ROBERT B. REICH, Chancellor’s Professor of Public Policy at the University of California at Berkeley and Senior Fellow at the Blum Center for Developing Economies, was Secretary of Labor in the Clinton administration. Time Magazine named him one of the ten most effective cabinet secretaries of the twentieth century. He has written thirteen books, including the best sellers “Aftershock" and “The Work of Nations." His latest, "Beyond Outrage," is now out in paperback. He is also a founding editor of the American Prospect magazine and chairman of Common Cause. His new film, "Inequality for All," is now available on Netflix, iTunes, DVD, and On Demand.

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COLBERT REPORT, NOVEMBER, 2013

WITH BILL MOYERS, SEPT. 2013

DAILY SHOW, SEPTEMBER 2013, PART 1

DAILY SHOW, SEPTEMBER 2013, PART 2

DEMOCRACY NOW, SEPTEMBER 2013

INTELLIGENCE SQUARED DEBATES, SEPTEMBER 2012

DAILY SHOW, APRIL 2012, PART 1

DAILY SHOW, APRIL 2012, PART 2

COLBERT REPORT, OCTOBER, 2010

WITH CONAN OBRIEN, JANUARY, 2010

DEBATING RON PAUL, JANUARY, 2010

  • The Real Job Killers


    Friday, February 28, 2014

    House Speaker John Boehner says raising the minimum wage is “bad policy” because it will cause job losses.  

    The U.S. Chamber of Commerce says a minimum wage increase would be a job killer. Republicans and the Chamber also say unions are job killers, workplace safety regulations are job killers, environmental regulations are job killers, and the Affordable Care Act is a job killer. The California Chamber of Commerce even publishes an annual list of “job killers,” including almost any measures that lift wages or protect workers and the environment.

    Most of this is bunk.

    When in 1996 I recommended the minimum wage be raised, Republicans and the Chamber screamed it would “kill jobs.” In fact, in the four years after it was raised, the U.S. economy created more jobs than were ever created in any four-year period.

    For one thing, a higher minimum wage doesn’t necessarily increase business costs. It draws more job applicants into the labor market, giving employers more choice of whom to hire. As a result, employers often get more reliable workers who remain longer – thereby saving employers at least as much money as they spend on higher wages.

    A higher wage can also help build employee morale, resulting in better performance. Gap, America’s largest clothing retailer, recently announced it would boost its hourly wage to $10. Wall Street approved. “You treat people well, they’ll treat your customers well,” said Dorothy Lakner, a Wall Street analyst. “Gap had a strong year last year compared to a lot of their peers. That sends a pretty strong message to employees that, ‘we had a good year, but you’re going to be rewarded too.’”

    Even when raising the minimum wage — or bargaining for higher wages and better working conditions, or requiring businesses to provide safer workplaces or a cleaner environment — increases  the cost of business, this doesn’t necessarily kill jobs.

    Most companies today can easily absorb such costs without reducing payrolls. Corporate profits now account for the largest percentage of the economy on record.  Large companies are sitting on more than $1.5 trillion in cash they don’t even know what to do with. Many are using their cash to buy back their own shares of stock – artificially increasing share value by reducing the number of shares traded on the market.

    Walmart spent $7.6 billion last year buying back shares of its own stock — a move that papered over its falling profits. Had it used that money on wages instead, it could have given its workers a raise from around $9 an hour to almost $15. Arguably, that would have been a better use of the money over the long-term – not only improving worker loyalty and morale but also giving workers enough to buy more goods from Walmart (reminiscent of Henry Ford’s pay strategy a century ago).

    There’s also a deeper issue here.  Even assuming some of these measures might cause some job losses, does that mean we shouldn’t proceed with them?  

    Americans need jobs, but we also need minimally decent jobs. The nation could create millions of jobs tomorrow if we eliminated the minimum wage altogether and allowed employers to pay workers $1 an hour or less. But do we really want to do that?

    Likewise, America could create lots of jobs if all health and safety regulations were repealed, but that would subject millions of workers to severe illness and injury.

    Lots of jobs could be added if all environmental rules were eliminated, but that would result in the kind of air and water pollution that many people in poor nations have to contend with daily.

    If the Affordable Care Act were repealed, hundreds of thousands of Americans would have to go back to working at jobs they don’t want but feel compelled to do in order to get health insurance.

