Robert B. Reich

Robert Reich: Trump Has Only Inflamed 5 of America's Biggest Crises

It’s easy to get caught up in the deeply flawed character of Donald Trump. We also need to recognize the policy catastrophe of this presidency.

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America's Wealthiest Are Increasingly 'Earning' Their Fortunes by Inheriting Them

In reality, most of America’s poor work hard, often in two or more jobs.In a new Pew poll, more than three quarters of self-described conservatives believe “poor people have it easy because they can get government benefits without doing anything.”

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Why the Republican Strategy to Set Working Class Whites Against the Poor is Backfiring

For almost 40 years Republicans have pursued a divide-and-conquer strategy intended to convince working-class whites that the poor were their enemies.

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Why Democrats Can't Be Trusted to Control Wall Street

Who needs Republicans when Wall Street has the Democrats? With the help of congressional Democrats, the Street is rolling back financial reforms enacted after its near meltdown.

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Conservative Morality: Free Pass for Criminal Bankers, Restrictions for Women and Gay Citizens

We're still legislating and regulating private morality, while at the same time ignoring the much larger crisis of public morality in America.

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Coming Tuesday (Hopefully): The State of the Union's Economy

If you're sitting in the well of the House when a president gives a State of the Union address (as I've had the privilege of doing five times), the hardest part is on the knees. You're required to stand and applaud every applause line, which means, if you're in the cabinet or an elected official of the president's party, an extraordinary amount of standing and sitting.

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The Politics of the Jobs Report

The White House is breathing easier this morning. The Bureau of Labor Statistics reports the unemployment rate dropped to 7.8 percent -- the first time it's been under 8 percent in 43 months.

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Why the Election Could Be Decided This Friday

The biggest election news this week won't be who wins the presidential debate Wednesday night. It will be how many new jobs were created in September, announced Friday morning by the Bureau of Labor Statistics.

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Slashed Funding for Public Universities Is Pushing the Middle Class Toward Extinction

Last week Rick Santorum called the President “a snob” for wanting everyone to get a college education (in fact, Obama never actually called for universal college education but only for a year or more of training after high school).

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Why No Responsible Democrat Would Want Newt Gingrich to Win the GOP Presidential Nomination

Republicans are worried sick about Newt Gingrich's ascendance, while Democrats are tickled pink.

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The Grotesque Corporate Monstrosity Unleashed By Citizens United

If Mitt Romney becomes president I’m to blame. Ten years ago I ran for the Democratic nomination for governor of Massachusetts — which would have given me the opportunity to whip Mitt Romney’s ass in the general election.

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8 Ways to Fight the Right-Wingers and Corporations Buying Off Our Government

Not only is income and wealth in America more concentrated in fewer hands than it's been in 80 years, but those hands are buying our democracy as never before -- and they're doing it behind closed doors.

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When Will the Recovery Begin? Never

The so-called "green shoots" of recovery are turning brown in the scorching summer sun. In fact, the whole debate about when and how a recovery will begin is wrongly framed. On one side are the V-shapers who look back at prior recessions and conclude that the faster an economy drops, the faster it gets back on track. And because this economy fell off a cliff late last fall, they expect it to roar to life early next year. Hence the V shape.

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The Heart of the Economic Mess

The Federal Reserve Board's "beige book" for June and July offers a clear explanation for why the economy has slowed to a crawl. It shows American consumers cutting way back on their purchases of everything from food to cars, appliances and name-brand products. As they do so, employers inevitably are cutting back on the hours they need people to work for them, thereby contributing to a downward spiral.

The normal remedies for economic downturns are necessary. But even an adequate stimulus package will offer only temporary relief this time, because this isn't a normal downturn. The problem lies deeper. Most Americans can no longer maintain their standard of living. The only lasting remedy is to improve their standard of living by widening the circle of prosperity.

