Robert Reich's writes at robertreich.substack.com. His latest book is "THE SYSTEM: Who Rigged It, How To Fix It." He is Chancellor's Professor of Public Policy at the University of California at Berkeley and Senior Fellow at the Blum Center. He served as Secretary of Labor in the Clinton administration, for which Time Magazine named him one of the 10 most effective cabinet secretaries of the twentieth century. He has written 17 other books, including the best sellers "Aftershock,""The Work of Nations," "Beyond Outrage," and "The Common Good." He is a founding editor of the American Prospect magazine, founder of Inequality Media, a member of the American Academy of Arts and Sciences, and co-creator of the award-winning documentaries "Inequality For All," streaming on YouTube, and "Saving Capitalism," now streaming on Netflix.

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THE NEXT ECONOMY AND AMERICA'S FUTURE, MARCH, 2011

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  • 29

    The Unfolding Tragedies in Afghanistan and in America


    Sunday, August 22, 2021

    I’m as sensitive as anyone to the sufferings of Afghans now, but I’ve had it with the sanctimony of journalists and pundits who haven’t thought about Afghanistan for 20 years –  many of whom urged we get out – but who are now filling the August news hole with overwrought stories about Biden’s botched exit and Taliban atrocities. 

    Surely the exit could have been better planned and executed. And what has happened is deeply tragic. But I fear that the sudden all-consuming focus on Afghanistan is distracting us from hugely important stuff that’s coming to a head at home:

    1. Republican politicians and right-wing media worsening the surging Delta variant of COVID by fighting masks and vaccinations, making the public health crisis even worse. 

    2. Wildfires and floods consuming much of America, as Republicans oppose Biden’s $3.5 trillion budget blueprint containing important measures to slow climate change.

    3. Texas and 23 other states passing voter suppression measures, while the “For the People Act” and the “John Lewis Voting Rights Act” – which would remedy these horrendous laws – languish in the Senate because Joe Manchin and Krysten Sinema refuse to do anything about the filibuster. 

    Afghanistan is an unfolding tragedy, and we should do everything in our power to take in Afghan refugees. But we also need to focus on issues that need and deserve our attention now but for which the window of opportunity to respond will close sooner than we expect. 

    If we don’t take action now on COVID and the critical importance of vaccinations and masks, on climate change and Biden’s $3.5 trillion package, and on voter suppression and the necessity of the For the People and the John Lewis Voting Rights Acts, we may never. And that would be a tragedy. 

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  • Why Aren’t Biden and the Democrats Going All Out for Democracy?


    Tuesday, July 27, 2021

    You’d think President Biden and the Democratic Party leadership would do everything in their power to stop Republicans from undermining democracy.

    So far this year, the GOP has passed roughly 30 laws in states across the country  that will make voting harder, especially in Black and Latino communities. With Trump’s baseless claim that the 2020 election was stolen, Republicans are stoking white people’s fears that a growing non-white population will usurp their dominance.

    Yet while Biden and Democratic leaders are openly negotiating with holdout senators for Biden’s stimulus and infrastructure proposals, they aren’t exerting similar pressure when it comes to voting rights and elections. In fact, Biden now says he won’t take on the filibuster, which stands firmly in the way.

    What gives? Part of the explanation, I think, lies with an outside group that has almost as much influence on the Democratic Party as on the Republican, and which isn’t particularly enthusiastic about election reform: the moneyed interests bankrolling both parties.

    They fear that a more robust democracy would make it easier for the majority of Americans who aren’t wealthy to raise taxes on the wealthy to finance all sorts of things the majority may want, from better schools to stronger safety nets. 

    So at the same time white supremacists have whipped up fears about nonwhites usurping their dominance, America’s wealthy have spent vast sums on campaign donations and lobbyists to prevent majorities from usurping their money.

    They’ve already whipped up resistance among congressional Democrats to Biden’s plan to tax capital gains at 39.6% — up from 20% — for those earning more than $1 million. And they’re on the way to convincing Democrats to restore the federal tax deduction for state and local taxes, of which they’re the biggest beneficiaries.  

    In recent years these wealth supremacists, as they might be called, have quietly joined white supremacists to become a powerful anti-democracy coalition.

    Some wealth supremacists have backed white supremacist’s efforts to divide poor and working-class whites from poor and working-class Black and brown people, so they don’t look upward and see where most of the economic gains have been going and don’t join together to demand a fair share of those gains.

