Today’s piece holds a lot of critical thoughts about our faulty economy and politics. It analyses the economic faults we need to fix. I thought I shared the below excellent Bill Moyers interview of Robert Reich before, but I can’t find this earlier share. So, maybe I didn’t. Anyway, this is a good interview to watch (and discuss) about the topic of our flawed economy, even if I may have shared it earlier, say on a Video Weekend. Here is the video clip itself plus a bit of meaningful commentary I just wrote, followed by Reich’s 2013 documentary film and some more commentary distilling and digesting the most important points he makes:
(Note: if the video linked above gets deleted, you may search the Internet for “Moyers & Company” and the title: “Inequality for All”)
Robert Reich reminds us of the old idea of upward mobility rewarding guts and gumption. It’s a traditional concept for excusing and edifying our socio-economic system, the idea of a meritocracy. Not only have we fallen far behind other countries (like European countries) in this rags-to-riches story, as Robert Reich reminds us in this interview, but I also feel that there is something else wrong with it: namely, in my opinion, this philosophy of everything being just fine when upward mobility exists, warps society towards greed and socially irresponsible callousness. It warps it in favor of greedy, materialistic people, especially those who have absolutely no concern for others (or very lightly put such concerns aside) and will do anything – even destroy livelihoods and kill people with abandon – in order to rise in wealth. I am completely in agreement with Pope Francis when he deplores our societies’ loss of human values in the wake of making everything to be just about money.
Robert Reich judges those at the top more kindly than I usually do (because I accept no excuses when people neglect their human duty to act socially responsible). He points out that the individual players (like company managers) are acting rationally within the rules of our economic game. What’s irrational is the set of economic rules which are not geared towards creating and upholding prosperity for all but only – like in the board game Monopoly – for the prosperity of a few. I agree with that. It is irrational for a community of human beings to set up rules which reward individual greed and shaft the common good.
The mechanism of this irrationality? The powerful moneyed interests have bought the rule making machine (the government which should be ours, not theirs).
A final word about this upward mobility thing. I prefer professional and vocational mobility (or freedom!) over upward mobility. Why? Because life shouldn’t be only about money! The advances of civilization, science, philosophy, and even technology, which lifted us out of primitivity, did – for the most part – not come from profit-seeking individuals. In fact, many lived lives of poverty to focus their energies on making our world better for everybody, not just themselves. Others were born privileged and thereby had the necessary leisure and freedom to focus on things like philosophical thinking or scientific research, something more of us would welcome and use to everybody’s benefit if our society didn’t thrust them into money-making job treadmills, something our highly productive country (the U.S.) no longer needs to do since we suffer a scarcity of jobs rather than a scarcity of products and services we can provide. It is time to reorganize based on changed circumstances, so we can all enjoy the prosperity of the richest nation in world history and – incidentally – thereby free up human potential that is currently stifled by doing jobs machines could do, by hunting for jobs that aren’t there, and so on.
Reich points out that democracy is a break on private greed and power. Therefore, democracy can stop capitalism from doing stupid things that are not in the public interest. However, as I keep reminding us, capitalism will always work hard to undermine democracy. So, either we get a boom and bust cycle where we get money out of politics sometimes and it instantly starts creeping back, or we make some fundamental change. Personally, having spent most of my life in the cyclic downturn, I don’t want these cycles; and I also worry that the constantly refining methods of surveillance and public opinion manipulation will sooner or later end our ability to get money out of politics and the government back into our hands. Then we will forever be ruled by the robber billionaires and their mighty corporations, at least until they destroy our planet and we all die. To me that is simply not good enough. I therefore believe, we must go the extra mile: not only get money out of politics now, but restructure our economy, politics, and societal awareness, as well as invent all sorts of corrective mechanisms, to stop money in politics from creeping back, most especially by stopping huge concentrations of wealth in the hands of a privileged few which is the moment when the vicious cycle always starts. Politicians can only be bribed by rich people when there are rich people. I propose prosperity for all and unbalancing super-wealth for none — the latter so that prosperity for all stays safe from attack.
It turns out that Reich’s 2013 documentary film is available on Youtube these days. For example here (and it is very worth watching if you didn’t watch it before, or even if you did, but if some time has passed since you watched it before):
(Note: if the video linked above gets deleted, you may search the Internet for the title: “Inequality for All – full movie”)
In his documentary movie, Robert Reich explains the factors of working American’s decline in some detail. The U.S. is currently the richest nation in world history, and yet wages of working Americans have been stagnant (or even declining, especially when you take into account the sharp rise of critical living expenses like housing and healthcare) since the late seventies, back when globalization and massive efforts to bust and prevent unions took off and higher education, such as college, also began to flatline, having been on a sharp rise since the end of World War II before. In contrast to America, countries like Japan, South Korea, and Germany invested in their people through things like free higher education and guaranteed healthcare for everyone. Therefore, in the U.S., the super-rich became ever richer at the expense of working Americans and still keep doing so as the rest of our country goes down the drain, while countries like Germany weathered the Great Recession of 2008 very well, and many folks in those countries still earn good wages. Meanwhile, in the U.S., most wages no longer suffice to make ends meet. It’s what happens when all the wealth and power goes to those who get to set wages and economic rules all by themselves. You get a third world country where a tiny number of families are unbelievably rich and the rest of the people must live in squalor without any hope or opportunities.
I like the question asked by one lady in this documentary: “How do you build wealth when you don’t have anything? ”
I also find very powerful a remark another lady in this movie says: “If you have ten million dollars, if you have a billion dollars, why do you need that little bit that I have? ”
Reich also relates how working Americans tried to cope with their wilting wages, first by women, who might have children or sick and elderly family members they previously were taking care of at home, started going into paid work in the late seventies. When that no longer sufficed by the 1990’s, both men and women started to work longer hours, second jobs, third jobs, and overtime. We then were working 300 hours more per year than the typical European. We then were working even harder than the Japanese, who had always been working longer and harder than everyone in the industrialized world. But there is a limit how many hours you can work (been there, done that, I can confirm this!). So, then, the only copying mechanism left was borrowing, living on credit. And when that happens, a financial bubble burst is preprogrammed. And we sure got it in 2008; and we are about to get another one (the latter being something Richard Wolff keeps warning us about). The borrowing scheme became easier than ever before in the late nineties, and seemed safer than ever before, because of rising real estate prices which provided a theoretical security — and which were, of course, itself the result of the financial sector’s speculations. So, unsurprisingly, this pumped up a bubble which then burst in our faces. Truly in our faces, rather than those of the banksters and Wall Street traders who pulled all the strings and made out like bandits on their gambles, since Bush/Obama & Congress bailed out the banks at our expense! And our taxes being used to bail out the wealthy gamblers wasn’t all of the damage, of course. The many lost homes, jobs, wages, and employment benefits that accompanied the crash, crippled so very many of us and continue to do so.
And then Reich goes into how money accumulating at the top eventually flows into politics…
Rich people (maybe not all of them but enough of them) abuse their wealth — by lobbying for bailouts, subsidies, and tax structures that entrench their wealth.
Nick Hanauer (at least I think it’s him speaking several times in this documentary): “I paid 11% last year on an eight figure income. … When you give rich business people tax breaks, all in the name of job creation, all that really happens is that the fat cats get fatter. And, of curse, that’s what happened over the last thirty years. That’s the signature feature of the economy of the last thirty years.”
Robert Reich: “If you don’t have voice; if you don’t have power; if you are vulnerable economically in society, you don’t have anybody to protect you.”
The rules of the economy are man-made. We can change them. We can make them fair.
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