Robert Reich / RobertReich.org – 2015-07-07 20:30:40
BERKELEY, Calif. (July 2, 2015) — A few words about patriotism — something we talk a lot about, especially around July 4th, but seldom stop to examine its real meaning.
True patriotism isn’t simply about waving the American flag. And it’s not mostly about securing our borders from outsiders. It’s about coming together for the common good.
Real patriotism is not cheap. It requires taking on a fair share of the burdens of keeping America going — being willing to pay taxes in full rather than seeking tax loopholes and squirreling away money abroad.
Patriotism is about preserving and protecting our democracy, not inundating it with big money and buying off politicians.
True patriots don’t hate the government of the United States. They’re proud of it. They may not like everything it does, and they justifiably worry when special interests gain too much power over it. But true patriots work to improve our government, not destroy it.
Finally, patriots don’t pander to divisiveness. They don’t fuel racist or religious or ethnic divisions. They aren’t homophobic or sexist. To the contrary, true patriots seek to confirm and strengthen the “we” in “we the people of the United States.”
Have a happy and safe Fourth of July.
Robert B. Reich, Chancellor’s Professor of Public Policy at the University of California at Berkeley and Senior Fellow at the Blum Center for Developing Economies, was Secretary of Labor in the Clinton administration. Time Magazine named him one of the ten most effective cabinet secretaries of the twentieth century.
He has written thirteen books, including the best sellers “Aftershock” and “The Work of Nations.” His latest, “Beyond Outrage,” is now out in paperback. He is also a founding editor of the American Prospect magazine and chairman of Common Cause. His new film, “Inequality for All,” is now available on Netflix, iTunes, DVD, and On Demand.
Twelve Ideas for a Better Economy
#1: RAISE THE MINIMUM WAGE TO $15
A basic moral principle that most Americans agree on is no one who works full time should be in poverty, nor should their family.
Yet over time we’ve seen significant growth in the “working poor” — people working full time, sometimes even 60 or more hours each week, but at such low wages that they remain impoverished.
What to do?
One step is to raise the minimum wage to $15 an hour. This is winnable. A powerful movement is fighting for $15 an hour and they’re winning new laws in cities and states, and forcing companies to raise wages.
If the minimum wage in 1968 had simply kept up with inflation it would be more than $10 today. If it also kept up with the added productivity of American workers since then, it would be more than $21 an hour.
Some opponents say minimum wage workers are teenagers seeking some extra pocket money.
Wrong. Half are 35 or older, and many are key breadwinners for their families.
And don’t believe scaremongers who say a $15 minimum will cause employers to cut employment.
More money in people’s pockets means more demand for goods and services, which means more jobs not fewer jobs.
Studies also show that when the minimum is raised more people are brought into the pool of potential employees, giving employers more choice of whom to hire. This reduces turnover and helps employers save money.
Finally, employers who don’t pay enough to lift their employees out of poverty are indirectly subsidized by the rest of us — who are paying billions each year in food stamps, Medicaid, housing assistance, and welfare, to make up the difference.
The minimum wage should be raised to $15 an hour. It’s the least that a decent society should require.
#2. MAKE WORK FAMILY FRIENDLY
No one should have to choose between providing for your family and being a good parent. Yet “family-friendly” work is still a pipedream.
Today most parents are also wage earners, whether in a two-parent or single-parent household. Politicians talk a lot about the importance of family, but must do a better job delivering.
â€“ Require that women receive equal pay for equal work.
â€“ Require employers provide predictable hours so workers can plan to be home when their family needs them.
â€“ Provide universal childcare — pre-school and after-school — financed by employers and taxpayers.
â€“ Require that employers offer paid family and medical leave.
The richest nation in the world should enable its workers to be good parents. Family-friendly work isn’t a luxury. People who work hard deserve to make more than a decent living. They and their families deserve a decent life.
#3. EXPAND SOCIAL SECURITY
America is on the cusp of a retirement crisis. Millions of Americans are already in danger of not being able to maintain their standard of living in retirement, and the problem is getting worse.