    By the same token, white supremacists have quietly depended on wealth supremacists to bribe lawmakers to limit voting rights, so people of color continue to be second-class citizens. It’s no accident that six months after the insurrection, dozens of giant corporations that promised not to fund members of Congress who refused to certify Biden as president are now back funding them and their anti-voting rights agenda.

    Donald Trump was put into office by this anti-democracy coalition. According to Forbes, 9 percent of America’s billionaires, together worth a combined $210 billion, pitched in to cover the costs of Trump’s 2020 campaign. During his presidency Trump gave both parts of the coalition what they wanted most: tax cuts and regulatory rollbacks for the wealth supremacists; legitimacy for the white supremacists.

    The coalition is now the core of the Republican Party, which stands for little more than voter suppression based on Trump’s big lie that the 2020 election was stolen, and tax cuts for the wealthy and their corporations.

    Meanwhile, as wealth supremacists have accumulated a larger share of the nation’s income and wealth than at any time in more than a century, they’ve used a portion of that wealth to bribe lawmakers not to raise their taxes. It was recently reported that several American billionaires have paid only minimal or no federal income tax at all.

    Tragically, the Supreme Court is supporting both the white supremacists and wealth supremacists. Since Chief Justice John Roberts and Justice Samuel Alito joined in 2005 and 2006, respectively, the court has been whittling away voting rights while enlarging the rights of the wealthy to shower money on lawmakers. The conservative majority has been literally making it easier to buy elections and harder to vote in them.

    The Democrats’ proposed “For the People Act” admirably takes on both parts of the coalition. It sets minimum national standards for voting, and it seeks to get big money out of politics through public financing of election campaigns.

    Yet this comprehensiveness may explain why the Act is now stalled in the Senate. Biden and Democratic leaders are firmly against white supremacists but are not impervious to the wishes of wealth supremacists. After all, to win elections they need likely Democrats to vote but also need big money to finance their campaigns.

    Some progressives have suggested a carve-out to the filibuster solely for voting rights. This might constrain the white supremacists but would do nothing to protect American democracy from the wealth supremacists.

    If democracy is to be preserved, both parts of the anti-democracy coalition must be stopped.

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  • Report Card: Six Months Into Biden’s Presidency


    Wednesday, July 14, 2021

    Joe Biden has a good chance of getting America back to where it was before the pandemic. Covid-19 is in retreat. So far, almost half of the adult population has been fully vaccinated. The economy is roaring back – still 7 million jobs short of where it was in January 2020 but on track to return to the starting gate by the end of the year. Biden’s “American Rescue Plan” is a major success.

    But it’s not clear Biden will get America back to where it was before Trump. His initial slew of executive orders erased most of Trump’s executive orders, but he hasn’t yet demolished all of Trump’s cruel immigration policies. Trump’s xenophobic rhetoric is gone but Biden hasn’t repaired relations with China. Many of Trump’s tariffs are still in place. And even with a bare Democratic majority in the US Senate, there’s little chance Congress will repeal all of Trump’s tax cuts for corporations and the wealthy.

    What about Biden’s big plans to remake America? Depending on your point of view, they’re either on hold or stalled. He’ll likely get bipartisan support for over half a trillion dollars of new spending for “hard” infrastructure. That’s not nothing. Beyond that, it’s anyone’s guess what Senate Democrats will agree to on legislation covering childcare, the environment, and healthcare and education that can circumvent a Republican filibuster.

    The biggest potential disaster concerns voting rights. As Republican-dominated states continue to restrict voting on the basis of Trump’s big lie about 2020 election fraud, and the Supreme Court signals its reluctance to get in the way, the only hope lies in what was supposed to be the Democrats’ highest priority – the For the People Act, setting minimum national standards for voting, and the John Lewis Voting Rights Act, restoring the potency of the old Voting Rights Act after the Court gutted it in 2013. But Senate Republicans won’t go along, and the refusal of a few Senate Democrats to alter the filibuster rule to allow them to be passed by a bare majority has condemned them to limbo.

    Biden’s failure to make the right to vote his highest priority  – to visibly fight for it, make it his own personal cause, and go on the road to take that cause to the American people – is not only bad policy for the nation. It’s also bad politics. It may cost Democrats dearly in next year’s midterm elections, and beyond.

