 It's my pleasure to introduce Heather Boucher, who is the chief economist and director of the Washington Center for Equitable Growth and a senior fellow at the Center for American Progress. We are pleased to co-host this event with WCEG. And with Heather, who will introduce the rest of the panel, get our conversation going. Heather. Thank you, Christian. It is just our honor at the Washington Center for Equitable Growth to be able to co-host this event with the Economic Policy Institute. I started my career here in Washington at EPI and just thrilled to be able to do this here today. So thank you, Larry, and thank you, Christian, everyone. This is wonderful. So we are so pleased this morning to be able to have Professor Thomas Piketty from the Paris School of Economics here today. Is that me? Yeah, this does make your hand wet. So I keep talking, or do you want us to leave? OK, great. So thank you. So I mean, this is an amazing morning. It's a very wet, dreary morning here in Washington. It's amazing to see so many people here today. Now, I am particularly looking forward to this conversation, as I think many of you are, because I believe that we need to be asking new questions about how our economy is performing. Once President Kennedy could say, a rising tide lifts all boats, promote growth, and all will benefit. However, those of us born after the baby boomers have seen the world in a different way. The only economic reality we've ever experienced is one where productivity gains go to the top while leaving the vast majority to cope with stagnant wages, greater hours of work, and most especially in the past decades, rising debt burdens. We've experienced firsthand the damage this has done to our generation and to the ones that are following. For example, here in the United States, young people take on debt to attend college at prices that would have bought their parents or grandparents a nice house in the suburbs, even as too few actually graduate from those colleges. For us, the golden era of US capitalism, described in many books that I've read, seems about as real as Hogwarts. The quest to reconsider how our economy is performing is compounded by the fact that economists neither predicted nor prevented the recent economic crisis. And to add insult to injury, we haven't yet fixed it. The share of the US population with the job remains just a few tenths of a percentage point above its lows in 2009 during the Great Recession. But of course, as we all know, profits are up, and those at the top have seen their incomes rise by over 30%, capturing 95% of all the income gains between 2009 and 2012. And this week's New York Times was filled with stories of the multi-millionaires and billionaires who are benefiting from this, quote unquote, recovery for the rich, while the rest of the economy just slogs along. In describing our current economic reality, presidential economics advisor Gene Sperling may have said best, the rising tide will lift some boats, but others will run aground. One issue that we'll discuss today is whether the decades of strong growth and shared prosperity of the decades just after World War II are actually repeatable. This is the critical question for policymakers. What can we do to promote equitable growth? Shall we focus at policies at the bottom, like raising the minimum wage or expanding their income tax credit? Should our efforts focus on creating solid middle-class jobs? Or should we aim our sights on limiting incomes at the top? Or should we not focus on any of that, but focus mostly on growth and hope that eventually the gains will go to the rest of us? Which path will be good for the economy, as well as for our societies and our democracies? These are the questions that we struggle with every day here in Washington. And ideally, those policy efforts should be informed by a theory of how the economy works that reflects reality. To do this, we need to reconsider whether or not we have the right tools in our standard economic toolbox to actually understand what drives our economy and what role policy can play in ensuring that the gains of growth are shared. We need to truly understand capitalism and, as our guest Thomas Piketty argues, capital. That's why I'm so pleased to be able to introduce him on this very rainy morning here in Washington. Thomas is pushing us to rethink our approach to the economy and is giving us a new set of tools. He comes to us from Paris, where he's a professor at the Paris School of Economics. He did spend some time here in the United States at MIT when he was a younger scholar. And of course, he is a well-known leader in the recent economics literature on the rising incomes of the top 1%, work that he's done with his colleague Emanuel Sayaz at the University of California, Berkeley. He is here today to discuss his new book, which is very heavy. And I recommend, if you want to do weightlifting, Capital in the 21st Century. I also strongly recommend it because I actually found it very funny and incredibly well-written. So with that, I would like to introduce Thomas. OK, so thanks a lot for inviting me. And it's a great pleasure to talk about my book today. So let me first describe what I have tried to do in this book. So this is really a book about the history of income and wealth in over 20 countries since the 19th century. So it's also the last part of the book, Part 4, that talks more about the future and about possible conclusion for the future. But let me say right away that you can perfectly disagree with everything that's in Part 4 and still find some interest in what's in Part 1, 2, and 3. And so most of the book is really about the past history of income and wealth. And just like everybody, I am better at analyzing the past than the future. And ultimately, the objective of the book is not so much to make predictions about the future, but to help everybody to write their own Part 4. And I don't pretend that my own conclusions are particularly convincing or interesting. I try to do my best to draw the conclusions that strike me as the most reasonable ones. But what the book is really about is I try to put together a large collection of data and historical evidence on income and wealth. And although the book is a single author, I should say that this is really the outcome of a collective research process. So over an international research process, over 30 scholars from over 20 countries were involved. I started working on the history of income and wealth inequality for the special case of France more than 15 years ago. So then I was very lucky to meet Tony Atkinson, who did similar work for the UK, with Emmanuel Saez, we did it for the US, with Facundo Alvaredo, we did it for Argentina and Spain, with Abidjid Benerji for India. And I cannot quote everybody, but if it has become a very large international project, and I think by far the largest existing international database on the historical evolution of inequality, this is, you know, a big thanks to these many scholars. And there's no way I could have collected all this data by myself. Also, you know, I think I am benefiting from, and we are all benefiting from, you know, the rise of information technologies, which make it much easier to collect such vast volume of data, which, you know, at the time of Kuznet in the 1950s, was one of the first authors to try to compute estimates of income distribution and who found this big decline in income inequality in the US between 1910 and 1950, you know, at that time, you know, the information technologies were of course much less developed, and it was much more difficult to do the same work for so many countries that we were able to do. So, you know, all what this book is doing is to try to present all this body of historical evidence in a consistent manner. And, you know, I'm not, you know, I want to be modest about the conclusion, and I certainly don't have the kind of deterministic view of the future that I sometimes read in the press, you know, release about the book. I certainly don't have this apocalyptic view of the future that some people seem to have when they read my book. You know, I think there are several possible futures. It only depends on the kind of institutions, educational institutions, monetary institutions that we choose. There are different forces pushing in different directions, and, you know, the objective of the book is just to see, you know, what do we know in the end about the trends for income and wealth in the past and does that help us to better understand some of the challenges for the future? So, the book is about the US, about Europe, about Japan. It's also about every country in the world, you know, including India and China, for which we could gather historical data. I guess, you know, it's not as centered on the US as the US debate