Robert B. Reich's Blog, page 42

The Real Reason For ImpeachmentIn today’s political climate, the...

The Real Reason For Impeachment

In today’s political climate, the question of whether or not to impeach the President of the United States is often thought of in political terms.

But there is a much deeper concern at the heart of the question.

An impeachment inquiry in the House is unlikely to send Trump packing before Election Day 2020 because Senate Republicans won’t convict him. And it’s impossible to know whether an impeachment inquiry will hurt or help Trump’s chances of being reelected.

Does this mean impeachment should be off the table? No. There’s a non-political question that Congress should consider: Is enforcing the United States Constitution important for its own sake — even if it goes nowhere, even if it’s unpopular with many voters, even if it’s politically risky?

Every child in America is supposed to learn about the Constitution’s basic principles of separation of powers, and checks and balances.

But these days, every child and every adult in America is learning from Donald Trump that these principles are bunk.

By doing whatever he could to stop the investigation into Russian interference in the 2016 election, including firing the head of the FBI, Trump told America it’s okay for a president to obstruct justice. 

Goodbye, law.

By issuing a blanket refusal to respond to any congressional subpoena, Trump is saying Congress has no constitutional authority to oversee the executive branch. He’s telling America that Congress is a subordinate branch of government rather than a co-equal branch. 

Forget separation of powers.

By spending money on his “wall” that Congress explicitly refused to authorize, Trump is saying that Congress no longer has any constitutional authority over spending. 

Goodbye, checks and balances.

By unilaterally shuttering the government in order to get his way, Trump told us he has the constitutional right not to execute the laws whenever it suits him. 

Farewell, Congress.

By directing the Attorney General, the Justice Department, the FBI and the Secretary of the Treasury to act in his own personal interest rather than in the interests of the American people, Trump is saying that presidents can run government for themselves. 

Adios, Constitution.

By unilaterally threatening to cut off trade with the second-largest economy in the world, Trump is telling us he has sole authority to endanger the entire American economy. (Make no mistake: If he goes through with his threat, the U.S. economy will go into a tailspin.)

The core purpose of the Constitution is to prevent tyranny. That’s why its Framers distributed power between the president, Congress and the judiciary. That’s why each of the three branches was designed to limit the powers of the other two.

In other words, the Framers anticipated the possibility of a Donald Trump.

Fortunately, they also put in a mechanism to enforce the Constitution against a president who tries to place himself above the law and to usurp the powers of the other branches of government. 

Article I, Section 2 gives the House of Representatives the “sole Power of Impeachment.” Article I, Section 3 gives the Senate the “sole Power to try all Impeachments.”

Trump surely appears to be usurping the powers of the other branches. Under these circumstances, the Constitution mandates that the House undertake an impeachment inquiry and present evidence to the Senate.

This may not be the political thing to do. But in order to safeguard our democracy, it is the right thing to do.

How Corporate Welfare Hurts YouYou often hear Trump and...

How Corporate Welfare Hurts You

You often hear Trump and Republicans in Congress railing against so-called “welfare programs” – by which they mean programs that provide health care or safety nets to ordinary Americans. 

But you almost never hear them complaining about another form of welfare that lines the pockets of wealthy corporations. We must end corporate welfare. Now.

There are several ways corporations get rich on the taxpayer’s dime. The most obvious comes through subsidies or tax breaks for certain businesses or industries.

Consider the fossil fuel industry, one of the most profitable and privileged sectors of the economy. Every year, oil companies get to deduct millions of dollars from their tax bills for the cost of new wells, oil exploration, and other drilling and mining expenses.

It’s been estimated that repealing these special tax breaks would save taxpayers $39 billion over 10 years.

Other examples of corporate welfare include billions in government subsidies for agricultural conglomerates, pharmaceutical makers, tech giants and defense contractors. 

Other industries don’t get these benefits. Meanwhile, most families don’t even benefit from tax credits and deductions for childcare.

State and local governments are also handing out corporate welfare, often with no strings attached. In 2013, for example, the state of Washington approved a record $8.7 billion handout to Boeing in order “to maintain and grow its workforce within the state.“ What did Boeing do? In the following years, it laid off more than 12,000 workers in the state.

State and local tax breaks for corporations are estimated to cost local schools almost $2 billion a year in lost tax revenue. 

It’s argued they create jobs, yet nationwide, not a single new job is created. At most, the jobs are merely moved from state to state.

How do corporations get this corporate welfare? Follow the money. They spend hundreds of millions on lobbying and campaign contributions.

An even more insidious example of corporate welfare occurs when corporations don’t pay their workers a living wage. As a result, those workers often have to rely on programs like Medicaid, public housing, food stamps and other safety nets.

