So for example, the family on the left Dialogue: 0,0:29:40.68,0:29:42.91,Default,,0000,0000,0000,,that collects unemployment insurance, Dialogue: 0,0:29:42.91,0:29:47.06,Default,,0000,0000,0000,,combined with the additional\Nincome that mom can bring in Dialogue: 0,0:29:47.06,0:29:49.34,Default,,0000,0000,0000,,for a temporary period of employment, Dialogue: 0,0:29:49.34,0:29:51.49,Default,,0000,0000,0000,,they got a chance, they'll go down some, Dialogue: 0,0:29:51.49,0:29:52.87,Default,,0000,0000,0000,,but they got a chance to pull through Dialogue: 0,0:29:52.87,0:29:55.36,Default,,0000,0000,0000,,and come back up on the other side. Dialogue: 0,0:29:55.36,0:29:58.24,Default,,0000,0000,0000,,The family on the right,\Nif something goes wrong, Dialogue: 0,0:29:58.24,0:29:59.09,Default,,0000,0000,0000,,there's no place to go, Dialogue: 0,0:29:59.09,0:30:02.02,Default,,0000,0000,0000,,they've already got their\Nother person not only at work Dialogue: 0,0:30:02.02,0:30:03.33,Default,,0000,0000,0000,,but already fully budgeted, Dialogue: 0,0:30:03.33,0:30:05.94,Default,,0000,0000,0000,,they've already given up that income fully Dialogue: 0,0:30:07.23,0:30:09.10,Default,,0000,0000,0000,,in order to survive. Dialogue: 0,0:30:09.10,0:30:11.71,Default,,0000,0000,0000,,But the risk of losing your job, Dialogue: 0,0:30:11.71,0:30:15.40,Default,,0000,0000,0000,,the risk of losing\Nincome didn't stay steady Dialogue: 0,0:30:15.40,0:30:18.50,Default,,0000,0000,0000,,between the early 1970s and today. Dialogue: 0,0:30:18.50,0:30:21.69,Default,,0000,0000,0000,,I draw here on Jacob Hacker's work, Dialogue: 0,0:30:21.69,0:30:25.68,Default,,0000,0000,0000,,some of you may be familiar\Nwith it, "The Great Risk Shift". Dialogue: 0,0:30:25.68,0:30:29.08,Default,,0000,0000,0000,,What Jacob has done in this has looked at Dialogue: 0,0:30:29.08,0:30:34.08,Default,,0000,0000,0000,,a family's chance of a 20%\Nor greater drop in income. Dialogue: 0,0:30:34.40,0:30:37.18,Default,,0000,0000,0000,,And he starts back in 1970, Dialogue: 0,0:30:37.18,0:30:40.56,Default,,0000,0000,0000,,Jacob is a good friend and\Nwill stick with the same years Dialogue: 0,0:30:40.56,0:30:44.41,Default,,0000,0000,0000,,I want to go with, and he goes up to 2003, Dialogue: 0,0:30:44.41,0:30:48.08,Default,,0000,0000,0000,,and you notice how income volatility Dialogue: 0,0:30:48.08,0:30:50.14,Default,,0000,0000,0000,,has gone up in this period of time. Dialogue: 0,0:30:50.14,0:30:52.19,Default,,0000,0000,0000,,So now we've got that family, Dialogue: 0,0:30:52.18,0:30:56.89,Default,,0000,0000,0000,,not only struggling because\Nthey got to have 104 paychecks, Dialogue: 0,0:30:56.89,0:30:58.83,Default,,0000,0000,0000,,struggling because the\Nodds that one of them Dialogue: 0,0:30:58.83,0:31:01.11,Default,,0000,0000,0000,,will be laid off has\Ngone up from where it was Dialogue: 0,0:31:01.11,0:31:02.04,Default,,0000,0000,0000,,a generation ago. Dialogue: 0,0:31:02.04,0:31:04.12,Default,,0000,0000,0000,,Okay, so that's where they\Nare on the income side, Dialogue: 0,0:31:04.12,0:31:05.34,Default,,0000,0000,0000,,in terms of risk. Dialogue: 0,0:31:05.34,0:31:08.96,Default,,0000,0000,0000,,This is risk this little unit has to bear. Dialogue: 0,0:31:08.96,0:31:10.63,Default,,0000,0000,0000,,Let's think about health. Dialogue: 0,0:31:10.63,0:31:13.43,Default,,0000,0000,0000,,Okay, same argument I\Ncould make as before. Dialogue: 0,0:31:13.43,0:31:14.75,Default,,0000,0000,0000,,They now have double the chance Dialogue: 0,0:31:14.75,0:31:17.39,Default,,0000,0000,0000,,that someone will be in a car accident, Dialogue: 0,0:31:17.39,0:31:18.52,Default,,0000,0000,0000,,one of their two workers, Dialogue: 0,0:31:18.52,0:31:21.02,Default,,0000,0000,0000,,and won't be able to go\Nto work and therefore Dialogue: 0,0:31:21.02,0:31:23.60,Default,,0000,0000,0000,,make enough money to\Npay a mortgage payment, Dialogue: 0,0:31:23.60,0:31:26.87,Default,,0000,0000,0000,,but this family now faces additional risks Dialogue: 0,0:31:26.87,0:31:29.46,Default,,0000,0000,0000,,on the health side as well. Dialogue: 0,0:31:29.46,0:31:30.99,Default,,0000,0000,0000,,What additional risks do they face? Dialogue: 0,0:31:30.99,0:31:32.67,Default,,0000,0000,0000,,Well, I'll pop forward to one, Dialogue: 0,0:31:32.67,0:31:35.63,Default,,0000,0000,0000,,and that is the increased odds Dialogue: 0,0:31:35.63,0:31:37.69,Default,,0000,0000,0000,,that they won't have health insurance. Dialogue: 0,0:31:37.69,0:31:41.30,Default,,0000,0000,0000,,Those odds have gone up\Nover the past 20 years, Dialogue: 0,0:31:41.30,0:31:42.97,Default,,0000,0000,0000,,but the ones I like to think about, Dialogue: 0,0:31:42.97,0:31:43.90,Default,,0000,0000,0000,,I keep coming back to this one Dialogue: 0,0:31:43.90,0:31:45.73,Default,,0000,0000,0000,,because it's my favorite slide, Dialogue: 0,0:31:45.73,0:31:48.00,Default,,0000,0000,0000,,the ones I like to think about Dialogue: 0,0:31:48.00,0:31:51.35,Default,,0000,0000,0000,,are that the world of healthcare\Nhas changed in 30 years. Dialogue: 0,0:31:51.35,0:31:52.72,Default,,0000,0000,0000,,So let me just give you an example. Dialogue: 0,0:31:52.72,0:31:56.45,Default,,0000,0000,0000,,In 1971, a woman who was healthy Dialogue: 0,0:31:56.45,0:31:58.30,Default,,0000,0000,0000,,and gave birth to a healthy baby, Dialogue: 0,0:31:58.30,0:32:00.19,Default,,0000,0000,0000,,ordinary delivery, non-cesarean, Dialogue: 0,0:32:00.19,0:32:02.98,Default,,0000,0000,0000,,stayed in the hospital for five days Dialogue: 0,0:32:02.99,0:32:05.28,Default,,0000,0000,0000,,after the day the baby was born, Dialogue: 0,0:32:05.28,0:32:06.41,Default,,0000,0000,0000,,that's what insurance paid for, Dialogue: 0,0:32:06.41,0:32:07.79,Default,,0000,0000,0000,,that's what the hospital expected. Dialogue: 0,0:32:07.79,0:32:09.20,Default,,0000,0000,0000,,You could go home earlier if you wanted to Dialogue: 0,0:32:09.20,0:32:11.40,Default,,0000,0000,0000,,but you're entitled to\Nfive days in the hospital. Dialogue: 0,0:32:11.40,0:32:13.37,Default,,0000,0000,0000,,If you had a cesarean, 10, Dialogue: 0,0:32:13.37,0:32:15.06,Default,,0000,0000,0000,,that you got to stay in 1971. Dialogue: 0,0:32:15.06,0:32:18.58,Default,,0000,0000,0000,,And you know what the numbers are in 2006? Dialogue: 0,0:32:18.58,0:32:20.37,Default,,0000,0000,0000,,24 hours, okay? Dialogue: 0,0:32:20.37,0:32:23.26,Default,,0000,0000,0000,,24 hours, and keep in\Nmind, in some places, Dialogue: 0,0:32:23.26,0:32:25.07,Default,,0000,0000,0000,,that's by legislation, Dialogue: 0,0:32:25.07,0:32:27.17,Default,,0000,0000,0000,,because they were trying\Nto push them out faster. Dialogue: 0,0:32:27.17,0:32:31.17,Default,,0000,0000,0000,,How have we made gains\Nin hospital efficiency Dialogue: 0,0:32:31.17,0:32:32.53,Default,,0000,0000,0000,,over the past 30 years? Dialogue: 0,0:32:32.53,0:32:34.03,Default,,0000,0000,0000,,You send home the sick people. Dialogue: 0,0:32:34.98,0:32:37.34,Default,,0000,0000,0000,,It really works, there is a policy, Dialogue: 0,0:32:37.34,0:32:40.06,Default,,0000,0000,0000,,we never want to talk about\Nthis in the United States, Dialogue: 0,0:32:40.06,0:32:42.40,Default,,0000,0000,0000,,it's known in the trade,\Nin the hospital trade, Dialogue: 0,0:32:42.40,0:32:44.62,Default,,0000,0000,0000,,is send them home quicker and sicker. Dialogue: 0,0:32:46.97,0:32:51.40,Default,,0000,0000,0000,,They save money by letting the\Nfamily provide