You hear a lot about how corporations are struggling to make good on their pension promises, and how Social Security won’t be there for you in retirement.
Baloney on both counts.
Corporations are awash in money, and they could afford to provide their hourly workers with pensions when they retire. Years ago, they routinely provided “defined benefit” pensions — a fixed amount every month after retirement.
Nowadays most workers are lucky if their company matches what they’re able to put away. The typical firm does no more than offer a 401-K plan that depends entirely on worker savings. But many workers get such low pay during their working lives that they haven’t been able to save for retirement.
At the same time, the cost of pharmaceuticals keeps rising, taking an ever-bigger bite out of retiree incomes. That means Social Security is more important than ever. Today, two-thirds of seniors derive over half of their income from Social Security, and one-third of seniors rely on it for at least 90% of their income. Without it, the poverty rate of our seniors would be 45% instead of 10%.
Social Security will be there for you in your retirement. The problem is it won’t pay you enough. That’s why it’s important to expand Social Security — not cut Social Security benefits.
We can afford to increase Social Security benefits, as well as help ensure the solvency of Social Security, by eliminating the cap on income subject to Social Security taxes.
Unlike the Medicare payroll tax that everyone pays as a small portion of their total incomes, the Social Security payroll tax is capped. Any income over $118,500 this year is exempt from it. Which means a billionaire pays the same Social Security payroll tax as someone earning $118,500.
This isn’t fair and it’s not sensible. Billionaires and millionaires should pay just like everyone else. Scrap the cap, and not only is Social Security more secure for you and your kids, but it will be able to pay out even more benefits in your retirement.
America’s seniors, who paid in to Social Security over their lifetimes, deserve enough retirement income to live on. If wealthy Americans pay their fair share, we can make sure tomorrow’s seniors get the Social Security they truly need.
#4. BUST UP WALL STREET
When Americans think of how the economic rules are stacked against them, they naturally think of Wall Street. When the Wall Street bubble burst in 2008 because of excessive risk-taking, millions of working Americans lost their jobs, health insurance, savings, and homes.
But The Street is back to many of its old tricks. And its lobbyists are busily rolling back the Dodd-Frank Act, intended to prevent another crash.
The biggest Wall Street banks are also much larger. In 1990, the five biggest banks had 10 percent of all of the nation’s banking assets. Now, they have 44 percent — more than they had at the time of the 2008 crash. They have a virtual lock on taking companies public, play key roles pricing commodities, are involved in all major US mergers and acquisitions and many overseas, and responsible for most of the trading in derivatives and other complex financial instruments.
And as they’ve gained dominance over the financial sector, they’ve become more politically potent. They’re major sources of campaign funds for both Republicans and Democrats.
Wall Street banks supply personnel for key economic posts in Republican and Democratic administrations, and lucrative employment to economic officials when they leave Washington.
It’s a vicious cycle. The bigger they get, the more likely it is that government will bail them out if they get into trouble again. This, in turn, confers on them an ever-larger competitive advantage over smaller, community-minded banks that don’t have the implied guarantee — which gives the biggest banks even more economic and political power.
What should be done?
First, resurrect the Glass-Steagall Act that used to separate investment from commercial banking.
Second, put a small sales tax on every financial transaction. This would discourage speculation and slow down the casino. Not incidentally, such a tax could generate billions of dollars a year for, say, better schools.
But the most important thing we should do is bust up the big banks. Any bank that’s too big to fail is too big, period.
Antitrust law should be used the way it was against the big oil trusts and the telephone monopoly. The idea was to prevent too much economic and political power from concentrating in too few hands. And that’s precisely the problem with Wall Street.
The only sure way to stop excessive risk-taking on Wall Street so you don’t risk losing your job or your savings or your home, is to put an end to the excessive economic and political power of Wall Street.
It’s time to bust up the big banks.
#5. REINVENT EDUCATION
Senator Bernie Sanders is making waves with a big idea to reinvent education: Making public colleges and universities tuition-free.
