You guys call free trade the “chief culprit in the destruction of good jobs” in America. Why?
Steele: When other countries put up trade barriers to our products, the Tom Friedmans say, “Oh, my God, we can’t put up walls in this country.” For the multinational corporations that have moved jobs abroad, it’s the best of both worlds. They get cheap labor and the Chinese government falling all over itself to help build plants, and then they ship the goods back home without any duties.
You call Apple’s rise to become the world’s most profitable company “chilling.” Isn’t it an all-American success story?
Steele: Unlike the classic American story of companies that created jobs here, Apple, in less than a generation, jettisoned their American side and moved everything to China.
Barlett: It had nothing to do with an inability to attract talent or any of the things Steve Jobs said it had to do with. It had to do with making more money. Period.
Since you wrote your landmark America: What Went Wrong in 1991, you say Congress has created special rules for a “financial aristocracy” that’s out to profit from middle-class decline.
Steele: We totally underestimated how rapidly the financial ruling class would consolidate their control. Who in their right mind would have believed they’d put through a bill in 2003 that taxes dividends at 15 percent? And if Paul Ryan gets his way, there will be no taxes on dividends at all.
Is Mitt Romney the poster boy for the financial aristocracy?
Barlett: He’s the finest illustration of the hypocrisy: Here’s a guy who preaches getting everyone off the government dole. But when he ran the Olympics, he got the gold medal for raiding the Treasury. It was a gravy train for all his rich friends in Utah.
Steele: The Salt Lake Olympics got more federal money than all other U.S. Olympics combined.
Republicans champion free markets, but Clinton passed NAFTA.
Barlett: This didn’t start with Republicans. It started with Democrats. It’s a bipartisan effort.
Has Obama been any better?
Steele: The GM example shows that when government steps in, it can have a very positive effect. But we need seed money for new industries. We can’t leave this to the private market, because it’s shipping those jobs elsewhere.
So what’s the quickest fix?
Steele: Increase the number of tax brackets, maybe up to a dozen. That way someone earning $400,000 won’t be in the same bracket as someone making $12 million. That’s not radical – it’s the way the system used to work. We’re just suggesting that we restore some of the balance.