tends to be, which is very natural. So, you know, the book refers to the rise of top managerial compensation in the US over the past 30 years, which is an unprecedented evolution with, you know, between two-thirds and three-quarters of aggregate economic growth going to the top 10% and mostly to the top 1% over the past 30 years in the US. And this reflects to a large extent this unprecedented rise in top managerial compensation. And this is very important. And, you know, I think this is not going to change just by magic and I think, you know, income tax progressivity at the very top end is probably, you know, one of the only way to try to calm down this process. But I'm not going to talk too much about that today because the book is really trying to shift the attention from the issue of rising top managerial compensation, which is very important, you know, I don't deny it, but it's trying to shift the attention to the issue of wealth accumulation and wealth inequality because, you know, I think in the long run it's probably even more important than the rise of top managerial compensation. I mean, both are important, you know, I don't want to choose, you know, the book talks about both evolution and, of course, they can feed each other in several ways. But what I would like to focus on in this brief introduction is really another process going toward rising inequality, which has more to do with the dynamics of the concentration of capital ownership and the dynamics of wealth inequality. And the key historical force that I study in the book, in that respect, is the tendency, you know, in the long run for the rate of return to capital to be higher than the economic growth rate. And I argue that this force in itself, other things, taking other things being given, can very well push toward, you know, rising wealth inequalities and probably, you know, level of concentration that could return to the extreme levels that we have observed in the past, in particular in European societies until World War I. And I think, you know, the primary mechanism to understand this very extreme level of wealth concentration that we had in the past is really the fact that, you know, until World War I, it was obvious for everybody that the rate of return to capital was bigger than the growth rate because the growth rate was pretty small. So before the Industrial Revolution, the growth rate was almost zero percent. So, of course, the rate of return was bigger than that. You know, if you open any novel by Genostine or whoever you want, you will see that the typical return to land capital is four or five percent per year. So, in other words, the value of land is typically 20 or 25 years of annual rent to the land. And this is so obvious that, you know, the novelists of the time go from capital to rental return to capital. They move between the two dimensions, the capital, the stock and the flow all the time. And it's obvious for every reader that, you know, if you want a rent of 1,000 pounds, you need a capital of 20,000 pounds. And, you know, it's sort of completely obvious. And growth rate at that time was zero percent. So, of course, the rate of return was a lot larger than the growth rate. Now, the Industrial Revolution has changed this a little bit, but much less so than one might so. Because, you know, the growth rate went to zero percent to one to two percent per year. If you look at productivity growth, now, this is a big difference. You know, it's a big difference to grow at one or 1.5 percent per year rather than at zero percent. But that's not enough to counter the fact that if the rate of return is on average four, five percent and, you know, for large risky portfolios, it can be six, seven percent. You know, this is gonna push toward a very high concentration, the level of concentration of wealth will eventually converge at some finite level. Because, you know, in the life of family wealth accumulation, you always have strange events happening. You know, some families over-consume the wealth, some go bankrupt, some have too many children, some have too few. You know, the life of family is complicated and this creates, you always have some mobility in the wealth distribution. But the level at which this concentration will stop will involve potentially very large wealth inequality or at least this is the explanation that I propose in the book to account for the fact that, you know, wealth concentration in European societies at the eve of World War I was amazingly high. Now, during the 20th century, a number of very unusual events occurred which changed this inequality between the rate of return to capital and the growth rate. First of all, you know, the World War I, the Great Depression, World War II, of course, reduced the private rate of return to capital for a very long time period, particularly in Europe and Japan with all the destruction of wealth. Inflation was also a way to destroy the private wealth that had been put into public bonds in the post-war period. The other unusual event that goes with the war period is the very large growth of the post-war decades and some of it, you know, some of the very large growth of the 50s, 60s, 70s is certainly to do with the fact that, you know, in particular in Europe and Japan, you know, these countries had to catch up with the US and also, more generally, you know, the growth, including in the US, was not as large in the 14, 1945 period that it could have been without the wars and shocks. The other unusual event and more positive, if you wish, event that you have in the 20s unprecedented population growth, you know, huge population growth with the Baby Boom Court and more generally, you know, it's important to understand that population growth first is a very big part of total economic growth historically, you know, if you take at the world level over the past three centuries, the growth rate for world GDP has been 1.6 percent per year over the past three centuries, half of it is population, 0.8, half of it is per capita GDP. Now, this can seem very small numbers, but in fact, when this accumulates over long period, you know, 0.8 percent per year was enough to multiply the world population by 10 over the past three centuries and average living standards also by 10. So, you know, this can seem small, but in fact, you know, that's quite large when it goes over a long period and population growth is a big part of historical growth and it is the same right now at the world level, you know, when you look at the world GDP growth rate in 2014, you're gonna get 3.5 percent, half of it is population growth. So, the population growth is not over yet. We are still at the end of the demographic transition, but you know, according to available projections, that's gonna decline. And that's one of the key reasons why we are returning to, you know, rate of return to capital that's structurally larger than the growth rate in the recent decades and that's pushing toward rising wealth inequality. You know, the simple mechanism is that with a bigger R minus G, the difference between the rate of return and the growth rate, initial wealth inequality stand to amplify until the point where you have the shock in your family wealth trajectory, but this stands to lead to high concentrated wealth. Now, let me make two points about, you know, America versus Europe in that respect. You know, I think there's a strong belief in American exceptionalism related to inequality, you know, I guess many countries in the world have a strong belief about their exceptionalism, but certainly particularly strong here. And for a long time period, you know, there was this view that among American sociologists that America was characterized among other things by an incredibly high rate of mobility, you know, less, more mobility than in Europe and less reproduction of economic positions in Europe. And I think for a long time, this was indeed true and this continues to be true to some extent if we look at the relative importance of inherited wealth and labor income, but that's due to a very particular reason which is the huge population growth that characterizes the US, so including now as compared to Europe and Japan. And you know, this per se, you know, the population of the US went from three million at the time of American independence to 300 million today, whereas the population of France was already 30 million at the time of the French revolution and it's 60 million today. So France, you know, it's almost the same country today. It's almost the same families or the same, not the same buildings in Paris, but you know, you have a sense of reproduction. Of course, when you go from three to 300 million or you know, from 100 million in 1900 to 300 today, wealth coming from the past has to be less important than in a country with a more