Robert Reich
People stand near the border fence between Mexico and the US in Tijuana, Mexico. The only way undocumented workers can ever become organized – and not undercut attempts to unionize legal workers – is if the undocumented workers also become legal, Reich writes. (Jorge Duenes/Reuters/File)
What immigration reform could mean for US workers
Their agreement on is very preliminary and hasn’t yet even been blessed by the so-called Gang of Eight Senators working on immigration reform, but the mere fact that AFL-CIO President Richard Trumka and Chamber of Commerce President Thomas J. Donohue agreed on anything is remarkable.
The question is whether it’s a good deal for American workers. It is, and I’ll explain why in a moment.
Under the agreement (arrived at last weekend) a limited number of temporary visas would be issued to foreign workers in low-skilled occupations, who could thereafter petition to become American citizens.
The agreement is an important step toward a comprehensive immigration reform package to be introduced in the Senate later this month. Disagreement over allowing in low-skilled workers helped derail immigration reform in 2007. ( Continue… )
The dome of the US Capitol Building is seen as the sun sets on Capitol Hill in Washington. American democracy has shown itself far less responsive to public opinion concerning economic issues that might affect the fates of large fortunes, Reich writes. (Charles Dharapak/AP/File)
Why don't politicians listen to public opinion on the economy?
Who says American politics is gridlocked? A tidal wave of politicians from both sides of the aisle who just a few years ago opposed same-sex marriage are now coming around to support it. Even if the Supreme Court were decide to do nothing about California’s Proposition 8 or DOMA, it would seem only matter of time before both were repealed.
A significant number of elected officials who had been against allowing undocumented immigrants to become American citizens is now talking about “charting a path” for them; a bipartisan group of senators is expected to present a draft bill April 8.
Even a few who were staunch gun advocates are now sounding more reasonable about background checks.
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It’s nice to think logic and reason are finally catching up with our elected representatives, but the real explanation for these changes of heart is more prosaic: public opinion. ( Continue… )
President Barack Obama and House Minority Leader Nancy Pelosi, left, leave a meeting with House Democrats at the Capitol, in Washington, Thursday. If there was ever a time for Democrats to champion working Americans and reverse troubling trends, it is now, Reich writes. (J. Scott Applewhite/AP)
Why Democrats should protect Social Security and Medicare
Prominent Democrats — including the President and House Minority Leader Nancy Pelosi — are openly suggesting that Medicare be means-tested and Social Security payments be reduced by applying a lower adjustment for inflation.
This is even before they’ve started budget negotiations with Republicans — who still refuse to raise taxes on the rich, close tax loopholes the rich depend on (such as hedge-fund and private-equity managers’ “carried interest”), increase capital gains taxes on the wealthy, cap their tax deductions, or tax financial transactions.
It’s not the first time Democrats have led with a compromise, but these particular pre-concessions are especially unwise.
For over thirty years Republicans have pitted the middle class against the poor, preying on the frustrations and racial biases of average working people who can’t get ahead no matter how hard they try. In the Republican narrative, government takes from the hard-working middle and gives to the undeserving and dependent needy. ( Continue… )
Continuing his effort to end political gridlock with Congress, President Barack Obama comes to Capitol Hill to meet with the Senate Republican caucus, in Washington, Thursday. When American families can’t spend enough to keep the economy going, Reich writes, the government has to step in as spender of last resort. (J. Scott Applewhite/AP)
Deficits are not the real economic problem
“Our biggest problems over the next ten years are not deficits,” the President told House Republicans Wednesday, according to those who attended the meeting.
The President needs to deliver the same message to the public, loudly and clearly. The biggest problems we face are unemployment, stagnant wages, slow growth, and widening inequality — not deficits. The major goal must be to get jobs and wages back, not balance the budget.
Paul Ryan’s budget plan — essentially, the House Republican plan — is designed to lure the White House and Democrats, and the American public, into a debate over how to balance the federal budget in ten years, not over whether it’s worth doing.
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“This is an invitation,” Ryan explained when he unveiled the plan Tuesday. “Show us how to balance the budget. If you don’t like the way we’re proposing to balance our budget, how do you propose to balance the budget?” ( Continue… )
House Budget Committee Chairman Rep. Paul Ryan, R-Wis. leaves a Republican caucus on Capitol Hill in Washington. (Jacquelyn Martin/AP/File)
Paul Ryan's budget and austerity economics
Republicans lost the election but they still shape what’s debated in Washington — the federal budget deficit and so-called “fiscal responsibility.”
The White House’s and the Democrat’s continuing failure to reshape that debate has lead directly and logically to Paul Ryan’s budget plan this week, which is a more regressive version of the same plan American voters resoundingly rejected last November.
