Robert B. Reich's Blog, page 41

The Real Lesson of Ukraine-gate: Trump Will Do Anything To Win in 2020

Amid the impeachment furor, don’t lose sight of the renewed importance of protecting the integrity...

Trump’s Economy RevealedDonald Trump and his enablers are...

Trump’s Economy Revealed

Donald Trump and his enablers are hoping that a strong economy will help the American people look past the damage they are doing to the country. That’s why Trump is constantly crowing about job numbers and the stock market in order to paint a rosy picture of the economy.

But when you look closer, the numbers reveal a very different story about Trump’s economy:

1. Wages are still stuck. The median annual earnings of full-time wage and salaried workers in 1979, in today’s dollars, was $43,680. The median earnings in 2018 was $45,708. So much for the $4,000 pay raise Trump and Republicans in Congress promised when they cut taxes for the wealthy and corporations. 

2. Percent of people with jobs is low. While the unemployment rate is low, employment is not nearly as good as it may look when you consider how many people have given up looking for jobs. The labor-force participation rate – the percent of working-age Americans with jobs – is the lowest it’s been since the late 1970s, when wives and mothers first began streaming into paid work to prop up family incomes.

3. Many people are working part-time jobs. Nearly 4 million Americans are stuck in part-time jobs, unable to find full-time jobs. Many of these part-time gigs are either freelance or contract, offering fewer rights and benefits. In turn, this has increased economic insecurity for millions of families.

4. A growing number of college graduates are overqualified for their current jobs. One in 10 college grads are underemployed, which is much higher than 20 years ago. At the same time, the cost of college has skyrocketed, with students going deeper into debt to pay for their education: 45 million Americans now owe 1.6 trillion in student debt.

5. The cost of health care continues to increase. Since 2008, average family premiums have soared 55 percent, which is twice as fast as workers’ earnings and three times as fast as inflation. Prescription drug prices also continue to rise – jumping almost 11 percent in the first half of 2019 alone.

6. Housing costs have skyrocketed. Nearly 39 million American households are now paying more than they can afford on housing. And more than one in four renters are spending over half their income on housing.

7. Americans are going deeper into debt to stay in the middle class. Consumer debt, excluding mortgages, has climbed to $4 trillion, which is the highest it’s ever been, even after adjusting for inflation.

So is anyone benefiting in Trump’s economy? The wealthy and corporations have never had it this good. In fact, under the Trump-Republican tax cut, 83 percent of the gains will go to the wealthiest 1 percent of Americans.

But most Americans are being left behind.

The next time Trump and his enablers boast about the economy to distract from the damage they’re really doing to America, know the truth. Their failed economic agenda has made Americans poorer and less secure.

Trump is a Clear and Present Danger to America and the World

In retrospect, what’s most disturbing about “Sharpiegate” isn’t Donald Trump’s clumsy effort to...

The Secret GOP Plan to Keep Power In 2020, we need to pay...

The Secret GOP Plan to Keep Power

In 2020, we need to pay attention to state elections as well as elections for president and Congress. State elections could decide whether the Republican Party further corrupts American democracy.

As demographics change — and America becomes more diverse and more liberal — the GOP has responded by implementing policies that will take away power from the American people. Rather than changing with the times, they’ve got another plan: minority rule – by them.

Beware. The 2020 elections offer a chance for Republicans to tilt political power in their direction for the next decade. In most states, the party that wins control of the legislature effectively gains the power to draw once-a-decade maps setting district boundaries for state and congressional elections after a new census count. And the next census count will be in 2020. 

The Supreme Court recently ruled it has no power to intervene when states use partisan gerrymandering to draw these maps, saying it is an issue for state legislatures and state courts.

So you can bet that on Election Day 2020 Republicans will try to further entrench their gains from the last census in 2010, when they swept into power in 20 state capitols and redrew political maps that secured a decade of political dominance.

Despite the fact that Republicans continually receive fewer raw votes in national elections, they could regain control of the House through such gerrymandering.

