Robert Reich Archive

Trump's Economy Revealed

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

Donald Trump and his enablers are hoping that a strong economy will help the American people look past the damage they are doing to the country. That’s why Trump is constantly crowing about job numbers and the stock market in order to paint a rosy picture of the economy.

But when you look closer, the numbers reveal a very different story about Trump’s economy:

1. Wages are still stuck. The median annual earnings of full-time wage and salaried workers in 1979, in today’s dollars, was $43,680. The median earnings in 2018 was $45,708. So much for the $4,000 pay raise Trump and Republicans in Congress promised when they cut taxes for the wealthy and corporations. 

2. Percent of people with jobs is low. While the unemployment rate is low, employment is not nearly as good as it may look when you consider how many people have given up looking for jobs. The labor-force participation rate – the percent of working-age Americans with jobs – is the lowest it’s been since the late 1970s, when wives and mothers first began streaming into paid work to prop up family incomes.

3. Many people are working part-time jobs. Nearly 4 million Americans are stuck in part-time jobs, unable to find full-time jobs. Many of these part-time gigs are either freelance or contract, offering fewer rights and benefits. In turn, this has increased economic insecurity for millions of families.

4. A growing number of college graduates are overqualified for their current jobs. One in 10 college grads are underemployed, which is much higher than 20 years ago. At the same time, the cost of college has skyrocketed, with students going deeper into debt to pay for their education: 45 million Americans now owe 1.6 trillion in student debt.

5. The cost of health care continues to increase. Since 2008, average family premiums have soared 55 percent, which is twice as fast as workers’ earnings and three times as fast as inflation. Prescription drug prices also continue to rise – jumping almost 11 percent in the first half of 2019 alone.

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The Myth of the Rugged Individual

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

The American dream promises that anyone can make it if they work hard enough and play by the rules. Anyone can make it by pulling themselves up by their “bootstraps.” 

Baloney. 

The truth is: In America today, your life chances depend largely on how you started – where you grew up and how much your parents earned.

Everything else – whether you attend collegeyour chances of landing a well-paying jobeven your health – hinges on this start. 

So as inequality of income and wealth has widened – especially along the lines of race and gender – American children born into poverty have less chance of making it. While 90% of children born in 1940 grew up to earn more than their parents, today only half of all American adults earn more than their parents did. 

And children born to the top 10 percent of earners are typically on track to make three times more income as adults than the children of the bottom 10 percent.

The phrase “pulling yourself up by the bootstraps” itself is rubbish. Its origins date back to an 18th-century fairy tale, and the phrase was originally intended as a metaphor for an impossible feat of strength. 

Other countries understand that the family you’re born into as well as the social safety nets and social springboards you have access to play large roles. 

Children born poor in Canada, Denmark, or the United Kingdom – nations without America’s degree of inequality, nations which provide strong social safety nets and public investments – have a greater chance of economic success than children born poor in America. 

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The 7 Biggest Failures of Trumponomics

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

Donald Trump and Republicans in Congress keep crowing about the economy, when in reality Trumponomics has been a disaster. Here are its 7 biggest failures:

1. Trump promised to bring down America’s trade deficit “as fast as possible.” Instead, the trade deficit has hit an all-time high. The United States is now purchasing more goods and services from the rest of the world than we sell abroad than at any time in history.

2. As a presidential candidate in 2016, he said he could completely eliminate the federal debt in 8 years. Instead, the federal debt has exploded thanksto Trump and the GOP’s $1.9 trillion tax cuts for the wealthy and corporationsThey’re already using the growing debt to threaten cuts to Social Security, Medicare, and Medicaid.

3. He promised to boost the wages of American workers, including a $4,000 pay raise for the average American family. Instead, wages for most Americans have been flat, adjusted for inflation. Meanwhile, over the same period, corporate profits have soared and the rich have become far richer, but the gains haven’t trickled down.

4. His administration said that corporations would invest their savings from tax cuts. Instead, corporations spent more money buying back shares of their own stock in 2018 than they invested in new equipment or facilities. These stock buybacks provide no real benefit for the economy, but boost executive bonuses and payouts for wealthy investors.

