Tuesday, November 08, 2011

Transcript: Bill Clinton on The Daily Show

Bill Clinton was the featured guest on tonight's The Daily Show with Jon Stewart on Comedy Central. The extended interview is in 3 segments, embedded video below, with the transcript of part 1 after the jump. Parts 2 and 3 of the transcript will be added tomorrow. Update: transcript of all 3 segments completed.

Copyright ©2011 Comedy Central, all rights reserved. Transcript presented under "fair use" in the furtherance of political discourse.

The Daily Show With Jon StewartMon - Thurs 11p / 10c
Exclusive - Bill Clinton Extended Interview Pt. 1
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The Daily Show With Jon StewartMon - Thurs 11p / 10c
Exclusive - Bill Clinton Extended Interview Pt. 2
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The Daily Show With Jon StewartMon - Thurs 11p / 10c
Exclusive - Bill Clinton Extended Interview Pt. 3
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Jon Stewart: Welcome back! My guest tonight: the 42nd President of these United States. His new book is called Back to Work: Why we need smart government for a strong economy. Please welcome back to the program President Bill Clinton!

Nice to see ya!

Bill Clinton: Thank you. Thank you.

Stewart: Hope all is well. How are ya?

Clinton: Good.

Stewart: You look good.

Clinton: At my age, you know, it's a minute-by-minute thing, but I think —

Stewart: No, I gotta tell ya: you look younger than me; I don't like it. [audience laughs] Back to Work: Why we need smart government for a strong economy — this is — there are very specific prescriptions for how to run this country. Have you signed a copy of this to President Obama? Because he, I think, would be very interested in flipping through it.

Clinton: First of all, you know, the second half of the book are the specific things I think should be done. Several of them have already been advocated by the President, and in each case I say, this is something they're doing now. The first half of the book explains how we got in this mess, and basically the economic and social history of the last thirty years. So I did it because I wanted Americans to know that how we're doin' now, compared to our history and our competitors, and the answer is, we're still doin' pretty well, but thigns are not going in the right direction. They're going in the wrong direction, and now, what will we need to do to turn it around? I don't know if you saw the headline today, 49 million Americans living below the poverty line —

Stewart: Oh! I thought you were going to say 49 million Americans accused Herman Cain! Okay, so you got 49 million Americans living below the poverty line. I didn't know where you were going. But what you said was more salient, so let's stick with that.

Clinton: Maybe not as good of a press coverage, but more salient.

Stewart: Right.

Clinton: So, anyway, what I tried to do is to say, first, if you look at this economic problem we've got, it's very important — and I think maybe nobody, including me, maybe we haven't been clear enough to the American people. If you go back 500 years, whenever there's a financial meltdown, that, as compared with a traditional recession, takes between 5 and 10 years to get over. If, going back to the time of — over 100 years or so of widespread home ownership, if you have a mortgage collapse at the same time, it takes a little longer. So, what our goal should be in America is to beat those odds, and to do it in a way that restores our competitive position in the world, and the fundamental problem we've got in America today — and this is my beef with the Tea Party, and with the "no compromise ever on taxes, never, never, never" crowd in Congress — is that what works in real life is people getting together with different perspectives and figuring out how to solve problems. Cooperatino works. What works in politics is conflict. And so — but the American people somehow know that, so these Tea Party guys must be totally bewildered that approval of Congress is 8% or something, and they say, all we're doing is what we told you we were gonna do if you voted for us, you voted for us, now we're doing what we told you we were gonna do. They don't understand is that what people really voted for was a kind of amorphous sense that things weren't getting better and maybe there was too much governmnet, maybe they'd balance it out. So I try to be very specific in this book about things we could do.

Stewart: But that's been a very successful tack, is to say, get government out of our lives. Have the Democrats made the case that government should actually be in our lives, and then made the case that it is effective and accountable in the 21st century, because it hasn't shown itself to be very agile or effective in combattng these crises?