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  • Wednesday, June 9, 2021

    7 Lessons We Need to Learn From Covid-19

    Maybe it’s wishful thinking to declare the pandemic over in the US, and presumptuous to conclude what lessons we’ve learned. So consider this a first draft.

    1. Workers are always essential

    We couldn’t have survived without millions of warehouse, delivery, grocery and hospital workers literally risking their lives. Yet most of these workers are paid squat. Amazon touts its $15 minimum wage but it totals only about $30,000 a year. Many essential workers don’t have health insurance or paid leave.
    Lesson: Essential workers deserve far better.

    2. Healthcare is a basic right

    You know how you got your vaccine without paying a dime? That’s how all healthcare could be. Yet too many Americans who contracted Covid-19 got walloped with humongous hospital bills. People with chronic disease, Black Americans and low-income children were most likely to have delayed or foregone care during the pandemic.Lesson: The U.S. must join the rest of the industrialized world and provide universal health coverage.

    3. Conspiracy theories can be deadly

    Last June, about one in four Americans believed the pandemic was “definitely” or “probably” created intentionally. Other conspiracy theories have caused some people to avoid wearing masks or getting vaccinated, resulting in unnecessary illness or death. Lesson: An informed public is essential. Some of the responsibility falls on Facebook, Twitter and other platforms that allowed misinformation to flourish — and on the government for enabling them.

    4. Wages are too low to get by on

    Most Americans live paycheck to paycheck. So once the pandemic hit, many didn’t have any savings to fall back on. Conservative lawmakers complain that the extra $300 a week unemployment benefit Congress enacted in March discourages people from working. What’s really discouraging them is lack of childcare and lousy wages. Lesson: Raise the minimum wage, provide universal childcare, strengthen labor unions and push companies to share profits with their workers.

    5. Remote work is now baked into the economy

    The percentage of workers punching in from home hit a high of 70% in April 2020. A majority still work remotely. Some 40% want to continue working from home. Two lessons: Companies will have to adjust. And much commercial real estate will remain vacant. Why not convert it into affordable housing?


    6. It’s past time for a wealth tax.

    The combined wealth of America’s 657 billionaires grew by $1.3 trillion – or 44.6% – during the pandemic. Yet billionaires’ taxes are lower than ever. Wealthy Americans today pay one-sixth the rate of taxes their counterparts paid in 1953. Lesson: To afford everything the nation needs, raise taxes at the top.

    7. Government can be the solution

    Ronald Reagan’s famous quip – “Government is not the solution to our problem, government is the problem” – can now officially be retired. Trump’s “Operation Warp Speed” succeeded in readying vaccines faster than most experts thought possible. Biden got them into more arms more quickly than any vaccination program in history.

    Furthermore, the $1.9 trillion Democrats pushed through in March will help the US achieve something it failed to achieve after the 2008-09 recession: a robust recovery. Lesson: The federal government did not just help beat the pandemic. It also did more to keep the nation afloat than in any previous recession. It must be prepared to do so again.

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  • The Beginning of the End of Democracy as We Know It?


    Tuesday, June 8, 2021

    On Sunday, West Virginia Senator Joe Manchin announced in an oped in the Charleston Gazette-Mail that he opposes the For the People Act. He also opposes ending the filibuster.

    An oped in the most prominent state newspaper is as non-negotiable a position as a politician can assert.

    It was a direct thumb-in-your-eye response to President Biden’s thinly-veiled criticism of Manchin last Tuesday in Tulsa, where Biden explained why he was having difficulty getting passage of what was supposed to be his highest priority – new voting rights legislation that would supersede a raft of new laws in Republican-dominated states designed to suppress the votes of likely Democratic voters, using Trump’s baseless claim of voter fraud as pretext.

    “I hear all the folks on TV saying, ‘Why doesn’t Biden get this done?’” Biden asked rhetorically in Tulsa. “Well, because Biden only has a majority of effectively four votes in the House and a tie in the Senate, with two members of the Senate who vote more with my Republican friends. But we’re not giving up.”

    Everyone who paid any attention to Senate politics knew he was referring to Manchin, as well as to Arizona Senator Kirsten Cinema, another Democratic holdout.

    Manchin’s very public repudiation of Biden on Sunday could mean the end of the For the People Act. That opens the way for Republican states to continue their shameless campaign of voter suppression – very possibly giving Republicans a victory in the 2022 midterm elections and entrenching Republican rule for a generation.

