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The State of the Union: What the President Should Say
The President will have to devote a big part of his speech to the economy, but which economy? Corporate profits are up but jobs and wages remain in the doldrums. People with lots of financial assets, or who are deemed “talent” by large corporations, are enjoying a solid recovery. But most Americans continue to struggle.
In order for the public to understand what must be done, the President has to be clear about what has happened and why. Corporations are profiting from sales of their foreign operations, especially in China and India. Here at home, they’re catering to rich Americans. But an important key to their profits is their reduced costs, especially payrolls. The result has been fewer jobs and lower pay.
The Great Recession accelerated trends starting three decades ago — outsourcing abroad, automating work, converting full-time jobs to temps and contracts, undermining unions, and getting wage and benefit concessions from remaining workers. The Internet and software have made all this easier.
He should point out that the U.S. economy is now twice as large as it was in 1980 but the real median wage has barely budged. Most of the benefits of economic growth have gone to the top. In the late 1970s, the richest 1 percent of Americans got about 9 percent of total income. By the start of the Great Recession they received more than 23 percent. Wealth is even more concentrated.
This is the heart of our problem. Most Americans no longer have the purchasing power to get the economy moving again. Once the debt bubble burst, they were stranded.
The President should make it clear corporations aren’t to blame. After all, they’re designed to make profits. Nor is it the fault of the rich who have played by the rules. The problem is the rules need fixing. He should stress that a future with no jobs or lousy jobs for most Americans is not sustainable - not even for American corporations, whose long-term profitability depends on the revival of broad-based domestic demand. (Watch out for the upcoming “correction.”)
The solution is to give average Americans a better economic deal.
For starters, he should propose to expand the Earned Income Tax Credit (essentially, a wage subsidy) all the way up through the middle class. And he should make the tax system more progressive: The rate on the first $50,000 to $90,000 of income should be cut to 10 percent; the next $90,000 to $150,000, 20 percent; and the next $150,000 to $250,000, 30 percent. Make up the revenue by increasing taxes on the next $250,000 to $500,000, to 40 percent; from $500,000 to $5 million, to 50 percent; and anything over $5 million, 60 percent. Tax capital gains the same as ordinary income.
In addition, he should call for strengthening unions by increasing penalties on employers who illegally deter them.
He will have to call for reducing the long-term budget deficit, but must make sure to distinguish between public investments that build future productivity (education, infrastructure, and basic R&D) and expenditures that improve our lives or keep us safe today. The former — essentially the nation’s “capital expenditures” — shouldn’t be cut at all. Indeed, they should be substantially increased. A “capital budget” separate from the regular federal budget would help draw this fundamental distinction.
Finally, he should recommend that Congress make college affordable by allowing federal loans to be repaid as 10 percent of earnings for the first 10 years of full-time employment.
Importantly, he should make it clear this isn’t redistribution. These measures would be good for everyone. Rich Americans will do better with smaller share of a rapidly-growing economy than a large share of one that remains in a deep hole.
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38 Comments so far
Show AllObama should say I resign.
Yes, but he should provide an explanation. I think the explanation should be something like this:
My fellow Americans, I cannot keep up this charade any longer. My guilty conscience weighs heavily on me, and I must confess that I am not the man I have been pretending to be. I am a liar, a war criminal, a schemer, and a coward. I promised to work for the welfare of the American people but I did not say that I only meant a few well-connected and wealthy American people. I have always done what is convenient or easy and acted in my own narrow interests. I have deceived the general electorate from the beginning of my political career, and the lies keep getting more elaborate and extraordinary. I am not worthy of this office or of your support. I am not even worthy to be treated with respect or dignity. I am going to turn myself over to the International Criminal Court at The Hague to be tried for war crimes and I urge all other war criminals to do the same, including members of my Cabinet and administration. So I hereby resign from the Office of the President of the United States, effective immediately. Good night and good luck.
Does anyone know what ever happened to RichM? I haven't seen him posting here since the election.
Extraordinary Rendition?
And to think it was only a few years ago that we were deluged with articles talking about what Bush should say...because people assumed he had the mentality of a child and therefor could not function without assistance.