    We’d create jobs, but not progress. Progress requires creating more jobs that pay well, are safe, sustain the environment, and provide a modicum of security. If seeking to achieve a minimum level of decency ends up “killing” some jobs, then maybe those aren’t the kind of jobs we ought to try to preserve in the first place.

    Finally, it’s important to remember the real source of job creation. Businesses hire more workers only when they have more customers. When they have fewer customers, they lay off workers. So the real job creators are consumers with enough money to buy.

    Even Walmart may be starting to understand this. The company is “looking at” whether to support a minimum wage increase. David Tovar, a Walmart spokesman, noted that such a move would increase the company’s payroll costs but would also put more money in the pockets of some of Walmart’s customers.  

    In other words, forget what you’re hearing from the Republicans and the Chamber of Commerce. The real job killers in America are lousy jobs at lousy wages.   

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  • Inequality, Productivity, and WhatsApp


    Thursday, February 20, 2014

    If you ever wonder what’s fueling America’s staggering inequality, ponder Facebook’s acquisition of the mobile messaging company WhatsApp .

    According to news reports today, Facebook has agreed to buy WhatsApp for $19 billion.

    That’s the highest price paid for a startup in history. It’s $3 billion more than Facebook raised when it was first listed, and more than twice what Microsoft paid for Skype.

    (To be precise, $12 billion of the $19 billion will be in the form of shares in Facebook, $4 billion will be in cash, and $3 billion in restricted stock to WhatsApp staff, which will vest in four years.)

    Given that gargantuan amount, you might think Whatsapp is a big company. You’d be wrong. It has 55 employees, including its two young founders, Jan Koum and Brian Acton.

    Whatsapp’s value doesn’t come from making anything. It doesn’t need a large organization to distribute its services or implement its strategy.

    It value comes instead from two other things that require only a handful of people. First is its technology — a simple but powerful app that allows users to send and receive text, image, audio and video messages through the Internet.

    The second is its network effect: The more people use it, the more other people want and need to use it in order to be connected. To that extent, it’s like Facebook — driven by connectivity.  

    Whatsapp’s worldwide usage has more than doubled in the past nine months, to 450 million people — and it’s growing by around a million users every day. On December 31, 2013, it handled 54 billion messages (making its service more popular than Twitter, now valued at about $30 billion.)

    How does it make money? The first year of usage is free. After that, customers pay a small fee. At the scale it’s already achieved, even a small fee generates big bucks. And if it gets into advertising it could reach more eyeballs than any other medium in history. It already has a database that could be mined in ways that reveal huge amounts of information about a significant percentage of the world’s population.

    The winners here are truly big winners. WhatsApp’s fifty-five employees are now enormously rich. Its two founders are now billionaires. And the partners of the venture capital firm that financed it have also reaped a fortune.

    And the rest of us? We’re winners in the sense that we have an even more efficient way to connect with each other.

    But we’re not getting more jobs.

    In the emerging economy, there’s no longer any correlation between the size of a customer base and the number of employees necessary to serve them. In fact, the combination of digital technologies with huge network effects is pushing the ratio of employees to customers to new lows (WhatsApp’s 55 employees are all its 450 million customers need).

    Meanwhile, the ranks of postal workers, call-center operators, telephone installers, the people who lay and service miles of cable, and the millions of other communication workers, are dwindling — just as retail workers are succumbing to Amazon, office clerks and secretaries to Microsoft, and librarians and encyclopedia editors to Google.   

    Productivity keeps growing, as do corporate profits. But jobs and wages are not growing. Unless we figure out how to bring all of them back into line – or spread the gains more widely – our economy cannot generate enough demand to sustain itself, and our society cannot maintain enough cohesion to keep us together.

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  • America’s “We” Problem


    Friday, February 14, 2014

    America has a serious “We” problem — as in “Why should we pay for them?”

    The question is popping up all over the place. It underlies the debate over extending unemployment benefits to the long-term unemployed and providing food stamps to the poor. 

    It’s found in the resistance of some young and healthy people to being required to buy health insurance in order to help pay for people with preexisting health problems. 

    It can be heard among the residents of upscale neighborhoods who don’t want their tax dollars going to the inhabitants of poorer neighborhoods nearby.  