    As it is, registered Republicans make up only about 25 percent of the American electorate, and the percentage appears to be shrinking in the wake of Trump’s horrendous exit.

    But because rural Republican states like Wyoming (with 574,000 inhabitants) get two senators just as do urban ones like California (with nearly 40 million), and because Republican states have gerrymandered districts that elect House members to give them an estimated 19 extra seats over what they’d have without gerrymandering, the scales were already tipped.

    Then came the post-Trump deluge of state laws making it harder for likely Democrats to vote, and easier for Republican state legislatures to manipulate voting tallies.

    Manchin says he supports extending the John Lewis Voting Rights Act to all fifty states. But that’s small comfort.

    The original 1965 Voting Rights Act was struck down by the Supreme Court in 2013, on the dubious logic that it was no longer needed because states with a history of suppressing Black votes no longer did so. (Note that within 24 hours of the ruling, Texas announced it would implement a strict photo ID law, and Mississippi and Alabama soon followed.)

    The efficacy of a new national Voting Rights Act would depend on an activist Justice Department willing to block state changes in voting laws that suppress votes and on an activist Supreme Court willing to uphold such Justice Department decisions. Don’t bet on either. We know what happened to the Justice Department under Trump, and we know what’s happened to the Supreme Court.

    Besides, a new Voting Rights Act wouldn’t be able to roll back the most recent round of voter suppression laws from Republican states.

    Without Manchin, then, the For the People Act is probably dead, unless Biden can convince one Republican senator to join senate Democrats in supporting it – like, say, Utah’s Mitt Romney, who has publicly rebuked Trump for lying about the 2020 election and has something of a reputation for being an institutionalist who cares about American democracy.

    Yet given Trump’s continuing hold over the shrinking Republican Party, any Republican senator who joined with the Democrats in supporting the For the People Act would probably be ending their political career. Profiles in courage make good copy for political obituaries and memorials.

    I’m afraid history will show that, in this shameful era, Republican senators were more united in their opposition to voting rights than Democratic senators were in their support for them.

    The future of American democracy needs better odds.

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  • The Greatest Danger to American Democracy


    Monday, May 31, 2021

    The greatest danger to American democracy right now is not coming from Russia, China, or North Korea. It is coming from the Republican Party. 

    Only 25 percent of voters self-identify as Republican, the GOP’s worst showing against Democrats since 2012 and sharply down since last November. But those who remain in the Party are far angrier, more ideological, more truth-denying, and more racist than Republicans who preceded them. 

    And so are the lawmakers who represent them. 

    Today’s Republican Party increasingly is defined not by its shared beliefs but by its shared delusions.

    Last Friday, 54 U.S. senators voted in favor of proceeding to debate a House-passed bill to establish a commission to investigate the causes and events of the January 6th insurrection. This was 6 votes short of the number of votes needed for “cloture,” or stopping debate – meaning any further consideration of the bill would have been filibustered by Republicans indefinitely. 

    So there will be no investigation. 

    The 54 Senators who voted yes to cloture – in favor of the commission – represent 189 million Americans, or 58% of the American population. The 35 who voted no represent 104 million Americans, or 32% of the population.

    In other words, 32% of American voters got to decide that the nation would not know about what happened to American democracy on January 6. 

    Furthermore, the 35 who voted against the commission were all Republicans. They did not want such an inquiry because it might jeopardize their chances of gaining a majority of the House or Senate in the 2022 midterm elections. They also wanted to stay in the good graces of Donald Trump, whose participation in that insurrection might have been more fully revealed. 

    Eight of these Republicans voted against certifying Joe Biden as president on January 6. Some of their constituents were responsible for the insurrection in the first place. 

    The Republican Party is also pursuing new laws in many states making it harder for likely Democrats to vote and opposing voting reforms in Congress.

    It is actively purging any Republican who has temerity to criticize Trump. They have removed from her leadership position Liz Cheney, who called Trump’s efforts to overturn the election and his role in inciting the deadly Jan. 6 riot the greatest “betrayal by a president of the United States of his office and his oath to the Constitution.” 

    Local Republicans leaders have either stepped down or been forced out of their party positions for not supporting Trump’s baseless election claims or for criticizing the former president’s role in inciting the deadly Capitol riot.

