Skip to: Content
Skip to: Site Navigation
Skip to: Search


Robert Reich

Director Jacob Kornbluth, left, and former Secretary of Labor Robert Reich are pictured in this Jan. 21, 2013, photo from the Sundance Film Festival at the Fender Music Lodge in Park City, Utah. Reich argues that increasingly rich and poor Americans have less contact with each other, and that is helping to create a divide between them. (Victoria Will/Invision/AP)

Are America's rich and poor living in different worlds?

By Guest blogger / 02.15.14

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? ( Continue… )

Gerald Terrell, the senior trustee for the Mount Zion First African Baptist Church, stands in the church's offices in Charlottesville, Va., in this file photo taken last month. He says the church is near a public housing project where children of families often don’t have the advantages that wealthier families consider basic. (Adam Geller/AP/File)

Why the three biggest economic lessons were forgotten

By Guest blogger / 02.12.14

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. ( Continue… )

An undated photo shows Lacey Wilson, a single mother of 4 kids who is struggling to make ends meet in St. Joseph Mo. In the 50 years since President Lyndon Johnson famously declared a "war on poverty," the struggling St. Joseph mother believes poverty is still an overwhelming issue. (Jessica Stewart/St. Joseph News-Press/AP/File)

Why widening inequality is hobbling equal opportunity

By Guest blogger / 02.07.14

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, including reducing poverty.” ( Continue… )

College student Frangy Pozo holds a banner at a 'Tear Up Your Debt' demonstration, during which students tear up mock tuition bills and loan papers to protest rising student loan debt, in Oct., in New Brunswick, N.J. (The Record/AP)

Why there is little reform despite wealth disparity

By / 01.27.14

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. ( Continue… )

The news conference of Federal Reserve Chairman Ben Bernanke appears on a television screen at a trading post on the floor of the New York Stock Exchange last month. Reich argues that the roaring growth of the stock market in 2013 led to one of the biggest upward redistributions of wealth in American history. (Richard Drew/AP/File)

The Great Redistribution: how the inequality gap widened in 2013

By Guest blogger / 01.06.14

One of the worst epithets that can be leveled at a politician these days is to call him a “redistributionist.” Yet 2013 marked one of the biggest redistributions in recent American history. It was a redistribution upward, from average working people to the owners of America.

The stock market ended 2013 at an all-time high — giving stockholders their biggest annual gain in almost two decades. Most Americans didn’t share in those gains, however, because most people haven’t been able to save enough to invest in the stock market. More than two-thirds of Americans live from paycheck to paycheck.

Even if you include the value of IRA’s, most shares of stock are owned by the very wealthy. The richest 1 percent of Americans owns35 percent of the value of American-owned shares. The richest 10 percent owns over 80 percent. So in the bull market of 2013, America’s rich hit the jackpot.

What does this have to do with redistribution? Some might argue the stock market is just a giant casino. Since it’s owned mostly by the wealthy, a rise in stock prices simply reflects a transfer of wealth from some of the rich (who cashed in their shares too early) to others of the rich (who bought shares early enough and held on to them long enough to reap the big gains).  ( Continue… )

Rosemary Cabelo uses a computer at a public library to access the Affordable Health Care Act website, in San Antonio last month. (Eric Gay/AP/File)

We should be optimistic about the Affordable Care Act

By Guest blogger / 01.02.14

Whatever happened to American can-do optimism?  Even before the Affordable Care Act covers its first beneficiary, the nattering nabobs of negativism are out in full force.

“Tens of millions more Americans will lose their coverage and find that new ObamaCare plans have higher premiums, larger deductibles, and fewer doctors,” predicts Republican operative Karl Rove. “Enrollment numbers will be smaller than projected and budget outlays will be higher.”

Rove is joined by a chorus of conservative Cassandra’s, from Fox News to the editorial pages of the Wall Street Journal, all warning that the new law will be a disaster. 

Robert Laszewski, president of Health Policy and Strategy Associates, anticipates a shortage of doctors. “There just aren’t going to be enough of them.”

Professor John Cochrane of the University of Chicago predicts the individual mandate will “unravel” when “we see how sick the people are who signed up on exchanges, and if our government really is going to penalize voters for not buying health insurance.” 