    The pronouns “we” and “they” are the most important of all political words. They demarcate who’s within the sphere of mutual responsibility, and who’s not. Someone within that sphere who’s needy is one of “us” — an extension of our family, friends, community, tribe – and deserving of help. But needy people outside that sphere are “them,” presumed undeserving unless proved otherwise.

    The central political question faced by any nation or group is where the borders of this sphere of mutual responsibility are drawn.

    Why in recent years have so many middle-class and wealthy Americans pulled the borders in closer?

    The middle-class and wealthy citizens of East Baton Rouge Parish, Louisiana, for example, are trying to secede from the school district they now share with poorer residents of town, and set up their own district funded by property taxes from their higher-valued homes. 

    Similar efforts are underway in Memphis, Atlanta, and Dallas. Over the past two years, two wealthy suburbs of Birmingham, Alabama, have left the countywide school system in order to set up their own.

    Elsewhere, upscale school districts are voting down state plans to raise their taxes in order to provide more money to poor districts, as they did recently in Colorado. 

    "Why should we pay for them?" is also reverberating in wealthy places like Oakland County, Michigan, that border devastatingly poor places like Detroit.

    "Now, all of a sudden, they’re having problems and they want to give part of the responsibility to the suburbs?" says L. Brooks Paterson, the Oakland County executive. “They’re not gonna talk me into being the good guy. ‘Pick up your share?’ Ha ha.”

    But had the official boundary been drawn differently so that it encompassed both Oakland County and Detroit – say, to create a Greater Detroit region – the two places would form a “we” whose problems Oakland’s more affluent citizens would have some responsibility to address.

    What’s going on?

    One obvious explanation involves race. Detroit is mostly black; Oakland County, mostly white. The secessionist school districts in the South are almost entirely white; the neighborhoods they’re leaving behind, mostly black.

    But racisim has been with us from the start. Although some southern school districts are seceding in the wake of the ending of court-ordered desegregation, race alone can’t explain the broader national pattern. According to Census Bureau numbers, two-thirds of Americans below the poverty line at any given point identify themselves as white.

    Another culprit is the increasing economic stress felt by most middle-class Americans. Median household incomes are dropping and over three-quarters of Americans report they’re living paycheck to paycheck. 

    It’s easier to be generous and expansive about the sphere of ”we” when incomes are rising and future prospects seem even better, as during the first three decades after World War II when America declared war on poverty and expanded civil rights. But since the late 1970s, as most paychecks have flattened or declined, adjusted for inflation, many in the stressed middle no longer want to pay for “them.”

    Yet this doesn’t explain why so many wealthy Americans are also exiting. They’ve never been richer. Surely they can afford a larger “we.” But most of today’s rich adamantly refuse to pay anything close to the tax rate America’s wealthy accepted forty years ago. 

    Perhaps it’s because, as inequality has widened and class divisions have hardened, America’s wealthy no longer have any idea how the other half lives. 

    Being rich in today’s America means not having to come across anyone who isn’t. Exclusive prep schools, elite colleges, private jets, gated communities, tony resorts, symphony halls and opera houses, and vacation homes in the Hamptons and other exclusive vacation sites all insulate them from the rabble. 

    America’s wealthy increasingly inhabit a different country from the one “they” inhabit, and America’s less fortunate seem as foreign as do the needy inhabitants of another country. 

    The first step in widening the sphere of “we” is to break down the barriers — not just of race, but also, increasingly, of class, and of geographical segregation by income — that are pushing “we Americans” further and further apart.

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  • Why The Three Biggest Economic Lessons Were Forgotten


    Tuesday, February 11, 2014
    Why has America forgotten the three most important economic lessons we learned in the thirty years following World War II?

    Before I answer that question, let me remind you what those lessons were:

    First, America’s real job creators are consumers, whose rising wages generate jobs and growth. If average people don’t have decent wages there can be no real recovery and no sustained growth.

    In those years, business boomed because American workers were getting raises, and had enough purchasing power to buy what expanding businesses had to offer. Strong labor unions ensured American workers got a fair share of the economy’s gains. It was a virtuous cycle.

    Second, the rich do better with a smaller share of a rapidly-growing economy than they do with a large share of an economy that’s barely growing at all.