stagnant population. So that's a very important difference and that's gonna be with us for some time. Now, is that gonna last forever? You know, is the US population going to be 900 million one century for now? You know, maybe yes, maybe not, you know, we don't know. You know, it's a complicated issue, but you know, whatever happens, this will have strong consequences of the structure of American inequality and American wealth. And you know, my best guess is that population will stabilize pretty much everywhere and therefore the rise of a wealth-based society that we now have in Europe and Japan might be a global phenomenon. But of course, you know, I don't know, you know, it could be that, you know, it could be that you still have a lot of population growth in the US because the entire world moves to America. You know, this is certainly what US universities would like and you know, you could. But you know, at some point, if everybody moves to America, you will have the same problem at the level of America. So that's not, you know, it's not, I mean, it's hard for me to say that to an American audience, but I think what makes America exceptional also makes it not generalizable to the rest of the planet. So you know, I mean, I love America for that reason, but you know, it's not, you know, where is what we can learn from France or from Europe or from Japan is easier to generalize to the rest of the planet because you know, it's unlikely that the world population is going to be multiplied by 100 in the next two centuries or even, you know. So, but we'll see, you know, I don't know, you know, if you want to reduce the importance of inequality and wealth accumulating in the past, please have a lot of children, you know, this is the best way to, you know, if everybody has 10 children, of course, you should not come too much on inheritance. But you know, apparently, moving in this direction, in a number of countries, we are moving in the direction of declining population. And this is quite frightening. You know, I just want to emphasize that this is frightening in itself, but this has also a consequences for the structure of inequality. So if you, you know, if each family has only one kid, then you inherit from both sides or from zero side if both parents are poor. And this makes the relative importance of inheritance, you know, so, you know, right now in countries like Germany, Japan, China, so it's an important country, the size of the generations that are born right now are 30% smaller than the generation of their parents. And, you know, this is not twice as small, but we are getting there. And potentially this can make the relative importance of wealth and income even higher than in the 19th century Europe. Let me also mention that, you know, I have read in a number of places that, you know, the pre-World War I European societies, there's not so much to learn from there because this were, you know, agrarian societies, stagnant society. Let me make the opposite point, which I think there's a lot to learn from the study of the pre-World War I period because, you know, this was actually a time of very large innovation, economic innovation. You know, this is a time where, you know, we invented the automobile, the electricity, the radio, the transatlantic steam. So, you know, this is less important than Facebook, of course, but, you know, still, you know, this is, these are significant innovations. And, you know, there was the stock market capitalization in London or Paris at that time as a fraction of GDP was higher than what it is today in the United States. So, you know, this was financial globalization at its best. You know, the net foreign asset position of Britain and France were between one and two years of GDP, you know, you don't have any country apart from small oil countries that have such large foreign assets today. So, you know, this is not an agrarian economy in any meaningful sense. So, I think, and still, even though you had all this innovation and all this industrial growth, you know, the growth rate of productivity was still one 1.5% per year. And this is already quite fast, you know, because one 1.5% per year over 30 year period, over a generation, it means that output per head rises by, you know, 30 to 50%. So, you know, between 1.3% and 1.5% of the economy has been renewed each generation. This is actually quite fast, you know. Not fast enough to counteract the fact that the rate of return, like 4 or 5% is going to be bigger than the growth rate. So, you know, I love innovation, productivity growth, but I think it will be, you know, it will be a mistake to believe that this per se, you know, it's going to bring the growth rate to 4, 5% and up to the rate of return to capital. You know, there's no conclude with this, and of course, I didn't look at all at the time, but I guess I should stop. There's no natural force of any kind, and there's no logical reason or no historical reason why the rate of return to capital and the growth rate should converge to one another. Because there's absolutely no reason. And it will be, so of course it could be by an incredible coincidence that the number of children we have and the number of innovation we make each year push the growth rate to 4 or 5% to the rate of return. And, you know, maybe we will discover a planet at some point where the growth rate is always 10% per year. But, you know, I think it will not be reasonable to bet on that, and I think it's, you know, if this happens, you know, if technological progress in the future is so fast that growth rate go up to 4 or 5% and equilibrate the rate of return to capital, then, you know, that's fine, then we will not need to worry about raising wealth inequality. But I think we, you know, it would be reasonable to make plans for another option, you know, and to... So, right now, you know, the top of the wealth distribution, not only in the U.S. but also in Europe and at the entire world level, is rising, you know, two, three times faster than the size of the world economy, in spite of the very fast rise in the size of the world economy, okay? So, the world GDP right now is rising at 3% a bit more than 3.5% per year. Alpha-feet is population, alpha-feet is rising per capita income. Per capita wealth is rising a little faster, about 2% per year. But the top of the distribution, if you use global rankings of billionaires published by Forbes magazine, which, you know, I don't claim it's a particularly reliable source, but at least, you know, let's... We live at a time where people buy Forbes in order to have information about wealth. You know, I would prefer that they buy government statistical publication or, you know, center for equitable growth publication, but apparently they don't find the information they need. So, if we use this global billionaire wealth rankings, what we find is that the top of the distribution has been rising at six, seven per year over the past three decades, so three times faster than average wealth in the world. So, in spite of the convergence between the bottom and the middle of the world distribution due to emerging countries and China, the gap between the top and the middle is increasing. And this will... You know, nobody knows where this will stop, but, you know, I think, you know, it will be a mistake just to assume that by an intradible coincidence, this will stop at a level that is compatible with the proper working for democratic institutions. So, let me stop there and, you know, I'd be very glad to answer questions and discuss these issues with you in a minute. So, we're now going to have our panel come up and take their positions. Do you want to alert you all that after this event is over, you'll be able to purchase a copy of Capital in the 21st Century as you exit the suite, and once we get everybody in position. Wonderful. So, thank you. Thank you so much for those remarks. It just definitely was very fascinating. Looking forward to having a rich conversation here. Going to spend a little bit of time allowing our panelists to discuss the debate, and then we'll bring Thomas in, give your voice a few minutes to rest and to process all of that. So, allow me to introduce my esteemed panel here. To my left is Professor Robert Solow. He is Institute Professor of Economics Emeritus at MIT. Professor Solow also served as a senior economist for the Council of Economic Advisors during the Kennedy Administration. He was awarded a John Bates Clark Medal in 61 and the Nobel Prize in 1987. It's just a treat to have you here today. Bob, you can get the mic there. And then to my right on the other side of Thomas is Betsy Stevenson. Professor Stevenson is a member of the Council of Economic Advisors. She's currently on leave from the University of Michigan's Gerald R. Ford School of Public Policy and