And at long last you begin to take that view of Obama, but too little too late. You know what the truth sounds like, you all know it. And you know that what comes out of Obama's mouth doesn't look, smell or taste like the truth.
Telling him what to say is a sad pathetic attempt at wanting to criticize someone without taking any actual risk. Plus I don't see any talk of violence and war in the suggestions so free pass on that huh?
Although I really like Reich I almost didn't read his article because there is no point in knowing what Reich thinks Obama should say. Thats because Reich is for the little guy, Obama is not. So unfortunately Mr. O is not going to say what Reich thinks he should.
I wont be listening to Obamas "State of the Screwin'" of the little guy, speech because I just cant take any more of being Bull Crapped to by Washington Politicians, or the M$M.
The state of the union is a crime scene in progress.
The fact that Obama is a co-conspirator in the heist assures that he'll say none of the lofty things Mr. Reich hopes for.
The economy will-not and can-not improve until the financial terrorists are thrown in prison and the rule of law is (re-?) established.
The banking criminals who destroyed the economy laugh at the law knowing that everyone from the congress to the regulators has had their palms greased and is permanently looking the other way.
To "hope" that Mr. Obama is going to turn into FDR by Tuesday only displays Mr. Reich has an active fantasy life. In reality Mr. Obama has spent much of the last year morphing himself into Ronald Reagan...penning op-eds and giving speeches almost weekly praising the free market and threatening worldwide currency war.
If Mr. Reich truly values the economic health of the country he should be using every column to implore Obama to use the state of the union to make public every document and communication in his possession that can be used to indict members the financial elite.
Then he should promptly offer his own resignation.
What the President could say if we lived in a democracy:
"Starting immediately, all US forces including intelligence services will be withdrawn from Iraq, Afghanistan, Pakistan. I am proposing a large reduction in the DOD budget as well.
I will use my executive authority to declare a state of financial emergency and seize all insolvent banks who have cooked their books and put them under FDIC recievership. The banks will write-down their bad debts and bondholders and shareholders will be liable for losses as well as management. All assets of management of Goldman-Sachs, JPMoraganChase, BofA etc will be seized and bonuses withdrawn.
Jamie Dimon, Lloyd Blankfein and many others are already in custody awaiting trial.
The Justice Dept., in cooperation with the ICC, is conducting a criminal investigation of GW Bush, R. Cheney et al. for treason and high-crimes.
The Justice Dept. is launching a full-scale criminal investigation into securities fraud, market manipulation etc. committed by some of the largest banks in the world.
I am working with Congress to have the Federal Reserve audited and made transparent.
Guantanamo will be closing immediately and if any charges are pending they will be tried in US courts acccording to the rule of law.
All drone attacks are terminated immediately and the use of drones suspended indefinetely.
I am also declaring a fiscal emergency and re-instating the income tax codes from 1974. The Federal government is expected to be in fiscal surplus within two years.
and that is just the beginning.
SOCIALIST: You're on a roll today! I vote for YOU!
CYGNUS: Right-on post, too!
Gracias, you two!
2nd'd on all counts.
Cheers out to you SR
Robert Reich:
"The President should make it clear corporations aren’t to blame. After all, they’re designed to make profits. Nor is it the fault of the rich who have played by the rules. The problem is the rules need fixing."
No, it's NOT "just" that the rules need fixing.
Lots of rules were gutted by Bush and Clinton for sure, including repeal of Glass-Steagall Act under Clinton.
But there are lots (and lots) of "rules" remaining on the books treating the kind of FRAUD that banks, investment houses and other large corporations (their CEO's) and individuals like Bernie Maddoff have engaged in over the past few decades.
Ask bank fraud expert William Black what HE thinks about this idea that "no one is to blame, it's just that there were no rules". (
Black says fraud was at the core of the financial meltdown and there is plenty of evidence that he is right
... for anyone who cares to look.
Reich is not stupid so that only leaves one possibility.