Sadly, the President is playing into the GOP’s hands with a new round of negotiations over a “grand bargain.”
Despite February’s encouraging job numbers, the major challenge is still jobs, wages, growth, and widening inequality — not deficit reduction and fiscal responsibility. ( Continue… )
A sign for Wall Street is displayed on the side of building near the New York Stock Exchange Monday. The health of an economy is not measured by the profits of corporations, Reich writes, it instead depends on how many people have jobs and whether those jobs pay decent wages. (Mark Lennihan/AP)
Why stocks are up while wages are down
Today the Dow Jones Industrial Average rose above 14,270 – completely erasing its 54 percent loss between 2007 and 2009.
The stock market is basically back to where it was in 2000, while corporate earnings have doubled since then.
Yet the real median wage is now 8 percent below what it was in 2000, and unemployment remains sky-high.
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Why is the stock market doing so well, while most Americans are doing so poorly? Four reasons: ( Continue… )
President Barack Obama speaks about the sequester after a meeting with congressional leaders at the White House in Washington. The president should now focus on good jobs and broad-based prosperity rather than prosperity for a few and declining wages and insecurity for the many, Reich writes. (Kevin Lamarque/Reuters/File)
With sequester underway, what should Obama do next?
What should the President do now?
Push to repeal the sequester (a reconciliation bill in the Senate would allow repeal with 51 votes, thereby putting pressure on House Republicans), and replace it with a “Build America’s Future” Act that would close tax loopholes used by the wealthy, end corporate welfare, impose a small (1/10 of 1%) tax on financial transactions, and reduce the size of the military.
Half the revenues would be used for deficit reduction, the other half for investments in our future through education (from early-childhood through affordable higher ed), infrastructure, and basic R&D.
Also included in that bill — in order to make sure our future isn’t jeopardized by another meltdown of Wall Street — would be a resurrection of Glass-Steagall and a limit on the size of the biggest banks. ( Continue… )
A visitor takes a photo of the US Capitol in Washington. The trickle-down-economics, on which Republicans base their refusal even discuss closing tax loopholes for the wealthy, is a proven failure, Reich writes. (Kevin Lamarque/Reuters)
The sequestration nation
With the sequester now beginning, I find myself thinking about Robert F. Kennedy — and 46 years ago when I was an intern in his Senate office.
1967 was a difficult time for the nation. America was deeply split over civil rights and the Vietnam War. Many of our cities were burning. The war was escalating.
But RFK was upbeat. He was also busy and intense — drafting legislation, lining up votes, speaking to the poor, inspiring the young. I was awed by his energy and optimism, and his overriding passion for social justice and the public good. (Within a few months he’d declare his intention to run for president. Within a year he’d be dead.)
The nation is once again polarized, but I don’t hear our politicians talking about social justice or the public good. They’re talking instead about the budget deficit and sequestration.
At bottom, though, the issue is still social justice. ( Continue… )
President Barack Obama addresses the National Governors Association in the State Dining Room of the White House in Washington, Monday. President Obama has the bully pulpit, Reich writes, and Americans trust him more than they do congressional Republicans. (Charles Dharapak/AP)
President Obama vs. GOP in a sequester showdown
The White House apparently believes the best way to strengthen its hand in the upcoming “sequester” showdown with Republicans is to tell Americans how awful the spending cuts will be, and blame Republicans for them.
It won’t work. These tactical messages are getting in the way of the larger truth, which the President must hammer home: The Republicans’ austerity economics and trickle-down economics are dangerous, bald-faced lies.
Yes, the pending spending cuts will hurt. But even if some Americans begin to feel the pain when the cuts go into effect Friday, most won’t feel it for weeks or months, if ever.
Half are cuts in the military, which will have a huge impact on jobs (the military is America’s only major jobs program), but the cuts will be felt mainly in states with large numbers of military contractors, and then only as those contractors shed employees. ( Continue… )
A pedestrian walks past an empty store front which use to be a Starbucks in Eagle, Colo. With consumers and government both spending less, businesses won’t hire more workers, Reich writes, they’ll fire more workers. (Tony Avelar/The Christian Science Monitor/File)
Where have all the customers gone?
Can we just put aside ideology for one minute and agree that businesses hire more workers if they have more customers, and fire workers if they have fewer customers?
There are two big categories of customer: One is comprised of individual consumers. The other is government.
We tend to think of the government as a direct employer — of teachers, fire fighters, civil servants.
But government is also a major customer of the private sector. It buys school supplies, pharmaceuticals, military equipment, computers. It hires private companies to build roads and bridges, dredge ports, manage data.
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One out of every five Americans works for a company whose customer is the government. ( Continue… )
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