I couldn’t agree more. Higher education isn’t just a personal investment. It’s a public good that pays off in a more competitive workforce and better-informed and engaged citizens. Every year, we spend nearly $100 billion on corporate welfare, and more than $500 billion on defense spending. Surely ensuring the next generation can compete in the global economy is at least as important as subsidies for big business and military adventures around the globe.
In fact, I think we can and must go further — not just making public higher education tuition-free, but reinventing education in America as we know it. (That’s the subject of this latest video in my partnership with MoveOn, “The Big Picture: Ten Ideas to Save the Economy.” Please take a moment to watch now.)
In the big picture, much of our education system — from the bells that ring to separate classes to memorization drills — was built to mirror the assembly lines that powered the American economy for the last century. As educators know, what we need today is a system of education that cultivates the critical thinking skills necessary for the economy of tomorrow.
We have to reinvent education because it’s not working for too many of our kids — who are either dropping out of high school because they aren’t engaged, or not getting the skills they need, or paying a fortune for college and ending up with crushing student debt.
How do we get there?
First, stop the wall-to-wall testing that’s destroying the love of teaching and learning. Let’s get back to a curriculum that builds curiosity, problem solving, teamwork and perseverance, and away from teaching to the test. Give teachers space to teach, and give students freedom to learn. Limit classrooms to 20 children so teachers can give students the individual attention they need.
Increase federal funding for education. The majority of US public school students today live in poverty. That’s a staggering figure. Our schools and educators aren’t equipped to deal with this harsh reality but we know ways to change that. High-quality early childhood education, for starters. Community schools to serve the whole child, with health services, counselors, and after school activities.
Offer high school seniors the option of a year of technical education, followed by two years of free technical education at a community college. The route into the middle class shouldn’t always require a four-year college degree. America needs technicians who can install, service, repair, and upgrade complex equipment in offices, laboratories, hospitals, and factories.
And Senator Sanders has proposed, make public higher education free — from community college to state universities — completely free, as it was in many states in the 1950s and 1960s. Higher education isn’t just a personal investment. It’s a public good that pays off in a more competitive workforce and better-informed and engaged citizens.
And critically, we must increase pay and improve conditions for the men and women who power our schools — teachers and school staff who educate our kids, clean our classrooms, and keep our schools safe.
The law of supply and demand isn’t repealed at the schoolhouse door. We’re paying investment bankers hundreds of thousands if not millions of dollars a year to make money for Wall Street. We ought to be paying educators and staff a decent wage to develop and guide the nation’s human capital — an investment that would benefit everyone.
By reinventing education in these sensible ways, we all gain.
#6. END CORPORATE WELFARE
Corporations aren’t people, despite what the Supreme Court says, and they don’t need or deserve handouts.
When corporations get special handouts from the government — subsidies and tax breaks — it costs you. It means you have to pay more in taxes to make up for these hidden expenses. And government has less money for good schools and roads, Medicare and national defense, and everything else you need.
You might call these special corporate handouts “corporate welfare,” but at least welfare goes to real people in need. In the big picture, corporate handouts are costing tens of billions of dollars a year. Some estimates put it over $100 billion — which means it’s costing you money that would otherwise go to better schools or roads, or lower taxes.
Conservatives have made a game of obscuring where federal spending actually goes. In reality, only about 12 percent of federal spending goes to individuals and families, most in dire need. An increasing portion goes to corporate welfare.
Other examples: The oil, gas, and coal industries get billions in their own special tax breaks. Big Agribusiness gets farm subsides. Big Pharma gets their own subsidy in the form of a ban on government using its bargaining power under Medicare to negotiate lower drug prices. And hedge-fund and private-equity managers get a special tax loophole that treats their income as capital gains, at a lower tax rate than ordinary income.
The real issue isn’t the government’s size. It’s whom government is for. Much of government is no longer working for the vast majority it’s intended to serve. If government were responding to the public’s interest instead of the moneyed interests, it would be providing more support for communities, families, and individuals who need it the most.
There’s no reason any corporations should be on the dole, or that your hard-earned dollars should be going to them for no reason but their political clout.