Yes we need a better system. How about if we did away with wages and have the business owners provide housing, clothing, food, and medical care with a guarantee of a job for life so long as the worker remains productive and keeps his mouth shut. As industries need workers these workers could then be traded among the companies that need the worker then.... oops l just remembered that system was used a while ago until that bearded Republican got elected in the 1800's.
I agreed with almost everything that Reich wrote but the following statements are satire? Right? Please?
"The President should make it clear corporations aren’t to blame. [bwa, ha, ha, ha]. After all, they’re designed to make profits [duh, sort of like crocodiles but not as useful]. Nor is it the fault of the rich [I just spit coffee all over my keyboard] who have played by the rules [the rules of the Russian mafia]."
Huh? The corporations, the rich, the weak rules, the lack of New Deal regulations are all to blame. The banksters, the corporate fraudsters should be indicted, tried and sent to jail. The CEOs of corporations that send jobs overseas, outsource jobs to India or China should have to live in those countries full time and renounce their US citizenship. Or the bloated US CEOs should be replaced by Indian executives who will work for cheaper wages. They will be happy with $800,000 instead of $25 million or a billion in the case of hedge fund vampires.
If I missed the joke or snark, then I apologize to Reich.
I once had high hopes for Obama, although, he was not the first person I would have chosen, and not who I voted for in the primary election. That Reich would still have hopes for him is comical. as well, i found it somewhat concerning that Reich believes that corporations should not be blamed, which is outrageous as many of the corporate elite are intentionally advocating policies desifned to enslave and destroy workers. That is another Obamism, this attitude of cozy relations with the devil, that is actually working destroy you. Robert Reich also seems to be genuinely frightened of corporations and Republicans, he is afraid to use the term income redistribution, which in reality is beneficial for workers and the general economy, but through Republican mass media lies most people dont understand that, or redneck joe thinks the government is going to try to take his entire income when redistribution is all about taking from the millionaires and putting it back into the middle class and to redneck joe.
Its now pretty clear the man is a rotten dud and we shouldnt expect an FDR type president from him.First it was the loss of the public option and the exclusion of the single payer advocates from the health summits. Then it was tax breaks for the wealthy. And then the continued police state and oppressive tactic under the Obama administration against anitiwar protests which are perhaps even worse than bush's reign., and the continued support for Obama for the wars, the fact he does conservative things such as cut federal worker pay without even asking Republicans for something in return, as if this is what he wants to do. There are also numerous quotes that illustrate his relationship to big business, such as him stating he does not fault wealthy bankers for taking millions of bonuses and golden parachute while he supports cuts to federal workers who are paid an average middle class wage. As well, he does not even advocate progressive positions and does not do so very vocally very often, which even if something such as the public option had not passed, he should be using the position he has to continue to fight and talk and press for the need for that. It seems he is not even interested in defending any progressive idea and intentionally lets the Beck types trash him and does nothing to fight back, as if the reason he was elected was to assure that any progressive idea would fail and would not be implemented. It is clear that to really reach people things must be repeated over and over again , as president he could have fireside chats extensively. Hours and hours of conservative fascist talk on Fox and AM each day cannot begin to be counteracted with a few minutes of brief press releases every week, which speaks to another issue regarding the lack of symmetry in the news adn commentary MSM realm and the fact that a wealthy corporate elite control the mass media and therefore, tailor and manufacture public opinion for right wing fascist ends.
Obama , has a cozy relationship with the wealthy business elite and he sort of seems to be partial to them and sympathetic to a bunch of billionaire elites. At the same time he lets critical encroachment on the social security, safety nets to occur. He goes along with Republican schemes that are designed to specifically to damage and destroy social security such as cutting the FICA tax which will not help social security but actually makes the situation much worse and the program more vulnerable to republican raids later on, an the Republican tax cut schemes designed to basically bankrupt the US government by doing billions more to the debt, either the Republicans want to bankrupt the government with tax cuts the rich or they want to just cut the programs such as Social security and health care outright to assure that those they feel are no longer valuable are left to die, and cementing absolute corporate control over the economy though the widening income gap. It is ironic that Republicans are actually raising the debt, and of course would also like to cut spending by killing the poor.
