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:
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.”
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.
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.
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.”
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.
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.
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.
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.
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.
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.