Robert Reich's Blog

The oligarchy’s ultimate political weapon

If you’re discouraged by what’s happening in the country, that is by design.

The forces undermining our democracy, polluting our planet, and stoking hatred are counting on you to give up. But we must not let them.

They use their allies in political office to grind the gears of government to a halt, so people see government as the problem, not the solution. But if there’s one thing we learned from this wretched pandemic, it’s that government intervention can reduce poverty and suffering, and we can afford to pay for it.

They want us to become so discouraged that we stop showing up to vote. Another victory for them. Those who want you to believe that change is not possible are counting on you to forget that history and give up. Don’t.

PS: If you’d like to join me on a (nearly) daily basis, please subscribe at https://robertreich.substack.com/

We're still missing the truth about what the Jan. 6 attack really meant

January 6 will be remembered as one of the most shameful days in American history. On that date in 2021, the United States Capitol was attacked by thousands of armed loyalists to Donald Trump, some intent on killing members of Congress. Roughly 140 officers were injured in the attack. Five people died that day.

But even now, almost a year later, Americans remain confused and divided about the significance of what occurred.

Let me offer four basic truths:

1. Trump incited the attack on the Capitol.

For weeks before the attack, Trump had been urging his supporters to come to Washington for a “Save America March” on January 6, when Congress was to ceremonially count the electoral votes of Joe Biden’s win. Without any basis in fact or law (60 federal courts as well as the Departments of Justice and Homeland Security concluded that there was no evidence of substantial fraud), Trump repeatedly asserted he had won the 2020 election and Biden had lost it.

“Big protest in D.C. on January 6th. Be there, will be wild!” Trump tweeted on December 19. Then on December 26: “See you in Washington, DC, on January 6th. Don’t miss it. Information to follow.” On December 30: “JANUARY SIXTH, SEE YOU IN DC!” On January 1: “The BIG Protest Rally in Washington, D.C. will take place at 11:00 A.M. on January 6th. Locational details to follow. StopTheSteal!”

At a rally just before the violence, Trump repeated his falsehoods about how the election was stolen. “We will never give up,” he said. “We will never concede. It will never happen. You don’t concede when there’s theft involved. Our country has had enough. We will not take it anymore.”

He told the crowd that Republicans are constantly fighting like a boxer with his hands tied behind his back, respectful of everyone — “including bad people.”

But, he said, “we’re going to have to fight much harder…. We’re going to walk down to the Capitol, and we’re going to cheer on our brave senators and congressmen and women, and we’re probably not going to be cheering so much for some of them, because you’ll never take back our country with weakness. You have to show strength, and you have to be strong…. We fight like hell. And if you don’t fight like hell, you’re not going to have a country anymore.“

He then told the crowd that “different rules” applied to them. “When you catch somebody in a fraud, you are allowed to go by very different rules. So I hope Mike [Pence] has the courage to do what he has to do, and I hope he doesn’t listen to the RINOs [Republicans in Name Only] and the stupid people that he’s listening to.”

Then he dispatched the crowd to the Capitol as the electoral count was about to start. The attack on the Capitol came immediately after.

2. The events of January 6 capped two months during which Trump sought to reverse the outcome of the election.

Shortly after the election, Trump summoned to the White House Republican lawmakers from Pennsylvania and Michigan, to inquire about how they might alter the election results. He even called two local canvassing board officials in Wayne County, Michigan’s most populous county and one that overwhelmingly favored Biden.

He phoned Georgia’s Republican secretary of state to “find 11,780 votes,” according to a recording of that conversation, adding “the people of Georgia are angry, the people of the country are angry. And there’s nothing wrong with saying that, you know, um, that you’ve recalculated.”

He suggested that Georgia’s secretary of state would be criminally prosecuted if he did not do as Trump told him. “You know what they did and you’re not reporting it. You know, that’s a criminal — that’s a criminal offense. And you know, you can’t let that happen. That’s a big risk to you and to Ryan, your lawyer. That’s a big risk.”

He pressed the acting US attorney general and deputy attorney general to declare the election fraudulent. When the deputy said the department had found no evidence of widespread fraud and warned that it had no power to change the outcome of the election, Trump replied “Just say that the election was corrupt + leave the rest to me” and to Trump’s congressional allies.

Trump and his allies continued to harangue the attorney general and top Justice Department officials nearly every day until January 6. Trump plotted with an assistant attorney general to oust the acting attorney general and pressure lawmakers in Georgia to overturn the state’s election results. But Trump ultimately decided against it after top department leaders pledged to resign en masse.

Presumably, more details of Trump’s attempted coup will emerge after the House Select Committee on January 6 gathers more evidence and deposes more witnesses.

3. Trump’s attempted coup continues to this day.

Trump still refuses to concede the election and continues to assert it was stolen. He presides over a network of loyalists and allies who have sought to overturn the election (and erode public confidence in it) by mounting partisan state “audits” and escalating attacks on state election officials. When asked recently about the fraudulent claims and increasingly incendiary rhetoric, a Trump spokeswoman said that the former president “supports any patriotic American who dedicates their time and effort to exposing the rigged 2020 Presidential Election.”