5. He promised a tax cut for middle-class families. Instead most Americans will end up paying more by 2027.

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Everything You Need to Know About the New Economy

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

The biggest economic story of our times isn’t about supply and demand.  It’s about institutions and politics.  It’s about power.

The median annual earnings of full-time wage and salaried workers in 1979, in today’s dollars, was $43,680. The median earnings in 2018 was $45,708. If between 1979 and 2018, the American economy almost tripled in size, so where did the gains go?  Most went to the top.

Now this is broadly known, but there is less certainty about why.

1. The Conventional View  

Conventional wisdom attributes the widening economic divide to globalization and technological change – the “inevitable” result of the invisible hand of the so-called “free market.”

Simply put, as the American economy merged with the rest of the globe, American workers had to compete with foreign workers willing to toil for a fraction of American wages. And as technology advanced, American workers also had to compete with software and robots that were cheaper to employ than Americans.

So, according to this conventional view, the only realistic way to raise the wages of most Americans is to give them more and better education and job training, so they can become more competitive. They can thereby overcome the so-called “skills gap” that keeps them from taking the jobs of the future – jobs and opportunities generated by new technologies.

2.  A Deeper View of the American Political Economy

The conventional story isn’t completely wrong, and education and training are important. But the conventional view leaves out some of the largest and most important changes, and therefore overlooks the most important solutions.

To understand what really happened, it’s critical to understand that there is no “free market” in nature. The term “free market” suggests outcomes are objectively fair and that any “intervention” in the free market is somehow “unnatural.” But in reality, markets cannot exist without people constructing them. Markets depend on rules, and rules come out of legislatures, executive agencies, and courts.  The biggest political change over the last four decades is the overwhelming dominance of big money in politics – influencing what those rules are to be.

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The 12 Biggest Myths about Raising Taxes on the Rich

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

Some politicians are calling for higher taxes on the rich. Naturally, these proposals have unleashed a torrent of opposition – mostly from…the rich. Here are the 12 biggest myths they’re propounding: 

Myth 1: A top marginal tax rate applies to all of a rich person’s total income or wealth.

Wrong. It would only apply to dollars in excess of a certain level. The 70 percent income tax rate proposed by Congresswoman Alexandria Ocasio-Cortez would apply only to dollars in excess of 10 million dollars a year. The 2 percent wealth tax proposed by Elizabeth Warren would apply only to wealth in excess of 50 million dollars.

Myth 2 : Raising taxes on the rich is a far-left idea.

Baloney. 70 percent of Americans – including 54 percent of Republicans – support raising taxes on families making more than 10 million dollars a year.  And expecting the rich to pay their fair share is a traditional American idea. From 1930 to 1980, the average top marginal income tax rate was  78 percent. From 1951 to 1963 it exceeded 90 percent – again, only on dollars in excess of a very high threshold. Even considering all deductions and tax credits, the very rich paid over half of their top incomes in taxes.  

Myth 3: A wealth tax is unconstitutional.

Rubbish. Most locales already impose an annual wealth tax on the value of peoples’ homes – the main source of household wealth for most people. It’s called the property tax. The rich hold most of their wealth in stocks and bonds, so why should these forms of wealth escape taxation?  Article I Section 8 of the Constitution gives “Congress [the] power to lay and collect taxes.”

Myth 4: When taxes on the rich are cut, they invest more and everyone benefits, when taxes on the rich are increased, economic growth slows.

Utter baloney. Trickle-down economics is a cruel joke. Donald Trump, George W. Bush, and Ronald Reagan all cut taxes on the rich, and nothing trickled down. There’s no evidence that higher taxes on the rich slows economic growth. To the contrary, when the top marginal tax rate has been high – between 71 to 92 percent – growth has averaged 4 percent a year. But when top rate has been low – between 28 and 39 percent – growth has averaged only 2.1 percent.

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Robert Reich: America is now a hotbed of socialism — for the rich

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

We renew our resolve that America will never be a socialist country,” Donald Trump said recently.

Someone should alert him that America is now a hotbed of socialism. But it’s socialism for the rich. Everyone else is treated to harsh capitalism.

In the conservative mind, socialism means getting something for doing nothing. This pretty much describes General Motors’ receipt of $600 million in federal contracts, plus $500 million in tax breaks, since Trump took office.

