Robert Reich. (photo: MoveOn.org)
ou
are the captains of American industry, the titans of Wall Street, and
the billionaires who for decades have been the backbone of the
Republican Party.You’ve invested your millions in the GOP in order to get lower taxes, wider tax loopholes, bigger subsidies, more generous bailouts, less regulation, lengthier patents and copyrights and stronger market power allowing you to raise prices, weaken unions and bigger trade deals allowing you outsource abroad to reduce wages, easier bankruptcy for you but harder bankruptcy for homeowners and student debtors, and judges who will let you to engage in insider trading and who won’t prosecute you for white-collar crimes.
All of which have made you enormously wealthy. Congratulations.
But I have some disturbing news for you. You’re paying a big price – and about to pay far more.
First, as you may have noticed, most of your companies aren’t growing nearly as fast as they did before the Great Recession. Your sales are sputtering, and your stock prices are fragile.
That’s because you forgot that your workers are also consumers. As you’ve pushed wages downward, you’ve also squeezed your customers so tight they can hardly afford to buy what you have to sell.
Consumer spending comprises 70 percent of the American economy. But the typical family is earning less today than it did in 2000, in terms of real purchasing power.
Most of the economic gains have gone to you and others like you who spend only a small fraction of what they rake in. That spells trouble for the economy – and for you.
You’ve tried to lift your share prices artificially by borrowing money at low interest rates and using it to buy back your shares of stock. But this party trick works only so long. Besides, interest rates are starting to rise.
Second, you’ve instructed your Republican lackeys to reduce your and your corporation’s taxes so much over the last three decades – while expanding subsidies and bailouts going your way – that the government is running out of money.
That means many of the things you and your businesses rely on government to do – build and maintain highways, bridges, tunnels, and other physical infrastructure; produce high-quality basic research; and provide a continuous supply of well-educated young people – are no longer being done as well as they should. If present trends continue, all will worsen in years to come.
Finally, by squeezing wages and rigging the economic game in your favor, you have invited an unprecedented political backlash – against trade, immigration, globalization, and even against the establishment itself.
The pent-up angers and frustrations of millions of Americans who are working harder than ever yet getting nowhere, and who feel more economically insecure than ever, have finally erupted. American politics has become a cesspool of vitriol.
Republican politicians in particular have descended into the muck of bigotry, hatefulness, and lies. They’re splitting America by race, ethnicity, and religion. The moral authority America once had in the world as a beacon of democracy and common sense is in jeopardy. And that’s not good for you, or your businesses.
Nor is the uncertainty all this is generating. A politics based on resentment can lurch in any direction at almost any time. Yet you and your companies rely on political stability and predictability.
You follow me? You’ve hoisted yourself on your own petard. All that money you invested in Republican Party in order to reap short-term gains is now reaping a whirlwind.
You would have done far better with a smaller share of an economy growing more rapidly because it possessed a strong and growing middle class.
You’d have done far better with a political system less poisoned by your money – and therefore less volatile and polarized, more capable of responding to the needs of average people, less palpably rigged in your favor.
But you were selfish and greedy, and you thought only about your short-term gains.
You forgot the values of a former generation of Republican establishment that witnessed the devastations of the Great Depression and World War II, and who helped build the great post-war American middle class.
That generation did not act mainly out of generosity or social responsibility. They understood, correctly, that broad-based prosperity would be good for them and their businesses over the long term.
So what are you going to do now? Will you help clean up this mess – by taking your money out of politics, restoring our democracy, de-rigging the system, and helping overcome widening inequality of income, wealth, and political power?
Or are you still not convinced?
Comments
+11
#
2016-03-01 10:12
So American
businesses have made themselves enormously wealthy at the expense of the
average consumer and those businesses are not growing as had been
hoped. SO IS ANYONE SURPRISED? There is only ONE globe (earth), with
only so many people (most of them in poverty), many of them suffering
from the global warming caused chiefly by big business. Is this
beginning to sound a bit circular? In their ravenous greed, businesses
have done their best to destroy this planet. I can't help but admire
Reich's idealism. From the last paragraph one would think there may be a
shred of altruism left in the hearts of the Kochs et al. Perhaps
instead they think to take their wealth off to some island paradise,
leaving a dead, unproductive planet behind them and spend it on ---
what? The pity of it is that this article was written for grown-ups, not
for spoiled, selfish 3 yr. olds.
+7
#
2016-03-01 10:16
Dr Reich is an economist and of course, in a good position to write this with some authority.
But ELIZABETH WARREN is the true attack-dawg AND watch-dawg, who speaks Wall Street's detliberately-obtuse lingo better than they do and therefore should be awarded a senior economic position in the next Democratic government whoever comes out on top, so that the many-headed have someone in authority to scare the shit out of these elitist greed-mongers and make them play ball.
But ELIZABETH WARREN is the true attack-dawg AND watch-dawg, who speaks Wall Street's detliberately-obtuse lingo better than they do and therefore should be awarded a senior economic position in the next Democratic government whoever comes out on top, so that the many-headed have someone in authority to scare the shit out of these elitist greed-mongers and make them play ball.