Trump recently announced he would be hosting a news conference at his Mar-a-Lago resort in Florida on January 6.

“Remember,” he said in the announcement “the insurrection took place on November 3rd. It was the completely unarmed protest of the rigged election that took place on January 6th.” (Reminder: they were armed.) Trump then referred to the House investigation: “Why isn’t the Unselect Committee of highly partisan political hacks investigating the CAUSE of the January 6th protest, which was the rigged Presidential Election of 2020?”

He went on to castigate “Rinos,” presumably referring to his opponents within the party, such as Republican Reps. Liz Cheney and Adam Kinzinger, who sit on the January 6 committee. “In many ways a Rino is worse than a Radical Left Democrat,” Trump said, “because you don’t know where they are coming from and you have no idea how bad they really are for our Country.” He added, “the good news is there are fewer and fewer RINOs left as we elect strong Patriots who love America.”

Trump has endorsed a primary challenger to Cheney, while Kinzinger will leave Congress at the next election. Trump and other Republicans have also moved to punish 13 House Republicans who bucked party leadership and voted for a bipartisan infrastructure bill in November.

4. All of this reveals a deep problem in America that must be addressed

Trump and his co-conspirators must be held accountable, of course. Hopefully, the Select Committee’s report will be used by the Justice Department in criminal prosecutions of Trump and his accomplices.

But this in itself will not solve the underlying problem. A belligerent and narcissistic authoritarian has gained a powerful hold over a large portion of America. As many as 60 percent of Republican voters continue to believe his lies. Many remain intensely loyal. The Republican party is close to becoming a cult whose central animating idea is that the 2020 election was stolen from Trump.

Trump has had help, of course. Fox News hosts and Facebook groups have promoted and amplified his ravings for their own purposes. Republicans in Congress and in the states have played along.

But even with this help, Trump’s attempted coup could not have gotten this far without something more basic: A substantial portion of the American population feels an anger and despair that has made them susceptible to Trump’s swagger and lies.

It is too simplistic to attribute this solely to racism or xenophobia. America has harbored white supremacist and anti-immigrant sentiments since its founding. The despair Trump has channeled is more closely connected to a profound loss of identity, dignity and purpose, especially among Americans who have been left behind – without college degrees, without good jobs, in places that have been economically abandoned and disdained by much of the rest of the country.

The wages of these Americans have not risen in forty years, adjusted for inflation, even though the economy is now three times larger than it was four decades ago. The norm of upward mobility has been shattered for these Americans. Through their eyes, the entire American system is now rigged against them.

This part of America yearns for a strongman to deliver it from despair. Trump has filled that void. To be sure, he’s filled it with bombast, lies, paranoia, and neofascism. But he has filled it nonetheless.

The challenge ahead is to fill it with a democracy and economy that work for everyone. Unless we understand and respond to this fundamental truth, we will miss the true meaning of January 6.

How corporate power is the real driving force behind inflation

The biggest culprit for rising prices that's not being talked about is the increasing economic concentration of the American economy in the hands of a relative few giant big corporations with the power to raise prices.

If markets were competitive, companies would seek to keep their prices down in order to maintain customer loyalty and demand. When the prices of their supplies rose, they'd cut their profits before they raised prices to their customers, for fear that otherwise a competitor would grab those customers away.

But strange enough, this isn't happening. In fact, even in the face of supply constraints, corporations are raking in record profits. More than 80 percent of big (S&P 500) companies that have reported results this season have topped analysts' earnings forecasts, according to Refinitiv.

Obviously, supply constraints have not eroded these profits. Corporations are simply passing the added costs on to their customers. Many are raising their prices even further, and pocketing even more.

How can this be? For a simple and obvious reason: Most don't have to worry about competitors grabbing their customers away. They have so much market power they can relax and continue to rake in big money.

The underlying structural problem isn't that government is over-stimulating the economy. It's that big corporations are under competitive.

Corporations are using the excuse of inflation to raise prices and make fatter profits. The result is a transfer of wealth from consumers to corporate executives and major investors.

This has nothing to do with inflation, folks. It has everything to do with the concentration of market power in a relatively few hands.

It's called "oligopoly," where two or three companies roughly coordinate their prices and output.

Judd Legum provides some good examples in his newsletter. He points to two firms that are giants in household staples: Procter & Gamble and Kimberly Clark. In April, Procter & Gamble announced it would start charging more for everything from diapers to toilet paper, citing "rising costs for raw materials, such as resin and pulp, and higher expenses to transport goods."

Baloney. P&G is raking in huge profits. In the quarter ending September 30, after some of its price increases went into effect, it reported a whopping 24.7% profit margin. Oh, and it spent $3 billion in the quarter buying its own stock.

How can this be? Because P&G faces very little competition. According to a report released this month from the Roosevelt Institute, "The lion's share of the market for diapers," for example, "is controlled by just two companies (P&G and Kimberly-Clark), limiting competition for cheaper options."

So it wasn't exactly a coincidence that Kimberly-Clark announced similar price increases at the same time as P&G. Both corporations are doing wonderfully well. But American consumers are paying more.