    Between 1946 and 1974, the economy grew faster than it’s grown since, on average, because the nation was creating the largest middle class in history. The overall size of the economy doubled, as did the earnings of almost everyone. CEOs rarely took home more than forty times the average worker’s wage, yet were riding high.

    Third, higher taxes on the wealthy to finance public investments — better roads, bridges, public transportation, basic research, world-class K-12 education, and affordable higher education – improve the future productivity of America. All of us gain from these investments, including the wealthy.

    In those years, the top marginal tax rate on America’s highest earners never fell below 70 percent. Under Republican President Dwight Eisenhower the tax rate was 91 percent. Combined with tax revenues from a growing middle class, these were enough to build the Interstate Highway system, dramatically expand public higher education, and make American public education the envy of the world.

    We learned, in other words, that broadly-shared prosperity isn’t just compatible with a healthy economy that benefits everyone — it’s essential to it.

    But then we forgot these lessons. For the last three decades the American economy has continued to grow but most peoples’ earnings have gone nowhere. Since the start of the recovery in 2009, 95 percent of the gains have gone to the top 1 percent.
     
    What happened?

    For starters, too many of us bought the snake oil of “supply-side” economics, which said big corporations and the wealthy are the job creators – and if we cut their taxes the benefits will trickle down to everyone else. Of course, nothing trickled down.

    Meanwhile, big corporations were allowed to bust labor unions, whose membership dropped from over a third of all private-sector workers in the 1950s to under 7 percent today.

    Our roads, bridges, and public-transit systems were allowed to crumble under the weight of deferred maintenance. Our public schools deteriorated. And public higher education became so starved for funds that tuition rose to make up for shortfalls, making college unaffordable to many working families.

    And Wall Street was deregulated — creating a casino capitalism that caused a near meltdown of the economy six years ago and continues to burden millions of homeowners. CEOs began taking home 300 times the earnings of the average worker.

    Part of the reason for this extraordinary U-turn had to do with politics. As income and wealth concentrated at the top, so did political power. The captains of industry and of Wall Street knew what was happening, and some played leading roles in this transformation.

    But why didn’t they remember the lessons learned in the thirty years after World War II – that widely-shared prosperity is good for everyone, including them?

    Perhaps because they didn’t care to remember. They discovered that wealth is also relative: How rich they feel depends not just on how much money they have, but also how they live in comparison to most other people.

    As the gap between America’s wealthy and the middle has widened, those at the top have felt even richer by comparison. Although a rising tide would lift all boats, many of America’s richest prefer a lower tide and bigger yachts.
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  • Why the Lousy Jobs Report Boosted Wall Street


    Saturday, February 8, 2014

    The stock market surged yesterday after the lousy jobs report. The Dow soared 160 points Friday, while the S&P 500, and Nasdaq also rose.

    How can bad news on Main Street (only 113,000 jobs were created in January, on top of a meager 74,000 in December) cause good news on Wall Street?

    Because investors assume:

    (1) The Fed will now continue to keep interest rates low. Yes, it has announced its intention of tapering off its so-called “quantitative easing” by buying fewer long-term bonds in the months ahead. But it will likely slow down the tapering. Instead of going down to $55 billion a month of bond-buying by April, it will stay at around $60 billion to $70 billion.

    (2) The slowdown in the Fed’s tapering will continue to make buying shares of stock a better deal than buying bonds – thereby pushing investors toward the stock market.

    (3) Continued low interest rates will also continue to make it profitable for big investors (including corporations) to borrow money to buy back their own shares of stock, thereby pushing up their values. Apple and other companies that used to spend their spare cash and whatever they could borrow on new inventions are now focusing on short-term stock performance.

    (4) With the job situation so poor, most workers will be so desperate to keep their jobs, or land one, that they will work for even less. This will keep profits high, make balance sheets look good, fuel higher stock prices.

    But what’s bad for Main Street and good for Wall Street in the short term is bad for both in the long term. The American economy is at a crawl. Median household incomes are dropping. The American middle class doesn’t have the purchasing power to keep the economy going. And as companies focus ever more on short-term share prices at the expense of long-term growth, we’re in for years of sluggish performance.

    When, if ever, will Wall Street learn?

