Photo by Svetlana Cvetko
Robert Reich is a rock star. The soft-spoken professor of public policy at the University of California, Berkeley, and former Secretary of Labor has been touring the country, spreading his message about the dangers of the rigged economy and the fictional “free market” to large and appreciative audiences.
Reich frequently makes points using self-deprecating humor, cracking jokes about his own height (four feet eleven inches).
“Shaquille O’Neal and I have an average height of six feet, two inches,” he said in a speech in Madison, Wisconsin, in late October. He was explaining why statistics showing rising average income can be deceiving. “You want to look at the median,” he explained. “The median has not done well in this recovery . . . yet the economy is so much better. Where did all the money go?” (Answer: to the top 1 percent.)
The crowd, hanging on Reich’s every word, overflowed the available space and packed an adjacent screening room at the downtown Madison Public Library. His message could not be more in tune with the current mood in the country, judging by the outpouring for him, for Elizabeth Warren, for Bernie Sanders, and even for rightwing populists in the Republican presidential field.
Reich’s credits include fourteen books and the award-winning documentary Inequality for All. The last time I interviewed him for The Progressive, in May 2001, his funny and insightful book Locked in the Cabinet was on the bestseller list, describing in sometimes maddening, sometimes hilarious detail how he struggled to get economic inequality on the agenda in the Clinton Administration in the go-go 1990s. Inequality is now Topic A in the 2016 presidential campaigns. “I can’t tell you how delighted I am,” he told me.
In his new book, Saving Capitalism (For the Many, Not the Few), Reich writes about the inevitable reshuffling of American politics, and the rise of anti-establishment candidates. “I didn’t expect that my prediction would come true so quickly!” he said.
We chatted for an hour in the library director’s office, before Reich went out to address the crowd. Funny, warm, and, despite the dire economic news he writes about, fundamentally optimistic, Reich is as engaging up close as he is in public.
Q: One of the most poignant scenes in your book is when a minimum-wage worker says he is not worth as much as a wealthy CEO. It’s really profound how people have internalized this.
Reich: Many people who are working class and poor blame themselves for not doing better. They don’t understand that the system has made it almost impossible for them. It’s not that they lack brains, as that particular worker said of himself. It’s that they lack organization.
A lot people still believe we’re in a meritocracy. But if you look at it closely, you see the rise of the working poor and the simultaneous rise of the nonworking rich. You see the obscenity of CEO pay, how CEOs are actually managing to get these outlandish amounts of money through what is essentially a conflict of interest—insider trading. Then look at Wall Street as well, where insider trading is rampant. You have to throw up your arms and say, this is not a meritocracy. We’re kidding ourselves.
Q: I’m curious what you think is possible within another Clinton Administration.
Reich: It’s a very central question. And I ask myself that question all the time. If it’s just—quote unquote—another Clinton Administration, then it’s going to be very close to Wall Street. Bob Rubin or his equivalent will be quite central on making economic policy.
On the other hand, times have changed. We are not where we were twenty years ago. So it’s possible that we may see something very different, even in a Hillary Clinton presidency.
We used to do trade agreements. We did NAFTA and CAFTA. They’ve become steadily more difficult. The opposition to the Trans Pacific Partnership is so much greater than the Obama Administration ever anticipated. It may not even happen. You’ve got to ask yourself, if you’re a CEO and you’ve been pushing hard for the Trans Pacific Partnership, what’s going on here?
What’s going on here is you have huge numbers of Americans who don’t trust CEOs or corporations and know that this deal is going to be hugely profitable for multinational American corporations, but not necessarily good for average workers. People know that. They’re not stupid.
Q: What do you make of the groundswell for Bernie Sanders?
Reich: Bernie Sanders was a huge surprise, even to himself. I know Bernie, and he entered the fray, I think, without expecting that he would make it through the primaries. I think he wanted to be the voice that he has become—representing the deep concern about the misallocation of power and wealth in society.
Times have changed. We are at a turning point. We are just about at a tipping point. If it hadn’t been Bernie, it would have been Elizabeth Warren. If it hadn’t been Elizabeth Warren, it would have been somebody. Because there is a pent-up demand for politicians to address this terrible issue of an unbalanced society.
Q: You talk in your book about the need for a “countervailing power,” and yet labor unions have been decimated in this country. So where is the organized force that you see as the actual potential for change?
Reich: I see great potential. If we were having this discussion in 1900, you might ask me the same question. There were no labor unions to speak of; there really wasn’t much countervailing power. And I would have said to you in 1900, “Well, I sense things are changing. There is a populist wave. We have William Jennings Bryan, and in 1896 there seems to be a lot of public discontent. It hasn’t coalesced into anything yet, but I think we’re on the cusp of a major progressive era.”
And you might look at me like you’re looking now, with skepticism, but sure enough, there was Teddy Roosevelt becoming President, and legitimizing and allowing this upsurge to occur. I think it will occur again.
Q: You write about a shift in the economy to what you call iEverything—where a handful of people create these amazing products but don’t employ anybody. It’s scary.
Reich: Well, it is scary until you realize that something has to change. It’s not just an economy, it’s a political economy. We make the rules and the rules will change. You can’t have an economy in which a handful of people make all the money.