Clinton: Well, actually, I think, people judge it in a pretty straightforward way. Trust in government was at an all-time high because the economy was working and government was working. Trust in government goes down when the economy is in the tank, but I personally believe that the President had to act — first President Bush, then President Obama — to save the financial system. I think they had to do something, or should have, to do what President Obama did to restructure the automobile industry. It wasn't a bailout, it was a restructuring. We're gonna get our money back, and there are 80,000 more people working. And if they hadn't done it, there would be 2 million fewer people working. But you've got to put this into some context. You've got to say the stimulus did almost exactly what it was supposed to do, except it was too small. The economy shrunk 7.5%. We lost 7.5% of GDP at the bottom of that recession. Trillions of dollars in wealth — 75% of Americans' wealth is in their homes — they lost so much of it. You can't fill a multi-trillion-dollar hole with $800 billion — at least, I can't. I can't figure out how to make the math work.

Stewart: I would like to try that.

Clinton: But it put a floor under the recession and kept it from being a depression, but it couldn't lift us all the way out. So, what we have to do now is, all of us ask ourselves, what is the best way to crawl our way out of this, and when should we deal with the long-term debt problem — not if but when. And the argument I make in the book is, the reason all these people ought to be working together instead of fighting is that you cannot, for example, deal with the debt problem, as the British are now finding —

Stewart: — with austerity.

Clinton: — with austerity unless you have growth. If you have growth, then when you cut the deficit, for example, you get lower interest rates, you save money for homeowners, you save money for businesses, you get more money invested. But if interest rates are already virtually 0%, there's no activity, if you have huge cutbacks now, probably what will happen is that tax revenues will go down even more than spending will be cut, and the deficit will get worse. We've got to grow the economy and put people back to work.

Stewart: Here's what we're gonna do: we're gonna take a break. When we come back, we're gonna talk about growth. You and me, together, we're gonna form some sort of a "club" for growth. We'll be right back with more, President Bill Clinton.

Part 2

Stewart: We're back here, we're talkin' to President Bill Clinton about growth. Now, the Republican argument for growth is always the same, in almost any condition, which is: deregulate and cut taxes. I'm surprised to see in the book, there is — you do say, corporate tax should come down. When you were President, you lowered capital gains [tax]. Is that saying — why is that? Because it seems to increase income inequality rather than help it.

Clinton: Well, let's talk about now, but briefly: keep in mind, when I was President, first I raised taxes —

Stewart: Right.

Clinton: — on individuals and corporations — on the wealthiest 1.2% of us and on the corporations, and I cut the deduction corporations could take for executive compensation and eliminated the deduction for lobbying expenses. So then, when the Republicans won the Congress, I basically believed that the citizens geared for compromise, and I thought, number one, we were trying to balance the budget — we were 90% of hte way home before the Balanced Budget Act even passed — and if I agreed to cut the capital gains rate from 28% to 20%, in return for that, what I got was the higher-education tax credits (the Hope Scholarships, we called them) and a million people in work-study — the biggest increase in higher-education aid since the G.I. Bill — and the Children's Health Insurance Program, which now insures about 10 million kids, and, if you read the poverty report today, is single-handedly responsible for millions of kids moving out of poverty, so I thought it was a good compromise, and I didn't think it would hurt the economy. I didn't understand why we went to 15% — I personally thought that was way too low, because the average person pays, with all the deductions and everything, about 20% – 20½% in taxes, and I don't think you want capital gains to get too much below that. That's not good policy. But I thought it was an honorable compromise. Now, where are we now? When I raised the corporate tax rate from 33% to 35% for corporations with incomes over $10 million a year, that put us smack-dab in the middle of all the rich countries. Since then, everybody's done two things: they've lowered their corporate tax rate and they have stopped taxing the income that corporations earn in other countries when it comes home.

Stewart: So there's amnesty on any of that money. They can bring that home and it's not —

Clinton: We're the only — yeah, in other countries.

Stewart: Right.

Clinton: We still do it. We say, you get a deduction for what you pay in other countries, but you still owe the 35% minus the deduction.

Stewart: But the real rate — corporate tax rate — is much lower than that in the United States.