The heart of the matter isn't the collapse in housing prices or even the frenetic rise in oil and food prices. These are contributing to the mess, but they are not creating it directly. The basic reality is this: For most Americans, earnings have not kept up with the cost of living. This is not a new phenomenon, but it has finally caught up with the pocketbooks of average people. If you look at the earnings of nongovernment workers, especially the hourly workers who comprise 80 percent of the work force, you'll find they are barely higher than they were in the mid-1970s, adjusted for inflation. The income of a man in his 30s is now 12 percent below that of a man his age three decades ago. Per-person productivity has grown considerably since then, but most Americans have not reaped the benefits of those productivity gains. They've gone largely to the top.

Inequality on this scale is bad for many reasons, but it is also bad for the economy. The wealthy devote a smaller percentage of their earnings to buying things than the rest of us because, after all, they're rich. They already have most of what they want. Instead of buying, the very wealthy are more likely to invest their earnings wherever around the world they can get the highest return.

This underlying earnings problem has been masked for years as middle- and lower-income Americans found means to live beyond their paychecks. But they have now run out of such coping mechanisms. As I've noted elsewhere, the first coping mechanism was to send more women into paid work. Most women streamed into the work force in the 1970s less because new professional opportunities opened up to them than because they had to prop up family incomes. The percentage of American working mothers with school-age children has almost doubled since 1970, to more than 70 percent. But there's a limit to how many mothers can maintain paying jobs.

So Americans turned to a second way of spending beyond their hourly wages: They worked more hours. The typical American now works more each year than he or she did three decades ago. Americans became veritable workaholics, putting in 350 more hours a year than the average European, more even than the notoriously industrious Japanese.

But there's also a limit to how many hours Americans can put into work, so Americans turned to a third coping mechanism: They began to borrow. With housing prices rising briskly through the 1990s and even faster from 2002 to 2006, they turned their homes into piggy banks by refinancing home mortgages and taking out home-equity loans. But this third strategy also had a built-in limit. And now, with the bursting of the housing bubble, the piggy banks are closing. Americans are reaching the end of their ability to borrow, and lenders have reached the end of their capacity to lend. Credit-card debt, meanwhile, has reached dangerous proportions. Banks are now pulling back.

As a result, typical Americans have run out of coping mechanisms to keep up their standard of living. That means there's not enough purchasing power in the economy to buy all the goods and services it's producing. We're finally reaping the whirlwind of widening inequality and ever-more-concentrated wealth.

The only way to keep the economy going over the long run is to increase the real earnings of middle-class and lower-middle-class Americans. The answer is not to protect jobs through trade protection -- that would only drive up the prices of everything purchased from abroad. Most routine jobs are being automated anyway. Nor is the answer to give tax breaks to the very wealthy and to giant corporations in the hope they will trickle down to everyone else. We've tried that, and it hasn't worked. Nothing has trickled down.

Rather, the long-term answer is for us to invest in the productivity of our working people -- enabling families to afford health insurance and have access to good schools and higher education -- while also rebuilding our infrastructure and investing in the clean energy technologies of the future. We must also adopt progressive taxes at the federal, state and local levels. In other words, we must rebuild the American economy from the bottom up. It cannot be rebuilt from the top down.

Will Hillary Clinton Spoil the Party?

I'm thrilled at the record Democratic turnouts across the country, and at the ground-breaking reality of the Democrats' two candidates. But I'm also becoming anxious at the prospect of a fight that could reduce the possibility of either of them entering the White House in January of 2009.

Is Hillary Clinton’s willing to sacrifice that possibility in order to preserve a tiny possibility that she'll get the nomination? With her win in Ohio and projected win in Texas, that seems so. In the days leading up to the Ohio and Texas primaries, we had Hillary Clinton's statement that both she and McCain have the experience to be Commander-in-Chief but Obama doesn't.

This is the first time in my memory that a major candidate in a primary has said that the other party's nominee would be a better president than his or her own primary opponent. We also had the outpouring of negative advertising from her campaign that both candidates had largely managed to avoid up to this point.

