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PIERS MORGAN TONIGHT
Powerball Jackpot Reaches $550 Million; The Fiscal Cliff Debate
Aired November 28, 2012 - 21:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PIERS MORGAN, CNN HOST: Tonight, what would you do with half a billion dollars?
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I can't conceive what it would be like.
UNIDENTIFIED FEMALE: Do something good with it.
UNIDENTIFIED MALE: You're not going to win.
(END VIDEO CLIP)
MORGAN: But there's a dark side to Powerball frenzy. Million of Americans just simply can't afford it. Betting their last dime on a winning ticket. Should the government get out of the gambling business or are lotteries just good clean fun?
Plus what are the odds that Washington could avoid the fiscal cliff.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: My hope is to get this done before Christmas.
REP. JOHN BOEHNER (R), HOUSE SPEAKER: I'm optimistic that we can continue to work together to avert this crisis and sooner rather than later.
(END VIDEO CLIP)
MORGAN: Should the rich just pay more? I'll ask former officials from the Obama and Bush administrations.
Plus money guru Dave Ramsey on you and your taxes.
And Tavis Smiley, his ongoing crusade against poverty in America.
(BEGIN VIDEO CLIP)
TAVIS SMILEY, AUTHOR, "THE RICH AND THE REST OF US": You can't have 1 percent of the people who own and control more wealth than the other 90 percent of the people. (END VIDEO CLIP)
MORGAN: This is PIERS MORGAN TONIGHT.
Good evening. Our big story tonight is really, really big. It's $550 million worth of big. Powerball. The winning numbers will be drawn in just about two hours' time and ticket buyers are still lining up. You probably heard that your odds of winning are one in 175,223,510. You may even have heard that a frequently cited statistics you're more likely to be crushed to death by a vending machine as you try to shake loose a candy bar. The odds are better on pushing (INAUDIBLE) are about one in 112 million.
But none of that has tarnished the enthusiasm of millions of Americans, my own staff included, who bought tickets today like a stampede. But joining me now is a man who says hitting the jackpot could be the quickest way to ruin rather than (INAUDIBLE).
Here live, Dave Ramsey. He's the host of the "Dave Ramsey Show" and the author of the "Total Money Makeover."
DAVE RAMSEY, HOST, "THE DAVE RAMSEY SHOW": Well, thanks, Piers. And good to be with you again.
MORGAN: So the lottery, on the face of it, a good bit of fun. Everyone can hope and dream. There's one big winner. What's wrong with that?
RAMSEY: Well, the problem is several things. One is it's false hope because as you say it in your open statistical analysis, it's crazy. You're more likely to be struck by lightning and live six times than by -- than win the ticket today. So this is just crazy.
And the problem is, is that it a tax on the poor and on people who can't do math. Rich people don't play the lottery. I mean, look at who's standing in line. It's Darryl and his other brother Darryl.
MORGAN: Well, I know a lot o rich people who play the lottery. Because they're just basically greedy pigs. But having said that, there is -- there is a point to that. And I know that all statistics say that in America in particular, the majority of lottery ticket buyers tend to be ill-educated, poorer and the society, one of the minority groups and so on. Those statistics are there, but at the same time aren't they the very people who would stand to gain most by winning? And what is wrong with giving the poorer sections, the needier sections of society a bit of hope and even if for most of them it turns out in the end to be a hope that isn't realized?
RAMSEY: Well, because it's false hope. That's the problem. They take the exact same amount of money and invest it, they could build some wealth over a period of time. And so we're teaching people that a game of chance with very low -- with very low probability of winning is actually the way to live your destiny in America today. Instead of living frugally, working hard, coming up with an idea, going to work early, leaving late, saving money, not spending everything you make.
I mean these are -- these are values that this country was built on as opposed to this idea that I'm going to gamble my way into wealth, which really, statistically, doesn't happen.
MORGAN: OK. Look, Dave, stay where you are. I want to come back to you and talk about this in more detail. And also about obviously the fiscal cliff.
But I want to bring in now two men on opposite sides of the Powerball debate. Terry Rich is the CEO of the Iowa Lottery and Les Bernal is the executive director of "Stop Predatory Gambling."
Welcome to you both. Let me start with you, if I may, Terry Rich. You obviously run one of the big lotteries in America. You heard what Dave Ramsey said. Dave didn't like it. This is a tax on the poor, it gives false hope, and really it should just be cancelled.
TERRY RICH, CEO, IOWA LOTTERY: You know, as he said that, I would just add one word. Optional. It's optional revenue. People don't have to play in and as lotteries work across America under great leadership of the governor and the legislature, who would not allow that, as they say, preying on the poor, it's important that we continue to talk about the lottery that it is not an in investment.