I was visited recently in my office by a CEO and chairman of a large high-tech firm who was worried about inequality. We had a very good discussion. He’s a very thoughtful man. I finally asked him, “What’s your concern?” He said, “I can see in the direction we’re going. Twenty years from now, I’m not sure who’s going to be able to afford my products.”
Q: You talk about a guaranteed income, which is fabulous . . .
Reich: Which is inevitable . . .
Q: But I wonder what pushback you get when you go on the road. Do people say that’s insane?
Reich: Well, of course there’s pushback, but when you understand the logic, it makes sense. What I try to do in this book is start at the almost molecular level of an understanding of the economy—the building blocks of the market, the building blocks of capitalism. And if you follow the logic, the logic leads inevitably to a guaranteed minimum income.
Q: You talk about how 70 percent of Harvard grads are now applying for Wall Street jobs. It seems there has been a tremendous drain of social support for a more modest life that allows for more equality.
Reich: Yes, but it’s a chicken-and-egg problem. Because as inequality increases, the rewards of being at the very top become almost unimaginably greater than they were before, so it’s very hard to resist, if you are a kid who can go to Harvard Business School and then to Wall Street or a management consulting outfit or a top law firm.
If you’re passing up a job that pays, let’s say, $100,000 a year, that’s one thing. But if you are passing up a job that pays $5 million a year, or even $1 billion a year—that’s a different universe. I’ve seen significant numbers of young people—not from Berkeley, thank goodness, because it’s very difficult to get into that bubble from Berkeley—but certainly from Harvard and from Princeton, from the Ivy League, succumb to this socialization process in which they become the new American aristocracy.
Q: And is that part of what happens in Washington, too?
Reich: Absolutely. It’s seductive. You have investment bankers who are filling the Treasury Department and big donors who are staying in the Lincoln Bedroom and countless fundraisers. You befriend these people and you golf with them and they introduce you to their friends and you summer at their estates and you gradually, almost unwittingly, become seduced into their world. And that is terribly dangerous.
You begin to see the rest of the world through their eyes. And you lose touch with where most people are, as they become more and more desperate. It’s not just that work is not paying as much for most people, it’s also that there’s less economic security. People are scared. Two-thirds of Americans are living paycheck to paycheck. The idea of full employment is disappearing.
Q: How was it for you to be in that environment in Washington?
Reich: It’s a very hard question for me to answer. I just remember that I spent so much of my time feeling angry. That’s not good for anybody. I felt alone. That so-called welfare reform bill of 1996—I thought it was a travesty. It’s one of the reasons almost one out of five of the nation’s kids is in poverty now.
I remember leaving the White House knowing full well Clinton was going to sign that Republican bill, and being surprised that there wasn’t anyone demonstrating. It was well known that he was making the decision that day. But as I walked back to my office down Pennsylvania Avenue, there was no one. Now, if there’s nobody, then pretty bad things can happen. No matter how good the people are who have been elected or appointed to positions in Washington, the moneyed interests will prevail.
Q: In the current race for President, do you think labor unions have been foolish to jump to endorse so early?
Reich: Every election season, the union presidents jump over themselves to try to be the first in line to endorse the establishment Democrat, without having gotten anything in return. Bill Clinton promised labor law reform, but he wasn’t at all interested. He gave them NAFTA. The union presidents were furious. I arranged a meeting in the White House where the union presidents could vent their anger, and good old Bill Clinton charmed the pants off everyone. It goes back to the seduction process. It can be very hard to resist, even for a union president, to be on the inside, and to attend galas at the White House.
Same thing with the Obama Administration. Obama promised the employee free choice act. It never happened. Remember both Clinton and Obama had Democrats in control of Congress at the beginning. Unions need to withhold their support until they get very concrete assurance that, by a date certain, this is what I as President will commit to do.
Q: What gives you reason to be optimistic?
Reich: I’ve gone around the country for the last year, talking to groups of people: small business people in Kansas City, who are very concerned about the big box retailers and Amazon; small farmers in Missouri who are organizing against big agriculture and the factory farms; the Fight for $15 people, who are making great headway. I even talked to some of the last regional bankers who are trying to hold on, notwithstanding the extraordinary resources of Wall Street. All you have to do is connect some of these people up and you have the beginnings of something quite significant.
It’s not something we might want or wish for. It’s inevitable. Because the current path we’re on is unsustainable. It’s not sustainable economically, because the poor and middle class don’t have enough purchasing power to keep the economy going. It’s not sustainable politically, because you either are getting a leftwing anti-establishment candidate, or a rightwing anti-establishment backlash. The Republican Party is in a civil war.
Hillary and Bernie Sanders won’t be in that kind of a civil war, but the forces behind Bernie are not going to go away.
Republicans, I think, are desperately holding on. That’s why they’re doing so much gerrymandering and voter suppression. There is a kind of desperation about the Republican Party right now, given the demographic shifts in the electorate, and the fact that the old white swing vote is no longer determinative.
It’s going to be very interesting to see.
Ruth Conniff is Editor-in-Chief of The Progressive.