And even though racial gerrymandering – drawing district lines on the basis of race – is unconstitutional, the Court’s new ruling could give Republicans an opening to use race and pass it off as partisan gerrymandering.

State governments can act now to prevent this power grab by taking redistricting out of the hands of legislatures, and starting independent commissions, as in Washington State and California.

Another way Republicans will seek to establish anti-democratic power if they win state houses in 2020 will be to suppress the votes of people of color through unjust voter ID laws and other attacks. These tactics, such as reducing the number of polling places in Democratic districts, tighter restrictions on early voting, or purging voter rolls, make it harder for people of color – who tend to vote Democratic – to cast their ballots.

We’ve seen this play before. After gaining full control of key state legislatures and governorships, Republicans in states such as North Carolina, Texas, and Wisconsin passed restrictive voter ID laws that disproportionately targeted minorities. These voter ID laws not only make voting harder for those who show up, they also discourage voters from even turning out in the first place.

So show up and vote in your state elections. Your votes could decide whether a shrinking Republican Party gives fewer and fewer people more power over the rest of us.

Reasons for Optimism

If stagnant wages, near-record inequality, climate change, nuclear buildups, assault weapons, mass...

The 5 Biggest Corporate Lies about UnionsWealthy corporations...

The 5 Biggest Corporate Lies about Unions

Wealthy corporations and their enablers have spread 5 big lies about unions in order to stop workers from organizing and to protect their own bottom-lines. Know the truth and spread the truth.

Lie #1: Labor unions are bad for workers. Wrong. Unions are good for all workers – even those who are not unionized. In the mid-1950s, when a third of all workers in the United States were unionized, wages grew in tandem with the economy. That’s because workers across America – even those who were not unionized – had significant power to demand and get better wages, hours, benefits, and working conditions. Since then, as union membership has declined, the middle class has shrunk as well.

Lie #2: Unions hurt the economy. Wrong again. When workers are unionized they can negotiate better wages, which in turn spreads the economic gains more evenly and strengthens the middle class. This creates a virtuous cycle: Wages increase, workers have more to spend in their communities, businesses thrive, and the economy grows. Since the the 1970s,  the decline in unionization accounts for one-third of the increase in income inequality. Without unions, wealth becomes concentrated at the top and the gains don’t trickle down to workers.

Lie #3: Labor unions are as powerful as big business. Now way. Labor union membership in 2018 accounted for 10.5 percent of the American workforce, while large corporations account for almost three-quarters of the entire American economy. And when it comes to political power, it’s big business and small labor. In the 2018 midterms, labor unions contributed less than 70 million dollars to parties and candidates, while big corporations and their political action committees contributed 1.6 billion dollars. This enormous gulf between business and labor is a huge problem. It explains why most economic gains have been going to executives and shareholders rather than workers. But this doesn’t have to be the case.

Lie #4: Most unionized workers are in industries like steel and auto manufacturing. Untrue. Although industrial unions are still vitally important to workers, the largest part of the unionized workforce is workers in the professional and service sectors – retail, restaurant, hotel, hospital, teachers–which comprise 59% of all workers represented by a union. And these workers benefit from being in a union. In 2018, unionized service workers earned a median wage of 802 dollars a week. Non-unionized service workers made on average, $261 less. That’s almost a third less.

Lie #5: Most unionized workers are white, male, and middle-aged. Some unionized workers are, of course, but most newly-unionized workers are not. They’re women, they’re young, and a growing portion are black and brown. In fact, it’s through the power of unions that people who had been historically marginalized in the American economy because of their race, ethnicity, or gender are now gaining economic ground. In 2018, women who were  in unions earned 21 percent more than non-unionized women. And African-Americans who were unionized earned nearly 20 percent more than African-Americans who were non-unionized.

Don’t believe the corporate lies. Today’s unions are growing, expanding, and boosting the wages and economic prospects of those who need them most. They’re good for workers and good for America.

