Robert Reich breaks down the distinct change in balance of power between large corporations and the government
Robert Reich, the former United States Secretary of Labor, is expressing concern about the shift in the balance of power between the U.S. governnent and corporations while explaining the country's failure to properly regulate businesses.
Reich began with a brief overview of the government's regulation of businesses and how it ultimately enter subsidization.
"From 1932 through the late 1970s, the government mainly regulated businesses. This was the era of the alphabet soup of regulatory agencies begun under Franklin D Roosevelt (the SEC, ICC, FCC, CAB, and so on) culminating in the EPA of 1970," Reich wrote.
"The government still regulates businesses, of course," he added, "but the biggest thing the federal government now does with businesses is subsidize them."
He went on to offer a comparison of decisions made by present-day president's in comparison to the years prior to the 80s.
Highlighting President Joe Biden’s recent accomplishments including the Chips and Science Act, the Infrastructure Investment and Jobs Act, and the Inflation Reduction Act, he noted that: "This shift from regulation to subsidy has characterized every recent administration."
He also recalled other executive decisions along the same lines.
"Trump’s Operation Warp Speed delivered $10bn of subsidies to Covid vaccine manufacturers," he wrote.
Recalling similar orders under former President Barack Obama, Reich also pointed out: "Obama’s Affordable Care Act subsidized the healthcare and pharmaceutical industries (indirectly, through massive subsidies to the buyers of healthcare and pharmaceuticals)."
He added, "Obama spent about $489bn bailing out the financial industry (and, notably, never fully restored financial regulations that previous administrations had repealed), as well as GM and Chrysler."
According to Reich, prior to the 1980s, the U.S. governnent would have likely taken a different approach. Instead of subsidizing sectors, he insists the government likely would have regulated them.
Reich went on to explain the shift from regulation to subsidization when he wrote, "Why the big shift? Because of the change in the balance of power between large corporations and the government."
He concluded, "In truth, the three decades-long shift in power to big corporations has transformed industrial policy into a system for bribing them to do the sorts of things government once demanded they do as the price for being part of the American system."
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