So we have to demand an end to corporate welfare. No more handouts to particular corporations and industries simply because they’re big enough and powerful enough to get them. No more specialized tax breaks. No more exemptions or special treatment. No more crony capitalism.
Want to end corporate welfare? Watch my latest video now, and share it with your friends.
#7. STRENGTHEN UNIONS
One big reason America was far more equal in the 1950s and 1960s than now is unions were stronger then. That gave workers bargaining power to get a fair share of the economy’s gains — and unions helped improve wages and working conditions for everyone.
But as union membership has weakened — from more than a third of all private-sector workers belonging unions in the 1950s to fewer than 7 percent today — the bargaining power of average workers has all but disappeared.
In fact, the decline of the American middle class mirrors almost exactly the decline of American labor union membership. So how do we strengthen unions?
First, make it easier to form a union, with a simple majority of workers voting up or down. Right now, long delays and procedural hurdles give big employers plenty of time to whip up campaigns against unions, even threatening they’ll close down and move somewhere else if a union is voted in.
Second, build in real penalties on companies that violate labor laws by firing workers who try to organize a union or intimidating others.
These moves are illegal, but nowadays the worst that can happen is employers get slapped on the wrist. If found guilty they have to repay lost wages to the workers they fire. Some employers treat this as a cost of doing business. That must be stopped. Penalties should be large enough to stop this illegality.
Finally — this one has been in the news lately, and if you only remember one thing, remember this: We must enact a federal law that pre-empts so-called state “right-to-work” laws.
Don’t be fooled by the “right to work” name. These laws allow workers to get all the benefits of having a union without paying union dues. It’s a back door destroying unions. If no one pays dues, unions have no way to provide any union benefits. And that means lower wages.
In fact, wages in right-to-work states are lower on average than wages in non-right-to-work states, by an average of about $1500 a year. Workers in right-to-work states are also less likely to have employer-sponsored health insurance and pension coverage.
When unions are weakened by right-to-work laws, all of a state’s workers are hurt. American workers need a union to bargain on their behalf. Low-wage workers in big-box retail stores and fast-food chains need a union even more. If we want average Americans to get a fair share of the gains from economic growth, they need to be able to unionize.
#8. RAISE THE ESTATE TAX ON THE VERY RICH
At a time of historic economic inequality, it should be a no-brainer to raise a tax on inherited wealth for the very rich. Yet there’s a move among some members of Congress to abolish it altogether.
If you’re as horrified at the prospect of abolishing the estate tax as I am, I hope you’ll watch and share the accompanying video.
Today the estate tax reaches only the richest two-tenths of one percent, and applies only to dollars in excess of $10.86 million for married couples or $5.43 million for individuals.
That means if a couple leaves to their heirs $10,860,001, they now pay the estate tax on $1. The current estate tax rate is 40%, so that would be 40 cents. Yet according to these members of Congress, that’s still too much.
Abolishing the estate tax would give each of the wealthiest two-tenths of 1 percent of American households an average tax cut of $3 million, and the 318 largest estates would get an average tax cut of $20 million.
It would also reduce tax revenues by $269 billion over ten years. The result would be either larger federal deficits or higher taxes on the rest of us to fill the gap. This is nuts. The richest 1 percent of Americans now have 42 percent of the nation’s entire wealth, while the bottom 90 percent has just 23 percent.
That’s the greatest concentration of wealth at the top than at any time since the Gilded Age of the 1890s.
Instead of eliminating the tax on inherited wealth, we should increase it — back to the level it was in the late 1990s. The economy did wonderfully well in the late 1990s, by the way. Adjusted for inflation, the estate tax restored to its level in 1998 would begin to touch estates valued at $1,748,000 per couple.
That would yield approximately $448 billion over the next ten years — way more than enough to finance ten years of universal preschool and two free years of community college for all eligible students.
Our democracy’s Founding Fathers did not want a privileged aristocracy. Yet that’s the direction we’re going in. The tax on inherited wealth is one of the major bulwarks against it. That tax should be increased and strengthened.