Some of this corporate welfare has gone into the pockets of GM executives. Chairman and CEO Mary Barra raked in almost $22 million in total compensation in 2017 alone.

But GM employees are subject to harsh capitalism. GM is planning to lay off more than 14,000 workers and close three assembly plants and two component factories in North America by the end of 2019.

The nation’s largest banks saved $21 billion last year thanks to Trump’s tax cuts, some of which went into massive bonuses for bank executives. On the other hand, thousands of lower-level bank employees got a big dose of harsh capitalism. They lost their jobs.

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The Myth of Meritocracy

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

Most Americans still cling to the meritocratic notion that people are rewarded according to their efforts and abilities. But meritocracy is becoming a cruel joke.

The Justice Department recently announced indictments of dozens of wealthy parents for using bribery and fraud to get their children into prestigious colleges.

But the real scandal isn’t how far a few wealthy parents will go to get their kids admitted (apparently $1.2 million in illegal payoffs), but how commonplace it has become for them to go almost as far without breaking any laws – shelling out big bucks for essay tutors, testing tutors, admissions counselors, and “enrichment” courses (not to mention sky-high tuition at private schools feeding into the Ivy League).  

Inequality is lurking behind all this, and not just because the wealthy can afford it. Researchers Daniel Schneider, Orestes Hastings, and Joe LaBriola found that in states with the biggest gaps between rich and poor, well-to-do parents spend the most trying to get their children into elite colleges.

America’s unprecedented concentration of wealth combined with seemingly bottomless poverty have increased parental anxiety – raising the stakes, and the competition, for admission.

While some entrepreneurs in America’s billionaire class lack a prestigious degree, it’s become harder to become a run-of-the-mill multimillionaire in America without one.

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What’s the Real American Story?

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

Donald Trump has perfected the art of telling a fake story about America. The only way to counter that is to tell the real story of America.

Trump’s story is by now familiar: he alone will rescue average Americans from powerful alien forces – immigrants, foreign traders, foreign politicians and their international agreements – that have undermined the wellbeing of Americans.

These forces have been successful largely because Democrats, liberals, “socialists,” cultural elites, the Washington establishment, the media and “deep state” bureaucrats have helped them, in order to enrich themselves and boost their power. Not surprisingly, according to Trump, these forces seek to remove him from office.

What makes Trump’s story powerful to some Americans despite its utter phoniness is that it echoes the four tales Americans have been telling ourselves since before the founding of the Republic.

To combat Trump’s fake story, we need a true story based on facts, logic and history. But in order for that true story to resonate with Americans, it must also echo the same four tales.

The first tale: The Triumphant Individual. 

It’s the little guy or gal who works hard, takes risks, believes in him or herself, and eventually gains wealth, fame and honor. The tale is epitomized in the life of Abe Lincoln, born in a log cabin, who believed that “the value of life is to improve one’s condition.” The moral: with enough effort and courage, anyone can make it in America.

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A Bold New Idea to Boost Wages

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

The challenges are well known: Working Americans are struggling to keep up with the increasing cost of living. Unemployment is low, but wages of most Americans have remained flat. More than three-quarters of Americans are now living paycheck to paycheck. Most can’t afford a $500 emergency.

There’s a simple and bold solution that would cost about as much as the Trump tax cut. But instead of helping corporations and the rich, it would help millions of working and middle-class Americans by putting money directly in their pockets.

I’m talking about expanding something called the Earned Income Tax Credit, or EITC. And although it’s been around for decades, it can be the basis of a revolutionary change in the lives of millions of people. 

As it now stands, the EITC gives thousands of dollars to the working poor, with the amount of money they receive gradually decreasing as their earnings rise until they reach a cap, which is now a little over $50,000.

It works so well because it directly boosts the incomes of people who need it the most. Cash gives people freedom and dignity— the power to decide, for example, whether to have their car repaired or buy new shoes for their kids or save for a rainy day. 

When working people have money to spend, they spend most of it in the communities they live in. This, in turn, causes businesses to hire more people to meet the demand. It’s a virtuous cycle that lessens poverty, makes the tax code fairer, and boosts the overall economy.