nursing care Dialogue: 0,0:32:51.40,0:32:52.48,Default,,0000,0000,0000,,instead of having the hospital, Dialogue: 0,0:32:52.48,0:32:55.81,Default,,0000,0000,0000,,so you still have your\Nsurgery done at the hospital, Dialogue: 0,0:32:55.81,0:32:59.55,Default,,0000,0000,0000,,but it's the family that will\Ntake care of you post-surgery. Dialogue: 0,0:32:59.55,0:33:04.55,Default,,0000,0000,0000,,And so today we witness the\Nspectacle of my mother-in-law, Dialogue: 0,0:33:06.39,0:33:10.45,Default,,0000,0000,0000,,a woman in her 80s where\Nsomeone's trying to explain to her Dialogue: 0,0:33:10.45,0:33:13.49,Default,,0000,0000,0000,,how it is that she can wash a tube Dialogue: 0,0:33:15.10,0:33:18.27,Default,,0000,0000,0000,,and rinse things out and give injections, Dialogue: 0,0:33:18.27,0:33:19.86,Default,,0000,0000,0000,,my sister-in-law was just asked to do this Dialogue: 0,0:33:19.86,0:33:21.98,Default,,0000,0000,0000,,when my brother had some surgery, Dialogue: 0,0:33:21.98,0:33:25.16,Default,,0000,0000,0000,,we're gonna train the family to take care, Dialogue: 0,0:33:25.16,0:33:27.13,Default,,0000,0000,0000,,only they're both at work. Dialogue: 0,0:33:27.13,0:33:30.83,Default,,0000,0000,0000,,And the consequence of this\Nmeans that for these families Dialogue: 0,0:33:30.83,0:33:33.28,Default,,0000,0000,0000,,with everybody in the\Nworkforce, somebody gets sick, Dialogue: 0,0:33:33.28,0:33:34.29,Default,,0000,0000,0000,,you just take off work, Dialogue: 0,0:33:34.29,0:33:35.97,Default,,0000,0000,0000,,'cause somebody's gonna\Nhave to take care of them, Dialogue: 0,0:33:35.97,0:33:37.49,Default,,0000,0000,0000,,somebody's gonna have to\N'cause you're not gonna get Dialogue: 0,0:33:37.49,0:33:39.92,Default,,0000,0000,0000,,this extra period of nursing care. Dialogue: 0,0:33:39.92,0:33:42.35,Default,,0000,0000,0000,,It's just another way\Nto give one more push. Dialogue: 0,0:33:42.35,0:33:44.57,Default,,0000,0000,0000,,How about if a kid gets sick, a child? Dialogue: 0,0:33:44.57,0:33:46.46,Default,,0000,0000,0000,,I mean something really serious, Dialogue: 0,0:33:46.46,0:33:48.72,Default,,0000,0000,0000,,grandma falls and breaks a hip. Dialogue: 0,0:33:48.72,0:33:51.12,Default,,0000,0000,0000,,A generation ago, there\Nwas someone at home Dialogue: 0,0:33:51.12,0:33:52.64,Default,,0000,0000,0000,,to provide that nursing care, Dialogue: 0,0:33:52.64,0:33:54.58,Default,,0000,0000,0000,,for that extra eight\Nweeks that grandma needed Dialogue: 0,0:33:54.58,0:33:56.15,Default,,0000,0000,0000,,some extra help. Dialogue: 0,0:33:56.15,0:33:59.82,Default,,0000,0000,0000,,Today, the illness of a family member Dialogue: 0,0:33:59.82,0:34:02.79,Default,,0000,0000,0000,,has a direct income impact for people Dialogue: 0,0:34:02.79,0:34:04.82,Default,,0000,0000,0000,,who aren't lucky enough\Nto have jobs that pay you Dialogue: 0,0:34:04.82,0:34:06.45,Default,,0000,0000,0000,,even when you're not at work. Dialogue: 0,0:34:06.45,0:34:10.30,Default,,0000,0000,0000,,So the consequence is we\Nend up with these families, Dialogue: 0,0:34:10.30,0:34:11.65,Default,,0000,0000,0000,,the child gets sick, Dialogue: 0,0:34:11.65,0:34:14.71,Default,,0000,0000,0000,,I read these stories over and\Nover in my bankruptcy files, Dialogue: 0,0:34:14.71,0:34:16.67,Default,,0000,0000,0000,,the child gets sick, Dialogue: 0,0:34:16.67,0:34:18.47,Default,,0000,0000,0000,,mom stays at the hospital with the child Dialogue: 0,0:34:18.47,0:34:19.71,Default,,0000,0000,0000,,until she loses her job. Dialogue: 0,0:34:20.61,0:34:24.36,Default,,0000,0000,0000,,There are income effects\Nnow from any illness Dialogue: 0,0:34:24.36,0:34:26.42,Default,,0000,0000,0000,,anywhere in the family. Dialogue: 0,0:34:26.42,0:34:31.10,Default,,0000,0000,0000,,So we end up with a family\Nonce again bearing more risk Dialogue: 0,0:34:31.10,0:34:33.49,Default,,0000,0000,0000,,that someone will get sick, Dialogue: 0,0:34:33.49,0:34:36.05,Default,,0000,0000,0000,,and we can just keep multiplying this. Dialogue: 0,0:34:36.05,0:34:38.52,Default,,0000,0000,0000,,What are the odds of spending $10,000 Dialogue: 0,0:34:38.52,0:34:39.69,Default,,0000,0000,0000,,in an emergency room today Dialogue: 0,0:34:39.69,0:34:41.86,Default,,0000,0000,0000,,compared to spending\N$10,000 in an emergency room Dialogue: 0,0:34:41.86,0:34:43.45,Default,,0000,0000,0000,,a generation ago? Dialogue: 0,0:34:43.45,0:34:45.61,Default,,0000,0000,0000,,One more that I just have to mention Dialogue: 0,0:34:45.61,0:34:48.50,Default,,0000,0000,0000,,that we can't quantify\Nyet but I'm watching it Dialogue: 0,0:34:48.50,0:34:50.65,Default,,0000,0000,0000,,is that insurance itself has changed Dialogue: 0,0:34:50.65,0:34:53.37,Default,,0000,0000,0000,,in terms of how much of the medical cost Dialogue: 0,0:34:53.37,0:34:55.66,Default,,0000,0000,0000,,is actually covered. Dialogue: 0,0:34:55.66,0:34:57.93,Default,,0000,0000,0000,,We now have floating around in America, Dialogue: 0,0:34:57.93,0:34:59.27,Default,,0000,0000,0000,,I just, I don't know what else to call it Dialogue: 0,0:34:59.27,0:35:01.01,Default,,0000,0000,0000,,except faux insurance, Dialogue: 0,0:35:01.01,0:35:02.47,Default,,0000,0000,0000,,people who think they're insured Dialogue: 0,0:35:02.47,0:35:05.89,Default,,0000,0000,0000,,until they actually get sick\Nand need their insurance Dialogue: 0,0:35:05.89,0:35:08.14,Default,,0000,0000,0000,,and it turns out that, well, Dialogue: 0,0:35:08.14,0:35:09.03,Default,,0000,0000,0000,,yeah, you have insurance, Dialogue: 0,0:35:09.03,0:35:12.40,Default,,0000,0000,0000,,I love the Utah policy that our Dialogue: 0,0:35:12.40,0:35:16.75,Default,,0000,0000,0000,,Secretary of Health Education and Welfare Dialogue: 0,0:35:16.75,0:35:19.80,Default,,0000,0000,0000,,comes out and says, "I got\Neverybody in Utah insured, Dialogue: 0,0:35:19.80,0:35:22.92,Default,,0000,0000,0000,,"except it doesn't cover hospitalization. Dialogue: 0,0:35:22.92,0:35:24.26,Default,,0000,0000,0000,,(audience laughing) Dialogue: 0,0:35:24.26,0:35:26.01,Default,,0000,0000,0000,,"And it doesn't cover specialists." Dialogue: 0,0:35:26.85,0:35:27.97,Default,,0000,0000,0000,,And you call that, Dialogue: 0,0:35:27.97,0:35:29.78,Default,,0000,0000,0000,,and of course, it doesn't\Ncover prescription drugs, Dialogue: 0,0:35:29.78,0:35:32.24,Default,,0000,0000,0000,,and it doesn't cover\Nsupplies and it doesn't, Dialogue: 0,0:35:32.24,0:35:35.20,Default,,0000,0000,0000,,there's more than it doesn't\Ncover than it does cover. Dialogue: 0,0:35:35.20,0:35:39.22,Default,,0000,0000,0000,,So all of this is being\Npushed back on the family. Dialogue: 0,0:35:40.35,0:35:42.01,Default,,0000,0000,0000,,So let me take one more twist on it, Dialogue: 0,0:35:42.01,0:35:45.35,Default,,0000,0000,0000,,so we've got changes in jobs,\Nchanges in health insurance, Dialogue: 0,0:35:45.35,0:35:46.30,Default,,0000,0000,0000,,changes to healthcare, Dialogue: 0,0:35:46.30,0:35:48.00,Default,,0000,0000,0000,,what it cost to do health and care, Dialogue: 0,0:35:48.00,0:35:51.26,Default,,0000,0000,0000,,and I just want to put\None more tweak into it Dialogue: 0,0:35:51.26,0:35:54.48,Default,,0000,0000,0000,,and that is to talk\Nabout the special risks Dialogue: 0,0:35:54.48,0:35:56.57,Default,,0000,0000,0000,,facing families with children. Dialogue: 0,0:35:56.57,0:35:58.58,Default,,0000,0000,0000,,I've made this my iconic family, Dialogue: 0,0:35:59.58,0:36:02.59,Default,,0000,0000,0000,,but