 I'm Tom Cardamone, president and CEO of Global Financial Integrity, welcome. Thank you for joining us. I know President Zelensky's in town, so that may divert some eyeballs, but you've decided to spend your time with us, so we very much appreciate it. And a warm greeting to the Stanford students. Glad to see you all here as well. I hope this really generates some discussion among the class. I want to start by describing briefly what the DC Forum is. I know some of you were at our conference in this room in February, but for those who aren't as familiar with the term, the D in this instance stands for democracy and the C stands for capitalism. And what the DC Forum is meant to do is to bring people together to begin a discussion on the friction that has developed between those two entities, those two groups of people, the capitalists on one side and democratic institutions on another. Raymond Baker, who will give the closing remarks later, published a book earlier this year called Invisible Trillions. And the invisible part of that title has to do with the tremendous amount of secrecy and opacity that has crept into all types of capitalist endeavors, all types of business activities. If you go to our website, the front page has a clickable map that will show 140 countries that provide some sort of secrecy for individuals, companies, terrorist groups, criminal organizations that allow them to move and hide money secretly, whether this has to do with disguised corporations, anonymous trust accounts, could be in a tax haven somewhere. It allows profit shifting, transfer of pricing, and of course, money laundering. Money laundering can happen dozens and dozens of ways, either through real estate, private investment accounts, buying legitimate goods and then reselling them elsewhere. There's a whole host of secrecy in the global context, but there's also frictions in a national context, sort of the bread and butter issues. This is another example of the friction between capitalism and democracy and the way people live from day to day. In this particular case, I think there's some statistics that help shine a light on it, and I won't bore you with too many, but a couple, I think, illustrate the issue. Over the last 40 years or so, factory production in this country has increased by 85%, but wages have stagnated only at about 13%. Over the same period of time, the cost of housing, the cost of college education have far outpaced inflation. So the middle class is shrinking and it creates all sorts of tensions that we're seeing in labor movement now, pushing back UAE, UAW strike, the Writers Guild strike, and there have been others that, other labor that have been organizing over the last year or two, Starbucks comes to mind. So you're seeing this pushback by working people who are fed up with the fact that the rich in this country are paying a decreasing percentage of their wages in taxes. The Warren Buffetts and Elon Musk's of the world don't even pay income taxes. As Warren Buffett said, my secretary pays more in tax than I do. That's a real problem and people are getting fed up with that. And it explains the rise of nationalism and the threat to democracy as we saw on January 6th. So this is the friction that we see between capitalism and democracy and it's what we're meant to discuss today. There are sort of three legs to the stool, I think, on how we can fix or address some of these challenges. One is the research and advocacy of the groups like GFI, Transparency International, and our friends at the FAC Coalition do on a daily basis. Government is another leg of that stool, unclear how committed they are. There's been certainly some good progress, but not nearly enough. And thirdly, the media and how the media engages this issue, how they educate the public and how that educated public can put pressure on elected officials. And today we're gonna be talking about that third leg of the stool with some experts in this area. I wanna briefly introduce the panel. Before I introduce the panel, we're gonna have a short five minute video by David K. Johnston, Pulitzer Prize winner who couldn't be here today but wanted to address the group here and give some of his thoughts on these issues. Welcome to this Global Financial Integrity Meeting about capitalism, democracy, and the challenges faced by those of us who report the news, who comment on the news, or who as policy experts inform the news. Hi, I'm David K. Johnston. I have been writing about and documenting income and wealth inequality since the late 1960s when I had the good fortune, well, I was still a teenager to be a staff writer at the San Jose Mercury. Since 1995, when I began a 13-year career at the New York Times, I focused heavily on documenting the widening gap between the hyper-rich and everyone else. The reality in America is that for the last 50 years, the super-rich, the hyper-rich have scooped up almost all of the gains. The bottom 90% of Americans have seen their incomes stagnate in real terms. The bottom 50% until very recently have seen their incomes fall. And yet at the top, we have people who pay little or no taxes and who collect as much as $5 million a day in dividends. Now, I hope today that you think about how do we get people to understand this and the tremendous threat that this poses to the liberties of the people? The kind of income and wealth inequality we are seeing is not natural. It is not like the sun appearing in the east every morning. It is instead the product of government policies, of laws, of rules, and of a lack of enforcement of those laws and rules. As Raymond Baker, the founder of Global Financial Integrity who will speak to you at the end of this conference, has brilliantly pointed out in his books, especially his most recent book, Invisible Trillions. The super-wealthy, the hyper-wealthy use some of their money to get rules and laws and lack of enforcement that helps them hide their money, helps them not pay taxes, and helps them not invest in productive assets which involve risk. So I hope you think conceptually today about these issues. And so let me start with capitalism. I don't believe we live in a capitalist society. We live in a society of corporate socialism. A study in 2010 showed that the average American family of four has taken from it through stealth mechanisms by state and local governments, not Washington state and local governments, subsidies to corporations that equal more than a week's take-home pay. It's 2% of your annual income slipped away from your pocket by state and local governments to benefit corporations. I've documented in my books that there are companies I name and whole industries that derive all of their profits from stealth subsidies that I managed to dig out of the public record, but they were certainly not put there in a way that was designed to make it easy to find them or understand them. On the democracy side, self-governance requires people who are informed and can make choices based on reliable information. Unfortunately, the latest literacy research shows that more than half of Americans read at the level of a sixth grader or below and about one in five at the level of a third grader, an eight-year-old. I don't care if you're the smartest kid in your sixth grade class, you don't have the critical thinking skills necessary to decide