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Howard’s End

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

America is the only place in the world where any citizen over the age of 35 can run for president. No experience in government necessary. No support from a political party necessary. You don’t even have to have any ideas or policy proposals.

Take Howard Schultz, the former CEO of Starbucks whose most notable achievement to date has been the Mocha Frappucinno.

Last Tuesday, CNN made Schultz a Serious Presidential Candidate by giving him an hour-long “town hall” in which he fielded questions from an audience.

Why did CNN do this? Because Schultz is worth over $3.6 billion.

In today’s America, someone with this much money can buy so much advertising and self-promotion that he automatically becomes a SPC just by virtue of wanting the job and having the capacity to self-finance a campaign.

Ironically, CNN and other major media are giving Schultz free media now because he can afford an almost infinite amount of paid media later.

Years ago, political parties played the major roles in selecting presidential candidates. Candidates came up through the ranks. They had to convince party leaders across the nation they had what it took to be president. Conventions were the last step in the winnowing process.

Then, over the last several decades, the media took over the job of winnowing the pack. Winners were determined largely by campaign coverage, including presidential primary debates.

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Trump’s economy is leaving his right-wing base stranded in poverty — and it’s only going to get worse

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

You’ve heard me talk about inequalities of income and wealth and political power. But another kind of inequality needs to be addressed as well: widening inequalities of place.

On the one hand, booming mega-cities. On the other hand, an American heartland that’s becoming emptier, older, whiter, less educated, and poorer. Trump country.

To understand what’s happening you first need to see technology not as a thing but as a process of group learning – of talented people interacting with each other continuously and directly, keying off  each other’s creativity, testing new concepts, quickly discarding those that don’t work, and building cumulative knowledge.

This learning goes way beyond the confines of any individual company. It now happens in geographic clusters – mostly along the east and west coasts in places like Seattle, San Francisco, Los Angeles, New York, Boston and suburban Washington D.C.

Bright young college graduates are streaming into these places, where their talents generate more value–and higher wages–together than they would separately.

As money pours into these places, so do service jobs that cater to the new wealth – lawyers, wealth managers and management consultants, as well as cooks, baristas and pilates instructors.

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Trump Wants Socialism for the Rich, Harsh Capitalism for the Rest

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

“America will never be a socialist country,” Donald Trump declared in his State of the Union address. Someone should alert Trump that America is now a hotbed of socialism. But it is socialism for the rich. Everyone else is treated to harsh capitalism.

In the conservative mind, socialism means getting something for doing nothing. That pretty much describes the $21 billion saved by the nation’s largest banks last year thanks to Trump’s tax cuts, some of which went into massive bonuses for bank executives. On the other hand, more than 4,000 lower-level bank employees got a big dose of harsh capitalism. They lost their jobs.

Banks that are too big to fail – courtesy of the 2008 bank bailout – enjoy a hidden subsidy of some $83 billion a year, because creditors facing less risk accept lower interest on deposits and loans. Last year, Wall Street’s bonus pool was $31.4 billion. Take away the hidden subsidy and the bonus pool disappears.

Trump and his appointees at the Federal Reserve are easing bank requirements put in place after the bailout. They’ll make sure the biggest banks remain too big to fail.

Trump is promoting socialism for the rich and harsh capitalism for everyone else in other ways. Since he was elected, GM has got more than $600 million in federal contracts plus $500 million in tax breaks. Some of this has gone into the pockets of GM executives. Chairman and CEO Mary Barra raked in almost $22m in total compensation in 2017 alone.

But GM employees are subject to harsh capitalism. GM is planning to lay off more than 14,000 workers and close three assembly plants and two component factories in North America by the end of 2019.

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Public Workers’ Trump Card

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

Air traffic controllers hold the trump card (pardon the expression) in upcoming negotiations between Donald Trump and congressional Democrats over border security.

That’s because the president and the Republicans know that another shutdown would likely cause a repeat of what happened last Friday, when so many of the nation’s air traffic controllers called in sick that America’s air traffic came to a near standstill. Hours later, Trump agreed to reopen the government without funding for his wall.

Never underestimate the power of airport delays to arouse the nation. Nancy Pelosi deserves credit for sticking to her guns, but the controllers brought the country to its knees.