the Economics Department. It's a real pleasure to have someone from the administration here today and I know that you all care very deeply about equality, looking forward to hearing your remarks. And then finally, of course, we have Josh Bivens. Dr. Bivens is the Research and Policy Director here at the Economic Policy Institute. He's the author of Everybody Wins Except for the Most of Us, What Economics Teaches Us, Teaches About Globalization, and is a quite prolific policy thinker here in Washington, D.C. So, thank you all for joining us. So, Bob, I'm gonna throw the first question over to you. You, of course, you named a growth model. You're a world-renowned expert on economic growth. And Thomas's book has given us a lot to think about in terms of the intersection between inequality and growth and this relationship between the rate of return and economic growth. And I'd like you to tell us what your views are reading this and what the likelihood that the rate of return on capital will remain above the rate of growth as Thomas suggests. Sure, thanks. Well, let me begin by saying that like, I suppose most people here, I thought Thomas's book was both important and fascinating. Strangely enough, in my own mind, I seem to agree with him about what the two important contributions of the book are. One is the sheer collection and presentation and analysis and description of this vast database across time and space. I think that's, we're gonna be digesting that for a long time. The second and the most important analytical contribution is to have uncovered this mechanism that works off of the excess of the rate of return on capital over the rate of growth of the economy to siphon income to the very top part of the income distribution. So far as I know, nobody had ever fastened on that before and I think it's an extremely valuable contribution. It's not, you will notice, some kind of market failure of a capitalist economy. It's a mechanism that's there. There's a graph in the book which shows that in Britain and France, there's no comparable picture for the US actually, the rate of return, the realized rate of return on wealth is trendless over a period of well over a century, ranging between four and 6% or three and 7% depending on how wide you wanna cast that. Most of us will have thought of that trendless character of the rate of growth as being the outcome of two opposing forces. Diminishing returns over time as capital accumulates tending to drive the rate of return down and technological change or productivity increase generally tending to push it back up. And historically, no inevitability about this, there has been in the main industrial countries no pronounced prolonged trend in the rate of return. Now, as Thomas explains in the book and explained just now, there's reason to expect over the next half a century or a century, I don't know how far ahead one wants to try to look when you get to be 90 years old, the horizon tends to narrow a little bit. But he, like the rest of us, thinks of the rate of growth as for these purposes, exogenous. There is the demography, there's the population growth which he expects to decelerate to slow down. There's the rate of growth of productivity, of total factor productivity, let's say, which no one knows about that. There are some economists, Bob Gordon being the most notable one who are definitely pessimistic about that. And Thomas is sort of on that side and I'm agnostic but certainly that pessimistic outlook could certainly be true for sure. So we expect the rate of growth perhaps over the next half century to be on the low side. The rate of return on capital is endogenous. That's not something that you can treat as given. And so one wants to make some guesses as to what's going to happen to the rate of return over the next half century and what's going to happen to that critical gap between R and G, between the rate of return and the growth rate. Well now, on the pure theory side, the sorts of influences that appear in the book suggest that there will be an increase in the capital output ratio or the wealth output ratio. This is likely if the law of diminishing returns is still operating at all, is likely to push the realized rate of return on capital down a little bit. You can ask how much down, if you make the technical calculations that one would normally, that a person like me would normally make and that Thomas, that rest on assumptions that are already in Thomas' book, you would expect the rate of return on capital to fall when the growth rate, when the permanent growth rate falls and to fall somewhat better than one to one so that the gap between R and G is likely to remain positive but to be somewhat narrower. So there is no reason there to expect this process of accumulation of wealth and income at the top of the distribution to stop concentrating, to stop increasing. But I want, I'm going to quit in a minute. I want to call attention to one other aspect of this that's not discussed in the book and there's no reason why it should have been discussed in the book, it's not a book about that. You would normally expect the combination of a lower rate of growth of the economy and the lower return on capital to diminish the incentive to do real investment in an economy. If income continues to be concentrated at the top, you would expect, if anything, the saving rate of the economy to rise. So I suspect that this kind of development is going to make it harder over the next 50 years to sustain the amount of investment that's necessary to maintain full employment in an economy like ours. Without meaning to, I think that Thomas has produced as strong an argument about the worry of stagnation over the next 50 years or so, then a stronger argument than those who have promoted that argument have themselves produced. So the one gap that I'd like to see filled if there's going to be a follow up to this book is I'd like the analysis of the rate of return in the US to be worked out in detail as it is in Great Britain and France because I think that the prospects for the next 50 years or so are not so good distributionally. We may come back to that discussion later on and on top of that add a level of difficulty to maintaining full utilization of the economy generally. Thank you. Thank you, Bob, I'm gonna come back to where you ended in a second when I get to Josh, but I wanna go to Betsy and Betsy, I wanted to throw you a question that pivots a little bit off of what Bob says, but it takes it in a slightly different direction, which is that, so Thomas suggests that if the rate of return is higher than the rate of growth, therefore we need to tax capital and we'll get to that in a little bit, but for now that sort of presumes that we can't do anything to change the rate of growth and Bob has made some points here from your perspective where you sit in the administration, what is your view on that? So I'm really glad that you asked me that and actually it dovetails really nicely with where Bob ended because I think being concerned about fully utilizing the labor force is something we should in fact be focused on and in fact the administration is focused on and that has many dimensions to that challenge of fully utilizing the labor force. One of the things that the administration is focused on right now is increasing opportunities for women and the White House is holding a working family summit and the philosophy behind that is the idea that we're not making good enough use of American talent and I think if you think about where this administration's been from the beginning, it's been trying to think about how we can do more to help get workers where they're gonna be most best used and so one example this is obviously the healthcare bill, the ACA, so by eliminating job lock by allowing people to be able to access health insurance through the exchanges, we have undone I think one of the important tethers that meant that people were misallocated and so letting people choose jobs where they're gonna be most productive, where they're gonna be happiest instead of where they're gonna actually get insurance is important but of course we can't stop there and we know that there are other things that we can do in order to help women be able to make choices about participating in the labor force that are really about their talents and where their talents are gonna be best utilized. There's this idea that we need to do more for the labor force also drives our concern about the long-term unemployed but we can't afford to have a group of people who are taken out of the labor force and are never participating fully so trying to figure out how to get the long-term unemployed back into the economy and being utilized and being able to contribute in a way that they were contributing both prior to becoming