who to vote for, who to temporarily imbue with power to act on bar behalf. And we also know from extensive research and philosophical writings about the 1930s that when people believe they have lost control of their economic future, that they can't rely on they will be better off tomorrow if they go to work today, they spend prudently, they save, they will turn to anyone who promises to make things better. And that's how we get authoritarians left or right. It's vital if we're going to defend and maintain the liberties of the people, the people are educated, have critical thinking skills, can read comfortably and therefore do if we're going to maintain our liberties and not put ourselves under authoritarians using their power to further enrich themselves as they strip every asset they can from us until we only own the ones that they don't want. For journalists, this means thinking about how to tell these as stories. Far too much of modern journalism, particularly print journalism, reads like policy memos. We need to tell these stories in ways that resonate with people, that touch their souls and that open their eyes so they can understand what's going on. Now none of this is an attack on the idea of wealth inequality per se. I believe it's part of human nature that some people value acquiring assets and some people have money burn a hole in their pocket. They spent next week's paycheck before this week came in. That's not the issue here. The issue is people who have acquired thanks to government policies wealth vastly beyond any capacity, even to do business deals and yet don't contribute even proportionally to the costs of the government that make these fortunes possible. So please think carefully today about the long-term effect of income and wealth inequality when it gets to the point as we are at now and have been for some time, that many people are losing faith in the notion of self-governance, in the notion of democracy and are willing to turn their lives over to people who they think can make them better off because they say so and they either are or pretend to be super wealthy. I'm sorry I can't be with you today. I'm making this video from my home in Rochester, New York but when you see it, I will be in Sweden speaking at the Global Investigative Journalism Conference but have a good time, learn a lot, do your best to make the world a better place with what you learned today. And so with that sort of setup, let me introduce the panel. Annie Boyajian is the Vice President of Policy and Advocacy at Freedom House. She will be our moderator today. Professor Larry Diamond is from Stanford University. He and some of his students are here with us. He's the co-founder of the Journal of Democracy. Jennifer Gould has done great work at the New York Post on money laundering and real estate over the last several years and Peter Coy is the economics writer for the New York Times opinion page. So a star cast and I'll turn it over to Annie. Well good afternoon. It's an honor to be with all of you. It is a tremendous honor to be joined by this esteemed group of panelists who as you all know bring a wealth of knowledge and experience in this field. I actually debated having all of us just spend the next 50 minutes reading everything they have written, but I decided it would be a little more interactive if we go ahead and proceed with the panel. So that is what we will do. And I'm looking forward to a dynamic discussion about how we can harmonize political and economic freedom and align our ideals with our interests. Before we get into the panel discussion, I wanted to set the stage by laying out some of what we know. And it is my honor to be at this second DC forum and one of the questions that this forum always rightly asks is as capitalism is practiced today, is it in confrontation with democracy? And I think everyone sitting in this room can acknowledge that in many ways the answer is yes. I had actually hoped to bring Raymond Baker's excellent book as a prop and then left it on my desk, but I'm glad to see that Peter has it for us very nicely. Raymond's excellent book lays this out quite clearly and I commend it to all of you. For those of you not familiar with Freedom House, we do not actually focus specifically on economic issues, but what we do look at are political rights and civil liberties issues around the world and then we track the scores to see whether we are measuring an expansion or a contraction in rights and democracy around the world. And unfortunately, for the last 17 consecutive years we have tracked a decline in rights and freedoms around the world and this has been driven in part by corruption. And that is something that is true in autocracies and democracies alike. Between 2005 and 2022, we saw an increase in corruption across all of our rankings categories of free, partly free or not free. And the way our ratings work is we have a set of questions we ask, the methodology is online for those of you who love the data. We run through the questions for each country or territory and then tally up a score and countries are sorted into that free, partly free or not free category you heard me mention, wide range within each of those categories. But we saw 1.3% increase in corruption and countries rated as free. A 10.3% increase in corruption and countries rated as partly free and a 21% increase in corruption and countries rated as not free. There are some nuances to that that we can talk about in the Q and A if anyone is interested since some regions did see a decline in corruption during that time period. But we know that countries with strong transparency, human rights and rule of law tend to be more productive environments for private enterprises and investments. Many of you are coming from the private sector and know that well. Countries that score badly in freedom in the world also tend to score badly in the world banks doing business rankings of what they call business enabling environments. Corruption undermines all of this. Corruption can lead to an increase in income inequality and poverty, something that has been well documented. Corruption can fuel human rights abuses. Transparency international research when you cross track that with Freedom House research shows that in countries where perception of public corruption is high, political rights and civil liberties are low. Raymond Baker and others have examined the linkage between rising inequality and declining democracy. And the challenges we see in democracies and with democracy have a big impact on people's trust in government and faith in democracy as a system of government. Many people feel that democracy is not delivering for them. I think some of us might even feel that ourselves. Pew found that public trust in government is at near historic lows in the United States. Globally, the Pew Research Center surveys have consistently found and I am quoting here large shares of the public in many countries saying they are dissatisfied with the way their democracy is working. A median of 56% across 17 advanced economies that they surveyed say their political system needs major changes or needs to be completely reformed. Roughly two thirds or more expressed this opinion in Italy, Spain, the US, South Korea, Greece, France, Belgium and Japan. So it is critical that policymakers and the business