Trump is threatening another shutdown if he doesn’t get his way by 15 February, when government funding will run out again. “Does anybody really think I won’t build the WALL?” he tweeted Sunday, after his acting chief of staff said that he was prepared to shutter the government for a second time.

But his threat is for the cameras. If there’s no agreement this time around, the controllers won’t work another 35 days without pay. Now that they understand their power, they will shut down the shutdown right away. Trump knows this.

Ironically, it was Ronald Reagan’s audacious decision in 1981 to fire and replace more than 11,000 air traffic controllers who were then striking illegally that legitimized decades of union busting. It signaled to employers around the country that unions – both public and private-sector – were fair game.

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America Rejects Trumpism

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

Make no mistake: America has rejected Trumpism.

No one seriously expected the Senate to flip, because Democrats had to defend 26 seats in that chamber, compared with only nine held by Republicans.

The real battleground was the House, where Democrats had to achieve a net gain of 23 seats to get the 218 needed for a majority.

They did.

Trump wasn’t on the ballot but he made the election into a referendum on himself.

So Americans turned against House Republicans, who should have acted as a check on him but did nothing – in many cases magnifying his vileness.

The nation has repudiated Trump, but do not believe for a moment that our national nightmare is over.

Trump still occupies the White House and in all likelihood will be there for two more years.

The Republican Party remains in control of the Senate.

Fox News is still Trump’s propaganda ministry. (The line between Fox and Trump, already blurred, vanished completely at his last pre-election rally when Fox hosts Sean Hannity and Jeannine Pirro joined him on stage.)

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The Truth About Trump’s Economy

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

I keep hearing that although Trump may be a scoundrel or worse, he’s done a great job for the economy.

Baloney. Yes, the stock market is great, but 84 percent of it is owned by the richest 10 percent of Americans.

The economy is growing, but very little of that growth is trickling down to average Americans. Jobs may be back but they pay squat, especially compared to the rising costs of housing, healthcare, and education.

Trump slashed taxes on the wealthy and corporations, and he promised everyone else a wage boost of $4,000 but it never happened.

Meanwhile, employers continue to cut pension and healthcare benefits. Jobs are less secure than ever. One in 5 jobs is now held by a worker under contract, without any unemployment insurance, sick leave, or retirement savings.

Housing costs are skyrocketing, with a large portion of Americans now paying a third of their paychecks in rent or mortgages.

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Message to Millennials

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

You are the largest, most diverse, and progressive group of potential voters in American history, comprising fully 30 percent of the voting age population.

 On November 6th, you have the power to alter the course of American politics – flipping Congress, changing the leadership of states and cities, making lawmakers act and look more like the people who are literally the nation’s future.

But you need to vote. In the last midterm election, in 2014, only 16 percent of eligible voters between the ages of 18 and 29 even bothered.

Now, I understand. I was young once. You have a lot on your minds – starting jobs, and careers, and families. Also, unlike your grandparents–some of whom were involved in civil rights, voting rights, women’s rights, the anti-Vietnam War movement–you may not remember a time when political action changed America for the better.

You don’t even recall when American democracy worked well. Instead, during your lifetime you’ve watched big money take over Washington and state capitals. Which may explain why only about 30 percent of you born in the 1980s think it “essential” to live in a democracy.

But the issues up for grabs this coming November 6 are not ideological abstractions. They’re causes in which you have direct personal stakes.

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Living in a New Gilded Age

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

The Trump Justice Department has approved a $69 billion merger between CVS, the nation’s largest drugstore chain, and insurance giant Aetna. It’s the largest health insurance deal in history.

Executives say the combination will make their companies more efficient, allowing them to gain economies of scale and squeeze waste out of the system.

Rubbish. This is what big companies always say when they merge.

The real purpose is to give Aetna and CVS more bargaining power over their consumers and employees, as well as pharmaceutical companies and healthcare providers (which have also been consolidating).

The result: Higher prices. Americans already spend far more on healthcare and medications per person than do citizens in any other developed country – and our health is among the worst.

America used to have antitrust laws that permanently stopped corporations from monopolizing markets, and often broke up the biggest culprits. 

But now, especially with Trump as president and lobbyists and CEOs running much of the government, giant corporations like Aetna and CVS are busily weakening antitrust enforcement and taking over the economy.