And while I can understand her decision -- bolstered by yesterday's results -- to fight on in this primary election, the reality is that she can only win by convincing large numbers of superdelegates to join her and re-engineering the Michigan and Florida primaries to her advantage, and then taking the fight all the way to the convention in August -- which if she gets that far, will be one of the most divisive in forty years.

I suppose I should not be surprised. If Hillary Clinton has experience in anything, it's in fighting when cornered. When Bill Clinton lost his governorship, it was Hillary Clinton who commissioned Dick Morris to advise the Clintons on a no-holds-barred campaign to retake the governor's mansion. At the start of 1995, when Newt Gingrich and company took over Congress and the Clinton administration looked in danger of becoming irrelevant, it was Hillary Clinton who installed Dick Morris in the White House, along with his sidekick Mark Penn, to "triangulate" by distancing Bill Clinton from the Democratic Party and moving the Administration rightward. (When Morris was subsequently discovered to have a penchant for the toes of prostitutes the White House dumped him but kept Penn on.) And now Mark Penn is the "chief strategist" of Hillary Clinton's campaign.

The sad news is that whether the Clinton scorched-earth strategy ultimately succeeds or fails, it will have caused great harm. In the unlikely event it succeeds, the result will be a shame and not a little ironic. Barack Obama has breathed life into the Democratic Party, and into American politics, for the first time in forty years. Not since Robert Kennedy ran for president has America been so starkly summoned to its ideals; not since then has America -- including, especially, the nation’s youth -- been so inspired.

The Clintons would prefer to write off Obamania as a passing fad, but the reality is that idealism and inspiration are necessary preconditions for positive social change. Nothing happens in Washington unless Americans are energized and mobilized to make it happen. Hillary Clinton's tactics are the old politics the nation is recoiling from -- internal division and national fear. This only serves to deepen Americans' cynicism about politics, and makes social change all the harder to achieve.

AlterNet is a nonprofit organization and does not make political endorsements. The opinions expressed by its writers are their own.

The Conflicted Consumer

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American Corporations Getting Rich Abroad

I'm spending my spare time these days debating supply-siders who are convinced that the record-breaking Dow proves the correctness of the Bush tax cuts.

Yes, the Dow did reach a record high last month. But the Commerce Department also reported that economic growth slowed to its weakest pace in four years. How can investors do so well while the real economy is doing so poorly? My supply-side friends don't have an answer, but I do.

It's because of two great decouplings that have occurred in recent years. First, the rest of the worlds' major economies have decoupled from the United States' economy. China, India, Japan and Europe are now such large markets, they can grow briskly even as America slows.

Second, America's largest corporations have decoupled from the United States. Their overseas subsidiaries are booming even as their American operations stagnate. General Electric expects more than half its revenue this year to come from outside the United States for the first time. More than half of Boeing's new orders are from overseas. Ford is struggling in America but doing well in Europe.

In other words, the president's supply-side tax cuts are great for America's global investors, who have been investing their extra money around the world -- either in foreign companies or in global American-based ones.

But little or nothing is trickling down to average working Americans. Half of U.S. households do own some shares of stock, usually through their IRAs or 401Ks. But the vast majority own less than $5,000 worth. Their equity is in their homes, whose values have slumped. They're paying far more for health insurance and fuel. And their wages haven't kept up.

Bottom line: The Bush tax cuts have delivered for Wall Street but done zilch for America's Main Streets.

Will Humanity go the Way of the Dinosaur?

According to a new report from the National Aeronautics and Space Administration, some 100,000 asteroids and comets routinely pass between the Sun and the Earth's orbit. About 20,000 of these orbit close enough to us that they could one day hit the Earth and destroy a major city.

But the really worrying news from NASA is that over a thousand of these things are large enough (almost a mile wide in diameter) and their orbits close enough to us as to pose a real potential hazard of crashing into the Earth with enough force to end most life on this planet. Scientists think this is what killed off the dinosaurs about 65 million years ago.