Which means you and I and other taxpayers end up subsidizing these low wages so those corporations can enjoy even higher profits for their executives and wealthy investors.

For example, every year, Americans spend an estimated $153 billion in taxes and on programs to subsidize McDonald’s and Walmart’s low-wage workers.

Here’s the bottom-line: When corporations get special handouts from the government, it costs the rest of us. We have to pay more in taxes to make up for these hidden tax breaks, subsidies, and loopholes. In turn, there’s less money for good schools and roads, Medicare and national defense, and everything else we need.

So the next time you hear conservatives railing against welfare handouts for the poor, remind them that we should really be cutting corporate welfare – unnecessary and unwarranted aid for dependent corporations.

America’s Real Divide Isn’t Left vs. Right. It’s Democracy vs. Oligarchy.

I keep hearing that the Democratic party has moved “left” and that some Democratic candidates may be...

The 4 Biggest Conservative Lies About InequalityEven though...

The 4 Biggest Conservative Lies About Inequality

Even though we’re heading toward levels of inequality not seen since the days of the 19th century robber barons, conservatives keep lying about what’s happening and what to do about it. Here are their four biggest lies about inequality, followed by the truth.

1. The rich and CEOs are America’s job creators, so we dare not tax them. 

The truth is the middle class and poor are the job-creators through their purchases of goods and services. If they don’t have enough purchasing power because they’re not paid enough, companies won’t create more jobs and the economy won’t grow. The giant Trump-Republican tax cut for corporations and the rich hasn’t trickled down to ordinary Americans. It’s just made the rich even richer.

2. People are paid what they’re worth in the market, so we shouldn’t tamper with pay. 

Wrong. Four decades ago, CEOs of big companies got 30 times the pay of typical workers. Now they get 361 times their workers’ pay. It’s not because they’ve done such a great job, but because they control the compensation committees of their boards. They’re using corporate profits to buy back even more shares of stock so their total compensation rises even more. And, they’re monopolizing the economy at the same time. 

Meanwhile, most American workers earn nearly the same today as they did forty years ago, adjusted for inflation. That’s not because they’re working less hard now, but because they don’t have strong unions bargaining for them, as they did then.

3. Any child can make it in America with enough guts, gumption, and intelligence, so we don’t need to do anything for poor and working-class kids.  

The truth is we already do next to nothing for poor and working class kids. Their schools don’t have enough teachers or staff, their textbooks are outdated, they lack science labs, their school buildings are falling apart. We don’t help with costs of child care. We don’t invest in early childhood education. We spend less educating poor kids than we do educating kids from wealthy families.

4. Increasing the minimum wage will result in fewer jobs, so we shouldn’t raise it. 

In fact, studies show that in states where the minimum wage has been increased, the number of jobs increases. That’s because minimum-wage workers have more money to spend – resulting in more jobs, and also saving employers money on employee turnover.

America’s lurch toward widening inequality can be reversed. But doing so will require bold political steps. And the American public must know the facts. 

So don’t listen to the right-wing lies about inequality. Know the truth, and act on it.

TRUMP NATIONALISM HAS NOTHING TO DO WITH PATRIOTISMLet us reject...

TRUMP NATIONALISM HAS NOTHING TO DO WITH PATRIOTISM

Let us reject Trump’s notion of how to celebrate America — not with tanks and missiles that glorify war, not with a rally fit for a dictator, not with children held at the border in cages, not with disdain for the Supreme Court and charges of “treason” hurled at the free press. 

Instead, let us celebrate America with renewed dedication to democracy, compassion, peace, and the rule of law.

Wishing you a happy, safe, and truly patriotic July 4th. 

Democrats, This Isn’t Politics as Usual

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Should We Abolish Billionaires?America now has more billionaires...

Should We Abolish Billionaires?

America now has more billionaires than at any time in history, while most Americans are struggling to make ends meet. With such staggering inequality, it’s fair to ask: should we abolish billionaires?

There are basically only four ways to accumulate a billion dollars – and none of them is a product of so-called free market capitalism. 

Billionaires themselves aren’t the problem. The real failure is in how our economy is organized.

One way to make a billion is to exploit a monopoly. 

Jeff Bezos is worth $150 billion. You might say he deserves this because he founded and built Amazon. But Amazon is a monopoly with nearly 50 percent of all e-commerce retail sales in America (and e-commerce is one of the largest sectors of all retail sales). Consumers have few alternatives. 

Nor do many suppliers who sell through Amazon; for the first 25 years of its existence, Amazon wouldn’t let them sell at a lower price anywhere else. And Amazon’s business is protected by patents granted Amazon by the U.S. government and enforced by government. 

If we had tough anti-monopoly laws, and if the government didn’t grant Amazon so many patents and trademarks, Bezos would be worth far less.

