Friday, September 1, 2017

Robert Reich's agenda for correcting our "unprecedented economic imbalance"

Why America must fix income inequality - and do it fast.

In my post by that title yesterday I reviewed “Zillionaire” Nick Hanauer’s plea for his follow Zillionaires to step up and support a national minimum wage hike. It made sense to me. It would be a big boost to the economy and reduce some of the anger and resentment directed toward the elites (and more importantly that toward our democratic institutions).

And then I asked why those Zillionaires did not respond to Hanauer’s message when he first delivered it in 2014? And why did they not perceive the dangers posed by our increasing income inequality during the last 40 years - and do something about it?

There is an old saying among psychologists. The best predictor of future behavior is past behavior.

Here is Robert Reich’s version of Hanauer’s complaints (from this morning’s Daily star).

Economic, political elites do little for the American worker

This will be the first Labor Day of the presidency of Donald J. Trump, who came to office riding a wave of anti-establishment anger from average working people. No one can say they didn’t see it coming.

By the time Trump was elected, the typical American household had a net worth 14 percent lower than the typical household in 1984. The richest 1 percent of Americans controlled more wealth than the bottom 90 percent.

Last year’s annual Wall Street bonus pool alone was larger than the annual year-round earnings of all 3.3 million Americans working full time at or below the federal minimum wage of $7.25 an hour.

While 90 percent of U.S. adults born in the early 1940s were earning more than their parents by the time they reached their prime earning years, only half of adults born in the mid–1980s are earning more than their parents in their prime earning years.

Most also have less economic security than their parents. Nearly one out of every five American workers is in a part-time job. Two-thirds are living paycheck to paycheck. Most are working more hours than they worked decades ago and taking fewer sick days or vacations.

The gap in life expectancy between the nation’s most affluent and everyone else is also widening. Increasing numbers of Americans on the downward economic escalator are succumbing to opioids, chronic liver cirrhosis, and poisonings that include drug overdoses.

The standard explanation for why all of this has occurred is that most American workers are no longer “worth” as much as they were before digital technologies and globalization. So they must now settle for lower wages and less security.


This doesn’t explain why workers in other advanced economies facing similar forces haven’t succumbed to such setbacks nearly as dramatically as have workers in the United States.

Or why the pay of top executives at big companies has soared from an average of 20 times that of the typical worker 40 years ago to almost 300 times now.

Or why the denizens of Wall Street, who in the 1950s and 1960s earned comparatively modest sums, are now paid tens or hundreds of millions annually.

And it can’t account for the decline in the starting wages of recent college graduates. A college education is now a prerequisite for joining the middle class but no longer a sure means for gaining ground once admitted to it.

To attribute all of this to the impersonal workings of the market, and to assume it’s because most workers aren’t “worth” as much as before, is to ignore the increasing ability of moneyed interests to alter the system for their own benefit — demolishing trade unions, turning full-time employees into contract workers, and monopolizing industry.

America’s economic and political elites could have used their growing political and economic clout to help workers get ahead — through better schools and more affordable college, comprehensive job retraining, wage insurance, better public transportation and expanded unemployment insurance.

They could have pushed for universal health insurance.

They could have paid for all this by accepting, even lobbying for, higher taxes on themselves.

They could have sought to reduce their own political clout by demanding limits on campaign spending.

But they did the reverse: They spent more and more of their ever-growing wealth and power on rigging the game to their own advantage.

As a result, trust in all the major institutions of our society has plummeted.

In his first seven months as president, Trump has done nothing for American workers. In fact, his attempt to undermine the Affordable Care Act, his retreat from Labor Department regulations boosting overtime pay, and his proposed tax cuts for the wealthy and big corporations will make most workers worse off.

But he is in office because of workers’ anger and distrust. “The establishment protected itself, but not the citizens of our country,” Trump said in his inaugural address. “Their victories have not been your victories; their triumphs have not been your triumphs.”

Tragically, Trump was right.

Now, all of us are paying the price.

If the Zillionaires won’t step up, then what? Reich lays out an agenda for the Democratic Party in his blog.

What Do Democrats Stand For?

The Democratic Party can lead the country in a new direction, but will it?

Millions of Americans who are politically engaged for the first time in their lives are crying out for a bold alternative to bigoted and destructive policies.

But Democrats can’t just be anti-Trump or move to the middle.

To be successful Democrats must address the forces that created Trump: The toxic combination of widening inequality and racism.

The richest one percent now own more than the bottom 90 percent. Corporations and the rich are running our politics.

The resulting economic stresses have made many people vulnerable to Trump’s politics of hate and bigotry.

If Democrats stand for one thing, it must be overcoming this unprecedented economic imbalance and creating a multi-racial, multi-ethnic coalition of the bottom 90 percent, to take back our economy and politics.

This requires, at the least:

  1. Public investments in world-class schools and infrastructure for all.

  2. Free public universities and first-class technical training for all;

  3. Single-payer Medicare-for-All;

  4. Higher taxes on the wealthy to pay for this;

  5. Using antitrust to break up powerful monopolies on Wall Street, Big Tech, Big Pharma, and Big Agriculture.

  6. Getting big money out of our politics.

Together, these steps form an agenda to reclaim our economy and democracy for all. Will Democrats lead the way?

That is the question. The fundamental problem facing America is “overcoming this unprecedented economic imbalance.” For me everything else is symptomatic and follows from that imbalance. Trump emerged as the populist leader, but he has done nothing for the worker. Nothing. Everything he has done or tried to do only exacerbates the imbalance. Health care? Kick millions off. Taxes? Give breaks to the wealthy.

Dems need to put Reich’s agenda at the top of every communication and every mission statement. If we do not do that, we become part of the problem and we will drown in a wave of pitchforks.

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