    American democracy is at an inflection point. 

    Senate Democrats must get rid of the filibuster and push through major reforms – voting rights, as well as policies that will enable more Americans in the bottom half – most of them without college educations, many of whom cling to the Republican Party – to do better. 

    In the 1930s, Franklin D. Roosevelt noted that the survival of American democracy depended on the adoption of policies that comprised the New Deal. In that Depression decade, democracy was under siege around the world, and dictators were on the rise. 

    Joe Biden understands that America and the world face a similar challenge. And like FDR, Biden is making a strong case that the adoption of his policies will buttress democracy against the forces of tyranny, not only as an example to the rest of the world but here at home. 

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  • Biden’s First 100 Days and the GOP’s First 100 Days Without Trump


    Monday, May 3, 2021

    By almost any measure, Joe Biden’s first 100 days have been hugely successful. Getting millions of Americans inoculated against COVID-19 and beginning to revive the economy are central to that success.

    Two thirds of Americans support Biden’s $1.9 stimulus plan, already enacted. His infrastructure and family plans, which he outlined last Wednesday night at a joint session of Congress, also have broad backing. The $6 trillion price tag for all this would make it the largest expansion of the federal government since Lyndon Johnson’s Great Society. But for most Americans, it doesn’t feel radical.

    Rather than bet it all on a single large-scale program such as universal healthcare – which Clinton’s failed to accomplish and which Obama turned into a target of Republican fearmongering – Biden has picked an array of popular initiatives, such as pre-school, public community c0llege, paid family and medical leave, home care, and infrastructure repairs, which are harder to vilify.

    Economists talk about pent-up demand for private consumer goods, caused by the pandemic. Biden is responding to a pent-up demand for public goods. The demand has been there for years but the pandemic has starkly revealed it. Compared to workers in other developed nations, Americans enjoy few social benefits and safety nets. Biden is saying, in effect, it’s time we caught up.

    Besides, it’s hard for Republicans to paint Biden as a radical. He doesn’t feel scary. He’s old, grandfatherly. He speaks haltingly. He’s humble. When he talks about the needs of average working people, it’s clear he knows them.

    Biden has also been helped by the contrast to his immediate predecessor – the most divisive and authoritarian personality to occupy the Oval Office in modern memory. Had Biden been elected directly after Obama, regardless of the pandemic and economic crisis, it’s unlikely he and his ambitious plans would seem so benign.

    In his address to a joint session of Congress Wednesday night, Biden credited others for the achievements of his first hundred days. They had been accomplished “because of you,” he said, even giving a nod to Republicans. His predecessor was incapable of crediting anyone else for anything.

    Meanwhile, the Republican party, still captive to its Trumpian base, has no message or policies to counter Biden’s proposals. Trump left it with little more than a list of baseless grievances irrelevant to the practical needs of most Americans – that Trump would have been reelected but for fraudulent votes and a “deep state” conspiracy, that Democrats are “socialists” and that the “left” is intent on taking away American freedoms.

    Biden has a razor-thin majority in Congress and must keep every Democratic senator in line if he’s to get his plans enacted. But the vacuum on the right has allowed him to dominate the public conversation about his initiatives, which makes passage more likely.  

    Trump is aiding Biden in other ways. Trump’s yawning budget deficits help normalize Biden’s. When Trump sent $1,200 stimulus checks to most Americans last year regardless of whether they had a job, he cleared the way for Biden to deliver generous jobless benefits.

    Trump’s giant $1.9 trillion tax cut for big corporations and the wealthy, none of which “trickled down,” make Biden’s proposals to increase taxes on corporations and the wealthy to pay for infrastructure and education seem even more reasonable.

    Trump’s fierce economic nationalism has made Biden’s “buy American” initiative appear innocent by comparison. Trump’s angry populism has allowed Biden to criticize Wall Street and support unions without causing a ripple.

    At the same time, Trumpian lawmakers’ refusal to concede the election and their efforts to suppress votes has alienated much of corporate America, pushing executives toward Biden by default.

    Even on the fraught issue of race, the contrast with Trump has strengthened Biden’s hand. Most Americans were so repulsed by Trump’s overt racism and his overtures to white supremacists, especially after the police murder of George Floyd, that Biden’s initiatives to end police brutality and “root out systemic racism,” as he said on Wednesday night, seem appropriate correctives.  