unemployed is obviously a really important set of policy concerns. A third set of concerns is thinking about the role of young minority men, many of whom have become disconnected from the labor force and the president has an initiative called My Brother's Keeper and trying to make sure that we are improving the opportunities for young men of color who have often found that they get into who have found themselves in situations where they're not getting the same kind of opportunities and so that kind of public-private partnership to improve opportunities for them and all of that is about, is really around a set of policies designed to make sure that we're doing as much as we can with the labor force. Another set of policies in terms of labor force growth is thinking about immigration reform. The CBO and the administration has pointed out that immigration reform would increase growth and if you're thinking about the rate of return of capital, when the rate of return of capital is greater than growth, we end up in a situation where inequality is growing. Obviously trying to boost G is something important I think more generally one of the things I wanted to say is I think we are seeing research that's really fundamentally shifting the way we're thinking about the relationships between growth and inequality. So Heather talked about how for many decades we were sort of told growth is important because a rising tide lifts all boats and we've all become a little bit disillusioned with that seeing that a lot of the gains have gone to the top. And I think this book is terrific for having us rethink that relationship between inequality and growth and it's worth putting it in the context of other research that's come out. For instance, research from the IMF suggesting that the policies that might reduce inequality are more benign for growth than people used to think. And additionally, other research which has taught, has indicated that countries that have less inequality actually have more sustained growth. So I think all of this research is coming together to tell us that we really need to rethink the relationship between inequality and growth. That growth is still very, is important and we need to be adopting growth promoting policies but that we shouldn't see growth as in conflict with inequality and in fact addressing inequality can foster growth and fostering growth by potentially raising G above R can actually help prevent inequality from rising further. Thank you Betsy, that was a nice, I like the way you brought in the IMF study which I think is so important for its intersection with Thomas's work. So thank you and we'll come back to that I think in a little bit as well. So Josh, I'd like to turn to you for your sort of opening reaction to Thomas's book and I wanted you to focus on, I mean I'm sure you wanna talk a little bit about the full employment angle here given the work that you do at EPI at the Economic Policy Institute but also sort of what are some of the policy levers more generally that you think are really important to consider given what we're learning from this book? Yeah, thank you for having me on this panel and thank Thomas for coming and for the way I think about this and I think about this in a pretty unsophisticated way. I mean one of the big takeaways from the book is bad things happen when R is greater than G when the rate of return to capital exceeds the growth rate and bad things happen mostly because capital income and wealth is already very concentrated so when the rate of return to capital exceeds the growth rate you just sort of have this snowball effect of ever greater inequality. So that again, the unsophisticated take on this is three things there. How do we make sure more people get to enjoy a high rate of return on capital? I mean if capital is completely distributed equally throughout the economy are greater than G, not a problem. So the first thing is expand the universe of people who get to enjoy the high rate of return. Two, try to raise G, try to raise the growth rate and then three, how to lower the rate of return on capital if all that the rate of return on capital is doing in some sense is sort of shifting rents away from the vast majority to sort of a privileged group at the top and so just a couple of comments on each of those things. In terms of who gets to enjoy the rate of return on capital we should do lots of things to make sure wealth is distributed more equally. You can think of like complete pie in the sky ambitious things like a financial transactions tax that finances a national wealth fund that sort of gives everybody sort of a big share in national wealth. That would actually have the side benefit you could imagine if you had a national wealth fund kind of like the Alaska fund but instead went around and invested in asset markets around the world you could actually reduce R in a socially useful way because you'd be kind of pounding down the equity premium and you'd be giving more and more people the benefits from a high rate of return on capital. I mean the shortest and easiest for boosting people's wealth is ensuring there's enough good jobs available that they earn a wage high enough to have a decent standard of living and save a little bit on top of that. So I think just to the next question of how to raise G which dovetails with that the first thing we have to do to boost G is not completely botch macroeconomic management. That is we need to get the economy back to full employment much sooner rather than later. Economists like to say, no, no, the G Tomas is talking about, that's a long run supply side thing. We've thrown away about seven years in the US economy by not ensuring a full recovery. Japan probably threw away a lot more than that by not engineering a full recovery from there in 1990. So we should at least get that part right and we're not getting that right. And we're mostly not getting it right really to name names, we're mostly not getting that right because Republicans in Congress are just obsessed with austerity and are strangling sort of all efforts to sort of engineer a full recovery. The other thing we can do to raise G which is, it's tough. That's not a very policy amenable variable in a lot of ways. One other thing besides what Betsy talked about, reverse the big decline in public investment we've seen over the past generation. If you look at the 10 year trajectory for public investment, you know, not just in the Ryan budget but in kind of every budget out there except for the Congressional Progressive Caucus, we really are cutting public investment to the bone. And so one thing that we can do to boost G is not let that happen to actually boost public investment. And then the last thing, how to lower the rate of return on capital. I think too many reviews of this book sort of think that Tomas has identified an absolute iron law of economics that cannot change or is what it is and everyone has to adapt to that. But you know, even in his book, he notes that we were able to sort of shove R&G much closer together in the United States for most of the post-World War II period. And I would argue we did that mostly because we took a lot of conscious policy decisions to make sure income did not concentrate. Progressive taxation is one that Tomas talks about a lot. But there's a whole menu of things we did over that time period that generally boosted the bargaining power of workers up and down the wage distribution and allowed them to have some bargaining power, you know, not just against capital owners but also against what Tomas calls the super managers. You know, we had effective unionization. There's enough density that you actually had bargaining power for lots of workers. For 30 years, the minimum wage actually kept pace with productivity growth, not just inflation. We really tightly regulated our financial sector. We did not just let them sort of take on lots of risk and pretend to be managing it, but really just hide it and sort of claim an ever larger share of national income while not providing much in the way of useful services. And I think related to the power of finance, we actually had macro policy makers who put a much higher weight on very low rates of unemployment than they did on very low rates of inflation. And so basically, I think we just need to look at all of those levers that actually gave rank and file workers some real bargaining power against both capital owners and the super managers, and think about what we can do to boost that bargaining power again. And so I'll just end really quickly. You know, the punchline is we should really try to push R&G closer together. We should make sure wealth isn't not so concentrated. And I'll say we have to think creatively about it because I think that the policies that go to the top of the list for