Congress has given NASA a budget of a little over $4 million a year to track these killer asteroids, but NASA says it needs at least a billion dollars more to find all of them by the year 2020. This might involve building a special observatory for tracking them and launching a spacecraft to observe the space around Earth from Venus.

The job could be finished sooner than 2020, says NASA, but that would probably require a deep space orbiting infrared observatory, at an additional cost of $700 million.

All of which raises at least three pertinent questions.

First, if we're spending over a billion dollars a day in Iraq, why can't we bring the troops home a few days earlier and use the savings to track killer asteroids that might end life on earth?

Second, since we're talking about the survival of most living things and not just Americans, why shouldn't we expect other nations to kick in some money, too -- especially now that the dollar is dropping relative to the euro and the yen?

And third, once NASA knows for sure that a killer asteroid is heading directly for us, how exactly are we supposed to get ourselves out of its way, or it out of our way -- and how much should we be budgeting to accomplish this?

Stop ATT From Taking Your Web

This week, the House is expected to vote on something termed, in perfect Orwellian prose, the "Communications Opportunity, Promotion and Enhancement Act of 2006." It will be the first real battle in the coming War of Internet Democracy.

On one side are the companies that pipe the Internet into our homes and businesses. These include telecom giants like AT&T and Verizon and cable companies like Comcast. Call them the pipe companies.

On the other side are the people and businesses that send Internet content through the pipes. Some are big outfits like Yahoo, Google and Amazon, big financial institutions like Bank of America and Citigroup and giant media companies soon to pump lots of movies and TV shows on to the Internet.

But most content providers are little guys. They're mom-and-pop operations specializing in, say, antique egg-beaters or Brooklyn Dodgers memorabilia. They're anarchists, kooks and zealots peddling all sorts of crank ideas They're personal publishers and small-time investigators. They include my son's comedy troupe--streaming new videos on the Internet every week. They also include gazillions of bloggers--including my humble little blog and maybe even yours.

Until now, a basic principle of the Internet has been that the pipe companies can't discriminate among content providers. Everyone who puts stuff up on the Internet is treated exactly the same. The net is neutral.

But now the pipe companies want to charge the content providers, depending on how fast and reliably the pipes deliver the content. Presumably, the biggest content providers would pay the most money, leaving the little content people in the slowest and least-reliable parts of the pipe. (It will take you five minutes to download my blog.) The pipe companies claim unless they start charge for speed and reliability, they won't have enough money to invest in the next generation of networks. This is an absurd argument. The pipes are already making lots of money off consumers who pay them for being connected to the Internet.

The pipes figure they can make even more money discriminating between big and small content providers because the big guys have deep pockets and will pay a lot to travel first class. The small guys who pay little or nothing will just have to settle for what's left. The House bill to be voted on this week would in effect give the pipes the green light to go ahead with their plan.

Price discrimination is as old as capitalism. Instead of charging everyone the same for the same product or service, sellers divide things up according to grade or quality. Buyers willing to pay the most can get the best, while other buyers get lesser quality, according to how much they pay. Theoretically, this is efficient. Sellers who also have something of a monopoly (as do the Internet pipe companies) can make a killing.

But even if it's efficient, it's not democratic. And here's the rub. The Internet has been the place where Davids can take on Goliaths, where someone without resources but with brains and guts and information can skewer the high and mighty. At a time in our nation's history when wealth and power are becoming more and more concentrated in fewer and fewer hands, it's been the one forum in which all voices are equal.

Will the pipe companies be able to end Internet democracy? Perhaps if enough of the small guys make enough of a fuss, Congress may listen. But don't bet on it. This Congress is not in the habit of listening to small guys. The best hope is that big content providers will use their formidable lobbying clout to demand net neutrality. The financial services sector, for example, is already spending billions on information technology, including online banking. Why would they want to spend billions more paying the pipe companies for the Internet access they already have?