We needed a president that would take a stand against the tax cuts for the wealthy, protect social security, oppose th FICA taxes, return us to a progressive taxation system , featuring a 90% top tax rate, and eliminate the influence of corporations on our government and politicians, who would take strong stands and make the institutional changes needed, to end plutocracy, such as an independent media that is run democratically, non time limited unemployment aid, living wages, jobs programs, really starting major works projects programs to build rail lines and retool our cities for an oil free future and build the infrastructure the US needs to break away from oil, rather than implement measly fuel efficiency standards, which like all else Obama does, is apparently designed to placate progressives while not doing anything significant at all. the Public option he should have demanded and not settled for a health care bill without that that, and he should have focused on affordable housing for all people
With A Republican party that are purebred authoritarian fascists who want to kill the poor, with the Comcast NBC merger, the increasing corporate consolidation, it is very clear our country is becoming a privatized capitalist dictatorship where a wealthy corporate dictatorship controls news, information, all jobs, wealth, even, who lives and dies from that, and the people are utterly enslaved, with government that serves the wealthy elite or is important, and turns a blind eye to the abuse and the plight of workers left destitute and homeless due to the corporate looting and engineered, mass layoffs (becoming a near certain death sentence).
To combat and fight such awesome forces tacks immense bravery and courage, Obama is a spineless jellyfish who does what is easy and convenient, not hard. Both FDR and Eisenhower gave ample warnings about corporate influence and its destructive impact on democracy and the cheapening of human life, where it is acceptable to let the poor die who are no longer deemed useful for he corporate capitalist plutocracy.
All pretty much on target, and yet we see time and time again only two dialogs in the mainstream media:
Either
Obama is a swell guy, fully accepted and adored by ALL Real™ Americans™®!!!! (cue numerous clips of happy men laughing and shaking hands together in their expensive designer business suits),
or he's a insidious and 'shadowy' villain painstakingly engineered by the socialist/fascist/wahabist conspiracy to rule the world as the sidekick of Satan.
Neither story gets it right, but how sick is it that the Faux News version (that's B in case there was any confusion) is actually more accurate?!
(I jest... or do I?)
What an ugly sight to see Robert Reich with his head up his ass.
With little problem, I could develop and post here a set of =Rules for Gang Rapers= that would seem fair to them, which they could follow, and later claim: "Hey! We were just following the Rules."
The rape victims could be chained or plasticuffed in positions to make forced penile entry easy, but it would be wrong to blame the manufacturers of restraint devices (like gun manufacturers who take no responsibility for what is done with their products).
Blood could be hosed away with ecologically approved detergents and sterile water that met standards of various government bureaus.
Economics is far worse than a =dismal science=. It is a dripping wet handmaiden to genocide, and does nothing of substance except provide a lexicon that serves as either a smoke screen, or the shells in the Shell Game.
Forget every other species' flaw; the human race earned extinction by creating Economics.
Trylon
Very Twainsian. Made me laugh.
Twain used to make wild gestures in front of his nose. He would complain that the air was foul because the earth rotates east, into air which the French farted in.
It really doesn't matter what he says because what he doesn't is going to be significantly different. SO why waste time watching him of those children in Congress playing musical chairs.
Reich is an apologist, plain and simple.
Rather than accept responsibility -- or even assign it to those who share their corporate ideology -- these folks want us to believe that "no one is to blame."
It's a very convenient system: the banksters and other crooks screw the public and rob them blind and then their friends in high office urge us all "Let us not assign blame because no one is to blame" and "let us look forward, not backward [at all the fraud, insider trading, torture, murder of innocent civilians in foreign lands and other criminal activity]".
The worst culprits of this "apology for the white collar criminals" are the Ivy League-trained folks like Reich (Yale) and Obama (Harvard).
I went to an Ivy and I know quite well how these people think and behave.
They have spent their entire lives sucking up to the powerful and influential. It's how they got where they are today. To expect that they would behave any differently now is unrealistic.