community and all of us as citizens fully understand the challenges we are facing and the relationship between capitalism and democracy so that we can start to address this in meaningful ways which I think we are seeing in some cases. So it is with this in mind that I turn to our esteemed panelists to dig deeper into these issues. And for opening remarks, I have asked each panelist to focus on the following question. How have you seen capitalism in confrontation with democracy in your own work? So I'll start first with Larry. Well, I'm going to echo, thank you, Annie. I'm gonna echo a little bit of what was said at the beginning by Tom and by David, but let me just do it in a slightly different way by presenting these statistics to start out. In the roaring 20s, when we actually not only had a previous confrontation between capitalism and democracy and when deep ideological and structural questions were being raised about their compatibility and existential challenges were being mobilized to democracy and even more so in the 1930s, there were enormous concentrations of both corporate power and individual wealth and income. And the percentage of total American income captured by the top 1% of income earners was well over 15%. In 1920, it was 16%, this was kind of, I guess when these statistics began to be gathered and just before the stock market crash in 1929, it rose up to 20%. And then there was of course the depression, it probably got even worse then, but capitalism, what saved capitalism was reform and frankly the New Deal and FDR and the efforts to use the power of a democratic state to reduce inequality, create jobs and so on and so forth. And after World War II, we settled into a pattern where the top 1% of income earners captured only 10% of the total national wealth or total national income. Wealth is a different story. And that was, I saw a trend line recently of this statistic that was pretty much the pattern, 9%, 10% of total income captured by the top 1% of income earners in the United States between 1950 and 1980, keep in mind. That includes the Eisenhower era, the Nixon era, Republican as well as Democratic Presidencies. And then we got a presidency, which I think did some very important things for freedom in the world, but also advanced, under Ronald Reagan, the Milton Friedman principle, that government was not the solution, it was the problem, particularly in terms of the domestic economy. And income inequality rose significantly in response to changes in the tax code and deregulation. And by 2019, in fact, probably well before, we were back up to the peak levels of income inequality we had had literally a century earlier. And nearly 20% of income in the United States was being captured by the top 1% of income earners. And that top 1% of income earners was earning more income total than the bottom 50% of income earners. And inequality is a substantial phenomenon and a lot of democracies around the world, but that proportion of 1920% is about double what it is in Sweden, Norway and France, where it's 10% still today and significantly higher than the 13% in Germany and the United Kingdom. Now, what about wealth? As some of you, most of you probably know, inequalities of wealth are much more extreme because there's a stock of wealth and it's much harder still for lower income people to accumulate wealth. And most of the wealth that is held in the United States is held through ownership of corporate stocks. This is not a statistic what I'm about to give you that comes from the Chinese Communist Party State, although in doing a little bit of research, I find they're very fond of quoting statistics about inequality of income and wealth in the United States. Unfortunately, it seems they're largely accurate in what they're citing. Of course, they don't cite the statistics about the extreme inequality of income and wealth in China itself, but in any case, the bottom 50% of the population in the United States in terms of wealth controls 2.6% of total wealth in the United States held by individuals or households. The top 1% of US households controls nearly a third, 32.3% of total household wealth. That comes not from China, but from the Federal Reserve at the end of 2021. And the rest is not very well shared. The middle 60% of US households have less than 30% of wealth, which means most of the rest is held by the other 19% after you get to the top 1%. Why is this happening? This is the note on which I'll close with six points. Number one, there's an inherent tendency toward concentration of wealth and power. I'm sorry, you can read any history and it's a story of human history. And we're a greedy species. And the story of institution building and of development is the building of states as my esteemed colleague, Frank Fukuyama has documented in powerful detail and tremendous insight, which regulate our worst tendencies and make it possible to have sustained development and sustained freedom. That's the positive story of development, where the strength and democraticness and accountability of the state work in tandem with capitalism to regulate its worst instincts and redistribute its worst excesses. And when you have democracy working properly, the power of the electorate can achieve that through public policy. But if democracy is distorted and deformed, the way it increasingly is, and we can talk more about this by social media and by the exercise of economic power, and you get the mobilization of lobbying influence on the executive branch and the legislative branch and ideological campaigns to persuade people of a different reality, then you can slash tax rates, eliminate regulation. And what you'll get is the concentration of income and wealth to the extreme levels that we have had. Campaign spending regulation is broken in the United States in part because of the interpretations of the Supreme Court that equate campaign spending with freedom of speech. We've been able to achieve very little in public financing. The democracies that have better income distribution in the world also have better regulation of campaign spending than we do. A second factor is the advance of technology and the growing returns to technology and education in comparison with those who don't have access to it. I think a reference was already made. And let me tell you, there is a frightening storm coming with artificial intelligence. I think that was also pointed out by our opening speaker that's going to accelerate radically this redistribution of income upward to the powerful and lucky few who control artificial intelligence. Third is the logic of corporations and the growing obsessive pursuit of short-term profits and maximization of that with pressure from the shareholders and the growing distance between the rewards for top corporate management and the rest of the salary earners and wage earners. Fourth is the tax structure and I've pretty much spoken about that. And finally, there is the structure, the deformed and extremely perverse and supercharged in its perversity structure of global capitalism that Rabin Baker has written about in his two extremely important books, Capitalism's Achilles' Heel in 2005 and the new book that Peter held up, Invisible Trillions. And I guess we'll talk more about that but reigning in money laundering and these distortions of global