9 Ways to Stay Sane During the PrimariesAs the presidential...

9 Ways to Stay Sane During the Primaries

As the presidential primaries get underway, it’s easy to get burnt out or overwhelmed by all the candidates and their platforms. Here are 9 ways to stay sane through the madness of the presidential primaries.

1. Look for a candidate with the right ingredients to inspire you and others. The next president will have to be someone who can bring together Americans from all walks of life — across race, class, gender, ethnicity, and religion — into a movement against the hatred, bigotry, and cronyism that now pervades Washington.

2. Don’t get distracted by the horserace, who’s up or who’s down in the polls. Focus on the substance: What their vision is for the country and how it will affect all of our lives.

3. Reach out to independents. Avoid political labels, and talk kitchen table issues like the rising cost of health care, housing and education. Focus on solutions rather than slogans or what you hear on cable news.

4. Get involved. Devote your time and energy to getting others organized and mobilized. It’s going to take a grassroots movement of Americans to take our country back from those who seek to divide us.

5. Study up on the candidates and their positions on issues you care about and see if they align. Visit their websites to explore their policy positions, read independent analyses of their proposals, dig deeper into their records in elected office.

6. Take a deep breath. The most important goal is to reclaim our democracy and forge an economy that works for all. Don’t succumb to divisiveness or carping criticism of other primary candidates. And remember that you can stay centered, mentally, regardless of how close you are to the political center.

7. Make sure you’re registered to vote, and know when and where to vote. The work you put into learning about the candidates means little if you don’t actually show up on Election Day. Once you’re registered, make sure your friends and family are too.

8. Follow the money. Some candidates have already pledged not to take money from wealthy donors or corporate political action committees. Make sure all of them follow suit.

9. Lastly, don’t lose faith in America. We’ve been through dark times before, but we have come out stronger on the other side. We will do so again.

The 5-Step CEO Pay ScamAverage CEO pay at big corporations...

The 5-Step CEO Pay ScamAverage CEO pay at big corporations topped 14.5 million dollars in 2018. That’s after an increase of 5.2 million dollars per CEO over the past decade, while the average worker’s pay has increased just 7,858 dollars over the decade. 

Just to catch up to what their CEO made in 2018 alone, it would take the typical worker 158 years.

This explosion in CEO pay relative to the pay of average workers isn’t because CEOs have become so much more valuable than before. It’s not due to the so-called “free market.” 

It’s due to CEOs gaming the stock market and playing politics. 

How did CEOs pull this off? They followed these five steps:

First: They made sure their companies began paying their executives in shares of stock.

Second: They directed their companies to lobby Congress for giant corporate tax cuts and regulatory rollbacks. 

Third: They used most of the savings from these tax cuts and rollbacks not to raise worker pay or to invest in the future, but to buy back the corporation’s outstanding shares of stock.

Fourth: This automatically drove up the price of the remaining shares of stock. 

Fifth and finally: Since CEOs are paid mainly in shares of stock, CEO pay soared while typical workers were left in the dust. 

How to stop this scandal? Five ways: 

1. Ban stock buybacks. They were banned before 1982 when the Securities and Exchange Commission viewed them as vehicles for stock manipulation and fraud. Then Ronald Reagan’s SEC removed the restrictions. We should ban buybacks again. 

2. Stop corporations from deducting executive pay in excess of 1 million dollars from their taxable income – even if the pay is tied to so-called company performance. There’s no reason other taxpayers ought to be subsidizing humongous CEO pay.

3. Stop corporations from receiving any tax deduction for executive pay unless the percent raise received by top executives matches the percent raise received by average employees. 

4. Increase taxes on corporations whose CEOs make more than 100 times their average employees. 

5. Finally, and most basically: Stop CEOs from corrupting American politics with big money. Get big money out of our democracy. Fight for campaign finance reform. 

Grossly widening inequalities of income and wealth cannot be separated from grossly widening inequalities of political power in America. This corruption must end. 

The Myth of the Rugged IndividualThe American dream promises...