It’s time to rein in America’s surging inequality. It’s time to raise the estate tax.
#9. MAKE POLLUTERS PAY US
Instead of investing in dirty fuels, let’s start charging polluters for poisoning our skies — and then invest the revenue so that it benefits everyone.
Each ton of carbon that’s released into the atmosphere costs our nation between $40 and $100, and we release millions tons of it every year.
Businesses don’t pay that cost. They pass it along to the rest of us — in the form of more extreme weather and all the costs to our economy and health resulting from it. We’ve actually invested more than $6 trillion in fossil fuels since 2007. The money has been laundered through our savings and tax dollars.
This has got to be reversed.
We can clean our environment and strengthen the economy if we:
(1) divest from carbon polluters,
(2) make the polluters pay a price to pollute, and
(3) then collect the money.
Please see the accompanying video, and share.
#10 END MASS INCARCERATION NOW
Imprisoning a staggering number of our people is wrong. The way our nation does it is even worse. We must end mass incarceration, now.
If I’m walking down the street with a Black or Latino friend, my friend is way more likely to be stopped by the police, questioned, and even arrested. Even if we’re doing the exact same thing — he or she is more likely to be convicted and sent to jail.
Unless we recognize the racism and abuse of our criminal justice system and tackle the dehumanizing stereotypes that underlie it, our nation — and our economy — will never be as strong as it could be.
Please take a moment to watch the accompanying video, and please share it so others can understand what’s at stake for so many Americans.
Here are the facts:
Today, the United States has 5 percent of the world’s population, but has 25 percent of its prisoners, and we spend more than $80 billion each year on prisons.
The major culprit is the so-called War on Drugs. There were fewer than 200,000 Americans behind bars as recently as the mid-70’s. Then, a racially tinged drug hysteria swept our nation, and we saw a wave of increasingly militant policing that targeted communities of color and poorer neighborhoods.
With “mandatory minimums” and “three strikes out” laws, the number of Americans behind bars soon ballooned to nearly 2.5 million today, despite widespread evidence that locking people up doesn’t make us safer.
Unconscious bias and cultural stereotypes lead to discriminatory enforcement of the laws — from who gets pulled over to where police conduct drug sweeps.
Even though Blacks, whites, and Latinos use drugs at similar rates, people with black and brown skin are more likely to be pulled over, searched, arrested, charged with a crime, convicted, and sent to jails and prisons where they can be subject to some of the worst human rights abuses.
As a result, black people incarcerated at a rate five times that of whites, and Latinos incarcerated at a rate double that of white Americans. Even if you’ve “served your time,” you never escape the label.
A felony conviction can bar you from getting a student loan, putting a roof over your head, or even from voting. It might even disqualify you from getting a job which can make it impossible for people with felony convictions to pull themselves out of poverty. And many who end up in prison were living in chronic poverty to begin with.
All of this means a lot of potential human talent is going to waste. We’re spending a fortune locking people up who could fuel our economy and build strong communities, in some cases just to increase the profits of private prison corporations.
So what do we do?
First, enact smarter sentencing laws that end mandatory minimums and transform the way we treat people who enter the criminal justice system. Instead of prisons and jails, we need well-paying jobs, and to invest in proven and cost-effective alternatives to incarceration, like job training and mental health and drug treatment programs.
Second, stop the militarized policing and end discriminatory policing practices such as “stop and frisk” and “broken windows” that disproportionately target communities of color.
Third, stop building new jails, start closing some existing ones, and begin to invest in schools, public transit, and housing assistance or local jobs programs. States are spending more and more on prisons, while cutting funding for schools. That’s crazy.
Finally, “ban the box” — the box on job applications that asks whether you have ever been convicted of a felony on a job application. Already, dozens of states cities, and counties have passed bills requiring that employers consider what you can do in the future, not what you might have done in the past.
Instead of locking people up unjustly, and then locking them out of the economy for the rest of their lives, we need to stop wasting human talent and start opening doors of opportunity — to everyone.