I absolutely agree with him on that. This is a chance to have some entertainment and in this tough economic times to dream just a little bit. So anybody that's spending too much will be the first to say don't play, we don't want you to play, we want you to get help if you're playing too much, or you know someone who's doing that. Every lottery has a Web site with an address on how to get help. So that's kind of the important distinction is that this is optional revenue that the states need for education and other good causes.
MORGAN: Les Bernal, I know you don't agree with that, but explain to me why you don't agree.
LES BERNAL, EXECUTIVE DIRECTOR, "STOP PREDATORY GAMBLING": Sure. A lot of folks have been calling this Powerball fever. A better name for it is the swindle flu. You know, state lotteries represent one of government's biggest public policy failures of the last 40 years. Powerball or you name the other lottery program, I mean, this is a government program that's based on pushing citizens into deeper personal debt.
You know, it's a classic gimmick. And it's become the public voice of American government today. And it's a lie. People say people don't play this, you know, as an investment, you -- according to the Consumer Federation of America, you have more 1 out of 5 Americans who think the most practical way to build wealth is to play the lottery.
MORGAN: Yes, but, Terry Rich --
BERNAL: You've turned America's working class -- you've turned America's working class into its lottery class.
MORGAN: OK. Terry Rich, what do you say to that? I mean there's no doubt that you have no way, you running a lottery, of knowing who is buying these tickets, their demographic, their wealth or anything. You don't really know if they are very impoverished people who are spending much more than they can afford on a weekly basis, maybe even addicted. You've got no way of knowing, have you?
RICH: Well, we actually do know it. And it almost exactly mirrors the demographics of any given state. So 50 percent of the people make $50,000 on a certain class, that's about the exact numbers when you look at the statistics of the people who play the lottery. And I take a little offense to the -- to the idea that hardworking people aren't smart enough to understand. I grew up on a farm in Iowa. We have very little money and my dad taught me cash is king.
And I think Dave Ramsey in listening to him, I agree with many of his philosophies on how you do investment. This is a form of entertainment and you need to take it at that. I absolutely agree. We don't want anybody just going out and emptying their savings account on a night like tonight. You want to get a couple of bucks, get a few friends together, you know, have a few tickets and have some fun dreaming and talking in this ugly economic time about what could happen. And I guarantee, most everybody realizes I probably won't win tonight, but what if?
MORGAN: I mean, you make it sound wonderfully harmless. But look, here's a statistic for you. Studies of lottery ticket sales in five states, including the Carolinas, California and Texas, they found consistently higher in the poorest counties, and more likely to be purchased by unemployed and households that earn $13,000 a year, spending 9 percent on lottery tickets.
I mean that is more than false hope. That is a huge chunk of a very needy selection of family's income being fritted away on something they have almost zero chance of winning.
RICH: Well, what it is people in a percentage of the same problem if they are not making enough, if they're buying food or buying other types of things, the percentage of their total income is obviously much higher. We don't -- we don't encourage, we don't tell or would want people to spend the majority of their income on lottery tickets. And that's an important message.
If you're listening right now and you're playing over your heard, or you know someone that is, let's get them help. We're absolutely in agreement with every one of the folks that will talk --
MORGAN: OK. Now, now, let me turn back to Les, because in your state of Massachusetts, there the lottery is the single largest source of unrestricted local aid. According to the Massachusetts Lotto site, just in 2012 alone, the lotto raised over $800 million in direct local aid. Now that is a huge chunk of change, isn't it?
BERNAL: It's -- government gambling has been a failed revenue source across the country, whether it's Massachusetts, California, you name it. That money you talked about is a small portion of the money that represents 4 percent of the total spending of the municipal budgets across the commonwealth of Massachusetts. It's miniscule.
MORGAN: Well, I mean, that's $1 billion.
BERNAL: So what we've done --
MORGAN: It's nearly a billion dollars that otherwise wouldn't be there, going to very important local causes.
BERNAL: Yes, but --
MORGAN: What is actually your problem with that?
BERNAL: But if you have sales -- that money comes from $4.7 billion worth of sales. Lottery sales. If that money was spent on other forms of products and services in our economy, the return, the economic growth from that, would be immensely higher. You know?
When Mr. Rich talks about how, you know, they don't know who -- that they're not making most of their money from a small amount of players, that's not true. Like the "New York Times" reported an 80 percent, 80 percent of lottery revenue comes from 10 percent of lottery players. It's the most predatory business in America today. And it's a government program.
RICH: There's one exception --
MORGAN: Terry, what do you say to that?
RICH: Here's the -- here's the facts that lotteries and states began to do lotteries because people have a desire. We do $68 million in lottery business in fiscal year 12. That's more than the movie and the music industry combined. We have nearly 70 percent of the people in any given year play the lottery at some point and if we didn't have state-run lotteries, the integrity is above reproach, in my opinion, and all of this as we take a look. And that's -- that really is a big goal and everything else because every time you buy is optional.
