Robert B. Reich's Blog, page 14

How We Stand Up to Putin and Stop Climate CatastropheHow do we...

How We Stand Up to Putin and Stop Climate Catastrophe
How do we stand up to Putin and avert a climate catastrophe at the same time?
Quitting our addiction to fossil fuels. Here’s how we get there.

In response to Russia’s invasion of Ukraine, the West has snapped a series of sanctions into place.

Russia is the world’s second largest crude oil exporter and the primary source of global natural gas. Regardless of the short-term effects on our pocketbooks, over the longer term we need to transition to renewable energies if we have any hope of keeping the earth habitable, and freeing our economy from the influence of geopolitical foes.

This is where carbon dividends come in. 

It works like this. We put a hard cap on the amount of carbon we allow into the economy. Permits up to this cap would be issued, and energy companies could buy them in quarterly auctions. At every mine, refinery, and port of entry, these companies would have to use a permit for every ton of carbon dioxide that would be released into the atmosphere once that fuel is burned. 

When they run out of permits, they cannot extract or import any more carbon-polluting fuel. 

To keep the climate from rising 1.5 degrees celsius above pre-industrial levels – the goal of the Paris Climate Accord – we need to slash emissions by roughly 90%. Accomplishing this by 2050 would demand reductions of 7.5% per year.
Currently we’re decreasing at a rate of 1.2% per year. 

With a carbon cap, in order to ensure we meet our goals, we could simply decrease the amount of permits issued by 7.5% every year. 

But how would we do that without Americans getting clobbered by higher prices at the gas pump? That’s where the carbon dividends come in. The revenue from selling the permits will be distributed back to the public as direct payments, no strings attached. 

For the majority of middle class and poorer Americans, the dividend will more than cover any increase in fuel prices, and they’ll come out ahead. The people who produce the most carbon emissions are by and large wealthy, and can afford the hike in prices. 

The earth’s capacity to absorb carbon is a natural resource, one we should share equally, instead of giving the wealthy and oil profiteers free reign.
Plus, everyone benefits from a cleaner planet. 

One study found that a quarter million premature deaths would be prevented over the next 20 years in the United States with a carbon fee and dividend program.

I know what you’re thinking right about now. Sounds nice, Bob. But it’ll never happen. Don’t be so sure! The idea is notably popular across the political spectrum. 

Carbon dividends were first proposed in 2009 in a bipartisan bill, and subsequent plans have come from both Republicans and Democrats. 

And there’s already precedent for parts of this program. Since 2009, the Regional Greenhouse Gas Initiative has capped and sold carbon permits to power companies in 11 Northeastern states. It is boosting their economies and has proven politically resilient. 

And in Alaska, every resident receives between $1,000 and $2,000 annually from the Alaska Permanent Fund, which invests the state’s oil royalties. Over 80% of Alaskans say it improves their quality of life. 

We treat gas prices as something out of our control, giving dangerous amounts of power to petro-states like Russia – with alarming consequences. By weaning ourselves from gas dependence, we’d gain relief from dirty air that kills millions globally; relief from the constant hemorrhage of government subsidies for fossil fuels and from wars for oil; and, above all, relief from the ongoing destruction of the earth’s climate. 

None of this is impossible. 

The best way to contain Russia, and build a sustainable future, is with a carbon dividend.

How the Supreme Court Could Make Your Life More DangerousYour...

How the Supreme Court Could Make Your Life More DangerousYour life could get a lot more dangerous. Republican appointees on the Supreme Court seem poised to strip away basic safety standards for our workplaces, our food, our air and water.

Congress gives federal agencies the authority to enact regulations that protect us in our daily lives. Congress defines the goals, but leaves it up to the health and safety experts in those agencies to craft and enforce regulations. 

I know regulations don’t sound very exciting, but they’re how our government keeps us safe.

Remember when lots of romaine lettuce was recalled because it was causing E.coli outbreaks? That was the Food and Drug Administration protecting us from getting sick. 