The Myth of the Rugged IndividualThe American dream promises that anyone can make it if they work hard enough and play by the rules. Anyone can make it by pulling themselves up by their “bootstraps.” 

Baloney.

The truth is: In America today, your life chances depend largely on how you started – where you grew up and how much your parents earned.

Everything else – whether you attend college, your chances of landing a well-paying job, even your health – hinges on this start. 

So as inequality of income and wealth has widened – especially along the lines of race and gender – American children born into poverty have less chance of making it. While 90% of children born in 1940 grew up to earn more than their parents, today only half of all American adults earn more than their parents did. 

And children born to the top 10 percent of earners are typically on track to make three times more income as adults than the children of the bottom 10 percent.

The phrase “pulling yourself up by the bootstraps” itself is rubbish. Its origins date back to an 18th-century fairy tale, and the phrase was originally intended as a metaphor for an impossible feat of strength. 

Other countries understand that the family you’re born into as well as the social safety nets and social springboards you have access to play large roles. 

Children born poor in Canada, Denmark, or the United Kingdom – nations without America’s degree of inequality, nations which provide strong social safety nets and public investments – have a greater chance of economic success than children born poor in America. 

Individuals in those countries are blamed less for their personal failures and credited less for personal successes. 

So, why is America still perpetuating the fallacy of the self-made individual? Because those in power want you to believe it. If everyone thinks they’re on their own, it’s easier for the powerful to dismantle unions, unravel safety nets, and slash taxes for the wealthy. 

It’s in their interest to keep the American Dream deeply rooted in our psyche – the assumption that you determine your destiny. So we don’t demand reforms that are necessary – paid family and medical leave, for example, or early childhood education, accessible childcare, and policies that lift every family out of poverty.

Let’s stop perpetuating this myth of the self-made individual. And let’s start rebuilding the American dream by creating opportunities for all, not just those who are already wealthy, privileged, and well-connected. 

Where Your Tax Dollars Really GoDonald Trump and Republicans in...

Where Your Tax Dollars Really Go

Donald Trump and Republicans in Congress claim that America spends too much on things like food stamps, welfare, and foreign aid. 

But let’s look at how the government actually spends your federal tax dollars each year. We’re going to look at what’s known as the “discretionary budget,” which has to be reappropriated by Congress each year.

Start with foreign aid, the conservatives’ favorite boogeyman. It’s $29 billion a year. That may sound like a lot but it’s only 2 percent of all discretionary spending. Add all spending on international affairs, it’s 4 percent.

What about science and technology, including NASA, the National Science Foundation, and research in clean energy, which conservatives love to hate?Just 3 percent.

The environment and natural resources – money for clean air, safe drinking water and protecting public lands? Another 3 percent.

Roads, bridges, highways, airports, all transportation funding: Another 3 percent.

Community and regional development: 2 percent.

Law enforcement, the Department of Justice, the entire federal court system: 5 percent

The Centers for Disease Control, the National Institutes of Health, and rural health clinics: 5 percent.

Food stamps, energy assistance, child care, other income security: Just 6 percent.

Education and workforce training gets just 7 percent.

Veterans benefits account for 7 percent of the budget as well.

All other government services–including Energy, Agriculture, and Commerce–account for only 1 percent of the discretionary budget.

But that’s only 46 percent. The remaining 54 percent of annual spending is on the military, which is more spent on the military than the next 7 nations combined. It’s huge. It’s about the only really big thing the federal government does.

You may be thinking, but what about Social Security, Medicare, Medicaid, and the Affordable Care Act? 

By law, these programs are mandatory spending, which don’t require Congress to approve funding every year. Americans have paid into Social Security and Medicare over their entire working lives.

Yet they’re still vulnerable. In fact, if Trump and Republicans in Congress aren’t going to cut discretionary spending – especially on the military – the only places they can look to make way for more tax cuts for the wealthy and corporations are Social Security, Medicare, and Medicaid.  

That’s been their goal all along. 

Know where the money is really going. And know what they have in mind.