But if we didn't have it, we'll go back to what it was, people are still going to find ways to game but they're going to do it illegally. And that was the problem with the numbers games. The mafia running the numbers, the states took it over to legalize and tax it, and as you look -- as you look at the future and the things that are going on with that, that's an important integrity and oversight to make sure of the things you don't over promote.
MORGAN: Terry Rich and Les Bernal, it's a fascinating debate. Thank you both for joining me. I'm going to have to take a break now, I'm afraid. When I come back --
RICH: Hope you got your tickets. MORGAN: -- I'll talk again to Dave Ramsey and his words of wisdom on Powerball. And also the fiscal cliff. I'm sure he's got all of the views there which would be very useful to all of us.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I would say the IRS always wins. Always get half. Always. No matter who wins, they always win.
UNIDENTIFIED FEMALE: But your odds of winning are very slim.
UNIDENTIFIED MALE: I don't know. I think it's one out of a million. But it will be less if I don't play.
(END VIDEO CLIP)
MORGAN: Wise words, the IRS, of course, always does win. Even when it comes to Powerball.
Back with me now is Dave Ramsey, host of the "Dave Ramsey Show" and the author of the "Total Money Makeover."
But, Dave, a spirited debate there between Mr. Lottery in Iowa and somebody who thinks it's a -- it's a ghastly curse on society. Sort of veering more towards where you sit. If I was to win tonight and I'm going to be purchasing tickets. If I was going to win tonight, should I take the lump sum or should I take the other option, the cash option? What was -- it's the annuity, right? You can take it over a number of years or you can just take the cash lump sum. Which one should I do?
RAMSEY: Well, I'm going to sidebar for just a second on you and then come back to that if I can. I think Mr. Rich sounds like a really nice gentleman but we need to know out there that the lottery organizations are advertising -- their advertising is targeting the lower class and they're targeting the lower income zip codes. And so to say that it's predatory is inaccurate because it's -- again, the very zip codes are right next to the payday lender, the rent-to-own people. And so this -- there is a very targeted thing here. They know who their market is. They know their market is not the rich man zip code into town.
Now if you do win, take the lump sum or take the annuity, if you're good with money, which I question if you're playing the lottery, you would take the lump sum because you're going to avoid the increase in taxes that are coming to you in the next few years because apparently tax rates on the rich are going up. That's what it looks like right now. And so you take the lump sum to avoid higher taxes on the income later because every time you get a pay out on the annuity you're going to be in that top range, you know, with the new tax rates that we appear to be facing.
If you're not good with money to protect you from yourself, you would take it as -- on the dole, so to speak, out of the annuity as if you were inheriting money and taking it out of a trust and they were keeping it away from you because you weren't capable of handling it.
MORGAN: Aren't you being a bit of a sort of pre-Christmas Scrooge here, Dave Ramsey? I mean, you know, everything you say is right and yet at the end of the day people with low incomes, they don't go and have a drink, maybe a cigarette, you know, whatever they do. Go to the cinema or whatever.
What you're missing here, I think, is the pure pleasure aspect of the hope and expectation of going to buy a ticket that could win you half a billion dollars. You're not factoring in the pleasure of playing that game.
RAMSEY: Well, the pleasure of playing that game averages about $37 per household. Were you to invest that in a decent growth stock mutual fund into a Roth IRA from age 30 to age 70, you'd have about half a million dollars. About 90 percent of the time that would happen. Instead of one in a bazillion times. And so yes, I do sound like Scrooge, I'm sorry, I'm calling folks to grow up, adults devise a plan and follow it. Children do what feels good.
MORGAN: I mean, there's got to be somebody tomorrow possibly who'll be re-watching this avidly as I'm sure they do every night, and saying, Dave Ramsey, I just won half a billion dollars, you know, what are you talking about?
RAMSEY: And there's 175 million that'll be watching -- I hope your ratings were that good tomorrow night -- that didn't win.
MORGAN: They're always good when you come on, Dave. You know that. But let's turn to the fiscal cliff. I know you don't want to get political about this or partisan or even talk about this ridiculous phrase fiscal cliff. But just tell me this. In your time as an American dealing in financial issues for the last 30, 40 years, what is your view about taxation generally? Does America suffer when taxes are slightly higher in terms of its economic prosperity, or is that just a bit of a myth?
RAMSEY: Well, I think there's a lot of theories out there running around and you know I've got the formal education in finance degree and so I've studied economics like a lot of folks have, and I was formally schooled in Keynesian economics. A lot of us. Where we were taught that that was the proper way to do things. And certainly that seems to be the direction of the Obama administration and that's the idea to raise taxes and the government to control re-investment into the economy.