Working in a warehouse? The Occupational Safety and Health Administration sets standards to ensure you don’t breathe in dangerous chemicals like asbestos. 

Enjoying the fresh air on a clear, sunny day? Thank the Environmental Protection Agency for limiting the amount of pollution that can go into our air.

These agencies save lives. Since OSHA was established a half-century ago, its workplace safety regulations have saved more than 618,000 workers’ lives.

Republicans have been trying to gut these agencies for decades. Now, with the Supreme Court’s right-wing majority solidly in place, they have their best chance yet.

In January 2022, the Supreme Court blocked OSHA’s vaccine-or-testing mandate from going into effect, which was estimated to prevent a quarter-million hospitalizations.

The Court claimed that Covid isn’t an “occupational hazard” because people can become infected outside of work, and that allowing OSHA to regulate in this manner “would significantly expand” its authority without clear Congressional authorization.

This is absurd on its face. Section 2 of the Occupational Safety and Health Act of 1970 clearly spells out OSHA’s authority to enact and enforce regulations that protect workers from illness, injury, and death in the workplace. Congress doesn’t need to list every specific workplace hazard before OSHA can protect workers.

What this ruling tells us is that the Republican appointees on the Supreme Court are intent on gutting the power of agencies to issue regulations.

This term, the Court will also hear a case regarding the EPA’s authority to enforce the Clean Water Act. If the Court undermines the EPA’s authority, it will put our environment – and our health – at risk. Remember when the Cuyahoga River caught on fire because it was brimming with oil, acid, and factory chemicals? That’s what we may be returning to.

And what’s next? Will they gut the Federal Trade Commission and put us all at risk of being defrauded? Target the Securities and Exchange Commission and deregulate the financial sector, sparking another financial crisis?

Beware. If Republican appointees on the Supreme Court succeed in gutting regulatory agencies, we all lose. This agenda is anti-worker, anti-consumer, and anti-environment. The only thing it’s good for is corporate profits.

Amazon workers’ astounding win, and how corporate America is trying to take back power

On Friday, Amazon – America’s wealthiest, most powerful, and fiercest anti-union corporation,...

The Rise of the Centibillionaires!The word “‘billionaire” didn’t...

The Rise of the Centibillionaires!

The word “‘billionaire” didn’t even exist until 1844. Fifty years later, we got “multibillionaire.” And for the next 127 years, that was enough. 

But in 2020, while the working class faced near-record unemployment during the pandemic, the wealthiest Americans faced a different problem. Some of them had gotten so rich, there was no longer a word to describe just how rich they were. 

That’s why I want to bring you one of the newest additions to the English language: “centibillionaires,” people with $100 billion or more.  

What’s it like being one of history’s first centibillionaires? It’s hard to even imagine, but let’s try it by comparing them to the less fortunate. By which I mean just … regular … billionaires. 

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If you’re a regular billionaire, you can afford a private jet. If you’re a centibillionaire, you can afford a brand-new Gulfstream jet every single day for more than ten years. (Not sure what you’d do with a new Gulfstream every day — maybe give one to each of your closest 4,000 friends?)

A regular billionaire would struggle to buy their own professional baseball team. Sad, I know. But a centibillionaire could easily buy every team in the entire major league. 

If you’re a regular billionaire, you can donate to your alma mater and get your name on a building. If you’re a centibillionaire, you could single-handedly give every teacher in America an $8,000 raise for 5 straight years. 

Of course, that’s not all you could do. $100 billion is enough to wipe out all the medical debt in the United States. Or provide permanent shelter for every homeless person in America. Or buy Covid-19 vaccines for the entire world.

Basically what I’m saying is, $100 billion is a lot of money. 

More than two and a half million times what the average American worker makes in a year. 

So here’s the big question. Are these centibillionaires so rich because they work two and half million times harder than the average American? Are they really 100 times smarter than the typical billionaire?

I don’t think so. The reason for the rise of centibillionaires is that for decades, wealth hasn’t trickled down, it’s gushed up, all the way to the very top. 