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  • a:2:{i:0;a:0:{}s:2:"o1";a:1:{s:9:"downloads";i:5739;}} Friday, February 7, 2014

    THE WAR ON THE POOR AND MIDDLE-CLASS FAMILIES

    Most Americans are on a downward escalator. Median household pay is dropping, adjusted for inflation. A smaller share of working-age Americans are in jobs than at any time in the last three decades.

    Only 113,000 jobs were added to the U.S. economy in January, on top of a paltry 75,000 in December.

    We need a new WPA to rebuild the nation’s crumbling infrastructure, a higher minimum wage, strong unions, investments in education, and extended unemployment benefits for those who still can’t find a job. When 95% of the economic gains go to the top 1%, the middle class and poor don’t have the purchasing power to keep it going.

    Yet too many still believe in trickle-down economics — that the wealthy are the job creators, and tax cuts for big corporations and the rich will boost the economy. The real job creators are the vast middle class and the poor — when they have enough money in their pockets. That’s the only way out of the vicious cycle we’re now in.

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  • Why Widening Inequality is Hobbling Equal Opportunity


    Wednesday, February 5, 2014

    Is it to be inequality or equal opportunity? 

    Under a headline “Obama Moves to the Right in a Partisan War of Words,” The New York Times’ Jackie Calmes notes Democratic operatives have been hitting back hard against the President or any other Democratic politician talking about income inequality, preferring that the Democrats talk about equality of opportunity instead.

    "However salient reducing inequality may be," writes Democratic pollster Mark Mellman, “it is demonstrably less important to voters than any other number of priorities, incudlng reducing poverty.”

    The President may be listening. Wags noticed that in his State of the Union, Obama spoke ten times of increasing “opportunity” and only twice of income inequality, while in a December speech he spoke of income inequality two dozen times. 

    But the President and other Democrats — and even Republicans, for that matter — should focus on the facts, not the polls, and not try to dress up what’s been happening with more soothing words and phrases. 

    In fact, America’s savage inequality is the main reason equal opportunity is fading and poverty is growing. Since the “recovery” began, 95% of the gains have gone to the top 1 percent, and median incomes have dropped. This is a continuation of the trend we’ve seen for decades. As a result:

    (1) The sinking middle class no longer has enough purchasing power to keep the economy growing and creating sufficient jobs. The share of working-age Americans still in the labor force is the lowest in more than thirty years. 

    (2) The shrinking middle isn’t generating enough tax revenue for adequate education, training, safety nets, and family services. And when they’re barely holding on, they can’t afford to — and don’t want to — pay more.

    (3) Meanwhile, America’s rich are accumulating not just more of the country’s total income and wealth, but also the political power that accompanies money. And they’re using that power to reduce their own taxes, and get corporate welfare (subsidies, bailouts, tax cuts) for their businesses.

    All this means less equality of opportunity in America. 

    Obama was correct in December when he called widening inequality “the defining challenge of our time.” He mustn’t back down now even if Democratic pollsters tell him to. If we’re ever to reverse this noxious trend, Americans have to hear the truth. 

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  • Why There’s No Outcry


    Saturday, January 25, 2014

    People ask me all the time why we don’t have a revolution in America, or at least a major wave of reform similar to that of the Progressive Era or the New Deal or the Great Society.

    Middle incomes are sinking, the ranks of the poor are swelling, almost all the economic gains are going to the top, and big money is corrupting our democracy. So why isn’t there more of a ruckus?

    The answer is complex, but three reasons stand out.

    First, the working class is paralyzed with fear it will lose the jobs and wages it already has.

    In earlier decades, the working class fomented reform. The labor movement led the charge for a minimum wage, 40-hour workweek, unemployment insurance, and Social Security.

    No longer. Working people don’t dare. The share of working-age Americans holding jobs is now lower than at any time in the last three decades and 76 percent of them are living paycheck to paycheck.

    No one has any job security. The last thing they want to do is make a fuss and risk losing the little they have.

    Besides, their major means of organizing and protecting themselves — labor unions — have been decimated. Four decades ago more than a third of private-sector workers were unionized. Now, fewer than 7 percent belong to a union.

    Second, students don’t dare rock the boat.

    In prior decades students were a major force for social change. They played an active role in the Civil Rights movement, the Free Speech movement, and against the Vietnam War.