Really there's not much evidence that that has worked. It hasn't worked under Obama. It didn't work under Bush. And there's even an argument that it didn't work under FDR which is where it originated that probably World War II actually bailed us out of that economic slump rather -- that called the Great Depression, rather than that. So I'm a small business guy, Piers, and so I'm a simple guy. I don't have a lot of sophisticated looks on things. I just know that I've got 350 employees and if you raise a bunch of taxes on me, I really don't literally, mathematically have as much money to hire people with. And sometimes people act like I take that money off and stick it in the bank and I'm just trying to get richer and richer and richer or something, and not hire people like I'm some kind of greedy jerk.
I actually want to hire people because it helps me to grow my business and helps me to help more people. I can't do that if I'm sending the money to the government. So to me, it seems like it constricts the economy to raise taxes.
MORGAN: Final question, Dave, and I want an honest answer here. Despite your opposition ideologically at the Powerball, have you sneakily bought a ticket?
RAMSEY: You know, I have never done that. I have done so many stupid things with money. I have a PhD in D-U-M-B. But I've never done that one.
MORGAN: Well, I think you're missing out. You're missing out on a lot of fun. Killjoy.
Anyway, it's good to talk to you, Dave. And you make a lot of sense as always. Nice to talk to you.
RAMSEY: Honored to be with you.
MORGAN: Coming up, "Battleground America -- coming up, "Battleground America" and the fiscal cliff again. The man and the author of bailout for President Obama goes toe-to-toe with one of Mitt Romney's top money man.
(BEGIN VIDEO CLIP)
WARREN BUFFETT, CHAIRMAN AND CEO OF BERKSHIRE HATHAWAY: I'll call you at 1:00 tonight and I'll tell you, Jon, I've got the best idea I've ever had. I'm going to put every penny I've got in it. If you want to come along and will you say, how much tax do I have to pay when I make a fortune?
JON STEWART, HOST, "THE DAILY SHOW WITH JON STEWART": I think the first thing I would say is, why are you calling me at 1:00 a.m.?
(END VIDEO CLIP)
MORGAN: That's Warren Buffett on the "Daily Show" talking taxes and why he and other rich Americans should be paying more of them. Can he get Republicans to agree, though?
Joining me for "Battleground America," two economic experts. Steven Rattner, a financier and led the auto bailout task force under President Obama, and Emil Henry, President Bush's former assistant treasury secretary who's also a senior adviser to the Romney campaign.
Welcome to you both. Let me start with you, Emil Henry. When Warren Buffett, I've been seeing him a lot this week. One of the richest men in the history of planet earth is demanding to be taxed more, give me a logical reason why he shouldn't be granted that wish.
EMIL HENRY, FORMER ASSISTANT TREASURY SECRETARY: Well, I'll tell you what, I'm sure that makes him feel good when he says that. Two issues, one is that that tax scheme that he is talking about would do precious little, call it a drop in the pond, to fix our fiscal condition. And it may well be a part of a -- of a solution. But it is -- it is so far from being the solution.
And the second reason is, you know, some things people stand on principle on, and there is a reason that over the years the tax code has had lower taxes on investment and savings and dividends because we like to encourage investment savings. We don't like to tax two or three times which dividends or other taxes might be taxed. So two small, and there is a principle involved.
MORGAN: Steven Rattner, is there a principle or is it just bloody minded news now by Republicans led by Grover Norquist, we shall not pay anymore taxes ever?
STEVEN RATTNER, CHAIRMAN OF WILLETT ADVISERS: At some point, of course, there is such a thing as too much tax. Everybody would agree with that. I would agree with that. But we're a long way from that. Let's just look at earned income tax which you pay on your actual wages. They're lower now than they were under President Clinton, thanks to tax cuts that were put in place 10 years ago.
And all President Obama is doing is saying let's go from 35 percent for the top earners to 39.6 percent, the same as it was under President Clinton. The economy did very well and we would help address our trillion-dollar deficit. It's more than just a drop in the bucket. Just raising rates on people making over $250,000 would be $1 trillion less deficit over the next 10 years.
MORGAN: Right. I mean, you know, Henry, $1 trillion is not to be sniffed at. And already some Republicans -- Tom Cole today -- broke with the leadership and urged his party to extend the Bush era tax cuts for households earning less than $250,000 to ensure most of the taxes don't go up in January. He's got a point, hasn't he? I mean who cares? This will (INAUDIBLE) every rich guy anyway.
HENRY: Sure, I mean, there is -- sure there's a point in there. I might -- I might dispute the numbers. I would argue, as the members of my party, I would argue that we have a spending problem as opposed to a revenue problem. To my friend Steve's remark about the Clinton tax rates that sounds great to go back to 39 percent. And yes, that was a time of balanced budgets. But, actually, those balanced budgets bear little resemblance to the tax rates.