That’s not an accident. As it turns out, the system that the super-rich themselves carefully crafted and lobbied for, benefits… the rich! 

And while you may not own more private jets than your average centibillionaire, you probably do pay a higher tax rate. And thanks to legal loopholes and the Trump tax cuts, when the wealthiest Americans die, they get to pass on most of their centibillions to their kids tax-free. 

We’ve got two choices as a country. We can tax the richest Americans fairly, and invest that money in ways that benefit all of us.

Or we can keep doing what we’re doing, and watch as centibillionaires get even richer while the rest of us get left behind. 

If you think wealth and power are too concentrated in the hands of a privileged few now, just imagine what a few more years of trickle-down nonsense will bring.

Of course, it won’t be all bad. At least “trillionaire” is easy to say.

How We Stop a Gerrymandering CatastropheEarlier this month, the...

How We Stop a Gerrymandering Catastrophe

Earlier this month, the Supreme Court overturned a lower court’s ruling and allowed Alabama’s egregious gerrymandered Congressional map to remain in place.

There’s no reason to sugarcoat this. Across the country, Republican state legislatures are using extreme gerrymandering to cement their power for decades, and the window to stop them is closing fast.

Senate Democrats must use every tool at their disposal to pass the Freedom to Vote Act and the John Lewis Voting Rights Advancement Act before the GOP rigs their way back to power in the midterms.

Know the truth about how we got into this gerrymandering mess - and what we can do to get out of it.

Our best shot at saving our democracy is right now. It’s time to act.

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The Hidden Link Between Corporate Greed and InflationInflation!...

The Hidden Link Between Corporate Greed and Inflation

Inflation! Inflation! Everyone’s talking about it, but ignoring one of its biggest causes: corporate concentration.

Now, prices are undeniably rising. In response, the Fed is about to slow the economy — even though we’re still 2 million jobs short of where we were before the pandemic, and millions of American workers won’t get the raises they deserve.

Meanwhile, Republicans haven’t wasted any time hammering Biden and Democratic lawmakers about inflation.

Don’t fall for their fear mongering.

Everybody’s ignoring the deeper structural reason for price increases: the concentration of the American economy into the hands of a few corporate giants with the power to raise prices.

If the market were actually competitive, corporations would keep their prices as low as possible as they competed for customers.

Even if some of their costs increased, they would do everything they could to avoid passing them on to consumers in the form of higher prices, for fear of losing business to competitors.

But that’s the opposite of what we’re seeing. Corporations are raising prices even as they rake in record profits. Corporate profit margins hit record highs last year. You see, these corporations have so much market power they can raise prices with impunity.

So the underlying problem isn’t inflation per se. It’s a lack of competition. Corporations are using the excuse of inflation to raise prices and make fatter profits.

Take the energy sector.

Only a few entities have access to the land and pipelines that control the oil and gas  powering most of the world. They took a hit during the pandemic as most people stayed home. But they are more than making up for it now, limiting supply and ratcheting up prices.

Or look at consumer goods.

In April 2021, Procter & Gamble raised prices on staples like diapers and toilet paper, citing increased costs in raw materials and transportation. But P&G has been making huge profits. After some of its price increases went into effect, it reported an almost 25% profit margin.

Looking to buy your diapers elsewhere? Good luck. The market is dominated by P&G and Kimberly-Clark, which—NOT entirely coincidentally—raised its prices at the same time.

Another example: in April 2021, PepsiCo raised prices, blaming higher costs for ingredients, freight, and labor. It then recorded $3 billion in operating profits through September. How did it get away with this without losing customers?

Pepsi has only one major competitor, Coca-Cola, which promptly raised its own prices. Coca-Cola recorded $10 billion in revenues in the third quarter of 2021, up 16% from the previous year.

Food prices are soaring, but half of that is from meat, which costs 15% more than last year. There are only four major meat processing companies in America, which are all raising their prices and enjoying record profits.

Get the picture?