I want to make two points\Nabout the iconic family here, Dialogue: 0,0:36:02.59,0:36:06.25,Default,,0000,0000,0000,,the mom, dad and two kids. Dialogue: 0,0:36:06.25,0:36:08.93,Default,,0000,0000,0000,,This is how it works for\Nmom, dad and two kids. Dialogue: 0,0:36:08.93,0:36:12.76,Default,,0000,0000,0000,,Think how it works for\Neither a mom and two kids Dialogue: 0,0:36:12.76,0:36:14.52,Default,,0000,0000,0000,,or a dad and two kids. Dialogue: 0,0:36:15.98,0:36:17.48,Default,,0000,0000,0000,,They are now competing, Dialogue: 0,0:36:17.48,0:36:20.56,Default,,0000,0000,0000,,I actually met a woman, it\Nwas a wonderful exchange, Dialogue: 0,0:36:20.56,0:36:23.68,Default,,0000,0000,0000,,I was sitting on an airplane\Nright after the book came out, Dialogue: 0,0:36:23.68,0:36:25.47,Default,,0000,0000,0000,,"The Two-Income Trap"\Nand I had it on my lap Dialogue: 0,0:36:25.47,0:36:27.50,Default,,0000,0000,0000,,and this woman next to me said,\N"Have you read that book?" Dialogue: 0,0:36:27.50,0:36:30.50,Default,,0000,0000,0000,,(audience laughing)\NAnd I said, "Mm-hmm." Dialogue: 0,0:36:30.50,0:36:33.82,Default,,0000,0000,0000,,And she said, "I'm a divorced mother", Dialogue: 0,0:36:33.82,0:36:34.88,Default,,0000,0000,0000,,and she said, "I'm an accountant." Dialogue: 0,0:36:34.88,0:36:36.34,Default,,0000,0000,0000,,She said, "I make a good income, Dialogue: 0,0:36:36.34,0:36:39.24,Default,,0000,0000,0000,,"I make above a median income\Nin the United States today." Dialogue: 0,0:36:39.24,0:36:42.13,Default,,0000,0000,0000,,She said, "I could make it,\NI could support my two kids Dialogue: 0,0:36:42.13,0:36:44.27,Default,,0000,0000,0000,,"on what I get for child support. Dialogue: 0,0:36:45.52,0:36:47.94,Default,,0000,0000,0000,,"I could do it if I were only competing Dialogue: 0,0:36:47.94,0:36:50.48,Default,,0000,0000,0000,,"against other one-income households, Dialogue: 0,0:36:50.48,0:36:53.65,Default,,0000,0000,0000,,"for the basics, for\Nhousing, for healthcare, Dialogue: 0,0:36:53.65,0:36:55.30,Default,,0000,0000,0000,,"for all the things we're buying." Dialogue: 0,0:36:55.30,0:36:57.57,Default,,0000,0000,0000,,But she said, "I'm competing\Nagainst two-income households." Dialogue: 0,0:36:57.57,0:36:58.68,Default,,0000,0000,0000,,And she said, "I just can't do it." Dialogue: 0,0:36:58.68,0:37:01.69,Default,,0000,0000,0000,,She said, "I can't hang\Non, I can't make it." Dialogue: 0,0:37:01.69,0:37:03.56,Default,,0000,0000,0000,,So that's the first\Npart I want you to see, Dialogue: 0,0:37:03.56,0:37:06.29,Default,,0000,0000,0000,,the one-income family\Ngets the lower income, Dialogue: 0,0:37:06.29,0:37:09.12,Default,,0000,0000,0000,,still faces high expenses,\Nstill wants the house Dialogue: 0,0:37:09.12,0:37:12.39,Default,,0000,0000,0000,,and so on and so forth, and\Nfaces all the same risks Dialogue: 0,0:37:12.39,0:37:16.13,Default,,0000,0000,0000,,with no one to back up and\Nprovide that second income, Dialogue: 0,0:37:16.13,0:37:18.93,Default,,0000,0000,0000,,but I want to step forward\Nto say something else Dialogue: 0,0:37:18.93,0:37:22.78,Default,,0000,0000,0000,,about families with children and that is Dialogue: 0,0:37:22.78,0:37:24.50,Default,,0000,0000,0000,,this goes back to Hacker's work, Dialogue: 0,0:37:24.50,0:37:28.82,Default,,0000,0000,0000,,percentage increase in\Nvolatility by family type Dialogue: 0,0:37:28.82,0:37:31.94,Default,,0000,0000,0000,,from 1970 to 2003. Dialogue: 0,0:37:31.94,0:37:34.65,Default,,0000,0000,0000,,And notice what Hacker points out here. Dialogue: 0,0:37:34.65,0:37:36.18,Default,,0000,0000,0000,,For those of you can't read the wording Dialogue: 0,0:37:36.18,0:37:37.90,Default,,0000,0000,0000,,all the way over to the far side, Dialogue: 0,0:37:37.90,0:37:40.17,Default,,0000,0000,0000,,green is single without children, Dialogue: 0,0:37:40.17,0:37:41.62,Default,,0000,0000,0000,,that's how much income volatility, Dialogue: 0,0:37:41.62,0:37:43.60,Default,,0000,0000,0000,,and look, that's substantial\Nincome volatility Dialogue: 0,0:37:43.60,0:37:47.41,Default,,0000,0000,0000,,that we've got there, in the high 30s. Dialogue: 0,0:37:47.41,0:37:51.67,Default,,0000,0000,0000,,Single with children, a little above 40%. Dialogue: 0,0:37:51.67,0:37:55.23,Default,,0000,0000,0000,,Married without children, you\Nget about a 70% volatility. Dialogue: 0,0:37:55.23,0:37:59.40,Default,,0000,0000,0000,,And married with children\Npushes up to about 95% Dialogue: 0,0:37:59.40,0:38:03.30,Default,,0000,0000,0000,,increase in volatility\Nover the past generation. Dialogue: 0,0:38:03.30,0:38:05.40,Default,,0000,0000,0000,,Now, are families struggling with this? Dialogue: 0,0:38:05.40,0:38:07.30,Default,,0000,0000,0000,,Well, let me show you some of my data. Dialogue: 0,0:38:08.58,0:38:10.26,Default,,0000,0000,0000,,Oh, not my data, government data, Dialogue: 0,0:38:10.26,0:38:12.15,Default,,0000,0000,0000,,I never know what the\Nnext slide is going to be, Dialogue: 0,0:38:12.15,0:38:14.25,Default,,0000,0000,0000,,keeps me on my toes. Dialogue: 0,0:38:14.25,0:38:15.98,Default,,0000,0000,0000,,The next one is to disaggregate Dialogue: 0,0:38:15.98,0:38:17.50,Default,,0000,0000,0000,,a little bit more about housing, Dialogue: 0,0:38:17.50,0:38:19.49,Default,,0000,0000,0000,,we talked just a little\Nbit about it before. Dialogue: 0,0:38:19.49,0:38:20.52,Default,,0000,0000,0000,,This is one of those charts, Dialogue: 0,0:38:20.52,0:38:22.29,Default,,0000,0000,0000,,it doesn't fit perfectly\Nwith what I'm talking about Dialogue: 0,0:38:22.29,0:38:24.03,Default,,0000,0000,0000,,because the years aren't quite right, Dialogue: 0,0:38:24.03,0:38:26.36,Default,,0000,0000,0000,,this is some government data I found. Dialogue: 0,0:38:26.36,0:38:28.60,Default,,0000,0000,0000,,Only goes back to 1983, Dialogue: 0,0:38:28.60,0:38:33.50,Default,,0000,0000,0000,,but notice what it shows, that\Nincrease in housing costs, Dialogue: 0,0:38:33.50,0:38:35.15,Default,,0000,0000,0000,,what families are paying for mortgages, Dialogue: 0,0:38:35.15,0:38:36.97,Default,,0000,0000,0000,,not my part in general, Dialogue: 0,0:38:36.97,0:38:38.64,Default,,0000,0000,0000,,they've done it the other way around, Dialogue: 0,0:38:38.64,0:38:40.53,Default,,0000,0000,0000,,what they're paying for the house itself, Dialogue: 0,0:38:40.53,0:38:42.36,Default,,0000,0000,0000,,what the cost of the house is. Dialogue: 0,0:38:42.36,0:38:47.18,Default,,0000,0000,0000,,We saw a 50% increase among\Nthe families with no children, Dialogue: 0,0:38:47.18,0:38:49.87,Default,,0000,0000,0000,,inflation adjusted and what housing costs, Dialogue: 0,0:38:49.87,0:38:52.53,Default,,0000,0000,0000,,but you notice among\Nfamilies with children, Dialogue: 0,0:38:52.53,0:38:54.23,Default,,0000,0000,0000,,it's 100% increase, Dialogue: 0,0:38:54.23,0:38:57.93,Default,,0000,0000,0000,,a full 100% increase in\Ninflation adjusted dollars Dialogue: 0,0:38:57.93,0:39:00.96,Default,,0000,0000,0000,,for what a home costs for\Nfamilies with children. Dialogue: 0,0:39:00.96,0:39:02.68,Default,,0000,0000,0000,,Now we're gonna save plenty\Nof time here for Q and A Dialogue: 0,0:39:02.68,0:39:04.21,Default,,0000,0000,0000,,because I think that's more fun Dialogue: 0,0:39:04.21,0:39:06.78,Default,,0000,0000,0000,,than having to listen to a lecture, Dialogue: 0,0:39:06.78,0:39:08.93,Default,,0000,0000,0000,,but I'll tell you at least\Nhow I read this chart. Dialogue: 