The pipe companies are busily trying to persuade big content providers that it's in their interest to pay for faster and more reliable Internet deliveries. Verizon's chief Washington lobbyist recently warned the financial services industry that if it supports net neutrality, it won't get the sophisticated data links it will need in the future. The pipes are also quietly reassuring the big content providers that they can pass along the fees to their customers. Will the big content providers fall for it? Stay tuned for the next episode of Internet democracy versus monopoly capitalism.

Two Cheers for Massachusetts

This article is reprinted from The American Prospect.

Forty-five million Americans are without health insurance, and the number keeps rising. Recently the state of Massachusetts unveiled a plan for reversing this trend. It would provide nearly every Massachusetts resident with health insurance -- and the plan won't require any additional state spending.

There's no free lunch and no free health care. So how does Massachusetts plan to insure its half mission non-insured residents? By doing three simple things that every other state could do just as well.

First, its using the money it now pays hospitals for giving free emergency care to the uninsured. As it is now, most people without health insurance don't see a doctor. They wait until whatever problem they have is so severe it becomes a health emergency. Then they go to the hospital emergency rooms that take in anyone needing emergency care. But by this time the health problem is hugely expensive to cure. So Massachusetts says, sensibly, let's use this money instead to insure poor and working-class people (who aren't poor enough to qualify for Medicaid) so they can see a doctor before their health problem becomes an expensive emergency.

Second, Massachusetts is bundling health insurance policies together so individuals and small businesses can buy health insurance as if they were parts of a large company. It's called economies of scale. It's roughly the same technique Wal-Mart uses to get great deals from its thousands of suppliers. As a result, health insurance will get cheaper in Massachusetts. This is also just good common sense.

Third -- and here's the most controversial step -- Massachusetts is requiring middle and upper-middle class people who don't now have health insurance to buy it for themselves. Many of these people are young -- in their twenties and thirties. They don't have insurance because they know their risk of having a serious health problem is very low. Like most young people, they think they're indestructible.

Of course they're not indestructible. Some of them will need health care. But when they're required to buy health insurance, they not only insure themselves. They also add their money to an insurance pool that will be drawn on by everyone -- including those who are older, poorer, and likely to be sicker.

Libertarians may holler about this but it seems sensible and fair. Mandatory insurance is not an invasion of our independence. We've got to buy car insurance if we want to drive. We have to buy home insurance if we want to get a mortgage. When we pay our local taxes we pay for fire fighters and police officers, even if we never use them -- even if people who live in more run-down parts of down end up using more of them than we do. So what's wrong with requiring that everyone who can afford it to buy health insurance, even if some people who are needier may get a bit more of the benefits?

The real gamble in the plan is whether the economies of scale Massachusetts gets by bundling policies together cuts costs enough so that every middle-class resident who will have to buy a policy can afford to. I'd prefer a single payer plan that would get rid of all the advertising and marketing costs that insurers and providers now spend to attract customers. That would surely make health-care far more affordable. But the Massachusetts plan is a good start nonetheless. And it may work elsewhere.

I'm not saying that as Massachusetts goes so goes the nation. Massachusetts is a bit, well, shall I say to the left of Kansas. But even Kansas might be attracted by a plan that insures nearly everyone without spending a taxpayer dime.

Class Warfare With Taxes

Tax bills now wending their way through the House and Senate would cut about $60 billion in taxes next year. But there's a huge difference between the two. The biggest item in House bill is a two-year extension of the president's tax cuts on stock dividends and capital gains. The House bill doesn't touch what's called the Alternative Minimum Tax (AMT). By contrast, the biggest item in Senate bill is temporary relief from the AMT. But the Senate bill doesn't extend the dividend and capital gains tax cuts.

No legislative choice in recent years has so clearly pitted the super-rich against the suburban middle class. Most of benefits of the House's proposed extension of the dividend and capital gains tax cuts would go to the top one percent of taxpayers, with average annual incomes of more than $1 million. Most of the benefits of the Senate's cut in the AMT would go to households earning between $75,000 and $100,000 a year, who would otherwise get slammed.