capitalism and kleptocracy and the ability of both corporations and wealthy politicians around the world to illicitly transfer money and play jurisdictions off one another has to be addressed or it will not be possible to get a grip on this problem. Thank you. Being on a panel with Larry is almost as good as taking his class so I appreciate it. Others will have to comment on that. So Jennifer, you have reported extensively on these issues over the years and so I'll turn to you now to bring that experience to this conversation for your opening remark. Well, thank you. It's great to be here with this incredible panel and very inspiring to listen to. I really agreed with a lot of what David was saying in the video at the beginning so I'm not gonna end Larry also emphasizing. There's so much I grew up in Canada. I started off as a reporter for the Toronto Star in the Globe and Mail while I was a student and then continued that when I was a student in New York and then went on to the Philadelphia Inquirer covering labor, covering the clups of communism and Russia coming back to cover Russian organized crime for the village voice and now real estate for the New York Post and there's really been a continuous line, a thread throughout all of these different places and beats that I had. So as a Canadian hearing the term corporate socialism, it didn't seem radical, that just to me seemed what the United States was and we've seen a lot of that and we heard a little bit about that. Now I wanted to tell you, share a quick story. 2009 economic crisis, I'm at the New York Post. A source tells me there's chaos everywhere. Just in passing, city group was going to buy a $50 million plane right after getting a $45 billion bailout. So of course the New York Post is great for this. We had plane crazy on the front cover. President Obama talked about it the next day and that plane, they defended it at first and then they decided that maybe it wouldn't be such a good idea, 12 seats, $50 million. So that just seemed to be one example, a very simple thing that told a bigger story. But what I wanted to talk about more is a flip side, that there is corruption, there's growing inequality, challenges to democracy that we see and experience every day and of course the worst was with Trump and what happened but the flip side is going back 30 years to the collapse of communism and looking at what is happening, another way that corruption has been weaponized from outside of our borders and really come back to infiltrate and there's so many ways that this has happened but it could not have happened without the complicity of the United States and that's sort of the striking part and that's the part that we can also change with time. But it started American advisors in Russia trying to set up systems to create stock markets, to create a capitalist system, some corruption there, the United States suing an Ivy League school, Harvard settling out of court, that sort of starts it, oligarchs, capital flight, money, moving across borders, organized crime, working with heads of state and an oligarchic class, a kleptocratic class and this idea that when you weaponize corruption there's so much that happened, it's normalized. If a head of state shares the wealth, steals the wealth and gives it to other people, then they're beholden to him and if the oligarchs are here, they're part of a system. Stories, there used to be so many stories about oligarchs on yachts, on their jets and they would be photographed with heads of state or top politicians in the West and none of this was an accident and it's really only been the last few years that there have been stories looking further, talking about toxic philanthropy, talking about foreign money coming into think tanks to universities, to cultural institutions and this money also going into our political system has allowed people to actually influence policy and that obviously impacts all of us. So I wanted to keep my comment short but the idea is really this weaponization of corruption and how we think about it and what we do to stop it and then as far as the money laundering goes, one last thing about that, when I started looking at real estate, there might be senators from Russia or different countries, billionaires from China who would come in and buy one or two condos in a building but as the money increased, it wasn't just buying condos in a fancy building, it was actually bringing in money that would create these buildings, these super towers and pushing people out of neighborhoods, really transforming the way we live so that this idea of corruption and corrupting people from one side of the world to another, strengthening a talk or see while undermining our democracies and that's really I think the issue that we have to look at in the last thing is with Raymond's book, this whole idea of capitalism and democracy being separated and I kind of think of a hammer and sickle just slicing it away and this idea that we have these countries that really operate with capitalism without democracy and 30 years ago, I think the idea was that that could never happen, that there would be this inevitable march towards democracy from capitalism to democracy and we're seeing the result of that, that it is a very real problem that capitalism can work against the interests of regular people, so that's what we hope new laws and new reporting will work to fight. Well, thank you and Peter, last but not least for opening comments, we'd love to hear from you and your experience on the economic, business and finance sector. I'm sure you've seen much of this through your own work. Yes, thank you all for having me here, Raymond in particular. I'm the least specialist up here, I'm a generalist, I have a newsletter that appears in the opinion section of the New York Times, Monday, Wednesday, Friday, which you're all welcome to sign up for and covers a wide variety of subjects but I did do one about Invisible Trillions back in August and I interviewed Raymond and learned a lot from the book in the interview and so I guess he thought I'd be good to have in this panel. I take something David K. Johnson said, a huge admirer of his work and he said something that too much journalism about this ends up sounding like policy briefs and that's probably true and David was a master when he was at the Times for avoiding that problem and really bringing stuff to light in a way that hit home and got people mad which was of course his goal and Jennifer, the Post has such a great back when having been in Russia, I didn't really realize that and then bringing your knowledge of Russian corruption to New York City real estate, like what a great combination and actually I wanna ask Annie something by the way I know that's not what it's supposed to be doing right now but I- Please do, it's interactive. Yeah, I was really interested in the data you had showing about the changes in the level of corruption in the free, the somewhat free and the not free countries. So conceptually you can think of freedom and corruption as being sort of orthogonal, different issues, freedom is good, corruption is bad but the nexus between them is not 100% obvious. I mean you can in theory imagine a country that's free and corrupt or pure and not free but can you just take a minute to explain why there is this linkage? And I