0,0:39:08.93,0:39:10.43,Default,,0000,0000,0000,,Families are going to schools. Dialogue: 0,0:39:11.41,0:39:13.86,Default,,0000,0000,0000,,People without children\Ndon't have to buy schools, Dialogue: 0,0:39:13.86,0:39:16.33,Default,,0000,0000,0000,,and so they buy from\Na wider pool of homes, Dialogue: 0,0:39:16.33,0:39:19.13,Default,,0000,0000,0000,,they can look at a lot of homes\Nin a lot of neighborhoods. Dialogue: 0,0:39:19.13,0:39:22.10,Default,,0000,0000,0000,,Families with children are\Nbuying what they believe Dialogue: 0,0:39:22.10,0:39:24.01,Default,,0000,0000,0000,,is a shrinking resource, that is, Dialogue: 0,0:39:24.01,0:39:26.12,Default,,0000,0000,0000,,places where you can have\Ndecent public schools Dialogue: 0,0:39:26.12,0:39:27.85,Default,,0000,0000,0000,,and send your children to public schools. Dialogue: 0,0:39:27.85,0:39:31.34,Default,,0000,0000,0000,,And in fact, we can triangulate\Nthese data in other ways, Dialogue: 0,0:39:31.34,0:39:32.98,Default,,0000,0000,0000,,so that you'll love this. Dialogue: 0,0:39:32.98,0:39:35.76,Default,,0000,0000,0000,,I wonder, I was gonna it's\Ngonna say it would happen Dialogue: 0,0:39:35.76,0:39:36.97,Default,,0000,0000,0000,,only outside Boston, Dialogue: 0,0:39:36.97,0:39:38.86,Default,,0000,0000,0000,,but I bet it also\Nhappens outside Berkeley, Dialogue: 0,0:39:38.86,0:39:41.36,Default,,0000,0000,0000,,we just have the data outside Boston, Dialogue: 0,0:39:41.36,0:39:46.36,Default,,0000,0000,0000,,a five point increase in\Nthird grade reading scores Dialogue: 0,0:39:48.44,0:39:51.71,Default,,0000,0000,0000,,between two side-by-side municipalities Dialogue: 0,0:39:51.71,0:39:55.36,Default,,0000,0000,0000,,in the Boston suburbs that are\Notherwise matched for access Dialogue: 0,0:39:55.36,0:39:57.23,Default,,0000,0000,0000,,to public transportation\Nand size of houses, Dialogue: 0,0:39:57.23,0:39:58.36,Default,,0000,0000,0000,,they've measured for everything, Dialogue: 0,0:39:58.36,0:40:02.41,Default,,0000,0000,0000,,sidewalks, crime rates,\Nracial composition, Dialogue: 0,0:40:02.41,0:40:03.44,Default,,0000,0000,0000,,everything you want to look at, Dialogue: 0,0:40:03.44,0:40:05.97,Default,,0000,0000,0000,,five points in third grade reading scores Dialogue: 0,0:40:05.97,0:40:09.35,Default,,0000,0000,0000,,translates into tens of thousands\Nof dollars of difference Dialogue: 0,0:40:09.35,0:40:10.76,Default,,0000,0000,0000,,in housing prices. Dialogue: 0,0:40:10.76,0:40:13.05,Default,,0000,0000,0000,,Parents are buying schools. Dialogue: 0,0:40:14.05,0:40:15.55,Default,,0000,0000,0000,,There was a great one out of San Diego, Dialogue: 0,0:40:15.55,0:40:17.05,Default,,0000,0000,0000,,study out of San Diego, Dialogue: 0,0:40:17.05,0:40:18.83,Default,,0000,0000,0000,,where they were having\Nparents do preferences Dialogue: 0,0:40:18.83,0:40:19.66,Default,,0000,0000,0000,,on where they buy, Dialogue: 0,0:40:19.66,0:40:23.39,Default,,0000,0000,0000,,parents would rather\Nlive near a toxic dump Dialogue: 0,0:40:23.39,0:40:25.70,Default,,0000,0000,0000,,than live in a place where they thought Dialogue: 0,0:40:25.70,0:40:27.24,Default,,0000,0000,0000,,the schools were underperforming, Dialogue: 0,0:40:27.24,0:40:28.64,Default,,0000,0000,0000,,where they thought their\Nchildren would not have Dialogue: 0,0:40:28.64,0:40:31.25,Default,,0000,0000,0000,,as good a chance in school,\Nand I think that's what we're, Dialogue: 0,0:40:31.25,0:40:33.24,Default,,0000,0000,0000,,that's a large part of\Nwhat we're seeing here. Dialogue: 0,0:40:33.24,0:40:35.65,Default,,0000,0000,0000,,So parents say, "I've gotta\Nhave those good schools, Dialogue: 0,0:40:35.65,0:40:40.52,Default,,0000,0000,0000,,"I gotta get out there, I gotta\Npush, I gotta get forward." Dialogue: 0,0:40:41.95,0:40:44.92,Default,,0000,0000,0000,,They're spending more\Nas we've talked about, Dialogue: 0,0:40:44.92,0:40:48.59,Default,,0000,0000,0000,,so what happens to them\Nwhen they push this hard? Dialogue: 0,0:40:48.59,0:40:51.56,Default,,0000,0000,0000,,Well, there comes in\Njust a little touch of Dialogue: 0,0:40:51.56,0:40:54.99,Default,,0000,0000,0000,,what I want to talk about\Nwith the safety net. Dialogue: 0,0:40:54.99,0:40:57.65,Default,,0000,0000,0000,,What's happened to the American safety net Dialogue: 0,0:40:57.65,0:40:59.34,Default,,0000,0000,0000,,for these families? Dialogue: 0,0:40:59.34,0:41:01.93,Default,,0000,0000,0000,,Well, the first part is\Nthe personal safety net, Dialogue: 0,0:41:01.93,0:41:03.07,Default,,0000,0000,0000,,the part you build yourself. Dialogue: 0,0:41:03.07,0:41:05.34,Default,,0000,0000,0000,,We've already looked at the data on that. Dialogue: 0,0:41:05.34,0:41:07.67,Default,,0000,0000,0000,,Less savings, more debt, Dialogue: 0,0:41:07.67,0:41:09.83,Default,,0000,0000,0000,,more people without health insurance Dialogue: 0,0:41:09.83,0:41:11.49,Default,,0000,0000,0000,,than we've ever had before. Dialogue: 0,0:41:11.49,0:41:13.46,Default,,0000,0000,0000,,And by the way, I should\Nmake a point on this, Dialogue: 0,0:41:13.46,0:41:15.31,Default,,0000,0000,0000,,more people without health insurance, Dialogue: 0,0:41:16.48,0:41:18.84,Default,,0000,0000,0000,,it's really been important to see here Dialogue: 0,0:41:18.84,0:41:22.19,Default,,0000,0000,0000,,how much lack of health\Ninsurance in the 1970s, Dialogue: 0,0:41:22.19,0:41:25.18,Default,,0000,0000,0000,,the typical modal uninsured person Dialogue: 0,0:41:25.18,0:41:30.18,Default,,0000,0000,0000,,was an unmarried male, no\Nchildren, 23 years old. Dialogue: 0,0:41:30.49,0:41:35.49,Default,,0000,0000,0000,,Today, modal is a 35\Nyear old married person Dialogue: 0,0:41:35.70,0:41:39.60,Default,,0000,0000,0000,,with two children, has\Nno health insurance, Dialogue: 0,0:41:39.60,0:41:42.03,Default,,0000,0000,0000,,this is the largest group\Nwhen you start looking Dialogue: 0,0:41:42.03,0:41:44.81,Default,,0000,0000,0000,,at the groups who have\Nno health insurance. Dialogue: 0,0:41:44.81,0:41:47.81,Default,,0000,0000,0000,,In 2001, Dialogue: 0,0:41:47.81,0:41:52.81,Default,,0000,0000,0000,,1.4 million people lost\Ntheir health insurance. Dialogue: 0,0:41:53.76,0:41:58.76,Default,,0000,0000,0000,,Of those, 800,000 earned\Nmore than $75,000 a year, Dialogue: 0,0:41:59.79,0:42:03.98,Default,,0000,0000,0000,,that is moved from the\Ninsured to the uninsured ranks Dialogue: 0,0:42:03.98,0:42:05.15,Default,,0000,0000,0000,,that we have data for. Dialogue: 0,0:42:05.15,0:42:06.79,Default,,0000,0000,0000,,So what we're starting to see is Dialogue: 0,0:42:06.79,0:42:08.54,Default,,0000,0000,0000,,people who have no health insurance, Dialogue: 0,0:42:08.54,0:42:10.58,Default,,0000,0000,0000,,the people who've lost that\Npart of their safety net Dialogue: 0,0:42:10.58,0:42:13.82,Default,,0000,0000,0000,,are increasingly among\Nin the middle class. Dialogue: 0,0:42:13.82,0:42:16.99,Default,,0000,0000,0000,,We could pick some\Nothers that shift between Dialogue: 0,0:42:16.99,0:42:21.25,Default,,0000,0000,0000,,the defined benefit plan and\Nthe defined contribution plan, Dialogue: 0,0:42:21.25,0:42:24.98,Default,,0000,0000,0000,,for those of you who who keep\Nup with the pension lingo. Dialogue: 0,0:42:24.98,0:42:27.45,Default,,0000,0000,0000,,What it basically means is the shift Dialogue: 0,0:42:27.45,0:42:32.14,Default,,0000,0000,0000,,so that you put in money,\Nand you take the risk Dialogue: 0,0:42:32.14,0:42:33.78,Default,,0000,0000,0000,,of how long