The round-the-clock nay-saying is having an effect. Support for the law has plummeted to 35 percent of those questioned in a recent CNN poll, a 5-point drop in less than a month. Sixty-two percent now say they oppose the law, up four points from November. 

Even liberal-leaning commentators are openly worrying. On ABC’s “This Week,” Cokie Roberts responded to my view that the law eventually would prove popular by warning of “a whole other wave of reaction against it” if employers start dropping their insurance. 

Some congressional Democrats are getting cold feet. West Virginia Senator Joe Manchin recently fretted that “if it’s so much more expensive than what we anticipated and if the coverage is not as good as what we had, you’ve got a complete meltdown.” 
Get a grip.

If the past is any guide, some fixes will probably be necessary – but so what? Our current healthcare system is the real disaster — the most expensive and least effective among all developed countries, according to Bloomberg’s recent ranking. We’d be collectively insane if we didn’t try to overhaul it.

But we won’t get it perfect immediately. What needs fixing can be fixed. And over time we can learn how to do it better.

If enrollments are lower than anticipated, the proper response is to keep at it until larger numbers are enrolled. CHIP, the Children’s Health Insurance Program, got off to a slow start in 1998. The Congressional Research Service reported “general disappointment … with low enrollment rates early in the program.” CHIP didn’t reach its target level of enrollment for five years. Now it enrolls nearly ninety percent of all eligible children. 

Richard Nixon’s Supplemental Security Income program of 1974 – designed to standardize welfare benefits to the poor — was widely scorned at the time, and many states were reluctant to sign up. Even two years after its launch, only about half of eligible recipients had enrolled. Today, more than 8 million Americans are covered. 

If mistakes are made implementing the Affordable Care Act, the appropriate response is to fix them. When George W. Bush’s Medicare Part D drug benefit was launched, large numbers of low-income seniors had to be switched from Medicaid. Many needed their prescriptions filled before the switch had been completed, causing loud complaints. The website for the plan initially malfunctioned. Pharmacies got the wrong information. Other complications led even Republican Representative John Boehner to call it “horrendous.” But the transition was managed, and Medicare Part D is now a firm fixture in the Medicare firmament.

If young people don’t sign up for the Affordable Care Act in sufficient numbers and costs rise too fast, other ways can be found to encourage their enrollment and control costs. If there aren’t enough doctors initially, medical staffs can be utilized more efficiently. If employers begin to drop their own insurance, incentives can be altered so they don’t.

Why be defeatist before we begin? Even Social Security — the most popular of all government programs — had problems when it was launched in 1935. A full year later, Alf Landon, the Republican presidential candidate, called it “a fraud on the workingman.” Former President Herbert Hoover said it would imprison the elderly in the equivalent of “a national zoo.” Americans were slow to sign up. Not until the 1970s did Social Security cover most working-age Americans.

As Alexis de Tocqueville recognized as early as the 1830s, what distinguishes America is our pragmatism, resilience, and optimism. We invent, experiment, and fix what has to be fixed.

Of course there will be problems implementing the Affordable Care Act. But if we’re determined to create a system that’s cheaper and more effective at keeping Americans healthy than the one we have now – and, in truth, we have no choice – we have every chance of succeeding.

Josie Robertson Plaza in front of the Metropolitan Opera House at Lincoln Center at dusk. Reich argues that in the form of supporting highbrow artistic foundations and fancy schools, 'charity' is increasingly becoming one way that the rich separate themselves from the rest of the world. (Kathy Willens/AP/File)

What 'charity' should really mean

By Guest blogger / 12.16.13

It’s charity time, and not just because the holiday season reminds us to be charitable. As the tax year draws to a close, the charitable tax deduction beckons.

America’s wealthy are its largest beneficiaries. According to the Congressional Budget Office, $33 billion of last year’s $39 billion in total charitable deductions went to the richest 20 percent of Americans, of whom the richest 1 percent reaped the lion’s share.

The generosity of the super-rich is sometimes proffered as evidence they’re contributing as much to the nation’s well-being as they did decades ago when they paid a much larger share of their earnings in taxes. Think again.