suspect as I talk there's gonna be people jumping up and down in the audience who would wanna get in on that question also but what we typically see in countries with weak rule of law, which tend to be countries that have lower scores on our freedom index, it is often easier to engage in corruption. What we think of as corruption in countries with robust rule of law may not actually be illegal in other countries. There is widespread capture of state resources which drives poverty, lack of access to opportunity. And so when you're looking at political rights and civil liberties, what we are scoring is really how people are experiencing rights and freedoms in their own country. And so leaders who are engaged in corruption who that then bankrupts the country and the people of their resources that really does impact how you are enjoying your rights and freedoms and often the folks who speak out against corruption are the ones who are targeted for repression. Is it also because when you talk about rights and freedoms, you're including not just political rights but maybe economic rights in a sense? So we don't look specifically at economic rights, what we really do stay in that political rights and civil liberties basket, but then you're looking at within that rule of law set of questions, are your resources secure? Are there laws that protect? You're right not to have your stuff stolen basically is how we would address it. An inelegant description, but. I have a story to pass along. My wife is Israeli and she went to high school with Anat Admati whom I think it's a lot of people here know and she's a colleague. Stanford professor. Exactly, it was a colleague of B. Larry and she's had Raymond Baker come out to speak. It's Danford. She actually, I told her I was coming to this. So she, my wife has a set of friends so she wanted to go to a musical in New York on Friday. So which one did she pick? Here lies love, which is about corruption in the Philippines. Ferdinand de Nelda Marcos. You know, she would go for the musical about corruption, right? Perfect story. Right, right? So we're gonna go see that. My article in August talked about a sweet spot for corruption and for the issues that Raymond writes about in Invisible Trillions. I said, there are some countries that are quite pure. Think of the Scandinavian nations. They don't allow a lot of illicit money in. They do a pretty good job. There are other countries that are quite corrupt. I don't know, Democratic Republic of the Congo. Just name off the top of my head. Where they would welcome as much corrupt money as you wanted to send there, but people don't want to put their money there. The United States is in that sweet spot because it's kind of got enough of a rule of law that corrupt people feel they can put their money there. And then it's corrupt enough that the money does get in. And that's why Janet Yellen in 2021 said, you know, here she is, secretary of the treasury. You can't imagine a more authoritative source saying the United States in some ways maybe even most have the biggest problem with a total amount of corrupt money coming in of any country in the world. Something we all need to be. And another point that Raymond made is that we look at the tricks of financial secrecy like over invoicing and under invoicing and so on. And shell companies. And what he argues is that just about all of those tricks originated in the rich countries. The poor countries figured out how to apply those tricks, but it was the rich countries that started them out and for corrupt reasons. I thought that was a really important point. And as for the topic, going back to what Larry said about capitals and democracy, I guess that was really the question you were asking us to address. I think this may betray my overall friendliness towards free markets, but I think capitalism doesn't have to fail. Corporate socialism is a problem, but that's not an inevitable consequence of a capitalist system. I think sometimes it's the lack of capitalism rather than an excess of capitalism that's the problem. And I'd love to hear Larry respond to me on that one. What you want is, for example, if capitalism does have a tendency towards concentration, what Larry's first point, then that's the role of antitrust. If capitalism has a tendency to increase the gaps between rich and poor, that's the purpose of transfer payments, taxation to reverse that. An effective market system should unleash people's creativity to create the wealth. And then the role of the government is to control the excesses that can result from that without putting down, putting such controls on it that you end up killing the goose that lays a golden egg. I'll just finish by mentioning the article I wrote. I sort of dipped in to an area that, as I admit, is not my specialty. I wrote about the real advances that are being made and Raymond told me that, yeah, there are steps in the right direction these days. We're focusing on the United States. There's the rule about getting rid of shell companies for residential real estate. But it's not gonna be public. Okay. And there are a lot of exemptions too. Say it into the mic. It won't be public, which is a real problem. And there are still a lot of exemptions to it. And you guys are also starting to dive into some of our solutions questions. Oh, and jumping ahead. Oh, so let me stop there. I don't want, because these are, I was just gonna go into the solutions now. So I'll just stop and we can come back to that. Thank you very much for having me. Thank you. Excellent comments. So we're gonna turn to audience questions in about 15 minutes. So what I'm gonna do is kind of moosh the two rounds of questions that we had, colleagues. And take a look at this solutions question. And so within that, I know some of you can talk about recommendations and some of you can't. So for those of you who can share recommendations, please do. For those who can just talk about trends that you have seen, the role of the media in addressing this issue since the title of this is Capitalism Confronting Democracy, the challenge for media. You can also talk about the challenge for media if you want. And I will go ahead and start with you, Jennifer. Again, you have reported extensively over the years on laundering and real estate, your recent piece, tax shelters in the sky. You noted some of these policy changes that you started to talk about. And I wondered if you could share some of the recent policy efforts that you have seen and talk about if you want to, benefits and drawbacks. And then also, have you seen assets being stashed in real estate markets that we wouldn't necessarily know about or expect or that we aren't paying enough attention to? Okay, great. Thank you. I just wanted to say one thing first about that, one comment that Peter was making about people stashing money in the US because it's safe, but still a little corrupt so you can get it in. That, I remember having one conversation with an FBI person who had been working really hard for many, many years. He said, that was the most frustrating thing for someone to be able to steal so much money from their own country and then to come and buy their dream house in Malibu and just live out their life there. Well, people in their country, maybe don't have pencils for school or whatever it is. Or