    The first 100 days of the Biden presidency were also the first 100 days of America without Trump, and the two cannot be separated.

    With any luck, Biden’s plans might be the antidote to Trumpism – creating enough decent-paying working class jobs, along with benefits such as childcare and free community college, as to forestall some of the right-wing dyspepsia that Trump whipped into a fury.

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  • Biden’s Industrial Policy


    Sunday, April 18, 2021

    America is about to revive an idea that was left for dead decades ago. It’s called industrial policy, and it’s at the heart of Joe Biden’s plans to restructure the U.S. economy.

    When industrial policy was last debated in the 1980s, critics recoiled from government “picking winners.” But times have changed. Devastating climate change, a deadly pandemic, and the rise of China as a technological powerhouse require an active government pushing the private sector to achieve public purposes.

    The dirty little secret is that America already has an industrial policy, but one that’s focused on pumping up profits with industry-specific subsidies, tax loopholes and credits, bailouts, and tariffs. The practical choice isn’t whether to have an industrial policy but whether it meets society’s needs or those of politically powerful industries.

    Consider energy. The fossil fuel industry has accumulated “billions of dollars in subsidies, loopholes, and special foreign tax credits,” in Biden’s words. He intends to eliminate these and shift to non-carbon energy by strengthening the nation’s electrical grid, creating a new “clean electricity standard” that will force utilities to end carbon emissions by 2035 and providing research support and tax credits for clean energy.

    It’s a sensible 180-degree shift of industrial policy.

    The old industrial policy for the automobile industry consisted largely of bailouts – of Chrysler in 1979 and General Motors and Chrysler in 2008.

    Biden intends to shift away from gas-powered cars entirely and invest $174 billion in companies making electric vehicles. He’ll also create 500,000 new charging stations.

    This also makes sense. Notwithstanding the success of Tesla, which received $2.44 billion in government subsidies before becoming profitable, the switch to electric vehicles still needs pump priming.

    Internet service providers have been subsidized by the states and the federal government, and federal regulators have allowed them to consolidate into a few telecom giants. But they’ve dragged their feet on upgrading copper networks with fiber, some 30 million Americans still lack access to high-speed broadband, and America has among the world’s highest prices for internet service.

    Biden intends to invest $100 billion to extend high-speed broadband coverage. He also threatens to “hold providers accountable,” for their sky-high prices – suggesting either price controls or antitrust enforcement.

    I hope he follows through. A proper industrial policy requires that industries receiving public benefits act in the public interest.  

    The pharmaceutical industry exemplifies the old industrial policy at its worst. Big Pharma’s basic research has been subsidized through the National Institutes of Health. Medicare, Medicaid, and the Affordable Care Act bankroll much of its production costs. The industry has barred Americans from buying drugs from abroad. Yet Americans pay among the highest drug prices in the world.

    Biden intends to invest an additional $30 billion to reduce the risk of future pandemics – replenishing the national stockpile of vaccines and therapeutics, accelerating the timeline for drug development, and boosting domestic production of pharmaceutical ingredients currently made overseas.

    That’s a good start but he must insist on a more basic and long-overdue quid pro quo from big pharma: allow government to use its bargaining power to restrain drug prices.    

    A case in point: The U.S. government paid in advance for hundreds of millions of doses of multiple COVID-19 vaccines. The appropriate quid pro quo here is to temporarily waive patents so vaccine manufacturers around the world can quickly ramp up. Americans can’t be safe until most of the rest of the world is inoculated.

    Some of Biden’s emerging industrial policy is coming in response to China. Last week’s annual intelligence report from the Office of the Director of National Intelligence warns that Beijing threatens American leadership in an array of emerging technologies.

    Expect more subsidies for supercomputers, advanced semiconductors, artificial intelligence, and other technologies linked to national security. These are likely to be embedded in Biden’s whopping $715 billion defense budget – larger even than Trump’s last defense budget.

    Here again, it’s old industrial policy versus new. The new should focus on cutting-edge breakthroughs and not be frittered away on pointless projects like the F35 fighter jet. And it should meet human needs rather than add to an overstuffed defense arsenal.

    Biden’s restructuring of the American economy is necessary. America’s old industrial policy was stifling innovation and gauging taxpayers and consumers. The challenges ahead demand a very different economy.