The same applies to people like George Lucas, Oprah Winfrey, or any other figure whose brands, ideas or creations depend on copyrights and trademarks, which are laws that have been dramatically extended in recent decades. 

If these were shortened, these people would be worth far less, too.

A second way to make a billion is to get insider information unavailable to other investors. 

The hedge-fund maven Steven A. Cohen is worth an estimated $12.8 billion. Now, how did he do it? According to a criminal complaint filed by the Justice Department, insider trading at Cohen’s SAC Capital was “substantial, pervasive, and on a scale without known precedent in the hedge fund industry.” 

Eight of Cohen’s present or former employees pleaded guilty or convicted for using insider information. Cohen got off with a fine, changed the name of the firm, and apparently is still at it.

A third way to make a billion is to pay off politicians. 

The Trump tax cut was estimated to save Charlesand David Koch– each of whose net worth is estimated to be about $50 billion – and their Koch Industries – 1 to 1.4 billion dollarsa year,not even counting tax savings on offshore profits and a shrunken estate tax. 

The Kochs and their affiliated groups spent an estimated $20 million lobbying for the Trump tax cut, including major donations to politicians. 

Not a bad return on investment: More than a billion dollars a year back for $20 million put in.  

Koch Industries has also been a major beneficiary of government programs to fill the Strategic Petroleum Reserve, provide roads and access to virgin growth forests, use eminent domain to seize private land for oil and gas pipelines, get oil subsidies, andprofit off federal lands.

A fourth way to be a billionaire is to get the money from rich parents or relatives. 

About 60 percent of all the wealth in America today is inherited.

That’s because, under U.S. tax law – which is itself largely a product of lobbying by the wealthy – the capital gains of one generation are wiped out when those assets are transferred to the next, and the estate tax is so tiny that only 0.2 percent of estates were even subject to it in 2017. 

America is creating a new aristocracy of people who never worked a day in their lives.  

Let’s abolish billionaires by changing the way the economy is organized. 

This doesn’t mean confiscating the wealth and assets of the super rich. It does mean getting rid of monopolies, stopping the use of insider information, preventing the rich from buying off politicians, and making it harder for the super-rich to avoid paying taxes. 

In other words, creating a system in which economic gains are shared more widely.

Entrepreneurs like Jeff Bezos would be just as motivated by say, a $100 million or even $50 million. 

But the cost to our democracy of billionaires with enough wealth and power to dictate the rules of capitalism for their own benefit is incalculable.

Dems Cave on the Border

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Trump’s Secret Tax on Ordinary Americans It’s bad enough that...

Trump’s Secret Tax on Ordinary Americans

It’s bad enough that the Trump administration has now imposed tariffs on America’s closest trading partners – because those tariffs will raise prices on everything from clothing to cars.

Even worse — and this will come as no surprise — Trump and his enablers are lying about the consequences of these trade wars.

First, a bit about tariffs: Tariffs operate exactly like taxes – on you.

Trump claims that “tariffs are… being paid to the United States by China…“ That’s baloney. Average Americans end up bearing the financial burden.

When the U.S. imposes tariffs on a country, like China, that raises costs for companies doing business there. And then those companies pass on their increased costs to you in the form of higher prices, as even Trump’s own economic advisor Larry Kudlow acknowledged .

Trump’s tariffs are tantamount to one of the biggest tax hikes on Americans in recent history. The latest round of 25% tariffs on Chinese imports will cost U.S. households $106 billion a year, or $831 for the average family.

And this tax increase is regressive, taking a bigger bite out of the incomes of average working families than the rich.

I haven’t even mentioned the costs to American workers of losing their jobs because China and other nations subject to Trump’s tariffs retaliate by raising tariffs on our exports to them.

Here’s another lie they’re trying to push: Trump’s chief of staff, Mick Mulvaney, claims that tariffs aren’t paid by American consumers because ”it’s relatively easy to substitute other goods” from other countries. Mulvaney also predicts a jump in U.S. production of consumer goods to fill the gap.

This, my friends, is total rubbish.

It’s not at all easy to substitute other goods at the same low prices as we can get them from Mexico or China. Companies have chosen these countries as their supplier not because the companies like the weather or food, but because it’s cheaper to make or buy stuff there than elsewhere.

There won’t be a jump in production here in the U.S. “to fill the gap,” because if it becomes too expensive to make or buy in China or Mexico, American companies will switch production to somewhere else that’s not as cheap as China or Mexico but still cheaper than making things in the United States – say, elsewhere in Latin America, or in Southeast Asia.

Once again, Trump’s economic nationalism is hurting ordinary Americans without creating a single new job.

Know the truth about tariffs – and spread it.

America’s Biggest Economic Problem Isn’t China

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