food. Or food. As we see, Venezuela, there were riots when the very wealthy criminals of that class, Baligarcs, they called them, came in and they were buying real estate in Miami, Palm Beach, New York. So two things as a journalist that I would love to see, we do need public laws, public access to information. We have some, we don't have enough. So that would be the first thing. If there are registries, if there are corporations, if we are ever going to find out who are behind these anonymous shell companies, we need to have that accessible to everybody. And I think if you look at PPE, so much fraud that happened, the way that some of that fraud was uncovered was regular people, journalists or anybody, just looking up information. And that should be a right. You should want, and this was in my article, you should have the right to know who was living next door to you. Why shouldn't you? The other thing are laws to protect journalists. The slap law, it's one of the other things, is that for many, especially in the 90s, definitely, it's only recently where journalists have been, where newsrooms are letting their writers in a certain way have the freedom to write without fear of lawsuits. And I would see this with different stories, different people, there'd be a sort of block, we'd get calls from PR people, sometimes every half an hour, if it was a particularly sensitive story. And it really was harassment. And at a certain point, there's a tipping point and that stops and if you're lucky, you'll have an editor who'll say just go for it and you can write your story. But there really does need to be laws that protect journalists. As far as different cities go, it's definitely become a much wider problem. The money laundering would first come to New York, then Miami. We started to get these geographical targeting orders looking at certain cities and so then dirty money would go somewhere else. Maybe New Jersey, a Chinese national is now in jail, accused of a billion dollar fraud, but his 27 million dollar mansion was in New Jersey and that might've been a reason why. Malibu, Connecticut, strange parts of cities that we had never heard of before. I'm doing a story I'm working on now that I won't share, but it's an obscure town that has a lot of kleptocrafts living in it, or their wives and children and why, you know, I don't know, but it goes all over the country really. But, you know, secondary cities, Austin, Aspen, you know, all these very wealthy towns are becoming wealthier and really moving people out. And I have to say, before I was at Freedom House, I was on the hill and I know that David in his video was talking about how too much reporting on the issue might be policy making, but I have to tell you some of this reporting I think is the most powerful thing to drive policy action. We bring human rights defenders, the ones who are investigating corruption, the ones who have been repressed to policy makers around the world. And, you know, they'll connect on the human level, but there's nothing like a really powerful piece of investigative journalism to drive policy forward. So what you do is incredibly important, thank you. So Peter, I'll go to you and then Larry, you're gonna bring us home because you're Mr. Recommendations, and then we'll turn to audience questions. Peter, you have worked with a lot of folks in the business sector and economists. Can you share your perspective why economists especially have been slow to wrap their heads around dirty money and illicit finance and what we can do to help sort of change the conversation and the awareness there and then in your engagement with business if you have any recommendations for improvements that can be made with that sector. Yeah, economists, that's a very broad big tent and there are all different kinds of economists. There are some who are very intent on rooting out corruption, finding it. And you have Tomah Piketty, the French economist who's been talking about inequality and Emmanuel Saez and so on. These people are trying to dig up the data, where is the wealth, who has it and so on. And, but as a general, I think it's a fair question because if all you do is look at the official data and that's the easy thing to do, you're gonna miss it. And the skills of economists are not to be kind of rooting around following the money the way, you know, say David K. Johnson or Jennifer, whoever else might do, where you're like picking up on tips and, you know, asking one person off the record for something and then that leads you to another person and so on. That's not what economists do. So, and then the other reason is probably that economists are trained to be equilibrium thinkers and how markets settle out, supply and demand and so on. And corruption is, is the gunk and the gears that kind of spoils a market system. So, it's not the first thing that comes to mind. Thank you. Larry, you wrote in your book, Il Wins, that democracy needs a strategy for restraining the most destructive flaw in human nature, which we've already heard you mention, are greed for power and wealth. Without such a formula, inequality will become entrenched, corruption will become a way of life and society will sink into a vicious cycle of cynicism, distrust and domination of the weak by the strong. How might such a strategy to restrain our greed be constructed and how would you work that in with some of the recommendations you have for these issues? Well, first, there needs to be a revolution in thinking that understands the nature of the beast that we are struggling against and that identifies corruption and bad governance as the core of the problem. I mean, I've spent literally half a lifetime arguing with a lot of development practitioners and a lot of foundations and even very small organizations and even very smart people like Bill Gates who's done tremendous work on specific development challenges around the world. I don't want to minimize the impact of his philanthropy on public health and so on. But, you know, if we vaccinate children and then they die later on as a result of violence or they live miserable lives because the opportunity for economic development has been stolen from them by the dynamics that we're talking about, how much have we accomplished? And I've been trying to make the case that to the World Bank, which our students just visited, to the U.S. Agency for International Development where I think we had some impact during the George W. Bush years and with the creation of the Millennium Challenge Account and so on, and a reorientation a little bit of our thinking about development assistance to stress the quality of governance more, the beginning of a change, that governance has to be at the heart of development. And if you just think about it in a little compartment as, yeah, another good thing we need to do it's just too possible that you're going to fall into the development trap that, yes, things may improve in isolated ways. Life expectancy is rising significantly and infant mortality is falling in Sub-Saharan Africa. And those are important. But we're not getting development transformation and the reason, there's not a lot of reasons, the reason why we are not getting development transformation in Sub-Saharan Africa and a lot of other places around the world and why Latin America is slipping backwards