Remember, in the Clinton years, we were -- in the latter Clinton years, one we were roughly at peace time, and two, there actually had been a capital gains tax cut as part of the 1996 package. And let's not forget the most important thing, there happened to be a little small thing at that time called a technology boom so much so that it led to a bubble of great excess and of course there were tax revenues there. So it's pointing to one marginal tax rat rate at one point in time as the panacea --
MORGAN: Right. Let me bring in Steven.
RATTNER: There is no one panacea or fixer. There is no silver bullet. We have a big problem. We have $1 trillion a year deficit. We have to address it. It has to be addressed in an y number of ways. The math is pretty simple. You need something like $4 trillion of deficit reduction over the next 10 years just to keep our ratio of debt to the size of our economy from growing.
And everybody agrees that most of that is going to come from holding down spending. But there's got to be a tax element as well. You've got to have more tax revenue. We could not afford the tax cuts that we had in the early part of the 2000 so we need to restore at least a piece of them.
I have not been on Wall Street as long as Warren Buffett. I'm certainly not anywhere near as rich as Warren Buffett, but I agree with his observation. I was on Wall Street for 30 years. I was there when high tax rates, I was there with low tax rates. It didn't change my work ethic. It didn't change your work ethic and we all -- when we worked together. I think people are driven by other things and within the margin we're talking about, 35 percent to 39 percent, this is not going to change the work ethic. It's going to raise revenue that we sorely need as part of a package including spending to get the budget deficit down.
MORGAN: Let me play you both a clip from Lloyd Blankfein from Goldman Sachs which was today, talking to Wolf Blitzer.
(BEGIN VIDEO CLIP)
LLOYD BLANKFEIN, CEO AND CHAIRMAN OF GOLDMAN SACHS: At the end of the day, I don't want to quibble -- you know, you quibble about the tax rate, but the more important thing is to increase the size of the wealth pie. And the idea of keeping rates low and then you pay a low marginal rate of a shrinking pie because the economy is impaired, I think that's crazy. I'd rather get the country on the proper footing as the most important objective.
(END VIDEO CLIP)
MORGAN: I mean, it's a really interesting debate, I think, about how you achieve what Lloyd Blankfein has said. How do you get America back on a sound economic footing? Putting your pragmatic hats on, if you were in that negotiating room, Emil Henry, what would the deal be?
HENRY: Broadly speaking, here's where I think this has to end up. One, recognize what we are facing is a spending problem. The -- you know, we -- my friend Steve talks about spending in the -- or the balance budgets of the Clinton years. The spending since the Clinton years has increased 50 percent. It's really out-of-control. That's why we have trillion-dollar budgets.
And the reason it's out-of-control is because of entitlements. When you look at the budget, the budget is, of all the government's expenditures, it's roughly 60 percent entitlement. So if you're going to get at spending, you have to go to entitlements. So big picture, there has to be a solution around entitlements on revenues again.
What I would like to see is -- I'd like to see the Bush tax rates continue as they are. However, give the process, give the country, north of $1 trillion but do it by getting rid of all the deductions and loopholes that -- that comprise 70,000 pages of the tax code. And you can do it. You can do $1 trillion to $2 trillion. These are the kinds of plans that are being offered and that's the sense of all --
HENRY: To create revenues and not -- and less impaired growth.
MORGAN: OK. Steven Rattner, if you were in that room and that was on the table what would you say?
RATTNER: I would say you need to have a compromise that's more in the middle. You need to have a package -- spending is not the only problem. Spending is a problem, I would agree with that. But as I said before, we had two rounds of tax cuts in the early part of the 21st century that we simply could not afford. You need to roll back a piece of them. So it has to come from both sides.
As far as where it comes from on the revenue side, I believe it should come from the wealthy. From the top 2 percent of Americans. There -- that's the group and I'm happy I'm a part of it, Emil is a part of it, I'm sure you're a part of it, Piers, that has benefited the most over the last few years. The average American is further behind. I don't think you take this money from the average American. I think you take it from those earning over $250,000.
Secondly, you also take it from people like Mr. Buffett who make most of their income from capital gains and have a very, very low tax rate. They should be paying a minimum of 30 percent as Buffett himself has proposed.
I'm all in favor of closing deductions and loopholes. But frankly when Lloyd Blankfein talks about the pie shrinking, the biggest risk we have right now is doing nothing, and go -- going over this so-called fiscal cliff at the end of the year, and then the economy will shrink and the pie will shrink. So we need to have a compromise. Both sides have to meet in the middle. And so far there has really not been a lot of progress in getting there.
MORGAN: Well, it's a fascinating debate. We'll carry on raging for the next 30 odd days.
Emil Henry and Steven Rattner, thank you both very much.
RATTNER: Thank you.
HENRY: Thank you, Piers.