The AMT was enacted more than three decades ago to prevent the super-rich from using tax breaks to avoid paying income taxes. But it's now the super-rich who are making off like bandits, while the AMT is about to hit the middle class. That's because the AMT was never indexed to inflation, which means it's starting to reach taxpayers considerably below the super-rich.

This year, the AMT will affect more than three million middle-class taxpayers who will no longer be able to deduct state and local taxes or use the child tax credit. Next year, if not adjusted, it will affect ten million more taxpayers. So unless the Senate version of the new tax bill prevails, middle-class taxes will rise -- even as the Bush tax cuts of 2001 and 2003 continue to reduce taxes on the very wealthy.

Here's where things get politically interesting. Both groups -- the super-rich and the upper middle class -- have lots of political clout in Washington, especially in Republican circles. So as these two tax bills move on a collision course, the multi-billion dollar question is: Which group will win?

The likely answer: Both! Here's betting the Senate and House will compromise by extending the dividend and capital gains tax cuts and cutting the AMT. It's an elegant compromise, of the sort Washington is skilled at making. There's only one problem. With it, the budget deficit will explode even more.

The underlying question is, who ends up paying for Iraq, the Katrina cleanup, the Medicare drug benefit, homeland security, everything else? If the House has its way, it won't be the super-rich, who will get their capital gains and dividend tax cuts extended. If the Senate gets its way, it won't be the middle class, who would otherwise be hit by the AMT. If the House and Senate compromise by giving both groups what they want, there's only one group left.

That group is the poor and near-poor. Cut more taxes on the super-rich and the middle class, and the only way Congress can say it's grappling with the soaring budget deficit is to cut more programs for the poor. That means fewer food stamps, less Medicaid and vanishing housing assistance.

Of course, this won't be nearly enough to shrink the deficit. So in order to extend the tax breaks for the rich and to avoid the AMT, America will have to rely even more on foreigners -- from whom we're already borrowing more than $2 billion a day.

In the end, it will be our kids and grandchildren who get the tab, because they'll have to pay foreigners back. And our current political leaders? They couldn't care less -- because by then, they'll be long gone.

A Society of Owers

You didn't hear much at the Republican Convention about jobs and wages, because job growth has stalled and wages are stagnant. But you did hear about something Republicans are now calling the "Ownership Society." The notion is to expand private ownership through more tax cuts on capital investments, tax credits for saving and privatized Social Security.

Sounds nice, but here's the problem: The Republican rhetoric assumes most Americans can save and invest. The reality is, most Americans are deep in debt. Before they can join the "Ownership Society" they've got to pay their credit card bills, their rising variable-rate mortgages and their auto loans. After that, there's no money left because jobs are in short supply and wages are stuck in the mud.

The Commerce Department reported this week that personal incomes rose a measly one-tenth of one percent in July, the lowest rise in almost two years. And – given rising prices for food, fuel and health insurance – consumers spent more than they earned. So last month, Americans went even deeper into debt. The result: Less ownership, not more.

It's true that more than half of American households now own stocks in corporations. But for most, it's just a few thousand dollars worth. And the total value of their current portfolio is less than they invested. They got lured into the stock market during the late '90s when stock prices were pumped up with accounting steroids.

The fact is, an Ownership Society based on the stock market would be a casino. The Bush administration would like you to put your Social Security payments into the stock market, but beware. If your timing is bad, you could find yourself retiring in a bear market. It's happened before. That's one of the reasons Social Security – as social insurance – was invented.

Face it: The Republican "Ownership Society" is hokum. Ownership of America is now more concentrated than since the days of the Robber Barons of the 19th century. The richest 1 percent of America owns more than the the bottom 90 percent put together.

