Posts from Robert Reich

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.)

More ...

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.

More ...

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.

More ...

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.

More ...

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

Robert Reich

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.

More ...

The Buyback Boondoggle is Beggaring America

Robert Reich

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?

More ...

Robert Reich: The Trump Economy Is Doomed from the Start

Robert Reich

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.

More ...

Trump's Big Buyback Bamboozle

Robert Reich

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.

More ...

The Meaning of America

Robert Reich

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.”

More ...

American Oligarchs' Day of Reckoning Is Nigh

Robert Reich

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.

More ...

Union Matters

3.4 Million American Jobs Wiped Out by U.S.-China Trade

Scott Paul and Robert E. Scott join Leslie Marshall to discuss a new EPI report entitled, "The China toll deepens: Growth in the bilateral trade deficit between 2001 and 2017 cost 3.4 million U.S. jobs, with losses in every state and congressional district."

Scott Paul is President of the Alliance for American Manufacturing (AAM), a partnership established by some of America’s leading manufacturers and the United Steelworkers union.

Robert E. Scott is Senior Economist and Director of Trade and Manufacturing Policy Research at the Economic Policy Institute (EPI).
EPI is a nonprofit, nonpartisan think tank created in 1986 to include the needs of low- and middle-income workers in economic policy discussions.

 

More ...

Who Really Pays for Tax Cuts?

Who Really Pays for Tax Cuts?