    But Biden’s new industrial policy must avoid capture by the industries that dominated the old. He needs to be clear about its aims and the expected response from the private sector, and to reframe the debate so it’s not about whether government should “pick winners” but what kind industrial policy will help America and much of the world win.

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  • The Basic Deal Between Corporate America and the GOP is Alive and Well


    Sunday, April 11, 2021

    For four decades, the basic deal between big American corporations and politicians has been simple. Corporations provide campaign funds. Politicians reciprocate by lowering corporate taxes and doing whatever else corporations need to boost profits.

    The deal has proven beneficial to both sides, although not to the American public. Campaign spending has soared while corporate taxes have shriveled.

    In the 1950s, corporations accounted for about 40 percent of federal revenue. Today, they contribute a meager 7 percent. Last year, more than 50 of the largest U.S. companies paid no federal income taxes at all. Many haven’t paid taxes for years.

    Both parties have been in on this deal although the GOP has been the bigger player. Yet since Donald Trump issued his big lie about the fraudulence of the 2020 election, corporate America has had a few qualms about its deal with the GOP.  

    After the storming of the Capitol, dozens of giant corporations said they would no longer donate to the 147 Republican members of Congress who objected to the certification of Biden electors on the basis of the big lie.

    Then came the GOP’s recent wave of restrictive state voting laws, premised on the same big lie. Georgia’s are among the most egregious. The chief executive of Coca Cola, headquartered in the peach tree state, calls those laws “wrong” and “a step backward.” The CEO of Delta Airlines, Georgia’s largest employer, says they’re “unacceptable.” Major League Baseball decided to relocate its annual All-Star Game away from the home of the Atlanta Braves.

    These criticisms have unleashed a rare firestorm of anti-corporate Republican indignation. The senate minority leader, Mitch McConnell, warns corporations of unspecified “serious consequences” for speaking out. Republicans are moving to revoke Major League Baseball’s antitrust status. Georgia Republicans threaten to punish Delta Airlines by repealing a state tax credit for jet fuel.

    “Why are we still listening to these woke corporate hypocrites on taxes, regulations & antitrust?” asks Florida Senator Marco Rubio.

    Why? For the same reason Willy Sutton gave when asked why he robbed banks: That’s where the money is.

    McConnell told reporters that corporations should “stay out of politics” but then qualified his remark: “I’m not talking about political contributions.” Of course not. Republicans have long championed “corporate speech” when it comes in the form of campaign cash –  just not as criticism.  

    Talk about hypocrisy. McConnell was the top recipient of corporate money in the 2020 election cycle and has a long history of battling attempts to limit it. In 2010, he hailed the Supreme Court’s “Citizens United” ruling, which struck down limits on corporate political donations, on the dubious grounds that corporations are “people” under the First Amendment to the Constitution.

    “For too long, some in this country have been deprived of full participation in the political process,” McConnell said at the time. Hint: He wasn’t referring to poor Black people.  

    It’s hypocrisy squared. The growing tsunami of corporate campaign money suppresses votes indirectly by drowning out all other voices. Republicans are in the grotesque position of calling on corporations to continue bribing politicians as long as they don’t criticize Republicans for suppressing votes directly.

    The hypocrisy flows in the other direction as well. The Delta’s CEO criticized GOP voter suppression but the company continues to bankroll Republicans. Its PAC contributed $1,725,956 in the 2020 election, more than $1 million of which went to federal candidates, mostly to Republicans. Oh, and Delta hasn’t paid federal taxes for years.

    Don’t let the spat fool you. The basic deal between the GOP and corporate America is still very much alive.

    Which is why, despite record-low corporate taxes, congressional Republicans are feigning outrage at Joe Biden’s plan to have corporations pay for his $2 trillion infrastructure proposal. Biden isn’t even seeking to raise the corporate tax rate as high as it was before the Trump tax cut, yet not a single Republicans will support it.

    A few Democrats, such as West Virginia’s Joe Manchin, don’t want to raise corporate taxes as high as Biden does, either. Yet almost two-thirds of Americans support the idea.

    The basic deal between American corporations and American politicians has been a terrible deal for America. Which is why a piece of legislation entitled the “For the People Act,” passed by the House and co-sponsored in the Senate by every Democratic senator except Manchin, is so important. It would both stop states from suppressing votes and also move the country toward public financing of elections, thereby reducing politicians’ dependence on corporate cash.

