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What’s the Real American Story?

Robert Reich

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

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

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

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

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

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

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

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

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

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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Union Matters

A Just, Inclusive and Sustainable Economy

From the AFL-CIO

This week, labor leaders from across the country descended on New Orleans to map out the path ahead for our movement. From trade and public education to equal pay and paid leave to back pay for federal contract workers and bargaining power for all, the AFL-CIO Executive Council tackled the issues that will define working people’s fight for economic justice in 2019 and beyond.

Sending waves through Washington yesterday, the Executive Council’s most notable decision was its announcement that, “if the administration insists on a premature vote on the new NAFTA in its current form, we will have no choice but to oppose it.” Here are a few highlights from the statement:

  • Trade policy must be judged by whether it leads to a just, inclusive and sustainable economy....By that measure, the North American Free Trade Agreement (NAFTA), which has driven the outsourcing of so many good jobs, has been a catastrophic failure. More than 850,000 U.S. jobs were shipped overseas under NAFTA between 1993 and 2013.
  • By design, NAFTA distorted power relationships in favor of global employers over workers, weakened worker bargaining power and encouraged the de-industrialization of the U.S. economy.
  • After a quarter-century of this race to the bottom, workers in all three NAFTA countries find it more difficult to form unions and negotiate collective bargaining agreements.
  • The NAFTA renegotiation requires strong labor rights provisions and strong enforcement provisions that as of today are not yet in the agreement.
  • The current effort by the business community to pass the new NAFTA is premature, and if it continues, we will be forced to mobilize to defeat it, just as we mobilized to kill the Trans-Pacific Partnership.

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New NAFTA Must Create an Economy for All

New NAFTA Must Create an Economy for All