and you have a wave of coups in Francophone Africa and a 17-year democratic recession that your organization Freedom House has documented is corruption and kleptocracy. And if we don't change globally the nature of governance, repeating a lot of what my colleague Frank Fukuyama has had to say in his two books on political order, we just aren't going to get there. And so do you want to spend all of our philanthropic and idealistic private and public sector development assistance smartly and strategically or do you want to be spread into a bunch of pillars that do their own individual idealistic and sectoral things without achieving the transformation that is possible? So on this front, I think a lot of the answers on the kleptocracy front are in, I'm sorry to repeat myself, Raymond Baker's brilliant book, Invisible Trillions. And I'll just maybe reframe and rearticulate and bullet form a number of them and add on a few things. First of all, we need radical transparency and accountability. Now, Jennifer, you've mentioned part of it. Let's be able to know, I wouldn't say who's living next to who everywhere in every residence, everywhere in the world, but certainly with residences that potentially represent kleptocratic money laundering, over a million, over two million, choose your minimum level of dollars, we ought to be able to identify the real beneficial owner of that property. No games, no laundering, no curtains, the freedom of information you should be able to discover it. Secondly, no more shell corporations. We ought to know everywhere in the world who is the real beneficial owner of a corporation and any country that will not reveal who is the real beneficial owner of corporations should be in a separate category in terms of access to our banking system and to a lot of the things they want from Europe, the United States, and the democracies that would collaborate on this. Third, not original to me, I'm drawing this out of invisible trillions, coordination among jurisdictions so you can't, in the sharing of information about corporate tax filings, so you can't have corporations engaging in this ludicrous transfer pricing to hide their corporate profits. And fourth, international enforcement, which also requires cooperation among law-abiding countries of the world that care about an international rule of law and some minimum of economic justice as a common strategy for saving global capitalism, international cooperation to enforce action against falsified corporate transactions. Fifth, stronger international bank regulation will leave it to others and two more things I want to add. Number one, to kind of build on what Jennifer said and the industry that Peter represents as well, we've got to mobilize an extremely powerful and resourceful international strategy to strengthen and support and train investigative journalism around the world. I'd like to send you to a lot of places in the world to share your skills. I did that a little. A few organizations including Luminate the Foundation and NED cooperated in a strategy that launched something called the International Fund for Public Interest Media. And the vision was to eventually mobilize from the donations of a lot of different democracies around the world because you're not going to get China or Saudi Arabia to contribute to this. Billions of dollars to support investigative journalists around the world, both if they're in exile in Estonia from Russia to challenge and expose what's going on there and build on the work that Navalny and others did to reveal all of Putin's palaces and so on and to support new investigative journalism enterprises in a lot of different countries. And I think this is vital both for the future of rule of law, the future of acceptably just capitalism and the future of democracy. And then I'll just say one thing. I don't want to get too partisan or too political here in the United States. So maybe I have to phrase this a little bit carefully. But we have an extremely perverse dynamic in the United States and in some other countries where large numbers of working-class people are voting against their obvious economic interests. This is not a coincidence. This is the result of a deliberate, clever, extremely highly developed and statistically informed political strategy to change the subject from what we've been talking about here, which is the shocking redistribution of income and wealth in the United States and certain other advanced industrial democracies from the working-class and the middle-class to the extremely wealthy. And the only way you can change the subject is by raising a variety of social and cultural issues that create a tribal consciousness that is different than the consciousness that would develop if people realized what's going on, the nature of the political and economic game here, and we're able to reflect on what would be, in that calculus, a rational type of exercise of their democratic vote. And that requires not only changes in campaign finance I've mentioned that and so on, and at a minimum radical transparency in campaign finance. At least I think that should be possible even in the wake of the Supreme Court interpretations of how far freedom of speech extends. But it also requires really a pretty serious rethinking on the part of political actors who consider themselves progressive but have not been pursuing, in my opinion, effective political and electoral strategies that would achieve the kinds of reforms we've been talking about. Well, our wonderful panelists have given us so much to reflect on and think about as we turn to audience questions. We have just about ten minutes, so I will ask that you keep your question to a question. And if you are sitting in the back, I will need help seeing who raises their hand first because of the light. Hi, good afternoon. My name is Frank Vogel. A very simple question. I should say I'm one of the founders of a group called Transparency International. None of you have mentioned the role of civil society in your presentations, which strikes me as a little odd, but maybe you could explain why you don't feel that civil society is actually leading the anti-corruption effort and why you omitted it. We at Freedom House can talk all about civil society, and we would certainly say it's on the civil society as the front lines of the fight for democracy and freedom around the world. And as I briefly mentioned, a lot of folks who are targeted first are the ones who are looking at some of these issues around corruption. There are most investigative journalists who are reporting on corruption, but environmental rights defenders, they are some of the most targeted. And of course, all of you know well, many of those large-scale industrial projects, dams, other things, are rife with corruption. And so civil society is a key piece. They're often, not often, they see the issues first. They see the repression first. Journalists are the first to report on it, but any effective solution to these issues will absolutely require governments working with civil society in the country in question to figure out what is actually a workable solution in this particular country. I don't know if my panelists would like to add to that. I agree with everything you said. I agree with what you said about the central importance of various kinds of civil