    But today’s students don’t want to make a ruckus. They’re laden with debt. Since 1999, student debt has increased more than 500 percent, yet the average starting salary for graduates has dropped 10 percent, adjusted for inflation. Student debts can’t be cancelled in bankruptcy. A default brings penalties and ruins a credit rating.

    To make matters worse, the job market for new graduates remains lousy. Which is why record numbers are still living at home.

    Reformers and revolutionaries don’t look forward to living with mom and dad or worrying about credit ratings and job recommendations.

    Third and finally, the American public has become so cynical about government that many no longer think reform is possible.

    When asked if they believe government will do the right thing most of the time, fewer than 20 percent of Americans agree. Fifty years ago, when that question was first asked on standard surveys, more than 75 percent agreed.

    It’s hard to get people worked up to change society or even to change a few laws when they don’t believe government can possibly work.

    You’d have to posit a giant conspiracy in order to believe all this was the doing of the forces in America most resistant to positive social change.

    It’s possible. of course, that rightwing Republicans, corporate executives, and Wall Street moguls intentionally cut jobs and wages in order to cow average workers, buried students under so much debt they’d never take to the streets, and made most Americans so cynical about government they wouldn’t even try for change. 

    But it’s more likely they merely allowed all this to unfold, like a giant wet blanket over the outrage and indignation most Americans feel but don’t express. 

    Change is coming anyway. We cannot abide an ever-greater share of the nation’s income and wealth going to the top while median household incomes continue too drop, one out of five of our children living in dire poverty, and big money taking over our democracy.

    At some point, working people, students, and the broad public will have had enough. They will reclaim our economy and our democracy. This has been the central lesson of American history.

    Reform is less risky than revolution, but the longer we wait the more likely it will be the latter.





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  • David Brooks’ Utter Ignorance About Inequality


    Saturday, January 18, 2014
    Occasionally David Brooks, who personifies the oxymoron “conservative thinker” better than anyone I know, displays such profound ignorance that a rejoinder is necessary lest his illogic permanently pollute public debate. Such is the case with his New York Times column last Friday, arguing that we should be focusing on the “interrelated social problems of the poor” rather than on inequality, and that the two are fundamentally distinct.
    Baloney.
     
    First, when almost all the gains from growth go to the top, as they have for the last thirty years, the middle class doesn’t have the purchasing power necessary for buoyant growth.
    Once the middle class has exhausted all its coping mechanisms – wives and mothers surging into paid work (as they did in the 1970s and 1980s), longer working hours (which characterized the 1990s), and deep indebtedness (2002 to 2008) – the inevitable result is fewer jobs and slow growth, as we continue to experience.
    Few jobs and slow growth hit the poor especially hard because they’re the first to be fired, last to be hired, and most likely to bear the brunt of declining wages and benefits.
     
    Second, when the middle class is stressed, it has a harder time being generous to those in need. The “interrelated social problems” of the poor presumably will require some money, but the fiscal cupboard is bare. And because the middle class is so financially insecure, it doesn’t want to, nor does it feel it can afford to, pay more in taxes.
     
    Third, America’s shrinking middle class also hobbles upward mobility. Not only is there less money for good schools, job training, and social services, but the poor face a more difficult challenge moving upward because the income ladder is far longer than it used to be, and its middle rungs have disappeared.
     
    Brooks also argues that we should not be talking about unequal political power, because such utterances cause divisiveness and make it harder to reach political consensus over what to do for the poor.
     
    Hogwash. The concentration of power at the top — which flows largely from the concentration of income and wealth there — has prevented  Washington from dealing with the problems of the poor and the middle class.
    To the contrary, as wealth has accumulated at the top, Washington has reduced taxes on the wealthy, expanded tax loopholes that disproportionately benefit the rich, deregulated Wall Street, and provided ever larger subsidies, bailouts, and tax breaks for large corporations. The only things that have trickled down to the middle and poor besides fewer jobs and smaller paychecks are public services that are increasingly inadequate because they’re starved for money.
     