#11. WHY MEDICARE ISN’T THE PROBEM; IT’S THE SOLUTION
Again and again the upcoming election you’ll hear conservatives claim that Medicare — the health insurance program for America’s seniors — is running out of money and must be pared back.
Baloney. Medicare isn’t the problem. In fact, Medicare is more efficient than private health insurance.The real problem is that the costs of health care are expected to rise steeply.Medicare could be the solution — the logical next step after the Affordable Care Act toward a single-payer system.
Please see the accompanying video — #11 in our series on ideas to make the economy work for the many rather than for the few. And please share.
Some background: Medicare faces financial problems in future years because of two underlying trends that will affect all health care in coming years, regardless of what happens to Medicare: The first is that healthcare costs are rising overall — not as fast as they were rising before the Affordable Care Act went into effect, but still rising too quickly.
The second is that the giant post-war baby boom is heading toward retirement and older age. Which means more elderly people will need more health care, adding to the rising costs. So how should we deal with these two costly trends? By making Medicare available to all Americans, not just the elderly.
Remember, Medicare is more efficient than private health insurers — whose administrative costs and advertising and marketing expenses are eating up billions of dollars each year. If more Americans were allowed to join Medicare, it could become more efficient by using its growing bargaining power to get lower drug prices, lower hospital bills, and healthier people.
Allowing all Americans to join Medicare is the best way to control future healthcare costs while also meeting the needs of the baby boomer and other Americans.
Everyone should be able to sign up for Medicare on the healthcare exchanges set up under the Affordable Care Act. This would begin to move America away from its reliance on expensive private health insurance, and toward Medicare for all — a single-payer system.
Medicare isn’t a problem. It’s part of the solution.
#12. MOST IMPORTANT OF ALL:
GET BIG MONEY OUT OF POLITICS
Over the past two months, the videos I’ve done with MoveOn.org have detailed several ways to make the economy work for the many, not the few: raising the minimum wage to $15 an hour, making public higher education free, busting up the big banks, expanding Social Security, making polluters pay, raising the estate tax, strengthening unions, ending corporate welfare, helping families succeed economically, and letting all Americans buy into Medicare.
But none of these is possible if we don’t get big money out of politics.
In fact, nothing we need to do as a nation is possible unless we limit the political power of the moneyed interests. So we made one more video — the one accompanying this post — and it’s incredibly important you share this one, too.
At the rate we’re going, the 2016 election is likely to be the most expensive in history — and the moneyed interests will be responsible for most of it. Our democracy is broken, and we must fix it. Easy to say, but how do we do it?
First and most immediately, require full disclosure of all original sources of campaign money — so the public knows who’s giving what to whom, and can hold politicians accountable if they do favors for contributors while neglecting their responsibilities to all of us.
If Congress won’t enact a law requiring such full disclosure, the Federal Election Commission has the power to do it on its own and the SEC can do it for public corporations — which, by the way, are major campaign spenders.
Meanwhile, the President should issue an executive order requiring all federal contractors to fully disclose their political contributions. There’s a growing movement to encourage him to do just that.
Next, our government should provide matching funds for small-donor contributions — say $3 in public dollars for every $1 dollar from a small donor. Those public dollars could come from a check-off on your income tax return indicating you want, say, $15 of your taxes devoted to public financing of elections.
Third and most importantly, we must reverse the Supreme Court’s 5-4 First Amendment decisions holding that money is speech and corporations have the political rights of people — and that therefore no laws can be enacted limiting the amount of money wealthy individuals or big corporations can spend on elections.
We have to work hard for a constitutional amendment to overturn “Citizen’s United” — with the understanding that we’ll either succeed in amending our Constitution, or we’ll build a social movement powerful enough to influence the Supreme Court, just like the movement that led to the historic “Brown v. the Board of Education” decision.
Ultimately we need Supreme Court justices who understand that the freedom of speech of most Americans is drowned out when big money can spend as much as it wants, to be as loud as it needs to be.
The fundamental rule for an economy that works for everyone is a democracy that works, period.
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