pushing R&G closer together from his work, they look a little different to me in Europe than the United States. I mean, most of the story I've been telling is really about the rate of return in the corporate sector and that is what's driving a lot of it in the United States. And Europe and Great Britain and France, there's a huge housing wealth component that has a whole range of policies that we should probably talk about as well. Thank you, Josh. So there are so many, I've written down like 22 threads I want to follow up on. This is what happens when you think about Thomas's book. But let me start with the one that I sort of take a different tact here just to get us started on something we haven't talked as much about. One of the things that I found so interesting about the book was the title, Capital in the 21st Century and kind of thinking about the fact that Thomas, you took us back 2000 years and made the argument that we could look at capital and you talked a little bit about this on the podium, that we could look at capital over this very long time period. We didn't have to look at capitalism as a separate different motive of production, shall we say. And I thought that was very interesting because there's a lot of implications that come from that. One of them is sort of thinking through what a rentier class means and you focused on how that was really the super managers of today. But I wanted to actually throw to the panel, my first reaction as I read the first 20 or 30 pages and I realized what you were doing was like, well, wait a minute, can you do this? Wait, can we let go of thinking about capitalism differently than other forms of economy? And what does that mean for our thinking about how the economy works? So I wanted to throw to the panel just to start us off on a little bit of a philosophical question. Throw it and go in reverse order or who wants the question, but start over there with Josh for a few remarks and then have a follow up in terms of the actual definition. So that's a big question. Yeah, I mean, I definitely, so there's something hugely useful in sort of stepping back and thinking of capital, not just as the machines we work with and the buildings we work in, but as sort of just command over economic resources. And clearly there have been groups that have had a privilege access to the command over economic resources for a really long time. I would say I don't wanna throw out capitalism as a unit of analysis totally because I do think especially the historical data in the book is so fascinating, but there really is something incredibly different, pre and post 1940. Basically between discovering Keynesian economics, discovering you can actually fight the business cycle and sort of having across a lot of the Western world some actual expansion of the franchise and people actually expect a rising living standard from their government. I feel like if you go back too far, you can kind of mislead yourself into how applicable that part of the data series is to today. And so that's the one thing that comes to mind is to me, the debate over economic policy in a way that sort of rings familiar to me kind of begins with 1940. Interesting. Bob, would you have a comment on this? Yeah, but it'll be a negative comment. I'm constitutionally against big questions. I like to get the little things right before we come to the big questions. And I'm a little worried about the discussion so far. I think it makes it sound too easy to solve Thomas' problem. A lot of the policy things that we'd like to do are not influences on the rate of growth. They're influences on the level of output. It gives you a temporary bulge in the rate of growth but not a permanent one and it leaves you in the pickety trap in the longer run. Secondly, it's wrong I think to talk about getting the growth rate above the rate of return. I said in my initial remarks that a lower growth rate probably induces a lower rate of return on capital. A higher growth rate, at least a higher growth rate of total factor productivity will induce a higher rate of, not a lower rate of return on capital. So I think that the problem is a little more deeply embedded than we like to think. On the question that Heather actually just raised, the big question, there's of course a difference between capitalism and pre-capitalism and namely it's who gets the return on capital, who gets the pocket, the return on capital, whatever it is. I take it as a practical matter. Thomas is a little more optimistic about this for Europe as I think somebody Josh maybe mentioned. This is a country that is no damn good at income redistribution. It's not about to do a lot of that. If you can't accomplish, although I like very much and I've written about it myself a little bit, but Josh said about trying to democratize the ownership of capital some, find some way to do that. Unfortunately, it always involves the tax system. So good luck with that. We ought to be thinking, and this I think was in Heather's mind, about mechanisms for affecting the pre-tax distribution of income. What are there things we can do to the market economy that will alter the pre-tax distribution? Democratizing the ownership of wealth is perhaps the most obvious of those and also the most difficult. But doing things which might strengthen wage growth is something that might conceivably be accomplished. So I'm for doing this step by step in a small way. Betsy, would you like to comment on that, or I? You know, I wanted to comment on the point that was just made that most of the policies affect the level and not the rate of growth. And I think that is certainly something that we're aware of, but there are certain policies like let's take preschool for all, which is something the administration's really pushed. We know that investing more and young children will cause them to be more productive. That won't necessarily affect the rate of growth forever. Once we get sort of all kids getting the same sort of access to skills at some point that's saturated. But I guess I'm optimistic enough that I think while we're failing to maximize the level of growth, we should be pursuing those policies. And there's some chance that they stimulate enough innovation that raising the level can actually impact the rate of growth by changing actually who's participating and who's got the skills and what kind of innovations they come up with. Well, and something that you said, Bob, I was lucky enough to get to spend last year in the UK where a lot of the folks I was working with talked a lot about what they call pre-distribution. Sort of thinking about what can we do before we get to the tax system. I don't know, Thomas, if you wanted to comment on this as well. Yeah, let me, you know, that all the policy options that have been discussed, I think are really complementary rather than substitute. I think we should not, we are not gonna replace progressive taxation by pre-school program and patent law and whatever. These are all very useful policy options. So to be a bit more concrete, let's assume we have done everything we can to increase the growth rate. Growth is good in itself when assuming we invent clean sources of energy, which we are not quite there yet, but assume we manage to do it. Growth is good in itself and I am very much in favor of doing everything we can to raise growth. Now, assume we have done everything we can, this is not enough, R is still bigger than G and as Bob was saying very clearly, there's certainly no presumptions that raising the growth rate is gonna reduce R minus G. So anyway, assume we've done everything again. What are we gonna do? Here I will be a bit more specific about the tax proposal in order to actually reduce the inequality of assets of asset ownership. One thing you could think of doing is just to tax capital in the sense you're gonna tax the rate of return to bring it down to the growth rate. Now that will be, I think, very stupid to do because if you tax capital at 80% so that the rate of return goes from five to 1%, maybe the growth rate will go from one to zero percent. So I don't think this is... So what I am proposing is a bit subtle than this. I'm not proposing to increase capital taxation as a rule. What I'm advocating is to make it progressive. So tech, for instance, so what would be a progressive tax on net wealth? The closest thing we have in this country to a wealth tax is the property tax. That's quite a lot of money. Total tax revenue from the property tax are large in the US and they are large in France but also the biggest wealth tax is the property tax. Now this is not a progressive tax on net wealth and what I would propose ideally, if we could do that right away, is to keep the same tax revenue that we have today from the property tax. So I'm not proposing that they should