MORGAN: Coming up next, who better than Tavis Smiley to put all this together. Politics, Powerball and the fiscal cliff. I hate that phrase. Let's call it financial build-up.
Tavis, we're going to discuss the financial build-up after the break.
SMILEY: Look forward to it.
MORGAN: I've just renamed it.
(BEGIN VIDEO CLIP)
OBAMA: Our ultimate goal is an agreement that gets out long-term deficit under control in a way that is fair and balanced. That kind of agreement would be good for our businesses, it'd be good for our economy, it would be good for our children's future. And I believe that both parties can agree on a framework that does that in the coming weeks. In fact my hope is to get this done before Christmas.
(END VIDEO CLIP)
MORGAN: President Obama saying what Americans all hope for, fiscal hill top deal before time runs out. We've renamed it there. Can both sides make it happen?
Tavis Smiley has a lot to say about this. He's an advocate, author and host of the "Tavis Smiley Show" on PBS. His new book is the "Rick and the Rest of Us: A Poverty Manifesto."
Bring it all together for me. This is all about politics, Powerball, fiscal cliff, financial build-up, whatever you want to call it. Where are we with all of this, Tavis? Because there's this kind of weird disconnect, isn't it, between an increasingly impoverished America at the bottom end, rushing out to spend the little money they do have on lottery tickets, on a whim and a prayer. Then you have this Washington battle that appears as intransigent as it's ever been over how to deal with the debt crisis. Meanwhile the debt rises to $16 trillion.
SMILEY: I hoped that the president would say this. He has not as of yet. And I'm not holding my breath any longer that he will given the clip you just played. But the short answer is this. This fiscal cliff conversation, fiscal cliff is really just a masquerading of austerity. A fiscal cliff is just disguised. It's austerity in disguise.
And the president and those of us who care about the future of this country in terms of this gap between the have got and the have nots ought to just say that. This is austerity masking around as a fiscal cliff conversation.
This Congress two years ago did not have the courage, the conviction or the commitment to address this issue and now they want to basically scare those Americans who are already on the short end of the stick with this conversation about a fiscal cliff when the reality is that millions of Americans have already gone over the fiscal cliff.
And so this is a conversation that in some regards is a waste of time in Washington. We ought to be talking about creating jobs and not about deficit reduction and I just -- it troubles me when the president himself even seems to go for that line about deficit reduction. It ought to be about job creation.
MORGAN: Is he being bold enough? Because the one thing that everybody hoped was, second term, President Obama would come out fighting, come out swinging, and be the Obama people fought and voted for four years ago. And this at the moment doesn't strike me as being too audacious. It's kind of more fiddling while Rome burns.
SMILEY: One of the things I've said in his first time that I hopes he would not repeat in the second term was too much compromise and too much capitulating, too much caving to the Republicans. Everybody saw this Republican obstructionism he was up against in his first term. And I just don't want to see him again let the Republicans clean his clock.
And over the last couple of days, you know, even today as a matter of fact, we're starting to get some signal -- Erskine Bowles said early today that he met with the president. This is -- this is Bowles-Simpson. So Erskine Bowles said early today, I saw on the Internet, that he met with the president. The president signaled that he might be willing to talk about raising of taxes.
So, again, the signs are kind of ominous here that we might end up back where we were in the first term with the president striking some grand bargain when again this fiscal cliff is really just austerity in disguise.
MORGAN: Another thing, Tavis, that is bizarre week when you've got all the talk about a fiscal cliff and millions of Americans being plunged into higher taxation and so on. At the same time millions of Americans have gone out and spent loads of money on Black Friday, record ever numbers, and they've also got to spend what little they have left on lottery tickets for the Powerball.
MORGAN: How do you stop that? Should you stop that? Are you with Dave Ramsey? Is this becoming a tax on the poor?
SMILEY: It is a tax on the poorer and the numbers bare that out. I saw your conversation, at least of it, with Dave. And I think Dave is right about the fact, again, that is a tax on the poor. For some people this is, as you said, Piers, fun and games, and I don't regret or begrudge anybody their opportunity to spend their money if they want to buy a lottery ticket. And many of these lotteries, as you discussed in your conversation, are about financing education.
Here's what troubles me. There's nothing wrong necessarily with using a lottery to fund education. It's when education itself becomes a lottery. Every time I see those balls bouncing around on some of the B-roll that we play, I think of the movie "Waiting for Superman." And there were parts of that movie that I had issue with. But anyone who saw that documentary, this award-winning documentary, and saw these kids sitting with their parents at these school meetings with these balls bouncing around, hoping that their number would come up, so that they could get a seat and get access to a high quality education in a good school room.
When you see those balls bouncing around, I think, again, not just of Americans wasting money on lottery tickets, but again, when education becomes a lottery, we've got a problem.