There are only two ways to reverse this trend, neither of which the Bush administration will support. The first is to enact a progressive tax on wealth – say, one-tenth of 1 percent per year, on those who own the most. Right now, the only wealth that's taxed is real property. The property tax is often regressive because poor and working-class families tend to cluster in their own communities, which means they pay through their noses for schools and local services.

A fairer system would tax total wealth, and it would be administered nationally. Revenues could be distributed to communities on the basis of population – enabling poor communities to have good schools and better services. If George Bush ever suggests this, I'll eat my spinach.

The second way to reverse the concentration of wealth in America is with an educational system that assures that every American can make the most of his or her God-given talents and abilities, and become rich one day if that's what she wants. But that's not what Bush has done. The administration has left the "No Child Left Behind Act" woefully underfunded, so states don't have enough money to respond to children who are left behind in lousy schools. And the administration has cut funds for job training, making it even harder for today's workers to get the skills they need to get ahead.

I'm all in favor of a real Ownership Society. But that's not at all what Republicans are selling.

This commentary originally appeared on Marketplace, public radio's only daily business news program and is reprinted via a special arrangement between and Robert Reich. Marketplace is produced by Minnesota Public Radio and is heard on 322 public radio stations nationwide.  

Will Terrorism Stall Globalization?

Will the war on terrorism enhance globalization, further immersing America in the global economy? Or will it cause us to retreat or try to retreat from the rest of the globe?

At first glance, the war seems to have generated a flowering of multilateralism. Western Europe and America haven't been closer since World War II. Suddenly, it seems we're also close allies of Russia, China, Pakistan, even places Americans hardly knew existed six weeks ago, like Uzbekistan.

And with political alliance comes economic integration. There's even a move afoot to increase trade with Pakistan. The administration is pushing Congress harder than ever for authority to move trade treaties without amendment.

Yet, most of this is symbolic. In fact, terrorism is already causing America and other advanced nations to step back from globalization. You can see this reflected in the steep drops in global equities, higher interest rates on bonds of emerging markets, and higher insurance costs in doing business abroad. Why? Because of the added risks of a world threatened by terrorism.

Or just look at the bottlenecks at our borders. Inspections of cargo inside trucks and tankers are dramatically slowing the flow of foreign parts and supplies, which is forcing American companies to stock more inventory and consider shifting some of their suppliers to the United States.

Foreign travel is down, not only among tourists but also corporate executives and staff. And the costs of providing security for overseas staff are rising.

You can bet on tighter controls over immigration to the United States. Legal immigrants accounted for more than a third of the growth of America's work force during the last decade. But those days may be over.

And don't expect a major new round of global trade talks to emerge from the World Trade Organization meetings, beginning November 9th. Many poorer nations are feeling the double punch of a slowing global economy and political unrest at home. They want rich nations to open their borders to exports of agricultural commodities, textiles and steel. But rich nations, including the United States, aren't in any mood.

Just last week, the Commerce Department's International Trade Commission found that America's steel industry has been seriously injured by foreign steelmakers, clearing the way for the White House to impose higher tariffs and quotas on foreign steel.

The irony, of course, is that the best way to fight terrorism over the long term is to give young people in poorer nations reason to believe they can make it in the new global economy. A retreat from globalization is exactly what the terrorists want.

Robert Reich, U.S. secretary of labor from 1993 to 1997, is University Professor of social and economic policy at Brandeis University, and founder and national editor of the American Prospect.

How to Be Tough on Terrorism

The righteousness of our cause shouldn't prevent us from asking why so many people around the world who aren't terrorists hate America and from seeking ways to reduce their hatred. Recognizing America's past failing in this regard isn't justifying terrorism. Finding means of ameliorating the hatred isn't appeasing terrorists. Rather, it's looking at terrorism's larger context -- the soil in which it has taken root -- and examining our role in helping to create those conditions or allowing them to endure.