+6
#
2016-03-01 10:21
Never mind. These screw-the-publi c
businesses will be quite comfy when HRC takes over the reins of
government; or when Trump does, since that's the most likely scenario.
HRC is likely to go down in flames once the Bernie Bots decide they have
been marginalized at every turn and see no reason to vote in the
general election. Or let's not forget, we have a likely HRC nominee who
is quite capable of being taken out of the game once another negative
revelation comes out right before the election. There goes the election
for the Dems and then the entire scenario turns in favor of the 1%. The
country is on the precipice of disaster, but who cares as long as our
oligarchy becomes totally complete?
+6
#
2016-03-01 10:29
No matter how the
repubs handle their party's leftover toxic waste, in the end the
kleptokrats aren't going anywhere. How about an open letter to the
Democratic establishment? They've been instrumental in enabling the
repub establishment, the latest sellout being the TPP. If the repubs
vaporized tomorrow, the understudy Democratic party in its current state
would step in to take their place.
+2
#
2016-03-01 10:30
I think Organized
Labor built the middle classes, not the Segregationist GOP. I really
like RR, but he too lives inside the Berkley Bubble of privilege? The
American Establishment, dominated by GOP elites, is responsible for
MILLIONS of deaths worldwide since WWII. They will fight and KILL to the
end to hold on to the corrupting power they have garnered.
+3
#
2016-03-01 10:31
Infrastructure,
Research, and Education represent Investments that benefit both Business
and the Society at large. Social Security, Medicare, and a future
Universal Health Care System are either Savings Accounts or Premiums
that benefit all citizens.
All of this comes from the hated "Taxes". That word is, therefore, very misleading .
All of this comes from the hated "Taxes". That word is, therefore, very misleading .
+2
#
2016-03-01 10:34
Robert Reich is still
in the same mindset though. Republicans, Democrats, how do they differ?
Democrats live like Republicans, they don't live any differently. Many
of them are as wealthy. Look at those in office for starters - John
Kerry, Diane Feinstein, Mark Warner, Jay Rockefeller, they are obscenely
wealthy and they are Democrats. Democrats also say they are for the
climate yet they fly all over the place and have just as high a carbon
and water footprint as Republicans and yet they try to tell Republicans
that climate change is real. Come on Democrats! Admit it - you're just
as bad but you talk a fine talk that is true. Yet you live the same way
that you condemn others. And by-the-way, please stop crying the minute
the Republicans do something against your party. Figure out how to
counter them instead of sitting in the corner with your proverbial thumb
in your mouth.
Full disclosure - I abhor Republicans even more than Democrats and believe we are all wasting our time with this stupid system when we have the technology now to lay off politicians and other "representative s" and represent ourselves in a direct democracy. It's not rocket science but do we ever hear a politician (or a Democrat) suggest they are a waste of space and show us another way?
Full disclosure - I abhor Republicans even more than Democrats and believe we are all wasting our time with this stupid system when we have the technology now to lay off politicians and other "representative s" and represent ourselves in a direct democracy. It's not rocket science but do we ever hear a politician (or a Democrat) suggest they are a waste of space and show us another way?
+1
#
2016-03-01 10:39
I totally agree with
Robert Reich's position in this article. How are the poor and middle
class going to be able to buy the goods being sold if they spend all
their money just trying to survive? Many corporations, such as Wal-Mart
give sub-standard wages to their employees which require them to apply
for Welfare. And the Republican establishment criticizes them for being
Welfare recipients.
How about paying people a living wage? Then they can get off of Welfare and become productive citizens.I know several people working two low paying jobs just because they are too proud to accept Welfare from the government.Why should that even be necessary? I'll bet if corporations began paying a living wage to their employees, welfare could be cut in half. Republicans are quick to point out that 47 million people do not pay taxes. Well, duh....Maybe if they had a decent income, they would be paying some taxes. And, of course, they are paying taxes. Sales tax, energy tax, phone tax, gas tax, etc. And it's a much higher portion of their income than the filthy, rich Republican establishment.
How about paying people a living wage? Then they can get off of Welfare and become productive citizens.I know several people working two low paying jobs just because they are too proud to accept Welfare from the government.Why should that even be necessary? I'll bet if corporations began paying a living wage to their employees, welfare could be cut in half. Republicans are quick to point out that 47 million people do not pay taxes. Well, duh....Maybe if they had a decent income, they would be paying some taxes. And, of course, they are paying taxes. Sales tax, energy tax, phone tax, gas tax, etc. And it's a much higher portion of their income than the filthy, rich Republican establishment.
Reich is totally right that they have given us the Singer puppet Rubio, the vile and egomanical Trump, and the cynical social conservative Cruz.
These people won't heal themselves. They have to be controlled by the very government regulations they've been fighting against for 50 years. They need a steeply progressive tax rate so there won't be any billionaires. The one thing they don't know is that the regulations are good for them too -- as least, good for them to the extent that they are still human.