MORGAN: What about Black Friday? What about the fact that it smashed all records? Is it healthy that Americans rush out with nearly 8 percent unemployment. A lot of real financial hardships rush out, tempted in by all these deals, the advertising and so on? Is that healthy in modern America to be having this -- it didn't just happen on Friday, it carried on over the weekend. I mean, that with Blue Monday, Green Tuesday.
MORGAN: I mean, it's a gimmick, isn't it?
SMILEY: It is a gimmick. And the short answer is that when you have corporate greed and political indifference and yes, some bad decisions, a lottery ticket isn't no more going to bail you out than is a flat screen television. But we allow ourselves to be sucked in by this. America long ago has gotten so caught up with -- just intoxicated with consumerism that we can't seem to break from it. Meanwhile you've got these corporate CEOs who just made out like a bandit on Black Friday because of the consumers who they snookered and sucked in. Now they're going to go on Washington today and tomorrow trying to get the best deal they can to save their money in this fiscal cliff conversation. It's heresy, quite frankly.
MORGAN: Let's take a short break. Come back and talk more about money, also about President Obama, just re-elected, he gave Mitt Romney a good beating in the end, which surprised a lot of people. We'll get your take on that.
MORGAN: Back with my special guest Tavis Smiley.
Tavis, President Obama got re-elected in the end quite an easy victory. Were you surprised? SMILEY: Not at all. I think that when the Republican nominee has to run to his right to try to get the nomination and then hustle back to the center to try to win the general, you're going to get caught flip-flopping on a variety of issues or as Mr. Romney's campaign famously said, you're going to get caught doing your Etch-a- Sketch thing. And he got caught so I wasn't surprised at all.
I thought the race would be a little bit closer but I expected from the very beginning once we knew Mr. Romney was the nominee for the president to win in part because Romney was the guy that they didn't want from the very beginning.
MORGAN: What was extraordinary was the gap, really, between Obama and Romney. African-American, 93 percent to 6, Latinos, 71-27, Asian 73-26. And so on. On almost every demographic you care to name, he got slaughtered.
SMILEY: He is and now the president has to -- has to represent. The president would not be in the White House right now were it not for these groups you just mentioned. Everybody seems to talk about women and indeed they showed up in huge numbers. Latinos showed up in huge numbers. And young people showed up in huge numbers.
I did a blog a few weeks back about how it is that black people have been pushed off the stage so quickly. Black folks are the president's most loyal constituency. With all due respect to Latinos and women and young people, it is this coalition that allowed him to get to the White House.
Again, there are conversation earlier about this so-called fiscal cliff, austerity masquerading, I hope that the president will remember who put him in the White House. I hope he will remember the mandate that he has from those -- I hope he'll remember, as I've said before that budgets are moral documents.
You can say what you say but you are what you are, and when you put your budget on the table we will see what you think of women and children. We will see what you think of those suffering communities. African-American unemployment, complete off the charts. The Hispanic community, not doing much better.
I just saw a number today, as a matter of fact, Piers, the median net worth in this country is now at the level of 1969. From 1983 to 2010 the top 1 percent, their median net worth jumped 71 percent. From '83 to 2010, their median net worth jumped 71 percent. The rest of the country we're now at 1969 levels from median net worth.
The president has to understand that. He can't cave in on this debate with these Republicans in Washington.
MORGAN: Who do you think the GOP should turn to now to try and become more electable? Putting aside your obvious preferences.
MORGAN: Where should they go? Should they have been braver this time and had a VP pick of a Condoleezza Rice or a Marco Rubio? What should they be thinking now?
SMILEY: Well, first of all, my preference, my preference is for the president to be more progressive. That's number one.
SMILEY: I've said that. Since we're talking about the right now.
MORGAN: But it's always healthy, I think, for America to have a proper --
SMILEY: Sure. I totally agree. I believe in competition. I don't like -- I like -- I don't like coronations. I like real content. So I want to see, you know, this kind of contestation. I think the problem, though, to answer your question, Republicans are making right now in the conversation is that they think it's about a personality rather than about a policy change. They think it's about outreach rather than inclusion.
And that's not going to get them where they want to go. If they want to be a competitive party in the most multicultural, multiracial, multi-ethnic America ever, they've got to understand that they're out of step with many Americans.
MORGAN: Now, Tavis, you've got this moderation, a nationally televised discussion, "Vision for New America: A Future Without Poverty," 6:30 to 9:00 p.m., Thursday, January 17th, 2013. Tell us about that.
SMILEY: We're going back to Washington in January to remind the president, to remind the nation, that poverty is threatening our very democracy. That poverty is now a matter of national security. This is an issue that we did not see debated during the campaign. It's an issue now the president has to deal with. There are all kinds of things, I think, pulling at him with regard to what his legacy ought to be. But he's got to channel Abraham Lincoln and FDR, and LBJ, and take a risk if he wants to be transformational and not just transactional. And I want to put at the top of his list the poor in this country. This divide that's growing every day.