you'll live, that is, Dialogue: 0,0:42:33.78,0:42:35.32,Default,,0000,0000,0000,,whether or not you'll outlive your money Dialogue: 0,0:42:35.32,0:42:38.63,Default,,0000,0000,0000,,versus the defined benefit plan which is Dialogue: 0,0:42:38.63,0:42:41.02,Default,,0000,0000,0000,,you get a certain amount until you die. Dialogue: 0,0:42:41.02,0:42:44.86,Default,,0000,0000,0000,,We've moved very much to\Nthe former from the latter, Dialogue: 0,0:42:44.86,0:42:47.43,Default,,0000,0000,0000,,so you have a real chance to outlive. Dialogue: 0,0:42:47.43,0:42:49.77,Default,,0000,0000,0000,,Those are on the personal side. Dialogue: 0,0:42:49.77,0:42:51.83,Default,,0000,0000,0000,,If you take a look on the public side, Dialogue: 0,0:42:51.83,0:42:55.63,Default,,0000,0000,0000,,we've had the same kind of\Nerosion of the safety net, Dialogue: 0,0:42:55.63,0:42:59.30,Default,,0000,0000,0000,,and that is unemployment benefits Dialogue: 0,0:42:59.30,0:43:01.87,Default,,0000,0000,0000,,no longer is a proportion of income, Dialogue: 0,0:43:01.87,0:43:05.24,Default,,0000,0000,0000,,are nearly as high as\Nthey were 30 years ago, Dialogue: 0,0:43:05.24,0:43:07.69,Default,,0000,0000,0000,,so they're not providing\Nthe same kind of safety. Dialogue: 0,0:43:09.27,0:43:12.88,Default,,0000,0000,0000,,I would make a pitch that what\Nwe pay for public education Dialogue: 0,0:43:12.88,0:43:15.36,Default,,0000,0000,0000,,to launch our children\Ninto the middle class Dialogue: 0,0:43:16.24,0:43:18.08,Default,,0000,0000,0000,,has eroded sharply. Dialogue: 0,0:43:18.08,0:43:19.87,Default,,0000,0000,0000,,And I'll make the pitch this way, Dialogue: 0,0:43:19.87,0:43:21.28,Default,,0000,0000,0000,,I'm giving you lots of different pieces Dialogue: 0,0:43:21.28,0:43:24.26,Default,,0000,0000,0000,,that we can talk about here,\Nbut here's the way it goes. Dialogue: 0,0:43:25.24,0:43:29.96,Default,,0000,0000,0000,,In 1970, it took 12\Nyears to educate a child Dialogue: 0,0:43:29.96,0:43:31.82,Default,,0000,0000,0000,,to go forward into the middle class. Dialogue: 0,0:43:31.82,0:43:32.65,Default,,0000,0000,0000,,How do I know that? Dialogue: 0,0:43:32.65,0:43:35.87,Default,,0000,0000,0000,,I know that from looking\Nat Gallup polling data Dialogue: 0,0:43:35.87,0:43:38.19,Default,,0000,0000,0000,,about what parents\Nthought it took to make it Dialogue: 0,0:43:38.19,0:43:39.27,Default,,0000,0000,0000,,in the middle class. Dialogue: 0,0:43:39.27,0:43:42.17,Default,,0000,0000,0000,,And the answer was a high school diploma, Dialogue: 0,0:43:42.17,0:43:43.27,Default,,0000,0000,0000,,a good work ethic, Dialogue: 0,0:43:43.27,0:43:45.36,Default,,0000,0000,0000,,there were parents who\Nbelieved in college, Dialogue: 0,0:43:45.36,0:43:47.38,Default,,0000,0000,0000,,but they believed that you could make it Dialogue: 0,0:43:47.38,0:43:49.51,Default,,0000,0000,0000,,in the middle class with\Na high school diploma Dialogue: 0,0:43:49.51,0:43:51.89,Default,,0000,0000,0000,,and a willingness to work hard. Dialogue: 0,0:43:51.89,0:43:54.24,Default,,0000,0000,0000,,Roll that forward to the year 2002, Dialogue: 0,0:43:56.23,0:43:58.17,Default,,0000,0000,0000,,here's a great number for you, Dialogue: 0,0:43:58.17,0:44:02.16,Default,,0000,0000,0000,,twice as many people in America by 2002 Dialogue: 0,0:44:02.16,0:44:06.09,Default,,0000,0000,0000,,believe that the moon\Nshot landing was faked, Dialogue: 0,0:44:07.41,0:44:10.72,Default,,0000,0000,0000,,and they filmed in Burbank, California, Dialogue: 0,0:44:12.24,0:44:15.18,Default,,0000,0000,0000,,than believe you can make\Nit into the middle class Dialogue: 0,0:44:15.18,0:44:17.52,Default,,0000,0000,0000,,in America without a college diploma. Dialogue: 0,0:44:19.42,0:44:24.42,Default,,0000,0000,0000,,Americans who differ on\Neverything have adopted wholesale Dialogue: 0,0:44:24.43,0:44:29.17,Default,,0000,0000,0000,,in a single generation that\Nthere is a single ticket Dialogue: 0,0:44:29.17,0:44:32.94,Default,,0000,0000,0000,,to the middle class, and\Nthat is a college diploma. Dialogue: 0,0:44:32.94,0:44:35.39,Default,,0000,0000,0000,,Now, all by itself, would\NI be opposed to this? Dialogue: 0,0:44:35.39,0:44:36.22,Default,,0000,0000,0000,,Are you kidding? Dialogue: 0,0:44:36.22,0:44:39.84,Default,,0000,0000,0000,,I'm in the education biz,\NI think this is fabulous. Dialogue: 0,0:44:39.84,0:44:41.02,Default,,0000,0000,0000,,Everyone should go to college, Dialogue: 0,0:44:41.02,0:44:42.72,Default,,0000,0000,0000,,my dog should get a college education, Dialogue: 0,0:44:42.72,0:44:46.89,Default,,0000,0000,0000,,I'm for college educations,\NI think that's terrific. Dialogue: 0,0:44:46.89,0:44:49.90,Default,,0000,0000,0000,,The difference is when you\Nlook at middle class families, Dialogue: 0,0:44:49.90,0:44:54.90,Default,,0000,0000,0000,,if you needed 12 years back\Nin 1970, taxpayer paid for it. Dialogue: 0,0:44:55.29,0:44:56.86,Default,,0000,0000,0000,,You got it all for free. Dialogue: 0,0:44:56.86,0:44:59.83,Default,,0000,0000,0000,,All you had to do was show\Nup, live there and show up. Dialogue: 0,0:45:00.69,0:45:04.70,Default,,0000,0000,0000,,By the year 2000, if you\Nneed a college diploma, Dialogue: 0,0:45:04.70,0:45:07.19,Default,,0000,0000,0000,,you've gotta pay for it\Nyourself, by and short. Dialogue: 0,0:45:07.19,0:45:09.32,Default,,0000,0000,0000,,Berkeley, other state supported schools, Dialogue: 0,0:45:09.32,0:45:12.01,Default,,0000,0000,0000,,I guess that means you guys\Nare not paying any tuition? Dialogue: 0,0:45:13.05,0:45:14.63,Default,,0000,0000,0000,,Room, board, books, right? Dialogue: 0,0:45:14.63,0:45:15.91,Default,,0000,0000,0000,,It's not very much, Dialogue: 0,0:45:15.91,0:45:18.03,Default,,0000,0000,0000,,I guess you borrowed maybe a dollar or two Dialogue: 0,0:45:19.15,0:45:20.28,Default,,0000,0000,0000,,in order to do this, Dialogue: 0,0:45:20.28,0:45:22.34,Default,,0000,0000,0000,,but notice what that means, Dialogue: 0,0:45:22.34,0:45:25.53,Default,,0000,0000,0000,,it means the launch, what\Nthe parents have to do Dialogue: 0,0:45:25.53,0:45:29.85,Default,,0000,0000,0000,,to get this next generation in\Nthe middle class has shifted Dialogue: 0,0:45:29.85,0:45:32.03,Default,,0000,0000,0000,,from being something\Nthat everybody pays for, Dialogue: 0,0:45:32.03,0:45:33.80,Default,,0000,0000,0000,,the taxpayer pays for, Dialogue: 0,0:45:33.80,0:45:37.50,Default,,0000,0000,0000,,to something only the families\Nwith children are paying for. Dialogue: 0,0:45:37.50,0:45:38.95,Default,,0000,0000,0000,,I'll make the same point, by the way, Dialogue: 0,0:45:38.95,0:45:41.14,Default,,0000,0000,0000,,on the other end of\Nthe education spectrum. Dialogue: 0,0:45:42.07,0:45:44.28,Default,,0000,0000,0000,,In 1970, I actually went\Nback and looked at this data, Dialogue: 0,0:45:44.28,0:45:46.83,Default,,0000,0000,0000,,it surprised me, almost no one Dialogue: 0,0:45:46.83,0:45:49.21,Default,,0000,0000,0000,,sent their children to preschool. Dialogue: 0,0:45:50.09,0:45:52.18,Default,,0000,0000,0000,,And in fact, if you go\Nback and read the articles, Dialogue: 0,0:45:52.18,0:45:55.40,Default,,0000,0000,0000,,you read Dr. Spock from\Nthe 1970s editions, Dialogue: 0,0:45:55.40,0:45:57.41,Default,,0000,0000,0000,,1960s, 1970s editions, Dialogue: 0,0:45:57.41,0:45:58.77,Default,,0000,0000,0000,,they can play with the\Nneighborhood children, Dialogue: 0,0:45:58.77,0:46:02.82,Default,,0000,0000,0000,,they'll be fine, and