A long range pool of unemployed and under-employed would be a terrible threat to our democracy. The ever growing disparity in income between the 1% of ultra rich and the rest of us can not prevail. The United Citizens supreme court permission for corporations to buy congress is toxic. Where is FDR when we need him?
Poor befuddled R. Reich is making 1 step forward (good!) and 2 steps back (bad!). But I am gratified about the 1 step forward. This is - yet - hope for Mr Reich. (pt 1)
"People with lots of financial assets, or who are deemed “talent” by large corporations, are enjoying a solid recovery."
Incorrect. Many people with lots of financial assets are waiting for better economic conditions. But then what does Mr Reich mean by "lots"? $1M? $10M? $10B? Besides, Wall Street had laid off a lot of the "talent".
"Here at home, they’re [i.e. Corporations] catering to rich Americans."
Incorrect. Walmart caters primarily to the low-income class. Only a few of the corporations cater mostly to the rich. Pension managers oversee the funds of middle-class workers, even union workers (public and private).
"The Great Recession accelerated trends starting three decades ago "
Incorrect. The trends that brought about the current Recession started back in 1913 with the establishment of the Federal Reserve which started the cozy dance between financial houses and the Federal Government. The other main trend that is partly the cause of the current Recession is the unilateral action in 1971 by Nixon to abandon the direct convertibility of the US dollar into gold, in effect dropping the gold standard: the era of FIAT Money started in earnest. Nothing under Reagan (30 years) ago contributed to the current Recession. The Clintonian boom was due to the Reagan-era policies.
"outsourcing abroad,"
The main cause is increased US regulation and taxation.
"automating work,"
Natural consequence of technology progress.
"converting full-time jobs to temps and contracts,"
Here, Mr Reich fail to define what is a full-time job. There is no objective standard. In France a full-time job is 35hrs/week. With automation, a full-time job require fewer and fewer hrs per week.
" undermining unions,"
Technological progress make unionism obsolete. Unionism focuses on restriction of trade to a few members when technology allows anyone to have the same effective expertise as the union members. Mr Reich has a contradiction in his hands: in one hand he is pushing unionism; on the other hand Mr Reich is pushing universal education (which is good) but the essence of unionism is AGAINST universal education since then the pool of non-union people with the same skills as the unions increases. The greater the supply, the lower the price/salary.
" and getting wage and benefit concessions from remaining workers."
The normal consequence of free market. Nobody objects when the price of goods goes down: the workers' salaries remain the same and the profits of the mean, blood-sucking entrepreneurs go down. Just as the price of goods go up and down, there is no reason why the salaries should not go up and down.
"The Internet and software have made all this easier."
The computer industry is the least regulated of the US economy and one feels the consequence: cheaper and more powerful tools. Here is where the latest explosion of billionaires occur: Mr Gates, the founders of Google and Facebook, etc.. Is it not wonderful when Government intervention is light: bet Mr Reich loves his Ipad, Ipod and is Twittering all about.
"He should point out that the U.S. economy is now twice as large as it was in 1980 but the real median wage has barely
budged. "
Irrelevant. More relevant is the basket of goods for a given unit of non-fiat money. Consumers made a gains in the areas where Government intervened the least.
"Wealth is even more concentrated."
Irrelevant. Relevant is the net wealth gain per capita. In this area, a good piece of the middle-class were mislead by Frank and Dodd in purchasing more housing than they can afford.
"Most Americans no longer have the purchasing power to get the economy moving again."
Incorrect. A step backwards. Consumers are not as stupid as Mr Reich and they have been paying down their credit card debt to the tune of more than $150B in the past 2 years. Facilitation of production is the solution.
"The President should make it clear corporations aren’t to blame. "
Correct. A step forwards.
"Nor is it the fault of the rich who have played by the rules."
Half correct. Mr Reich's dishonesty is in not focusing on who made the rules.
The problem is the rules need fixing.
Half correct.
"He should stress that a future with no jobs or lousy jobs for most Americans is not sustainable depends on the revival of broad-based domestic demand. "
Incorrect. Solution: removing barriers to Production. Cannot consume what is not produced.