Here's where America's political and intellectual left and right seem incapable of reasoned debate. Much of the left is still bemoaning America's Cold War support of anticommunist dictators -- the shah, Mobutu, Somoza, Greek colonels, Korean generals, Pinochet, Marcos, Armas, the mujahideen -- and our nation's gruesome record advising them, training their death squads, schooling and equipping their torture specialists, and helping them squirrel away their vast wealth. Given this history, the post�September 11 effulgence of American flags, patriotic hymns, and "freedom and democracy" bromides offered by American politicians strikes many on the left as dangerously ahistoric if not downright hypocritical.

The right dismisses this sordid history as irrelevant to the current crisis and accuses anyone on the left who dwells on it as "blaming America" for terrorism. Both sides are wrong: the left for suggesting that this history should make us any less determined to fight Islamic extremism and the right for assuming that this record has no bearing on why much of the third world is hostile toward us. Of course, we must proceed against terrorists with full force. Yet it's also important to understand that our checkered history has shaped the understandings of many poor nations whose cooperation we need in order for that force to be effective and many of the world's poor who are both attracted to radical fundamentalism and repelled by American bullying.

This blaming-versus-understanding terrain is also where American backers and critics of Israel butt heads. Backers don't want to admit that part of the third world's animosity toward the United States comes from its unswerving support for an Israeli government that's been assassinating Palestinian leaders, bombing Palestinian towns, demolishing Palestinian homes, and expanding Jewish settlements on the West Bank. Critics, meanwhile, fail to acknowledge the immensity and randomness of the violence aimed at Israeli Jews, and their legitimate worries about surviving in a region whose hostile Arab population is growing quickly. Here, too, much of this debate is beside the point. It's time for the United States to pressure Ariel Sharon and Yasir Arafat to resume the peace process with an eye toward a separate Palestinian state on the West Bank. Indeed, the United States and the West may have to take a stronger role in creating that state. Without it, continued hostilities between Israelis and Palestinians will only further inflame the Muslim world.

Finally, we have to think through our responsibilities as the world's only remaining superpower. America-firsters insist that we have no obligation to anyone beyond our borders and should act only where our national interest is directly at stake. This entails expanding global trade, stabilizing the world economy through the International Monetary Fund, defending ourselves against missiles from rogue states, and fighting terrorism that threatens domestic security. Globalists say that we have more important moral duties: We must fight genocide wherever it breaks out; share our wealth and knowledge in order to save the lives of 50 million people a year -- 12 million of them children -- who will otherwise die of preventable disease or malnutrition; and bear our rightful share of the cost of reducing carbon-dioxide emissions, improving working and living conditions in the third world, and reversing the trend toward greater inequality between rich and poor nations.

Considering the larger context of terrorism, each of these positions has part of the truth -- but again, neither is sufficient. America-firsters are correct that the national interest is America's paramount concern, but globalists correctly focus attention on the many ways in which the United States can play a more constructive role in the world. Spreading prosperity and relieving human suffering are in our national interest to the extent that they reduce the anger felt by many of the world's poor toward rich and powerful America while creating opportunities for the poor to share the benefits of the global economy. It's the same lesson we learned from rebuilding war-ravaged Europe and Japan after the Second World War, when an emerging Soviet threat prompted us to take a broader view of national security. The terrorist threat should cause us to think no less generously. Identifying and responding to the root causes of terrorism in no way justifies the horror that terrorists inflict; nor should doing so be seen as a means of appeasing them. To the contrary, it's part of a long-term strategy to eradicate them. Ultimately, terrorism cannot be rooted out by anything other than its roots.

Britain's Tony Blair, who has offered the most eloquent justification for why we are at war against terrorism, promised during his first campaign for prime minister to be "tough on crime, and tough on the causes of crime." It was possible and desirable to do both. It's the same with the current war, which must be fought on two fronts: We must be brutally tough on terrorism but equally tough on its causes.

Robert Reich, U.S. secretary of labor from 1993 to 1997, is University Professor of social and economic policy at Brandeis University, and founder and national editor of the American Prospect.

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