society organizations, and I'm a long-time admirer of Transparency International. And thank you for your work. I talk about this at some length in multiple respects. In my book, Yale wins. I mean, we were given a few minutes, and I probably egregiously exceeded them at the beginning and in round two. But I've laid out an agenda of some of the things I think need to happen. Now, if you want to talk about how it needs to happen, I mean, many of the reforms we got in terms of the Antitrust Act and the improvement of democracy, including with direct democracy and so on, and reforms for better governance, which Frank talks about a lot in the political order book and everything that was happening around Teddy Roosevelt's trust-busting and so on were as a result of civil society mobilization and advocacy. Gary Coleman, you're in the room. He led that effort. I would like your advice, Mr. Diamond, or Professor Diamond, on how to get the Supreme Court approach to freedom of speech and take the money out of the campaigns. That's a huge stepping stone. The other is in terms of how NGOs or civil society slice and dice issues, because that's how foundations will support you. So if you could get the major foundations to work on governance, that's your assignment for tomorrow. Well, two quick points on the latter. There is the potential for a lot of maybe more precisely focused or narrowly focused civil society organizations to collaborate in broader coalitions, and there's a lot of civil society energy emerging now around democratic reform in the United States, including electoral reform. So they're not just narrowly focused. On the Supreme Court, the Economist magazine, which the last time I checked was not a socialist enterprise, has endorsed the idea of 18-year term limits for the Supreme Court, and there's a bill in Congress that would temporarily expand the Supreme Court and give every president going forward, Republican or Democrat, every two years the ability to nominate a Supreme Court justice in the near term that would result in a temporary enlargement of the Supreme Court, and then with 18-year term limits and a justice appointed every two years, it would eventually come back to a steady state of nine justices. That isn't going to happen anytime soon, but I personally favor it. Okay, I think we can squeeze in one last quick one. So, sir, gentlemen back here. Hi, my name is Jeff Falk. I'm with Johns Hopkins. So for 30 years I was very high on the greed scale. I worked as an investment banker and a private equity executive. So I agree with what you said. The bottom 60% that have no net worth should be united and going after the 1% that have all the money, but instead they're sidetracked on issues like abortion or guns or something. So what role is the establishment of the media has in perpetuating that division among the 60%? So I guess I'd ask the Post and the New York Times reporters to comment. Thank you. I mean, there's different ways to answer that because obviously because those issues are very real issues. And so it's easy to say while someone wants to sell a newspaper, someone owns a newspaper with their own view and that's going to be reflective in their stories. So I wouldn't frame it that way. It's more some of the striking things that I learned actually today from the beginning, from that video from David, that the average education is sixth grade, which is absolutely terrifying. So I look at it that journalists have to, you know, our role is to educate in a way or reveal. It's not just to entertain or to sow division. And you know, if people are screaming at each other on TV, I don't necessarily think of that as journalism either, you know. So there are just so many different levels, so many stories to tell and a culture war is very different from economic needs of people and there is definitely a way to tell both of those stories. Yeah, I like that response. I'll just say, only speaking just for myself, in my newsletter, I try to be solutions oriented and I try to keep the temperature down. I try not to just use inflammatory language and to pit people against each other. So that's my own little contribution. So I'm going to have to stop us there so we can keep to time and I will turn over to Charles Davidson, who will then turn over to Raymond Baker to close us out. This wasn't planned that I was going to participate in today's program at all and my joke to Raymond about introducing him as we were getting ready for this and he said, well, yeah, why don't you do that? So it's a little strange introducing a closing speaker. Raymond said I have about 20 minutes. Is that right? So I think that'll be fun. Actually, if I had 20 minutes, we could have some fun. I'm seeing one minute. But I'd just like to make a point then about Invisible Trillions, which was the inspiration for the D.C. Forum that Raymond and I and Jack Blum and Tom organized and all of that and Peter has noticed the book. The book hasn't gotten all that much play and when you think about it, it's because it's so important. If people had gone out and bought this book in droves, it would be because they already knew about the problem and already knew enough to be interested in the book. And just like Raymond's capitalism's Achilles' heel, that also did not become an immediate bestseller at all because it was new. And Raymond has been an absolute pioneer in this field and the last thing I want to say about him is, as most of you know, but not all, Raymond's a Harvard MBA grad who got into this reform thing after a long career as an active businessman. There are not very many MBAs who are involved in this reform movement and we need, of course, more converts. I also have an MBA, but it's from a lesser school than the Harvard Business School where Raymond meant, so I won't mention where. But I think we need to realize what a unique property Raymond has represented in this and capitalism's Achilles' heel took a long time before it was very influential. Now all the people in our government, all these young people who are working on this issue in the kleptocapture, all the stuff, they all know that book. Invisible Trillions is fated to have a similar fate. Thank you. Thank you, Charles. I'd like to now to update my resume with all those nice comments. I think that we are dealing with an existential threat that in many ways parallels the threat of global warming and I think it will take the efforts of all of us, particularly the younger generation to solve this problem. My generation brought on this problem. Your generation has to solve it. Tom, thank you for kicking us off. David K. Johnston, I appreciate his contributions. Annie, thank you for bringing Freedom House into this issue. Larry, what can I say about Larry? Mr. Democracy, thank you for hosting me in Stanford a few months ago and we look forward to ongoing collaboration. Jennifer, you're one of the few people in the world that can address these issues through a Russian kleptocracy lens and also an American facilitation lens. Keep it up. And Peter, I remain staggered by the breadth of your focus on economic issues bringing in also political and social issues. I hope that you will also help us spread what we're trying to accomplish. Thank you all for coming. We look forward to seeing you at the next event. Have a good evening. Thank you.