be doubled or you just keep the same tax revenue but transform it as a progressive net wealth which would mean in effect that you will actually reduce the property tax for maybe the bottom 90% of the population because most people have very little wealth. So in particular, if you have a house worth 500,000 dollars but if you have a mortgage of 490,000 dollars, your net wealth is 10,000 dollars and so it was a progressive tax on net wealth you would not pay anything. Whereas in the current system, you pay as much property tax as someone without a mortgage or inherited from his apartment or re-embossed in debt many years ago and I think this is nonsense. The interest deduction does some of it but doesn't do it as clearly. I think the primary objective is not so much to increase taxation of capital but to increase wealth mobility and to increase access to wealth. Right now, the bottom 50% of the US population owns 2% of US national wealth and the next 40% owns 23% and the top 10 owns 75. So 2% for the bottom 50% is really low and even if you don't want to go all the way to socialism, maybe some houses can be increased maybe to 5%, 10%, I don't know what should be the target but certainly reducing the property tax and all those people who are trying to access wealth, trying to make it progressive is a way to go. Many people would say, this will never happen. Let me just say that I am a bit more optimistic about American democracies than Bob in the sense that one century ago, in 1900 or 1910, everybody would have said that the progressive income tax would never happen, that this was impossible according to the constitution and indeed that was impossible but things happen. Sometimes things happen and in Europe, the rise of the move to progressive taxation was largely due to the war, to the Bolshevik revolution. In America, I think that it was more due to the working of the democratic process in a way. So we don't have to be pessimistic about this. I don't know about you Betsy but I'm gonna take a clip of that things happen and just keep, put it on my computer to help me inspire me every day. One thing that you talk about in the book that I'd like to ask, whoever on the panel feels that they wanna answer, you suggest that one thing we could do is actually just start tracking the money which I thought was a very interesting proposal. I don't know Betsy, if you guys have thought about this at all or Bob, if you've sort of, is that possible? Could we sort of track what we know about wealth in a way that we aren't doing now so we can actually have the information to get to the next step? So I guess the one thing I would say about that is certainly there's possibilities to track wealth and we saw that with the Foreign Account Tax Compliance Act that this administration put forward that in that we've been negotiating bilateral, multilateral treaties with countries to share information. So if we're able to track it as it leaves the country, then surely this is not an impossible task. I like that. So I wanna switch over to a slightly different topic but one that we've talked about a little bit, that one of the mechanisms through which the rate of, you see the rate of growth kind of continuing to increase is through inheritances. It's through the way I've been thinking the calcification of these income flows that we talk about a lot here in Washington into actually the stock of wealth. And for me that was one of these, we talk a lot about inequality, we talk about wealth inequality, but I haven't seen a lot of conversations about how high income inequality actually concretely translates into increasing stocks of wealth for some people. That's not, I mean it's really, we're looking then at the flow, not just this sort of point in time. We don't talk about that as much. So I wanted to spend a few minutes essentially talking in some ways about mobility but also how we see inheritances playing out in different ways in the US economy. So actually Betsy, I know I just went to you but I wanted to go to you first on this one as well that we think of inheritances a lot in terms of money but increasingly I think there's a lot of economic evidence about other ways that we're passing on inheritances to the next generation. I know you've done some research on this. Yeah, so I mean the administration's definitely focused on this issue of opportunity for all. And one of the things that we are seeing is high income people are able to make investments in their children that lower income people aren't able to make. So coming back to the idea of preschool for all, we know that higher income people are able to put their children in high quality daycare and high quality preschool and high quality schools and good colleges and their kids are able to graduate with less debt so you can see all the way through the spectrum of opportunity if you are lucky enough to be born to wealthy parents you are going to be, you're much more likely to be heavily invested in and we need to make sure that we're, that kind of asymmetry can increases inequality even if we're really allocating things on a merit based system because we're putting all these skills into our higher income kids. And one of the things that really struck me when we were talking about the minimum wage debate, we need to raise the minimum wage and as many of you know, the president raised the minimum wage for federal contractors and one of the arguments for raising the minimum wage and why it doesn't have the kind of negative impact on employment that standard economics tells you it could have, I think one of the reasons that it doesn't is because workers when they're paid more at the bottom become more productive and that undoes some of the excess cost. And one of the things I liked about your book is it goes back in time and when I started thinking about raising the minimum wage I went back and looked at Marshall who said you have to pay people enough that they can eat proper meals. You'd think that when we were talking about 2014 the United States people can eat enough. Actually you should look at the research because people at the bottom show that we see over the course of the month their caloric intake drops as they run out of SNAP as they run out of the government services. We also see an increase in hospitalizations for hypoglycemia over the course of the month as people become more food deprived. So we, you know, when people are food deprived you know, we know that they're really income constrained in really important ways. And one of the things I was saying to Heather is I'm very curious even how this plays out in a prenatal context because there's also a lot of research that shows if you're not getting proper nutrition during your pregnancy, there's lifelong consequences for the kids and we look at people at the bottom and we see that they run out of calories as they get towards the end of the month and if that's happening during pregnancy that's another source of inequality. So there's just lots of ways in which having not having enough income at the bottom perpetuates inequality and this is behind why the minimum wage is such an important foundational part of expanding opportunity for the president. Could I just add something to that? I think that Betsy just made a very good point and it fits into the rest of the discussion in this way. We've talked a little bit about how it would be a good thing but a very difficult thing to make the distribution of wealth of capital more equal. But what she's talking about now is a way of making the distribution of human capital equal. That's a valuable, that's a very valuable thing and it is definitely worth doing. Tomas, God help him, doesn't talk much about human capital. The book would not be carryable. Yes. But now I also wanna add a pessimistic point. You'd think if you wanted to reduce the influence of inherited wealth on the society that the most direct way to do that would be through an estate tax. This is a country that cannot even sustain a viable estate tax. Okay. We have some fans of that here in the audience. Certainly true. So I'd actually wanna pivot up what you just said, Bob, about human capital to then throughout, I mean, Tomas does spend some time in the book talking about human capital and for the most part there's a section where you do talk about it and you talk about how we're not seeing at the very, very tippy top of the income distribution that these very high salaries being paid are actually due to an increase in the marginal productivity of that human capital at the very top, but that it looks more like rents and there's been some economists, many economists who've claimed that rising incomes from the top reflect the rising value that these superstars whose skills and talents that are so special and so unique are reflected in