only a tiny fraction Dialogue: 0,0:46:02.82,0:46:06.30,Default,,0000,0000,0000,,of American children are in preschool. Dialogue: 0,0:46:06.30,0:46:08.23,Default,,0000,0000,0000,,Today, it's totally flipped. Dialogue: 0,0:46:08.23,0:46:12.34,Default,,0000,0000,0000,,Basically through all the education folks, Dialogue: 0,0:46:12.34,0:46:14.87,Default,,0000,0000,0000,,early childhood specialists,\Nthey are completely in for Dialogue: 0,0:46:14.87,0:46:17.23,Default,,0000,0000,0000,,children under two years have preschool. Dialogue: 0,0:46:18.20,0:46:22.61,Default,,0000,0000,0000,,And once again, who pays for\Nthe two years of preschool? Dialogue: 0,0:46:22.61,0:46:24.60,Default,,0000,0000,0000,,It's paid for by the family. Dialogue: 0,0:46:24.60,0:46:26.12,Default,,0000,0000,0000,,So one way you could look at this Dialogue: 0,0:46:26.12,0:46:27.90,Default,,0000,0000,0000,,is in the space of a generation, Dialogue: 0,0:46:27.90,0:46:32.28,Default,,0000,0000,0000,,we went from 12 years being\Nenough to push that kid forward Dialogue: 0,0:46:32.28,0:46:34.37,Default,,0000,0000,0000,,to adding two more years, that's 14, Dialogue: 0,0:46:34.37,0:46:37.82,Default,,0000,0000,0000,,and four more years, that's\N18 years of education Dialogue: 0,0:46:37.82,0:46:39.87,Default,,0000,0000,0000,,in order to push those kids forward, Dialogue: 0,0:46:39.87,0:46:43.26,Default,,0000,0000,0000,,only the difference now\Nis the family privately Dialogue: 0,0:46:43.26,0:46:45.89,Default,,0000,0000,0000,,pays for a third of the\Neducation themselves. Dialogue: 0,0:46:45.89,0:46:47.62,Default,,0000,0000,0000,,And we could have some great fun Dialogue: 0,0:46:47.62,0:46:49.40,Default,,0000,0000,0000,,with what the education costs. Dialogue: 0,0:46:51.19,0:46:53.95,Default,,0000,0000,0000,,Recently, it's been about three years ago, Dialogue: 0,0:46:53.95,0:46:58.88,Default,,0000,0000,0000,,Chicago, city of Chicago\Npublicly supported Dialogue: 0,0:46:58.88,0:47:03.74,Default,,0000,0000,0000,,preschool programs, there was\Nalready some tax dollars in it Dialogue: 0,0:47:03.74,0:47:05.00,Default,,0000,0000,0000,,but the parents had to pay tuition. Dialogue: 0,0:47:05.00,0:47:07.90,Default,,0000,0000,0000,,I always loved this one,\Nthe tuition was larger Dialogue: 0,0:47:07.90,0:47:10.69,Default,,0000,0000,0000,,than the tuition at the\NUniversity of Illinois. Dialogue: 0,0:47:10.69,0:47:12.94,Default,,0000,0000,0000,,That's what the parents were\Nsupposed to come up with Dialogue: 0,0:47:12.94,0:47:16.63,Default,,0000,0000,0000,,to put their three year\Nold into the system Dialogue: 0,0:47:16.63,0:47:18.24,Default,,0000,0000,0000,,that was gonna get them the education Dialogue: 0,0:47:18.24,0:47:20.14,Default,,0000,0000,0000,,that was gonna get them\Nultimately launched Dialogue: 0,0:47:20.14,0:47:22.07,Default,,0000,0000,0000,,into the middle class. Dialogue: 0,0:47:22.07,0:47:26.03,Default,,0000,0000,0000,,So in that sense, we shrink\Npart of what's available Dialogue: 0,0:47:26.03,0:47:27.96,Default,,0000,0000,0000,,to support families with children Dialogue: 0,0:47:27.96,0:47:29.36,Default,,0000,0000,0000,,so that they can move forward, Dialogue: 0,0:47:29.36,0:47:31.56,Default,,0000,0000,0000,,so they can launch this next generation. Dialogue: 0,0:47:31.56,0:47:33.41,Default,,0000,0000,0000,,So how have families responded to this? Dialogue: 0,0:47:33.41,0:47:34.91,Default,,0000,0000,0000,,This is where I said I'll come to Dialogue: 0,0:47:34.91,0:47:36.93,Default,,0000,0000,0000,,at least a little bit of my data here. Dialogue: 0,0:47:36.93,0:47:38.69,Default,,0000,0000,0000,,Let me tell you about bankruptcy. Dialogue: 0,0:47:39.61,0:47:42.21,Default,,0000,0000,0000,,What's happened with bankruptcy? Dialogue: 0,0:47:42.21,0:47:43.15,Default,,0000,0000,0000,,What this one's about, Dialogue: 0,0:47:43.15,0:47:45.63,Default,,0000,0000,0000,,I'll tell you what the\Nbright colors on here, Dialogue: 0,0:47:45.63,0:47:49.39,Default,,0000,0000,0000,,this is about bankruptcy\Nfiling rates per thousand Dialogue: 0,0:47:49.39,0:47:50.82,Default,,0000,0000,0000,,in the population. Dialogue: 0,0:47:51.75,0:47:55.56,Default,,0000,0000,0000,,And this is in 200 and 2001, Dialogue: 0,0:47:55.56,0:47:59.02,Default,,0000,0000,0000,,I love this data, it's\Ngot 2003 on these data. Dialogue: 0,0:47:59.02,0:48:02.11,Default,,0000,0000,0000,,Married couples are the\Nfar one in the light blue, Dialogue: 0,0:48:02.11,0:48:07.10,Default,,0000,0000,0000,,about 7.4 married couples\Nper 1,000 married couples, Dialogue: 0,0:48:07.10,0:48:09.40,Default,,0000,0000,0000,,so each is being within their own group, Dialogue: 0,0:48:10.24,0:48:12.04,Default,,0000,0000,0000,,filed for bankruptcy. Dialogue: 0,0:48:12.04,0:48:16.30,Default,,0000,0000,0000,,Unmarried men, about 6.3 per 1,000. Dialogue: 0,0:48:16.30,0:48:20.65,Default,,0000,0000,0000,,Unmarried women, about 7.2 per 1,000. Dialogue: 0,0:48:20.65,0:48:23.74,Default,,0000,0000,0000,,But the trick here for\Nall three of these groups Dialogue: 0,0:48:23.74,0:48:26.24,Default,,0000,0000,0000,,is they are all childless groups. Dialogue: 0,0:48:26.24,0:48:29.11,Default,,0000,0000,0000,,So I've got them, all you've\Ngot them in their graphics, Dialogue: 0,0:48:29.11,0:48:32.85,Default,,0000,0000,0000,,they're couples, men,\Nmen alone, women alone, Dialogue: 0,0:48:32.85,0:48:34.44,Default,,0000,0000,0000,,and none of them have children. Dialogue: 0,0:48:34.44,0:48:37.30,Default,,0000,0000,0000,,These are the bankruptcy filing\Nrates in the United States Dialogue: 0,0:48:37.30,0:48:39.22,Default,,0000,0000,0000,,in the early 2000s. Dialogue: 0,0:48:39.22,0:48:40.59,Default,,0000,0000,0000,,Now let's add in children. Dialogue: 0,0:48:43.97,0:48:47.02,Default,,0000,0000,0000,,Turquoise, again, is married couples, Dialogue: 0,0:48:47.02,0:48:49.08,Default,,0000,0000,0000,,only this time with children. Dialogue: 0,0:48:49.08,0:48:53.79,Default,,0000,0000,0000,,It's jumped, the filing rate\Nhas jumped to 15 per 1,000, Dialogue: 0,0:48:53.79,0:48:57.41,Default,,0000,0000,0000,,and among women heads of household, Dialogue: 0,0:48:57.41,0:48:59.08,Default,,0000,0000,0000,,no husband in the household, Dialogue: 0,0:48:59.08,0:49:00.92,Default,,0000,0000,0000,,it has jumped to 23 per 1,000. Dialogue: 0,0:49:00.92,0:49:03.88,Default,,0000,0000,0000,,You notice by the way,\Nunmarried men with children Dialogue: 0,0:49:03.88,0:49:06.14,Default,,0000,0000,0000,,fall out statistically\Nbecause there aren't enough Dialogue: 0,0:49:06.14,0:49:09.59,Default,,0000,0000,0000,,to be able to say something\Nthat's statistically valid Dialogue: 0,0:49:09.59,0:49:11.54,Default,,0000,0000,0000,,about what's going on here. Dialogue: 0,0:49:11.54,0:49:16.54,Default,,0000,0000,0000,,So what this one tells me is\Nthat families with children Dialogue: 0,0:49:17.09,0:49:20.72,Default,,0000,0000,0000,,are under enormous financial stress. Dialogue: 0,0:49:20.72,0:49:23.79,Default,,0000,0000,0000,,I watch them, I study them\Nfrom the bankruptcy end Dialogue: 0,0:49:23.79,0:49:26.18,Default,,0000,0000,0000,,of the spectrum which\Nis where they end up, Dialogue: 0,0:49:26.18,0:49:27.88,Default,,0000,0000,0000,,and let me tell you a little bit about Dialogue: 0,0:49:27.88,0:49:30.24,Default,,0000,0000,0000,,why they file for bankruptcy. Dialogue: 0,0:49:30.24,0:49:35.24,Default,,0000,0000,0000,,90% of those families file\Nfor one of three reasons; Dialogue: 