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Why I’m Betting on Millennials, this November 6th

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

Millennials (and their younger siblings, generation Z’s) are the largest, most diverse and progressive group of potential voters in American history, comprising fully 30 percent of the voting age population.

On November 6th, they’ll have the power to alter the course of American politics – flipping Congress, changing the leadership of states and cities, making lawmakers act and look more like the people who are literally the nation’s future.

But will they vote?

In the last midterm election, in 2014, only 16 percent of eligible voters between the ages of 18 and 29 bothered.

In midterms over the last two decades, turnout by young people has averaged about 38 points below the turnout rate of people 60 and older. Which has given older voters a huge say over where the nation is likely to be by the time those younger people reach middle age and the older voters have passed on.

I’m not criticizing younger non-voters. They have a lot on their minds – starting jobs, careers, families. Voting isn’t likely to be high on their list of priorities.  

Also, unlike their grand parents – boomers who were involved in civil rights, voting rights, women’s rights, the anti-Vietnam War movement – most young people today don’t remember a time when political action changed America for the better.

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The Buyback Boondoggle is Beggaring America

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

Trump and Republicans branded their huge corporate tax cut as a way to make American corporations more profitable so they’d invest in more and better jobs. 

But they’re buying back their stock instead. Now that the new corporate tax cut is pumping up profits, buybacks are on track to hit a record $800 billion this year. 

For years, corporations have spent most of their profits on buying back their own shares of stock, instead of increasing the wages of their employees, whose hard work creates these profits. 

Stock buybacks should be illegal, as they were before 1983.

Stock buybacks are artificial efforts to interfere in the so-called “free market” to prop up stock prices. Because they create an artificial demand, they force stock prices above their natural level. With fewer shares in circulation, each remaining share is worth more.     

Buybacks don’t create more or better jobs. Money spent on buybacks isn’t invested in new equipment, or research and development, or factories, or wages. It doesn’t build a company. Buybacks don’t grow the American economy.

So why are buybacks so popular with Corporate CEOs?

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Robert Reich: The Trump Economy Is Doomed from the Start

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

How to build the economy? Not through trickle-down economics. Tax cuts to the rich and big corporations don’t lead to more investment and jobs. 

The only real way to build the economy is through “rise-up” economics: Investments in our people – their education and skills, their health, and the roads and bridges and public transportation that connects them.

Trickle-down doesn’t work because money is global. Corporations and the rich whose taxes are cut invest the extra money wherever around the world they can get the highest return. 

Rise-up economics works because American workers are the only resources uniquely American. Their productivity is the key to our future standard of living. And that productivity depends on their education, health, and infrastructure.
Just look at the evidence. 

Research shows that public investments grow the economy.

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Trump's Big Buyback Bamboozle

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

Trump’s promise that corporations will use his giant new tax cut to make new investments and raise workers’ wages is proving to be about as truthful as his promise to release his tax returns.

The results are coming in, and guess what? Almost all the extra money is going into stock buybacks. Since the tax cut became law, buy-backs have surged to $88.6 billion. That’s more than double the amount of buybacks in the same period last year, according to data provided by Birinyi Associates.

Compare this to the paltry $2.5 billion of employee bonuses corporations say they’ll dispense in response to the tax law, and you see the bonuses for what they are – a small fig leaf to disguise the big buybacks.

If anything, the current tumult in the stock market will fuel even more buybacks.

Stock buybacks are corporate purchases of their own shares of stock. Corporations do this to artificially prop up their share prices.

Buybacks are the corporate equivalent of steroids. They may make shareholders feel better than otherwise, but nothing really changes.

Money spent on buybacks isn’t reinvested in new equipment, research, or factories. Buybacks don’t add jobs or raise wages. They don’t increase productivity. They don’t grow the American economy.

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The Meaning of America

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

When Trump and his followers refer to “America,” what do they mean?

Some see a country of white English-speaking Christians.

Others want a land inhabited by self-seeking individuals free to accumulate as much money and power as possible, who pay taxes only to protect their assets from criminals and foreign aggressors.

Others think mainly about flags, national anthems, pledges of allegiance, military parades, and secure borders. 

Trump encourages a combination of all three – tribalism, libertarianism, and loyalty. 