Clinton: Yeah. So, the reason I think it should change is, first, most people aren't paying it. The corporate tax take — the actual amount paid — is 23%, which is 1% below the average of other wealthy countries — so, what I recommend is that we broaden the base (that is, eliminate some of the credits and deductions, or at least smooth them out, have a de facto alternative minimum for corporate income) and get pretty close to that 23%, but we should leave it maybe at 24% or 25%, whatever it takes to fund a very generous research and development tax credit, because I want to bring manufacturing jobs — high-end manufacturing jobs — back to America, and increasingly manufacturers all over the world want their research and development to be close to their manufacturing. We've got a huge chance to do that now, and so I would leave the R&D tax credit. I would eliminate the others. One real problem is, there is no correlation between the amount of corporate tax that companies pay and whether they're creating jobs in America, so if you flatten it out, you'll be rewarding the job generators in America.

Part 3

Stewart: This is the point that I was — drives me crazy: you know, they say corporations are people, they have the rights, but they're not Americans. So, the idea that we could drop

Clinton: I don't think they are people; I hate that Citizens United decision.

Stewart: So do I! Drives me crazy, because if they're people, they're sociopaths. They have no morality.

Clinton: Here's the deal.

Stewart: They just have a profit motive for shareholders; that's not a moral individual.

Clinton: Well, when I went to law school, I was probably in the Dark Ages, in the 70's —

Stewart: That's when I went.

Clinton: I was — yeah, were you born then? — anyway, I was part, virtually, of the last generation of American law students and business students taught that corporations had a responsibility — because they had special privileges under the law, like limited liability — to their stakeholders: to their shareholders, their employees, their customers, and the communities of which they were a part. But starting in the late 70's, that practice changed, and all of a sudden, the stakeholders were way up — the shareholders were way up here, and all the stakeholders were down here. It had the ironic consequence of giving the most influence over corporate decisions to the stakeholders with the least concern about the long-term profitability of the corporation and the greatest concern about the short-term profitability, which accelerated a lot of these trends.

Stewart: [inaudible]

Clinton: So we need to be competitive because we want them to — they've got $2 trillion they could bring back here and invest — but we also need to try to create an ethic in America where the employees and the customers and the communities count, too, and we need to make it easier for those corporations to act that way again. We can help and support that. We need — but that's the point I try to make in the book. What works everywhere — the countries that are doing great, that have a higher percentage of college graduates than we do, higher growth rates, lower income inequality — are countries where there's a partnership, a working relationship with government and business. The communities in America that are doing great — Orlando — I was in Orlando last night. They have one hundred computer simulation companies.

Stewart: It's the happiest place on earth.

Clinton: Yeah. Well, they got Disney and Universal and Global Entertainment Arts videogame division — they all need simulators, right? They also get $5 billion a year from the Defense Department and NASA, the space agency, because they need simulators. And they've got a university, the University of Central Florida, with 53,000 students, that will change the curriculum every single semester to train people to do the jobs.

Stewart: So, who is doing the manufacturing policy? Who is planning this at a central level? That's the thing that makes me crazy. It doesn't seem like we have one. China's got a factory with 400,000 people in it; they work in conditions that no American should ever have to experience. Cutting Apple's corporate tax rate isn't gonna bring that —

Clinton: We don't have to do that. We don't have to do that. What we have to do — that shouldn't be the government's role. We should figure out is, where do we have a competitive advantage? For example, in solar energy and wind energy — both of which would already be competitive with coal if you had to pay the extraneous costs of coal, the healthcare costs and other things — and which will be — wind within 2 years, solar within 5, will be competitive in price with coal; they're both cheaper than nuclear right now. And I think — what we need to do is to make sure that we meet the competition in terms of the tax incentives and other things to bring these manufacturing jobs here. If we do, we're gonna do fine. We've got a great venture capital network, we have massive capacity in all these clean-tech areas. Just think about it: we were bypassed in the last decade by Germany in the production and deployment of solar cells. The sun shines, on average, in Germany as much as it does in London. But Deutsche Bank — not Greenpeace, Deutsche Bank — [Jon Stewart laughs] — did a study saying that even if you account for the subsidies the German government and German people paid to get that solar, they still netted 300,000 jobs. So, we're four times as big and twice as capable, so you do the math: it's 2½ million jobs if we do what they did. We have got to be competitive in these areas, and I don't mind giving people tax credits, but it ought to be to generate jobs and opportunity in America.

Stewart: You're saying there's gotta be caveats associated with it; I agree. Back to Work — you should read this; it's on the bookshelves now. President Bill Clinton. Thank you.