0,0:49:36.11,0:49:40.43,Default,,0000,0000,0000,,Job loss, medical problem in the family, Dialogue: 0,0:49:40.43,0:49:42.68,Default,,0000,0000,0000,,sometimes the wage\Nearner, sometimes a child, Dialogue: 0,0:49:43.83,0:49:46.27,Default,,0000,0000,0000,,or family breakup, either\Na death in the family Dialogue: 0,0:49:46.27,0:49:47.79,Default,,0000,0000,0000,,or a divorce in the family. Dialogue: 0,0:49:47.79,0:49:50.10,Default,,0000,0000,0000,,In fact, nearly half the families Dialogue: 0,0:49:50.10,0:49:52.82,Default,,0000,0000,0000,,have at least two of those three, Dialogue: 0,0:49:52.82,0:49:57.02,Default,,0000,0000,0000,,and about 20% have been\Nhit by three out of three. Dialogue: 0,0:49:59.17,0:50:01.86,Default,,0000,0000,0000,,That's how it is that\Nthey end up in bankruptcy. Dialogue: 0,0:50:01.86,0:50:05.05,Default,,0000,0000,0000,,Now let me give you an idea\Nof what these numbers mean Dialogue: 0,0:50:05.05,0:50:08.25,Default,,0000,0000,0000,,so I can put it in a little\Nbit different context. Dialogue: 0,0:50:08.25,0:50:10.16,Default,,0000,0000,0000,,These families that are\Nfiling for bankruptcy, Dialogue: 0,0:50:10.16,0:50:15.16,Default,,0000,0000,0000,,families with children,\Nmore children live in homes Dialogue: 0,0:50:15.22,0:50:19.61,Default,,0000,0000,0000,,that will file for bankruptcy this year Dialogue: 0,0:50:19.61,0:50:22.62,Default,,0000,0000,0000,,than live in homes that\Nwill file for divorce. Dialogue: 0,0:50:23.79,0:50:25.87,Default,,0000,0000,0000,,That is, there are more\Nchildren in America, Dialogue: 0,0:50:25.87,0:50:29.18,Default,,0000,0000,0000,,and this has been true by\Nthe way since the late 1990s, Dialogue: 0,0:50:29.18,0:50:31.75,Default,,0000,0000,0000,,every year, more children\Nare going through Dialogue: 0,0:50:31.75,0:50:35.43,Default,,0000,0000,0000,,their parents' bankruptcy\Nthan are going through Dialogue: 0,0:50:35.43,0:50:36.74,Default,,0000,0000,0000,,their parents' divorce. Dialogue: 0,0:50:36.74,0:50:38.61,Default,,0000,0000,0000,,So let me say that to you a different way. Dialogue: 0,0:50:38.61,0:50:40.30,Default,,0000,0000,0000,,You know anybody who\Ngot divorced any time, Dialogue: 0,0:50:40.30,0:50:42.09,Default,,0000,0000,0000,,say in the last six or seven years, Dialogue: 0,0:50:43.08,0:50:45.88,Default,,0000,0000,0000,,you know some children who live in homes Dialogue: 0,0:50:45.88,0:50:47.73,Default,,0000,0000,0000,,where mom and dad have split up, Dialogue: 0,0:50:48.83,0:50:52.51,Default,,0000,0000,0000,,then you, statistically\Nspeaking, know more, Dialogue: 0,0:50:52.51,0:50:55.04,Default,,0000,0000,0000,,random cross-sections of America, Dialogue: 0,0:50:55.04,0:50:57.66,Default,,0000,0000,0000,,you know more who went bankrupt. Dialogue: 0,0:50:57.66,0:51:00.20,Default,,0000,0000,0000,,Why do you think you don't\Nknow more that went bankrupt? Dialogue: 0,0:51:00.20,0:51:01.85,Default,,0000,0000,0000,,And that's because you can't hide divorce, Dialogue: 0,0:51:01.85,0:51:03.73,Default,,0000,0000,0000,,but you can sure hide bankruptcy. Dialogue: 0,0:51:03.73,0:51:05.65,Default,,0000,0000,0000,,And that's what people have done. Dialogue: 0,0:51:06.49,0:51:08.22,Default,,0000,0000,0000,,There's an enormous stigma Dialogue: 0,0:51:08.22,0:51:10.43,Default,,0000,0000,0000,,attached to filing for bankruptcy. Dialogue: 0,0:51:10.43,0:51:13.07,Default,,0000,0000,0000,,When we interviewed the families Dialogue: 0,0:51:13.07,0:51:16.36,Default,,0000,0000,0000,,who had filed for\Nbankruptcy, quite frankly, Dialogue: 0,0:51:16.36,0:51:19.64,Default,,0000,0000,0000,,I was shameless about\Nthis, we paid them $50 Dialogue: 0,0:51:19.64,0:51:23.61,Default,,0000,0000,0000,,if they would take extensive\Ntelephone surveys for us Dialogue: 0,0:51:23.61,0:51:27.53,Default,,0000,0000,0000,,about bankruptcy, and so we\Ngot very high response rates, Dialogue: 0,0:51:27.53,0:51:30.00,Default,,0000,0000,0000,,but one of the key things\Nwe learned early on Dialogue: 0,0:51:30.00,0:51:33.54,Default,,0000,0000,0000,,is that people would\Nsay, "Don't use the word, Dialogue: 0,0:51:33.54,0:51:35.68,Default,,0000,0000,0000,,"partly because I can't bear to hear it, Dialogue: 0,0:51:35.68,0:51:37.74,Default,,0000,0000,0000,,"and partly because I'm\Nafraid the child will pick up Dialogue: 0,0:51:37.74,0:51:40.49,Default,,0000,0000,0000,,"an extension phone, or\Nsomeone will walk into the room Dialogue: 0,0:51:40.49,0:51:45.49,Default,,0000,0000,0000,,"and hear me say it, and we\Ndon't want anyone to know." Dialogue: 0,0:51:45.49,0:51:49.53,Default,,0000,0000,0000,,About 85% of the families that\Nwere filing for bankruptcy Dialogue: 0,0:51:49.53,0:51:54.10,Default,,0000,0000,0000,,were hiding it from their own\Nparents, from their siblings, Dialogue: 0,0:51:54.10,0:51:56.47,Default,,0000,0000,0000,,from their best friends,\Nand in some cases, Dialogue: 0,0:51:56.47,0:51:57.67,Default,,0000,0000,0000,,from their own children. Dialogue: 0,0:51:59.40,0:52:01.95,Default,,0000,0000,0000,,Many of them said they had other stories. Dialogue: 0,0:52:01.95,0:52:03.95,Default,,0000,0000,0000,,Yeah, they were giving up the house, Dialogue: 0,0:52:03.95,0:52:06.07,Default,,0000,0000,0000,,and moving in with Bob's mom Dialogue: 0,0:52:06.07,0:52:08.76,Default,,0000,0000,0000,,because Bob's mom's health was not good. Dialogue: 0,0:52:10.16,0:52:12.34,Default,,0000,0000,0000,,Yeah, that's a story you can tell. Dialogue: 0,0:52:12.34,0:52:13.62,Default,,0000,0000,0000,,"We're moving across country Dialogue: 0,0:52:13.62,0:52:15.93,Default,,0000,0000,0000,,"because there are better\Njob opportunities." Dialogue: 0,0:52:15.93,0:52:18.26,Default,,0000,0000,0000,,Yeah, they're moving across country Dialogue: 0,0:52:18.26,0:52:20.50,Default,,0000,0000,0000,,hoping they can get a job, Dialogue: 0,0:52:20.50,0:52:24.38,Default,,0000,0000,0000,,but going to live in rather\Nreduced circumstances. Dialogue: 0,0:52:24.38,0:52:27.72,Default,,0000,0000,0000,,So those are the families who\Nare filing for bankruptcy, Dialogue: 0,0:52:27.72,0:52:31.23,Default,,0000,0000,0000,,in part, the reflection of what's happened Dialogue: 0,0:52:31.23,0:52:32.92,Default,,0000,0000,0000,,to this safety net. Dialogue: 0,0:52:32.92,0:52:34.26,Default,,0000,0000,0000,,So I just want to wrap this up Dialogue: 0,0:52:34.26,0:52:36.91,Default,,0000,0000,0000,,and open it up for some\Nquestions and answers Dialogue: 0,0:52:37.87,0:52:41.60,Default,,0000,0000,0000,,because I just want to make\Nthree or four big points Dialogue: 0,0:52:41.60,0:52:44.18,Default,,0000,0000,0000,,at the end here about about\Nwhat we're talking about Dialogue: 0,0:52:44.18,0:52:47.70,Default,,0000,0000,0000,,with these families in financial trouble. Dialogue: 0,0:52:47.70,0:52:50.28,Default,,0000,0000,0000,,First I want to make is\Na point about the poor. Dialogue: 0,0:52:51.47,0:52:55.60,Default,,0000,0000,0000,,I've hammered on the middle\Nclass over and over and over, Dialogue: 0,0:52:55.60,0:52:59.60,Default,,0000,0000,0000,,and I've done it because for\Neverybody who cares about Dialogue: 0,0:52:59.60,0:53:01.71,Default,,0000,0000,0000,,poor families in America, Dialogue: 0,0:53:01.71,0:53:04.58,Default,,0000,0000,0000,,you should be riveted on these data. Dialogue: 0,0:53:04.58,0:53:08.88,Default,,0000,0000,0000,,Middle class families under\Nenormous economic stress Dialogue: 0,0:53:08.88,0:53:10.58,Default,,0000,0000,0000,,have fewer resources to give Dialogue: 