But the core of our national identity has not been any of this. It has been found in the ideals we share – political equality, equal opportunity, freedom of speech and of the press, a dedication to open inquiry and truth, and to democracy and the rule of law. 

We are not a race. We are not a creed. We are a conviction – that all people are created equal, that people should be judged by the content of their character rather than the color of their skin, and that government should be of the people, by the people, and for the people.

Political scientist Carl Friedrich, comparing Americans to Gallic people, noted that “to be an American is an ideal, while to be a Frenchman is a fact.”

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American Oligarchs' Day of Reckoning Is Nigh

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

The Republican tax plan to be voted on this week is likely to pass. “The American people have waited 31 long years to see our broken tax code overhauled,” the leaders of the Koch’s political network insisted in a letter to members of Congress, urging swift approval.

They added that the time had come to put “more money in the pockets of American families.”

Please. The Koch network doesn’t care a fig about the pockets of American families. It cares about the pockets of the Koch network. 

It has poured money into almost every state in an effort to convince Americans that the tax cut will be good for them. Yet most Americans don’t believe it. 

Polls shows only about a third of Americans favor the tax plan. The vast majority feel it’s heavily skewed to the rich and big businesses – which it is.  

In counties that Trump won but Obama carried in 2012, only 17 percent say they expect to pay less in taxes, according to a recent NBC News/Wall Street Journal poll. Another 25 percent say they expected their family would actually pay higher taxes.

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Robert Reich: The True Path to Prosperity

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

It’s often thought that Democrats care about fairness and not economic growth, while Republicans care about growth even at the cost of some fairness.

Rubbish. Growth and fairness aren’t opposites. In reality, Democrats are the party of economic growth and fairness. Republicans are the party of neither.

The only way to grow the economy is by investing in the education, healthcare, and infrastructure that average Americans need in order to be more productive. Growth doesn’t “trickle down.” It rises up.

Consider the two biggest legislative initiatives over past decade – the Affordable Care Act, achieved without a single Republican vote, and the current Trump-Republican tax overhaul, speeding ahead without a single Democrat.

The ACA extends coverage to 21 million mostly lower-income Americans, including millions of children.

It’s largely paid for by two tax increases on the rich – a 3.8 percent increase on their capital gains taxes and other investment-related income, and a 0.9 percent surcharge on their Medicare taxes. Those tax increases are a major reason why Republicans have wanted to repeal it.

But the ACA isn’t just about fairness. Healthier Americans are also more productive workers. Children who receive health care are better learners. The Act thereby fuels economic growth and widens prosperity.

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The New Poll Tax

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

Hundreds of thousands of Americans are being denied the right to vote because they are poor. 

In nine states, Republican legislators have enacted laws that disenfranchise anyone with outstanding legal fees or court fines. For example, in Alabama more than 100,000 people who owe money – roughly 3 percent of the state’s voting-age population – have been struck from voting rolls.  

This is unconstitutional. In 1964, the 24th amendment abolished the poll tax, a Jim Crow tactic used to bar poor blacks from voting. 

These new laws are a modern reincarnation of that unconstitutional system, disproportionately disenfranchising people of color. 

Income and wealth should have no bearing on the right to vote. Many Americans are struggling to make ends meet. But they still have a constitutional right to make their voices heard.

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Patriotism, Taxes, and Trump

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

Selling the Trump-Republican tax plan should be awkward for an administration that has made patriotism its central theme.

That’s because patriotism isn’t mostly about saluting the flag and standing during the national anthem. 

It’s about taking a fair share of the burden of keeping America going.

But the tax plan gives American corporations a $2 trillion tax break, at a time when they’re enjoying record profits and stashing unprecedented amounts of cash in offshore tax shelters.

And it gives America’s wealthiest citizens trillions more, when the richest 1 percent now hold a record 38.6 percent of the nation’s total wealth, up from 33.7 percent a decade ago.

The reason Republicans give for enacting the plan is “supply-side” trickle-down nonsense. The real reason is payback to the GOP’s mega-donors.

A few Republicans are starting to admit this. Last week, Gary Cohn, Trump’s lead economic advisor, conceded in an interview that “the most excited group out there are big CEOs, about our tax plan.”