Undoubtedly, super-rich family foundations, such as the Bill and Melinda Gates Foundation, are doing a lot of good. Wealthy philanthropic giving is on the rise, paralleling the rise in super-rich giving that characterized the late nineteenth century, when magnates (some called them “robber barons”) like Andrew Carnegie and John D. Rockefeller established philanthropic institutions that survive today.

But a large portion of the charitable deductions now claimed by America’s wealthy are for donations to culture palaces – operas, art museums, symphonies, and theaters – where they spend their leisure time hobnobbing with other wealthy benefactors. ( Continue… )

House Budget Committee Chairman Paul Ryan, left, and Senate Budget Committee Chairwoman Patty Murray, announce Tuesday a tentative agreement between Republican and Democratic negotiators on a government spending plan, at the Capitol in Washington. The budget deal is topsy-turvy and makes no fiscal sense, Reich writes. (J. Scott Applewhite/AP)

Three reasons Congress's budget deal is bad for US

By Guest blogger / 12.13.13

About the only good thing that can be said about the budget deal just patched together by House Republican budget chair Paul Ryan and Senate Democratic budget chair Patty Murray is that the right-wing Heritage Foundation and the Koch brothersAmericans for Prosperity oppose it.

But that doesn’t mean it’s a good deal for the country. In fact, it’s a bad deal, for at least three reasons:

First, it fails extend unemployment benefits for 1.3 million jobless who will lose them in a few weeks. These people and their families are still caught in the worst downturn since the Great Depression.

Almost three Americans are jobless for every job that’s available – a ratio worse than it was at the bottom of the last downturn.  ( Continue… )

The headquarters of JP Morgan Chase & Co are seen in New York. JP Morgan Chase is facing scrutiny for breaking the Foreign Corrupt Practices Act. There ought to be a Domestic Corrupt Practices Act, Reich argues, that prevents the bribing of domestic officials, too. (Mike Segar/Reuters/File)

JP Morgan Chase, the Foreign Corruption Practice Act and the corruption of America

By Guest blogger / 12.09.13

The Justice Department has just obtained documents showing thatJPMorgan Chase, Wall Street’s biggest bank, has been hiring the children of China’s ruling elite in order to secure “existing and potential business opportunities” from Chinese government-run companies. “You all know I have always been a big believer of the Sons and Daughters program,” says one JP Morgan executive in an email, because “it almost has a linear relationship” to winning assignments to advise Chinese companies. The documents even include spreadsheets that list the bank’s “track record” for converting hires into business deals.

It’s a serious offense. But let’s get real. How different is bribing China’s “princelings,” as they’re called there, from Wall Street’s ongoing program of hiring departing U.S. Treasury officials, presumably in order to grease the wheels of official Washington? Timothy Geithner, Obama’s first Treasury Secretary, is now president of the private-equity firm Warburg Pincus; Obama’s budget director Peter Orszag is now a top executive at Citigroup.

Or, for that matter, how different is what JP Morgan did in China from Wall Street’s habit of hiring the children of powerful American politicians? (I don’t mean to suggest Chelsea Clinton got her hedge-fund job at Avenue Capital LLC, where she worked from 2006 to 2009, on the basis of anything other than her financial talents.)  ( Continue… )

A cashier hands a customer his change and receipt during a transaction at a Sears store, in Henderson, Nev. Reich explains that redistribution may be the only solution to income inequality. (Julie Jacobson/AP Photo/File )

One answer to low-wage work: Redistributing the gains

By Guest blogger / 12.06.13

The President’s speech Wednesday on inequality avoided the “R” word. No politician wants to mention “redistribution” because it conjures up images of worthy “makers” forced to hand over hard-earned income to undeserving “takers.”

But as low-wage work proliferates in America, so-called takers are working as hard if not harder than anyone else, and often at more than one job.

Yet they’re still not making it because the twin forces of globalization and technological change have reduced their bargaining power and undermined their economic standing — while bestowing ever greater benefits on a comparative few with the right education and connections (and whose parents are often best able to secure these advantages for them).

Better education and training for those on the losing end is critically important, as will several of the other proposals the President listed. But they will only go so far.  ( Continue… )

  • Weekly review of global news and ideas
  • Balanced, insightful and trustworthy
  • Subscribe in print or digital

Special Offer

 
Become a fan! Follow us! Google+ YouTube See our feeds!