    Unequal political power is the endgame of widening inequality — its most noxious and nefarious consequence, and the most fundamental threat to our democracy. Big money has now all but engulfed Washington and many state capitals — drowning out the voices of average Americans, filling the campaign chests of candidates who will do their bidding, financing attacks on organized labor, and bankrolling a vast empire of right-wing think-tanks and publicists that fill the airwaves with half-truths and distortions.
     
    That David Brooks, among the most thoughtful of all conservative pundits, doesn’t see or acknowledge any of this is a sign of how far the right has moved away from the reality most Americans live in every day. 
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  • Fear is Why Workers in Red States Vote Against Their Economic Self-Interest


    Wednesday, January 15, 2014

    Last week’s massive spill of the toxic chemical MCHM into West Virginia’s Elk River illustrates another benefit to the business class of high unemployment, economic insecurity, and a safety-net shot through with holes. Not only are employees eager to accept whatever job they can get. They are also also unwilling to demand healthy and safe environments.  

    The spill was the region’s third major chemical accident in five years, coming after two investigations by the federal Chemical Safety Board in the Kanawha Valley, also known as “Chemical Valley,” and repeated recommendations from federal regulators and environmental advocates that the state embrace tougher rules to better safeguard chemicals. 

    No action was ever taken. State and local officials turned a deaf ear. The storage tank that leaked, owned by Freedom Industries, hadn’t been inspected for decades. 

    But nobody complained. 

    Not even now, with the toxins moving down river toward Cincinnati, can the residents of Charleston and the surrounding area be sure their drinking water is safe — partly because the government’s calculation for safe levels is based on a single study by the manufacturer of the toxic chemical, which was never published, and partly because the West Virginia American Water Company, which supplies the drinking water, is a for-profit corporation that may not want to highlight any lingering danger.  

    So why wasn’t more done to prevent this, and why isn’t there more of any outcry even now? 

    The answer isn’t hard to find. As Maya Nye, president of People Concerned About Chemical Safety, a citizen’s group formed after a 2008 explosion and fire killed workers at West Virginia’s Bayer CropScience plant in the state, explained to the New York Times: “We are so desperate for jobs in West Virginia we don’t want to do anything that pushes industry out.” 

    Exactly.

    I often heard the same refrain when I headed the U.S. Department of Labor. When we sought to impose a large fine on the Bridgestone-Firestone Tire Company for flagrantly disregarding workplace safety rules and causing workers at one of its plants in Oklahoma to be maimed and killed, for example, the community was solidly behind us — that is, until Bridgestone-Firestone threatened to close the plant if we didn’t back down.

    The threat was enough to ignite a storm of opposition to the proposed penalty from the very workers and families we were trying to protect. (We didn’t back down and Bridgestone-Firestone didn’t carry out its threat, but the political fallout was intense.)

    For years political scientists have wondered why so many working class and poor citizens of so-called “red” states vote against their economic self-interest. The usual explanation is that, for these voters, economic issues are trumped by social and cultural issues like guns, abortion, and race. 

    I’m not so sure. The wages of production workers have been dropping for thirty years, adjusted for inflation, and their economic security has disappeared. Companies can and do shut down, sometimes literally overnight. A smaller share of working-age Americans hold jobs today than at any time in more than three decades. 

    People are so desperate for jobs they don’t want to rock the boat. They don’t want rules and regulations enforced that might cost them their livelihoods. For them, a job is precious — sometimes even more precious than a safe workplace or safe drinking water. 

    This is especially true in poorer regions of the country like West Virginia and through much of the South and rural America — so-called “red” states where the old working class has been voting Republican. Guns, abortion, and race are part of the explanation. But don’t overlook economic anxieties that translate into a willingness to vote for whatever it is that industry wants. 

    This may explain why Republican officials who have been casting their votes against unions, against expanding Medicaid, against raising the minimum wage, against extended unemployment insurance, and against jobs bills that would put people to work, continue to be elected and re-elected. They obviously have the support of corporate patrons who want to keep unemployment high and workers insecure because a pliant working class helps their bottom lines. But they also, paradoxically, get the votes of many workers who are clinging so desperately to their jobs that they’re afraid of change and too cowed to make a ruckus.  

    The best bulwark against corporate irresponsibility is a strong and growing middle class. But in order to summon the political will to achieve it, we have to overcome the timidity that flows from economic desperation. It’s a diabolical chicken-and-egg conundrum at a the core of American politics today.

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