"For starters, he should propose to expand the Earned Income Tax Credit.. "
Incorrect. Better solution is to establish a Negative Income Tax and elimination of the Minimum Wage law.
"In addition, he should call for strengthening unions by increasing penalties on employers who illegally deter them."
Incorrect and a big step backwards. Employers are not the cause of the diminishing unions in the private sectors. The change in the type of work done at the factory floor is causing the decreasing importance of unions. Increasingly the blue-collar works are adopting professional attitudes and are more attracted to professional associations, not unions.
"...public investments that build future productivity (education, infrastructure, and basic R&D)..."
All these areas are best handled in the private sector. Public Schools - for the past 30 years - are producing lousy graduate who are qualified for only lousy jobs. Infrastructure can be built and maintained with less and less manpower and old days of Hoover Dam and Golden Gate Bridge are all gone (that is, one can build such structure with a fraction of the manpower needed in the 1930's).
"...expenditures that improve our lives or keep us safe today. The former — essentially the nation’s “capital expenditures”"
A vague and worthless statement. All kinds of things improve our lives. Mr Reich is just itching to have Government intrude in all aspects of our lives in the name of "improving" our lives. As far as keeping us safe, Mr Reich has not supported securing our border with either Mexico or Canada.
"The main cause [for outsourcing abroad] is increased US regulation and taxation."
"The computer industry is the least regulated of the US economy..."
Shouldn't that mean no computer-related jobs are being outsourced? From what I've read, a good number of them were - or cheaper workers from overseas were being brought in to do some of those that remained.
"Public Schools - for the past 30 years - are producing lousy graduate who are qualified for only lousy jobs."
The quality of a public school education varies considerably, but some of the principal developers of your aforementioned Apple products, as well as some of the founders of Google, Facebook, and Twitter, attended public schools for at least part of their formal educations within the last 30 years. They hardly have what you'd call "lousy" jobs.
"As far as keeping us safe, Mr Reich has not supported securing our border with either Mexico or Canada."
Didn't realize that Canada was so dangerous. As for Mexico, a number of industries in the U.S. rely on lower-paid Mexican labor (legal and illegal) to get things done. I'd guess that some of those "free trade" deals that you'd probably otherwise praise have contributed to making the borders a little more open than you'd like.
Poor befuddled R. Reich is making 1 step forward (good!) and 2 steps back (bad!). But I am gratified about the 1 step forward. This is - yet - hope for Mr Reich. (pt 2).
"Finally, he should recommend that Congress make college affordable .."
Mr Reich wants to become a comic. To paraphrase P.J. O’Rourke,"..if you think College is expensive now, just wait until it is free."
"Importantly, he should make it clear this isn’t redistribution. "
Correct and a step backwards. It is theft by taxation from the future unborn generations.
"These measures would be good for everyone."
Incorrect. These measures - if taken by Government - assure greater debt and deeper Depression.
"Rich Americans will do better with smaller share of a rapidly-growing economy than a large share of one that
remains in a deep hole."
False set of alternatives. But who is keeping the economy in the hole? Government. Really. Look at the BIG HOLE
at Ground Zero in NYC. Who is holding up the reconstruction? Government!
Mr Reich shows he is a panderer to the clueless Progressives and not a seeker of Truth.
If Mr. Reich, at his now fairly late age, had lost his job, house, pension, and hope of future material security, like millions of other people have due to the designs of America's corporate tyranny, one would like to think that he'd be singing a very different song just now.
Or at least he'd be shutting his corporate quisling mouth, out of some final personal and professional decency.
The fact that Reich, still to this day, and with all his education and smarts, insists on exonerating-by-default the US corporate model while pretending to be a progressive economist, marks him, for me at least, as something worse than shameless; something more like a morally insane schizoid, and not really distinguishable from the 'bad' people he pretends to reprove.
Okay, I’m not surprised that so many on this thread have (so far) excoriated Reich. And I expect the same for coming out in his favor.
Robert Reich is a realist. He knows positions like those advocated by socialist January 23rd, 2011 5:19 pm stand less than a snowball’s chance in hell of being advocated by Obama any time soon. Reich attempts to move the needle, not blow away the instrument. In that, he stands some chance of influencing events, whereas socialist (unless, maybe, he get elected to high office) doesn’t.