    Corporations can and should bankroll much of what America needs. But they won’t as long as corporations keep bankrolling American politicians.

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  • Bessemer and the Power Shift


    Sunday, March 21, 2021

    The most dramatic change in American capitalism over the last half century has been the emergence of corporate behemoths like Amazon and the simultaneous shrinkage of organized labor. The resulting imbalance has spawned near-record inequalities of income and wealth, corruption of democracy by big money, and the abandonment of the working class.

    All this is coming to a head in several ways.

    Next week, Amazon faces a union vote at its warehouse in Bessemer, Alabama. If successful, it would be Amazon’s first U.S.-based union in its nearly 27-year history.

    Conditions in Amazon’s warehouses would please Kim Jong un – strict production quotas, 10-hour workdays with only two half-hour breaks, unsafe procedures, arbitrary firings, “and they track our every move,” Jennifer Bates, a warehouse worker at Bessemer, told the Senate Budget Committee last week.  

    To thwart the union drive, Amazon has required Bessemer workers to attend anti-union meetings, warned workers they’d have to pay union dues (wrong – Alabama is a so-called “right-to-work” state that bars mandatory dues), and intimidated and harassed organizers.

    Why is Amazon abusing its workers?

    The company isn’t exactly hard-up. It’s the most profitable firm in America. Its executive chairman and largest shareholder, Jeff Bezos, is the richest man in the world, holding more wealth than the bottom 39 percent of Americans put together.

    Amazon is abusing workers because it can.

    Fifty years ago, General Motors was the largest employer in America. The typical GM worker earned $35 an hour in today’s dollars and had a major say over working conditions. Today’s largest employers are Amazon and Walmart, each paying around $15 an hour and treating their workers like cattle.

    The typical GM worker wasn’t “worth” more than twice today’s Amazon or Walmart worker and didn’t have more valuable insights about how work should be organized. The difference is GM workers a half-century ago had a strong union behind them, summoning the collective bargaining power of over a third of the entire American workforce.

    By contrast, today’s Amazon and Walmart workers are on their own. And because only 6.4 percent of America’s private-sector workers are now unionized, there’s little collective pressure on Amazon or Walmart to treat their workers any better.  

    Fifty years ago, “big labor” had enough political clout to ensure labor laws were enforced and that the government pushed giant firms like GM to sustain the middle class.

    Today, organized labor’s political clout is miniscule by comparison. The biggest political players are giant corporations like Amazon. And what have they done with their muscle? Encouraged state “right-to-work” laws, diluted federal labor protections, and kept the National Labor Relations Board understaffed and overburdened.

    They’ve also impelled government to lower their taxes (Amazon paid zero federal taxes in 2018); extorted states to provide them tax breaks as condition for locating facilities there (Amazon is a champion at this game); bullied cities where they’re headquartered (Amazon forced Seattle to back down on a plan to tax big corporations like itself to pay for homeless shelters); and wangled trade treaties allowing them to outsource so many jobs that blue-collar workers in America have little choice but to take low-paying, high-stress warehouse and delivery gigs.

    Oh, and they’ve neutered antitrust laws, which in earlier era would have had companies like Amazon in their crosshairs.

    This decades-long power shift – the emergence of corporate leviathans and the demise of labor unions – has resulted in a massive upward redistribution of income and wealth. The richest 0.1 of Americans now has almost as much wealth as the bottom 90 percent put together.

    Corporate profits account for a growing share of the total economy and wages a declining share, with multi-billionaire executives and investors like Bezos taking home the lion’s share.  

    The power shift can be reversed – but only with stronger labor laws, tougher trade deals, and a renewed commitment to antitrust.

    The Biden administration and congressional Democrats appear willing. The House has just passed the toughest labor law reforms in over a generation. Biden’s new trade representative, Katherine Tai, promises that trade deals will protect the interests of American workers rather than exporters. And Biden is putting trustbusters in critical positions at the Federal Trade Commission and in the White House.

    I’d like to think America is at a tipping point similar to where it was some hundred twenty years ago when the ravages and excesses of the Gilded Age precipitated what became known as the Progressive Era. Then, reformers reversed the course of American capitalism for the next 70 years, making it work for the many rather than the few.

    Today’s progressive activists – in Washington, at Amazon’s Bessemer warehouse, and elsewhere around the nation – may be on the verge of doing the same.

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