these very large salaries, but you basically say that's not true, this is rents. I wondered if anyone on the panel, Bob, would you like to? I think that's a very good point and I would go even further. I've been puzzling about Tomas's remarks about super managers and the more you get to know super managers the less you believe in their marginal productivity, for sure. I wonder whether, in fact, there's not a case for regarding a large part of that income as income from wealth, as a form of profit sharing. You ask, well, why that? Why the executive? Why give a fraction of the income thrown off by capital to the CEO? And there I think it's the Lake Wobagon effect, fundamentally. I cannot imagine a compensation committee that says to itself, well, our guy is somewhere down in the bottom quartile of executives, so why don't we pay him at the bottom quartile of executive companies? Not in the capacity of a compensation committee to say that to itself, because we'd have to say we should get rid of him and get one at the median, at least, but I wonder if part of the paradox is not that a substantial fraction of those high what Tomas calls super manager salaries are not functionally a return to wealth rather than a return to labor. Thank you. Josh, do you want to comment on that? Just a couple of words in support of that. I mean, one, just as a sort of accounting matter, a lot of what gets called labor compensation in sort of the IRS data that Tomas is stock options and executive bonuses that are clearly very linked to capital performance. The fact that they show up on a W-2 form means they show up as labor compensation and all that, but I think it's totally right that they look very capital like in that regard. And then I would just say, I think it's even worse than Bob said in terms of CEO pay. It's not just that the compensation committee can't admit they have a below average CEO. They seem unable to construct pay packages that even prospectively would pay them for performance. I mean, they are always game. CEOs, they benefit from pure luck. They benefit from stock prices that go up in their industry, not in their firm, relative to other firms in the industry. They do all sorts of things that actually consciously delink their own CEO's performance from the CEO pay from the firm's performance. So I think it's even worse than that. Oh, and again, there was a nice piece on this in last weekend's paper that sort of talked about some of those pieces. So we have about 10 minutes. So I'm gonna have some questions here from the audience that I'm integrating and I have two big things that I wanna touch on before we end. Because we are here in Washington and we wanna think about policy. One of the things that I think was especially interesting for me thinking about policies that come out of the book is that while, in many cases, when we think about what went right in the post World War II, those decades, a lot of times, now of course I'm a labor economist by training, so maybe this is just me, but a lot of times when you think about what went right, you think about the policies that gave workers and their families something. You think about the Social Security Act. We think about the Fair Labor Standards Act, which we're celebrating the 75th anniversary of this year. We think about the Wagner Act. We think of the policies that actually gave workers power and money and we think about unions. We think about sort of this side of the equation. And for me, and I wanna pose this to everybody on the panel, what the book really pushed me to think about was, okay, well we think a lot about the policies for the bottom and the middle, but what should we be really thinking about in terms of the top? And have I been misdirected all of this time? Should I've been really thinking about the R and the G? And how should we be thinking about this in terms of our policy agenda? So I'd actually like to start with you, Josh. So quickly, I don't think you've been misdirected, but I do think what the book shows is, you know, I'll all sequel, one person's income is another person's cost. And so if what you're interested in is boosting incomes for the vast majority, that income is gonna come from somewhere. I mean, maybe you can claim we're gonna do something that's just gonna make productivity go through the roof and we'll direct all that to the bottom. More likely it's going to come from somewhere else, it's going to come from the top. And so that means two things. I mean, you should be really forthright about that. And you should also realize that when you talk about things like disciplining CEO pay and actually introducing some competition to that market and re-regulating fine, you know, it's not just beating up on rich people for fun, it is actually expanding the consumption possibilities of everybody else. And so it's not just an exercise in hating the rich, it's an exercise in actually generating a fairer economy. And so you do have to look at the top. No. I don't think I have anything to add to that, that hasn't been said already. Okay, well, so then I'll move on to one of these questions that I think that just came in from the audience. So one is what, then this is a question that I think for Thomas, what do you think the single most worst effect of high income inequality is? You could just bring it down to one thing. To me, the main problem is the working of our democratic institutions. You know, I think inequality is okay as long as it's sort of within certain limit. But if when it gets too extreme, it is just, there is a serious risk that our political institutions are just captured by the top income and top wealth group. And I think pre-World War I Europe is clearly an example. And I think we should have a serious discussion as to whether we're gonna be in the same situation in this country. And yeah, to me, this is really the main issue. One of the main lessons of the 20th century is that we don't need 19th century inequality to grow. You know, the kind of extreme concentration of wealth that we had in the 19th century in European countries was just not useful for growth. In the sense that, you know, this disappeared, well, mostly for tragic reasons due to the war, and you know, this did not prevent growth from happening. So, and similarly, you know, the kind of huge rise in top managerial compensation and top inequalities that you see everywhere in the U.S. Well, you know, you see it everywhere except in the growth statistics and in the performance statistics of the U.S. economy, which has not been particularly good over the past few decades. So, you know, extreme inequality is just not useful and is living to a corruption of our political institutions. So, it's just bad. Thank you. Would anyone else like to comment on that? You know, one thing we haven't talked about is just overall societal well-being. So, I will refer back to my own research. I have done a lot of research pointing out that subjective well-being does rise with income. And, you know, people look at this and they say, well, you know, there was a long time I think people really wanted to cling to the idea that income, rising income wouldn't increase your well-being. And I think we've shown that well-being rises with income, but in, you know, it's in a percentage-based way. So, when your income increases 10%, you get the same kind of increase in well-being regardless of whether you're at the top or the bottom. And one of the things that points to is that if you want to maximize aggregate well-being in society, you need actually a more equal distribution because the amount of well-being people at the top lose when you redistribute to people at the bottom is very small compared to the amount of well-being that people at the bottom gain. And so, you know, this, you know, if this idea of redistribution is not at all inconsistent with the idea that subjective well-being or that people are continually made better off even as they get more income, but if you're thinking about it from a, you know, overall society perspective, really high inequality does lead to overall lower societal well-being. We've almost achieved the level of theory that had been achieved in the late 18th century. No. No. It hurts. So, I'll ask Josh or Bob if you have just a final remark and then I'll wrap up. No, my final remark is I like Thomas' book. I think you should all read it. It's very heavy, but if you rest it on something, you can read it and enjoy it. It's a really good book. I'll, Bob, have the last word. Well, thank you. I mean, I'm actually very excited that we ended on this very optimistic note, both that we need to address these issues to save, but that we can grow with less inequality and I believe it will make us happier is what Betsy just said. So with that, have a lovely weekend afternoon. Thank you.