“Most of the benefits of economic growth have gone to the top. In the late 1970s, the richest 1 percent of Americans got about 9 percent of total income. By the start of the Great Recession they received more than 23 percent. Wealth is even more concentrated. This is the heart of our problem.” Reich puts his finger on a major, huge cause (or maybe symptom) of our current malaise. I give him credit for that.
“The President should make it clear corporations aren’t to blame. After all, they’re designed to make profits. Nor is it the fault of the rich who have played by the rules. The problem is the rules need fixing.” Note that he excepts the rich who HAVEN’T played by the rules. Corporations are exactly as described, and unless you want corporations to be banned (socialist?), it’s the rules that need fixing. How can one reasonably advocate punishing CEO’s and their underlings, stockholders, etc., if they’re not disobeying the law?
“The rate on the first $50,000 to $90,000 of income should be cut to 10 percent; the next $90,000 to $150,000, 20 percent; and the next $150,000 to $250,000, 30 percent. Make up the revenue by increasing taxes on the next $250,000 to $500,000, to 40 percent; from $500,000 to $5 million, to 50 percent; and anything over $5 million, 60 percent. Tax capital gains the same as ordinary income.” This would be a vast improvement over what we have now. There’s a least some chance that such a proposal will be enacted, but no chance that armed rebellion would accomplish as much.
“Rich Americans will do better with [a] smaller share of a rapidly-growing economy than a large share of one that remains in a deep hole.” So true. Rich Americans will never relinquish their grip on their billions unless they recognize it’s in their best interest to do so. People like Gates and Buffet are beginning to think like Reich. It’s a good thing.
"Rich Americans will never relinquish their grip on their billions unless they recognize it’s in their best interest to do so. People like Gates and Buffet are beginning to think like Reich. It’s a good thing."
It seems our fundamental interpretations of history are quite different, as I cannot disagree more with that statement. The super wealthy have demonstrated time and again that they are unable or unwilling to have a long-term view or act in the best interest of society. In fact it is well known that our corporate culture favors short-term profit. Everything is short term in this country, where have you been in an ivory tower?
I can only infer that you believe an entrenched oligarchy is a good thing. Noblesse oblige?
If you really believe that Congress has acted in good faith by repealing Glass-Steagall and a whole raft of other regulations, while the regulatory agencies turn a blind-eye to fraud, I really can't continue the discussion. You really believe the Fed is acting in the best interests of the larger economy? You really believe that current corporate law favors a robust free market?
Do you really believe that the current framework has not contributed at all to US economic power waning steadily?
I really do wish your claims were valid, however my observation of the data just does not support it. On the bright side, I am glad that someone is still in a position to have such an optimistic view.
socialist January 23rd, 2011 9:54 pm -- I appreciate your reply.
I didn't discuss, as far as I can tell, the ideas you impute to me in your fourth paragraph. I'm essentially in agreement with Reich, who also didn't discuss those matters, as best I can tell. I can certainly subscribe to your view that the "current framework" has contributed to the waning of U.S. economic power, although it is perhaps a relative thing in that the U.S. is falling behind China and about to be equaled by other countries.
As for Gates and Buffet demonstrating that they are "unable or unwilling to have a long-term view or act in the best interest of society" (as you imply), please check out http://www.msnbc.msn.com/id/39422689/ns/us_news-giving/. I don't argue that billionaires automatically understand what's best for society. However, when they offer to give most of their billions to charity, rather than turn it over to the U.S. government (although they also favor a more equitable tax regime), it's perhaps permissible to say they recognize that the people in charge of the U.S. government shouldn't be trusted to make proper use of the billions they (Gates, Buffet, et al.) propose to give, and have given, to charities. Don't you agree?
"Reich is a realist" and "There’s a least some chance that such a [tax] proposal will be enacted".
Are you kidding? Only a few weeks after Obama extends the tax cut for the rich under a Democratic Congress and now with a Republican House, you are calling such a proposal to raise taxes on the rich a realistic possibility. Give me a break.