0,0:53:10.58,0:53:12.38,Default,,0000,0000,0000,,when we talk about how it is Dialogue: 0,0:53:12.38,0:53:14.69,Default,,0000,0000,0000,,that we're going to help the poor. Dialogue: 0,0:53:14.69,0:53:18.58,Default,,0000,0000,0000,,More importantly, they frankly\Nhave less appetite to give, Dialogue: 0,0:53:18.58,0:53:20.69,Default,,0000,0000,0000,,when they see themselves\Nas already stretched, Dialogue: 0,0:53:20.69,0:53:23.17,Default,,0000,0000,0000,,when they see themselves\Nfacing foreclosure notices Dialogue: 0,0:53:23.17,0:53:26.67,Default,,0000,0000,0000,,and bill collectors, they back off. Dialogue: 0,0:53:26.67,0:53:30.68,Default,,0000,0000,0000,,And more critically, a middle\Nclass that looks like this, Dialogue: 0,0:53:30.68,0:53:34.46,Default,,0000,0000,0000,,a middle class where people are\Nfalling out and into poverty Dialogue: 0,0:53:34.46,0:53:38.75,Default,,0000,0000,0000,,is a middle class that has\Nless room to bring the poor up Dialogue: 0,0:53:38.75,0:53:41.99,Default,,0000,0000,0000,,and provide them the opportunities\Nto join the middle class. Dialogue: 0,0:53:41.99,0:53:44.01,Default,,0000,0000,0000,,I think people who talk\Nabout the intractability Dialogue: 0,0:53:44.01,0:53:46.87,Default,,0000,0000,0000,,of poverty now are absolutely right, Dialogue: 0,0:53:46.87,0:53:50.23,Default,,0000,0000,0000,,there are social issues\Nfar beyond my expertise, Dialogue: 0,0:53:50.23,0:53:53.51,Default,,0000,0000,0000,,but this is an element of it\Nthat no one's talking about. Dialogue: 0,0:53:53.51,0:53:56.48,Default,,0000,0000,0000,,There's no place for the poor to go, Dialogue: 0,0:53:56.48,0:53:59.46,Default,,0000,0000,0000,,and not much help coming\Nfrom the middle class today Dialogue: 0,0:53:59.46,0:54:01.44,Default,,0000,0000,0000,,compared with even a generation ago. Dialogue: 0,0:54:02.35,0:54:03.71,Default,,0000,0000,0000,,The second point I want to make about Dialogue: 0,0:54:03.71,0:54:06.16,Default,,0000,0000,0000,,what these data speak to me about Dialogue: 0,0:54:06.16,0:54:10.19,Default,,0000,0000,0000,,is that I fear we're moving\Nfrom a three class society Dialogue: 0,0:54:10.19,0:54:11.81,Default,,0000,0000,0000,,to a two class society. Dialogue: 0,0:54:12.79,0:54:16.85,Default,,0000,0000,0000,,America has always been\Nsort of one of those Dialogue: 0,0:54:16.85,0:54:20.90,Default,,0000,0000,0000,,perfect distributions,\Nsome poor, some rich, Dialogue: 0,0:54:20.90,0:54:25.15,Default,,0000,0000,0000,,and a big, big solid middle class Dialogue: 0,0:54:25.15,0:54:27.66,Default,,0000,0000,0000,,stuck right there in the middle. Dialogue: 0,0:54:27.66,0:54:30.40,Default,,0000,0000,0000,,Americans identify with the middle class, Dialogue: 0,0:54:31.68,0:54:33.12,Default,,0000,0000,0000,,it affects our democracy, Dialogue: 0,0:54:33.12,0:54:35.30,Default,,0000,0000,0000,,it's part of what gives us\Nour political stability, Dialogue: 0,0:54:35.30,0:54:38.00,Default,,0000,0000,0000,,it's what affects our economy\Nand drives our economy, Dialogue: 0,0:54:38.00,0:54:39.67,Default,,0000,0000,0000,,it affects our self-identity, Dialogue: 0,0:54:39.67,0:54:41.74,Default,,0000,0000,0000,,it affects who we are in this world, Dialogue: 0,0:54:41.74,0:54:43.50,Default,,0000,0000,0000,,but I fear that what's happening Dialogue: 0,0:54:43.50,0:54:45.47,Default,,0000,0000,0000,,and what these data are about Dialogue: 0,0:54:45.47,0:54:48.95,Default,,0000,0000,0000,,is that we actually are gonna\Nsee a larger upper class. Dialogue: 0,0:54:48.95,0:54:53.90,Default,,0000,0000,0000,,We're seeing, not just the rich\Nrich, but the sort of rich, Dialogue: 0,0:54:53.90,0:54:57.84,Default,,0000,0000,0000,,the ones who have the same\Njobs, bringing in two incomes, Dialogue: 0,0:54:57.84,0:55:01.27,Default,,0000,0000,0000,,who don't get sick, who don't lose a job, Dialogue: 0,0:55:01.27,0:55:03.04,Default,,0000,0000,0000,,who in that income volatility, Dialogue: 0,0:55:03.04,0:55:05.13,Default,,0000,0000,0000,,and the things that go\Nwrong in the medical world, Dialogue: 0,0:55:05.13,0:55:07.94,Default,,0000,0000,0000,,who don't divorce, who don't\Nhave a death in the family, Dialogue: 0,0:55:07.94,0:55:10.78,Default,,0000,0000,0000,,who don't hit any of life's bumps, Dialogue: 0,0:55:10.78,0:55:12.50,Default,,0000,0000,0000,,they stay with the upper group. Dialogue: 0,0:55:12.50,0:55:13.84,Default,,0000,0000,0000,,They put away some savings, Dialogue: 0,0:55:13.84,0:55:17.12,Default,,0000,0000,0000,,they don't get deep in debt, they do okay, Dialogue: 0,0:55:17.12,0:55:22.12,Default,,0000,0000,0000,,and then the rest is just\None long trail of underclass Dialogue: 0,0:55:22.34,0:55:25.61,Default,,0000,0000,0000,,that stays on a constant debt treadmill. Dialogue: 0,0:55:25.61,0:55:26.77,Default,,0000,0000,0000,,Sometimes it's a little more, Dialogue: 0,0:55:26.77,0:55:29.74,Default,,0000,0000,0000,,sometimes it's a little\Nless, but never out of debt, Dialogue: 0,0:55:29.74,0:55:32.05,Default,,0000,0000,0000,,never any real economic security. Dialogue: 0,0:55:32.05,0:55:33.66,Default,,0000,0000,0000,,I could change my metaphors, Dialogue: 0,0:55:33.66,0:55:35.23,Default,,0000,0000,0000,,people who are just costantly living Dialogue: 0,0:55:35.23,0:55:36.82,Default,,0000,0000,0000,,on the edge of a clif, Dialogue: 0,0:55:36.82,0:55:40.50,Default,,0000,0000,0000,,some falling over, some\Nscratching back up a little, Dialogue: 0,0:55:40.50,0:55:43.84,Default,,0000,0000,0000,,but never with the kind of security Dialogue: 0,0:55:43.84,0:55:47.56,Default,,0000,0000,0000,,that for the first three\Nquarters of a century, Dialogue: 0,0:55:47.56,0:55:51.28,Default,,0000,0000,0000,,were associated with being middle class. Dialogue: 0,0:55:51.28,0:55:53.57,Default,,0000,0000,0000,,I worry about what that means. Dialogue: 0,0:55:53.57,0:55:56.53,Default,,0000,0000,0000,,I worry that the middle class, Dialogue: 0,0:55:56.53,0:55:59.19,Default,,0000,0000,0000,,which used to mean solid and boring Dialogue: 0,0:55:59.19,0:56:03.69,Default,,0000,0000,0000,,and not worth studying, only\Nworth making fun of, you know, Dialogue: 0,0:56:03.69,0:56:07.37,Default,,0000,0000,0000,,"My parents were hopelessly\Nmiddle class", sort of remarks, Dialogue: 0,0:56:08.35,0:56:11.92,Default,,0000,0000,0000,,that that's kept us from seeing a problem Dialogue: 0,0:56:11.92,0:56:14.77,Default,,0000,0000,0000,,in the middle class that threatens Dialogue: 0,0:56:14.77,0:56:18.03,Default,,0000,0000,0000,,not just these families with\Nchildren that I've identified, Dialogue: 0,0:56:18.03,0:56:22.34,Default,,0000,0000,0000,,but really threatens the\Nfabric of our country. Dialogue: 0,0:56:23.19,0:56:26.39,Default,,0000,0000,0000,,We have a middle class today\Nthat is newly weakened, Dialogue: 0,0:56:27.24,0:56:31.86,Default,,0000,0000,0000,,and I think what this means\Nis that it's time to realign Dialogue: 0,0:56:31.86,0:56:36.86,Default,,0000,0000,0000,,both our academic and our\Npolitical interests and alliances Dialogue: 0,0:56:37.65,0:56:40.39,Default,,0000,0000,0000,,to talk more about what's\Nhappening to these families. Dialogue: 0,0:56:40.39,0:56:41.61,Default,,0000,0000,0000,,So with that, I'm gonna quit, Dialogue: 0,0:56:41.61,0:56:44.48,Default,,0000,0000,0000,,and take as many questions as people have. Dialogue: 0,0:56:44.48,0:56:47.62,Default,,0000,0000,0000,,(audience applauding) Dialogue: 0,0:56:47.62,0:56:50.45,Default,,0000,0000,0000,,(dramatic music)