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Income inequality on the rise

This is a RUSH transcript from "The O'Reilly Factor," December 17, 2013. This copy may not be in its final form and may be updated.

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O'REILLY: On "Back of the Book" segment tonight, inequality in the U.S.A. A new study released by the World Bank says that American income inequality is on the rise, but global income inequality has fallen.

That means that, here, the rich are getting richer, while everybody else remains stagnant or in bad shape. Should we be ashamed. Joining us now from Washington to analyze, Charles Krauthammer, --

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-- author of the huge bestselling book, "Things That Matter."

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All right, look, this World Bank study, I gave it to you. And the report was that you couldn't make anything out of it. That was gibberish to me, gobbly goop to me.

But the overarch is that no longer is the United States a country where we can all pursue happiness on an equal basis. That's what Obama is trying to get across, the president is trying to get across.

The Democratic Party is selling that all-day long. Hollywood is selling it. Is it true.

CHARLES KRAUTHAMMER, FOX NEWS CONTRIBUTOR: Look, I think, if you're looking for numbers and you compare the upper fifth or the upper tenth to the lower fifth or tenth, things are much worse today in terms of inequality than they were 30 years ago, 50 years ago, a hundred years ago.

I think that's undoubtedly true. The question is, what are the causes and is it because of policy. I mean, part of it is globalization.

Whether it's a premium on intellectual property -- you're a guy in graduate school, you come up with an algorithm, you call it "Google," and in a year or two, you're a multibillionaire.

That didn't exist a hundred years ago. So, education, and sort of being inculcated in that culture of education, I think, is the most highly- prized attribute.

And the question is, are we giving the poor a chance at education. And I would say that's a real issue. That's a place where you could really intervene with policy.

I think the way that the Democratic Party, the teachers' unions who have had a stranglehold on the system, has really reduced students like those in the inner cities, to a life of real lack of opportunity.

O'REILLY: And I don't disagree with that, as a former high school teacher and a person who was raised in a working class neighborhood. I saw my whole life, those who embraced education, --

KRAUTHAMMER: Exactly.

O'REILLY: -- usually prospered. Those who did not, usually failed, unless they were gifted in some way, like a basketball player or, you know, somebody who can do something.

KRAUTHAMMER: Right.

O'REILLY: However, it is absolutely true that the main component of an American child's education is parents. And the government cannot legislate responsible parenting.

And you know, and I know, that we have seen a diminishment, in some cases, the disintegration of the traditional family. That is the prime driver of kids failing in school.

I don't like the teachers' unions either. They cover for a lot of bad people. But it's the disintegration of the home that is driving the underclass. And the government can't do anything about that, Charles.

KRAUTHAMMER: Well, look, you try to do what you can do. There's no magic wand for undoing the breakup, the disillusion of the traditional nuclear family.

But what we can do is, for those kids with aptitude who are able to overcome the home environment, you put them in a lousy school with tenured teachers who can't teach, and we know it condemns them to illiteracy.

And you give them a voucher, you allow a choice to go to other schools. We know that could help students.

O'REILLY: OK, let me stop you there.

KRAUTHAMMER: And yet, you've got people who are resisting that.

O'REILLY: OK, but that's my next question. We've proven the voucher system can work in Washington, D.C., --

KRAUTHAMMER: Right.

O'REILLY: -- one of the most intensely divided --

KRAUTHAMMER: Right.

O'REILLY: -- communities in the country. Yet, the liberal Democratic Party, which espouses massive amounts of money injected into the school system, with no responsibilities attached to it, none, just flood the zone with money. They resist vouchers. Tell the folks why.

KRAUTHAMMER: Look, well, of course, because the teachers' unions are the mainstay of the party. They're huge contributors. There are large sections of the Democratic convention.

O'REILLY: So, it's a corrupt bargain. It's a corrupt bargain.

KRAUTHAMMER: Of course it is. And everybody knows that. And that's one of the reasons that we're not getting school reform.

I think there is no question about that. And I think it's disgraceful. And it is the well-off, the limousine liberals whose kids are in the wonderful private schools, who deny the vouchers to poor kids who would have a chance out of the ghetto.

And they claim that it's in the name of saving the public schools, but they don't save the public schools. I'll give you one number. Liberals love to throw money at problems.

The per capita spending on students in America is twice today what it was in 1970. And our test scores are the same or lower. It has nothing to do with the money, it has everything to do with the quality of the teaching.

O'REILLY: And it has to do with discipline, it has to do with how the schools are run and what the expectations are of the student.

KRAUTHAMMER: That is true.

O'REILLY: Right.

KRAUTHAMMER: But it's hard to change what's happening in the home. We are a free society.

O'REILLY: You can't, can't change it.

KRAUTHAMMER: It's easier to change what you can do in a public school because it's controlled by the government.

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