Reich is a mainstream economist that won't say anything to offend the establishment for fear of losing his Sunday morning talkshow spot and newspaper spots.
Progressive101 January 23rd, 2011 10:46 pm -- Yes, of course you're correct that in the present climate, the proposal doesn't stand a chance. I believe at times in our history, tax rates like those suggested existed. When I was young, the super rich paid at something like a 90% or 95% rate. They evaded taxes, too, but at least in theory the system was much more progressive than it became under Reagan. I don't think Reich's proposal is outlandish in that perspective.
And you're correct that Reich has to worry about being booted from the MSM talking head shows. At present, however, I think he's among the few in those environs who actually make sensible statements. I compare him favorably to Paul Krugman, who's also about as progressive as the MSM allows.
"The rate on the first $50,000 to $90,000 of income should be cut to 10 percent; the next $90,000 to $150,000, 20 percent; and the next $150,000 to $250,000, 30 percent. Make up the revenue by increasing taxes on the next $250,000 to $500,000, to 40 percent; from $500,000 to $5 million, to 50 percent; and anything over $5 million, 60 percent."
Why stop unfairly at 60 percent on anything over $5 million? Aren't billionaires best able to pay? Tax them at 100% and get the benefit of less money-power concentration meaning less oligarchical dictatorship.
Silver FOX, I never dreampt that I'd ever say this, "but I wanted to give you a hug..."
Great article! I like Reich's take on this.
Everyone always screams at Obama, "Use the bully pulpit!" Well, O k here's the State of the Union. Given the limitations of his power, what's the best use of the occasion?
I wish Obama would let Reich write the speech (not to mention the policy).
The hard fact is that nearly 50% of all Americans espouse the belief that the freedom to accumlate vast wealth _ without any compelled sharing _ is the only situation that can motivate sufficient economic activity to create employment.
There is no logical or moral argument that will make these people support more taxes. Many of them consider any taxation a form of theft. This has crossed the boundary from theory into religion, and thinking otherwise has literally become heresy and treason. There is zero hope of persuading these people to adopt a more socialist outlook by appealing to reason _ even if they intellectually agree, their revulsion toward the 'other' and the force of peer pressure have set their mentality. Their numbers make the prospect of persuading them by force very unappealing.
The only hope of redistributing concentrated Corporate wealth lies in working Americans concluding that their labor and creativity are an equal part of the big economic equation, that their contribution is as worthy as that of management and owners, and then demanding more wages and more benefits by massive widespread wildcat strikes. We Americans have a deep-seated ethos of being proud of sacrifice, of confusing humility with poverty, and loyalty to employers that makes self-denial a virtue _ it's a combination of massive inferiority complex and an obsession with being seen as self-reliant.
The only way to address this issue _ short of violence against those who disagree, or partition _ is to somehow convince this large bloc of people that they actually deserve to share in the prosperity they create.
What faith does Reich have in the super rich, the corporate elite? He believes that they would rather have a smaller piece of a growing pie than a larger piece of a shrinking one. I suppose that if I were rich I would feel that way too, but I don't think that sentiment represents the corporate wealth of this country. After all the super rich who are in control are already obscenely rich, they don't really need more wealth. Their prime concern is to maintain that wealth and stay in control. A strategy of repression in the US and reinvestment in other world markets that appear even more lucrative is apparently what they have chosen and it makes sense. The more power they have the more wealth they can extract in the US-- assuming they stay in power. As they look at American politics they know they have triumphed and as they look at the American populous which is turning right they can rest assured that the peasants have once again missed their target. They are so easy to fool. With this citizenry and this government they should be able to stay in power indefinitely. The corporate world does not think its overplayed its hand. In fact they are just getting started in solidifying their rule. The dark days come next-- and then who knows what.
Dear Bob; SD&STFU. After Nixon,Reagan,Bush I,Clinton,Bush II and now Obama the last thing we need to hear is more Reaganite/neo-liberal clap trap. You fuckers have caused enough damage so please go EAT SHIT AND DIE you fucking useless piece of shit.