Republican Rep. Chris Collins admitted that “my donors are basically saying, ‘Get it done or don’t ever call me again.’”

Republican Sen. Lindsey Graham warned that if Republicans failed to pass tax reform, “the financial contributions will stop.”

Republican mega-donors view the tax payback as they do any other investment. When they bankrolled Trump and the GOP, they expected a good return.

The biggest likely beneficiaries are busily investing an additional $43 million to pressure specific members of Congress to pass it, according to The Wall Street Journal.

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Robert Reich: Trump's Tax Plan Is a Cruel Farce

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

Have you noticed that there’s no Trump tax plan and no Republican tax plan? All they’ve come up with so far is a bunch of platitudes about how nice it would be to cut taxes, simplify the tax code, and spur economic growth. 

Who doesn’t support these nice goals?

The reason there’s no tax plan is congressional Republicans are hopelessly divided on it.

Right-wing Republicans (the “Freedom Caucus” along with what’s left of the Tea Party) are most interested in reducing the size of the government and shrinking the federal deficit and debt.

Corporate and Wall Street Republicans – along with Donald Trump – are most interested in cutting taxes on corporations and the wealthy. They have the backing the GOP’s big business donors who stand to make a bundle off tax cuts.

Here’s the problem. You can’t have a giant tax cut for corporations and the wealthy, and at the same time shrink the federal deficit and debt – unless you make gigantic cuts in government spending on things the American public wants and needs.

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Robert Reich: Bernie Points the Nation to a Better Future—Democrats Should Get on Board

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

Senator Bernie Sanders, Elizabeth Warren, Cory Booker, and Jeff Merkley, are introducing a Medicare For All bill in the Senate. It’s a model for where this nation needs to be headed.

Some background: American spending on health care per person is more than twice the average in the world’s 35 advanced economies. Yet Americans are sicker, our lives are shorter, and we have more chronic illnesses than in any other advanced nation.

That’s because medical care is so expensive for the typical American that many put off seeing a doctor until their health has seriously deteriorated.

Why is health care so much cheaper in other nations? Partly because their governments negotiate lower rates with health care providers. In France, the average cost of a magnetic resonance imaging exam is $363. In the United States, it’s $1,121. There, an appendectomy costs $4,463. Here, it’s $13,851.

The French can get lower rates because they cover everyone — which gives them lots of bargaining power.

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Robert Reich: Trumpcare Is a Moral Travesty

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

Shame on every one of the 217 Republicans who voted to repeal the Affordable Care Act on Thursday, and substitute basically nothing. 

Trumpcare isn’t a replacement of the Affordable Care Act. It’s a transfer from the sick and poor to the rich and healthy. 

The losers are up to 24 million Americans who under the Affordable Care Act get subsidies to afford health insurance coverage, including millions of people with pre-existing conditions and poor people who had access to Medicaid who may not be able to afford insurance in the future. 

The winners are wealthy Americans who will now get a tax cut because they won’t have to pay to fund the Affordable Care Act, and healthy people who won’t have to buy health insurance to subsidize the sick. 

House Republicans say they have protected people with pre-existing health problems. Baloney. Sick people could be charged premiums so high as to make insurance unaffordable. Trumpcare would even let states waive the Obamacare ban on charging higher premiums for women who have been raped — which actually occurred before the Affordable Care Act.

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Trump's Latest Tweetstorm Is Grounds for Impeachment

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

One way dictators take over democracies is by threatening the independence of a nation’s courts. Donald Trump is doing just this. 

Connect the following dots:

1. In January, Trump blasted a federal judge for staying his travel ban. “The opinion of this so-called judge, which essentially takes law-enforcement away from our country, is ridiculous and will be overturned!” he tweeted.

2. In February, after the judge made the stay permanent, Trump issued a veiled threat: “Just cannot believe a judge would put our country in such peril. If something happens blame him and court system. People pouring in. Bad!”

3. Last week, after another federal judge issued a nationwide injunction blocking Trump’s travel ban, Trump’s Attorney General, Jeff Sessions, said, “I really am amazed that a judge sitting on an island in the Pacific can issue an order that stops the president of the United States from what appears to be clearly his statutory and constitutional power.”

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