The underlying problem is not inflation. It’s corporate power. Since the 1980s, when the U.S. government all but abandoned antitrust enforcement, two-thirds of all American industries have become more concentrated.

Most are now dominated by a handful of corporations that coordinate prices and production. This is true of: banks, broadband, pharmaceutical companies,  airlines, meatpackers, and yes, soda.

Corporations in all these industries could easily absorb higher costs — including long overdue wage increases — without passing them on to consumers in the form of higher prices. But they aren’t.

Instead, they’re using their massive profits to line the pockets of major investors and executives — while both consumers and workers get shafted.

How can this structural problem be fixed? Fighting corporate concentration with more aggressive antitrust enforcement. And imposing a windfall profits tax on profitable corporations that are using this period of rising costs to gouge consumers. 

So don’t fall for the fear mongering about inflation. The real culprit here is corporate power.

Putin and Trump Have Convinced me I was Wrong about the 21st Century

I used to believe several things about the twenty-first century that Putin’s invasion of Ukraine and...

The Fed is About to Shaft American Workers -- For No Good Reason

The January jobs report from the Labor Department is heightening fears that a so-called “tight”...

How to Get Teenagers to Read Important Books? Ban Them.

When I was a young teenager near the middle of the last century, I asked the high school librarian...

Can Congress Really Use Insider Information to Trade...

Can Congress Really Use Insider Information to Trade Stocks? 

Members of Congress use privileged information to make money on the stock market, while they’re supposed to be working for you. Make no mistake, it’s legalized corruption.

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Btw, if you’d like my daily analyses, commentary, and drawings, please subscribe to my free newsletter: robertreich.substack.com

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There’s no good reason for elected officials to trade individual stocks at all. Unless you have special insider knowledge, buying and selling individual stocks is a terrible way to get rich. It’s gambling, plain and simple. That’s why many Americans with retirement accounts prefer to invest in index funds — which are tied to the performance of the entire stock market

But many members of Congress continue to invest in individual stocks, and some do quite well. How do they do it?

Consider this: just before the economy crashed in 2008, several lawmakers frantically shifted their holdings to “safer” investments. This frenzy came just after private meetings with Treasury officials who had warned that an economic disaster was imminent.

I imagine most of you weren’t invited to these meetings — I certainly wasn’t. But those lawmakers were — and likely chose to act on that information.

When this story came to light, people were naturally outraged. After immense public pressure Congress passed the STOCK Act in 2012. The act required lawmakers to disclose their stock sales, and those of their spouses, within 45 days. By forcing these transactions to be public, the hope was that lawmakers would stop making questionable trades.

And it worked. Well… partially.

In January 2020, a handful of senators — including Richard Burr, Dianne Feinstein, and Kelly Loeffler — all made significant trades after receiving a classified briefing on COVID-19, well before the public knew the full extent of the threat.

Few, if any, lawmakers have faced serious consequences for violating the spirit or the letter of the law, as insider trading is notoriously difficult to prove.

In 2021 alone, news outlets identified 43 lawmakers who failed to properly disclose their trades. Their punishment? Nothing. Lawmakers are supposed to face a paltry $200 fine for failing to report on time —  but congressional ethics officials usually waive it.

There is an obvious solution to all this: bar members of Congress from trading individual stocks.

The proposed Ban Conflicted Trading Act does just this. Lawmakers would have six months after being elected to sell their individual holdings, transfer them to a blind trust over which they have no control, or hold onto them until they leave office without trading them.

But Congress has yet to hold a vote on this bill, even though 67 percent of Americans agree it’s a good idea to prevent members of Congress from trading individual stocks.

As usual, follow the money: a majority of lawmakers are millionaires, who likely get a sizable chunk of their wealth from investments and trades. So they won’t support this bill unless there’s enough public outcry to make them. 

That’s where you come in.

With distrust in government near an all-time high, even the appearance of a conflict of interest hurts our democracy. Members of Congress are elected to represent the interests of the people, not the money in their brokerage accounts.

Banning members of Congress from trading individual stocks is a no-brainer. Let’s get it done.