And so we're calling on the president to convene a White House conference on the eradication of poverty. A White House conference to eradicate poverty in this country so we're going to Washington with a lot of the anti-poverty experts all together on one stage at George Washington University. To say to the president, let's call a conference, bring the experts together, and craft a national plan that can cut poverty in half in 10 years and eradicate it or move closely to eradicating it in 25. This is not a skill problem, it's a will problem. Do we have the will to do it?
MORGAN: And very quickly, what's the number one priority to try and eradicate poverty, would you say?
SMILEY: Jobs, jobs, jobs, and jobs with a living wage. We need to be creating jobs, not trying to cut the deficit. There was a time for that. We need jobs.
MORGAN: Tavis, good to see you as always.
SMILEY: Good to see you, Piers. Thank you.
MORGAN: Now you've got a very famous voice. People know Tavis Smiley by the mid dulcet tones. (INAUDIBLE) on Thursday.
SMILEY: But it's not that English thing you have, though.
MORGAN: Well, no, and obviously mine is much more (INAUDIBLE).
I'll talk to somebody who has an even more memorable voice than you and me. She is the lottery queen herself. Going to talk Powerball. She's got a name that millions know and love. Please reveal your name to us.
YOLANDA VEGA, NEW YORK LOTTERY SPOKESWOMAN: For the New York Lottery, I am Yolanda Vega.
MORGAN: Before we go to tonight, the woman who's been announcing the winning lottery numbers for the past 20 years. Yolanda Vega is the famous face and voice from the New York Lottery and she joins me now.
VEGA: Thank you. Thank you for having me, Piers.
MORGAN: I just want to hear that voice. I really want to hear you say, "Piers, you have won."
VEGA: You've won the big jackpot, Piers.
MORGAN: So we had a big debate tonight. I decided to leave the show with it, because everyone is talking about very little else. Because there's not much else going on other than fiscal cliffs and it seemed that the Powerball is gripping the nation. You've heard the debate on either side.
Is it a force of good, really, the lottery, or does it have its negative side? Do you appreciate that, too?
VEGA: Well, I've got to tell you honestly, Piers, I've been doing this almost 23 years, and there has been nothing but goodness coming as far as I can see. All the winners that I give the giant oversized checks to are definitely so very excited and, you know, for the time being, that people purchase their $2 Powerball ticket, they have a source of entertainment, an opportunity to dream, and to hold on to what they believe can happen positively, and hopefully for the best for all, and all the people around them. MORGAN: Isn't the problem, though, that a lot of the winners I noticed end up having pretty miserable time? Because they sort of alienate themselves almost by default, not through choice, from all their old friends and the areas they used to live. They go and buy the fancy mansions and the cars and stuff. And they disconnect themselves from the kind of comfort blanket community.
VEGA: That might be because the media shows you that. What I see are all the positive people that stay positive, and know how to invest their money, and know how to make it happen for themselves. There are so many people that win millions of dollars, and I believe there's a small pocket of those people, negative people that you do see and are focused on.
MORGAN: And Yolanda, are you allowed to play the lottery or not?
VEGA: Nobody in the New York Lottery can play. No one under my roof can play. My family can play if they live in other boroughs obviously, but husband nor my daughters cannot play, and they're not very happy about it.
MORGAN: Do you ever sneak off to other state so you can get your hands on a ticket?
VEGA: I do go to other states and buy scratch-offs, and that's a lot of fun to do once in a while. But we can't play Mega Millions or Powerball in any other states. Maybe their local lotto I can.
MORGAN: What is the biggest amount of money you've won on a scratch card?
VEGA: Oh, I think I won $250 in the state of Georgia.
MORGAN: You decided not to retire?
VEGA: Yes. Absolutely not. And, you know, I bought a $20 ticket there that day. And I was very disappointed on that $20 ticket, I won zero.
MORGAN: If you won -- obviously, I know you can't, I'm talking metaphorically, if you won a half a billion dollars, as the Powerball now is tonight what would you spend it on?
VEGA: I think right now -- I mean I've always thought I'd buy an exotic island or a bunch of cars for friends and family. But right now, in this time structure, at this holiday season, I probably would get lots and lots of bills and go visit all my friends and family out in New York City.
MORGAN: Well, I would buy Lionel Messi and Cristiano Ronaldo and take them to my beloved Arsenal soccer team. And I don't care what it would cost. That's not the whole lockdown. I'll take them tomorrow. Yolanda, it's -- I think it's great fun, the lottery. It's gives people a little bit of hope and fun. So you do a wonderful job. Congratulations.
VEGA: Absolutely. Thank you so much.
MORGAN: And thank you for joining me.
VEGA: Thank you. Good luck.