Robert Reich: Growing Inequality Is The Central Problem Of Our Age

In a interesting and lengthy (1850 words) blog, Robert Reich, Bill Clinton’s Secretary of Labor, warns of “deep-seated anxiety and frustration” growing in the population — particularly the middle class. He says anger is caused by the glaring inequalities in the system, and that our democracy is so corrupted by big money at the top that it is not working to fix the problem.

Reich points out, sorrowfully, had badly our democracy has failed to help regular citizens, and makes a big list of actions a democratic government could have taken had it been focused on attacking inequality. He points out that, instead, government’s actions — less regulations, tax cuts for the wealthy, etc. — in fact, has steadily made the problem worse.

Reich says, “Democrats have been almost as reluctant to attack inequality or even to recognize it as the central economic and social problem of our age. (As Bill Clinton’s labor secretary, I should know.) The reason is simple. As money has risen to the top, so has political power. Politicians are more dependent than ever on big money for their campaigns.”

Excerpts from the article:

• The major fault line in American politics is no longer between Democrats and Republicans, liberals and conservatives, but between the “establishment” and an increasingly mad-as-hell populace determined to “take back America” from it.
• Missing from almost all discussion of America’s dizzying rate of unemployment is the brute fact that hourly wages of people with jobs have been dropping, adjusted for inflation. … June’s decline in average hours pushed weekly paychecks down at an annualized rate of 4.5 percent.
• When most of the gains from economic growth go to a small sliver of Americans at the top, the rest don’t have enough purchasing power to buy what the economy is capable of producing. America’s median wage, adjusted for inflation, has barely budged for decades. Between 2000 and 2007 it actually dropped.
• In 1928 the richest 1 percent of Americans received 23.9 percent …. By the late 1970s the top 1 percent raked in only 8 to 9 percent of America’s total annual income. … By 2007 the richest 1 percent were back to where they were in 1928 — with 23.5 percent of the total.
• The problem isn’t that typical Americans have spent beyond their means. It’s that their means haven’t kept up with what the growing economy could and should have been able to provide them.
• The puzzle is why so little was done to counteract these forces. Government could have given employees more bargaining power to get higher wages … Safety nets could have been enlarged to compensate for increasing anxieties about job loss …. With the gains from economic growth the nation could have provided Medicare for all, better schools, early childhood education, more affordable public universities, more extensive public transportation. And if more money was needed, taxes could have been raised on the rich.
• Big, profitable companies could have been barred from laying off a large number of workers all at once … Corporations whose research was subsidized by taxpayers could have been required to create jobs in the United States. The minimum wage could have been linked to inflation. And America’s trading partners could have been pushed to establish minimum wages pegged to half their countries’ median wages — thereby ensuring that all citizens shared in gains from trade and creating a new global middle class that would buy more of our exports.
• Democrats have been almost as reluctant to attack inequality or even to recognize it as the central economic and social problem of our age. (As Bill Clinton’s labor secretary, I should know.) The reason is simple. As money has risen to the top, so has political power. Politicians are more dependent than ever on big money for their campaigns.