Or consider another major consumer product oligopoly: PepsiCo (the parent company of Frito-Lay, Gatorade, Quaker, Tropicana, and other brands), and Coca Cola. In April, PepsiCo announced it was increasing prices, blaming "higher costs for some ingredients, freight and labor."

Rubbish. The company recorded $3 billion in operating profits and increased its projections for the rest of the year, and expects to send $5.8 billion in dividends to shareholders in 2021.

If PepsiCo faced tough competition it could never have gotten away with this. But it doesn't. In fact, it appears to have colluded with its chief competitor, Coca-Cola – which, oddly, announced price increases at about the same time as PepsiCo, and has increased its profit margins to 28.9%.

And on it goes around the entire consumer sector of the American economy.

You can see a similar pattern in energy prices. Once it became clear that demand was growing, energy producers could have quickly ramped up production to create more supply. But they didn't.

Why not? Industry experts say oil and gas companies (and their CEOs and major investors) saw bigger money in letting prices run higher before producing more supply.

They can get away with this because big oil and gas producers don't face much competition. They're powerful oligopolies.

Again, inflation isn't driving most of these price increases. Corporate power is driving them.

Since the 1980s, when the federal government all but abandoned antitrust enforcement, two-thirds of all American industries have become more concentrated.

Monsanto now sets the prices for most of the nation's seed corn.

The government green-lighted Wall Street's consolidation into five giant banks, of which JPMorgan is the largest.

It okayed airline mergers, bringing the total number of American carriers down from twelve in 1980 to four today, which now control 80 percent of domestic seating capacity.

It let Boeing and McDonnell Douglas merge, leaving America with just one major producer of civilian aircraft, Boeing.

Three giant cable companies dominate broadband [Comcast, AT&T, Verizon].

A handful of drug companies control the pharmaceutical industry [Pfizer, Eli Lilly, Johnson & Johnson, Bristol-Myers Squibb, Merck].

So what's the appropriate response to the latest round of inflation? The Federal Reserve has signaled it won't raise interest rates for the time being, believing that the inflation is being driven by temporary supply bottlenecks.

Meanwhile, Biden Administration officials have been consulting with the oil industry in an effort to stem rising gas prices, trying to make it simpler to issue commercial driver's licenses (to help reduce the shortage of truck drivers), and seeking to unclog over-crowded container ports.

But none of this responds to the deeper structural issue – of which price inflation is symptom: the increasing consolidation of the economy in a relative handful of big corporations with enough power to raise prices and increase profits.

This structural problem is amenable to only one thing: the aggressive use of antitrust law.

Former labor secretary breaks down 'the cruelest form of capitalism in the world'

Elon Musk's wealth has surpassed $200 billion. It would take the median U.S. worker over 4 million years to make that much.

Wealth inequality is eating this country alive. We're now in America's second Gilded Age, just like the late 19th century when a handful of robber barons monopolized the economy, kept wages down, and bribed lawmakers.

While today's robber barons take joy rides into space, the distance between their gargantuan wealth and the financial struggles of working Americans has never been clearer. During the first 19 months of the pandemic, U.S. billionaires added $2.1 trillion dollars to their collective wealth and that number continues to rise.

And the rich have enough political power to cut their taxes to almost nothing—sometimes literally nothing. In fact, Jeff Bezos paid no federal income taxes in 2007 or in 2011. By 2018, the 400 richest Americans paid a lower overall tax rate than almost anyone else.

Watch:

But we can not solve this problem unless we know how it was created in the first place.

Let's start with the basics.

I. The Basics

Wealth inequality in America is far larger than income inequality.

Income is what you earn each week or month or year. Wealth refers to the sum total of your assets—your car, your stocks and bonds, your home, art—anything else you own that's valuable.Valuable not only because there's a market for it—a price other people are willing to pay to buy it—but because wealth itself grows.

As the population expands and the nation becomes more productive, the overall economy continues to expand. This expansion pushes up the values of stocks, bonds, rental property, homes, and most other assets. Of course recessions and occasional depressions can reduce the value of such assets. But over the long haul, the value of almost all wealth increases.

Lesson: Wealth compounds over time.

Next: personal wealth comes from two sources.The first source is the income you earn but don't spend. That's your savings. When you invest those savings in stocks, bonds, or real property or other assets, you create your personal wealth— which, as we've seen, grows over time.

The second source of personal wealth is whatever is handed down to you from your parents, grandparents, and maybe even generations before them—in other words, what you inherit.

Lesson: Personal wealth comes from your savings and/or your inheritance.

II. Why the wealth gap is exploding

The wealth gap between the richest Americans and everyone else is staggering.
In the 1970s, the wealthiest 1 percent owned about 20 percent of the nation's total household wealth. Now, they own over 35 percent.

Much of their gains over the last 40 years have come from a dramatic increase in the value of shares of stock.

For example, if someone invested $1,000 in 1978 in a broad index of stocks—say, the S&P 500 they would have $31,823 today, adjusted for inflation.

Who has benefited from this surge? The richest 1 percent, who now own half of the entire stock market. But the typical worker's wages have barely grown.

Most Americans haven't earned enough to save anything. Before the pandemic, when the economy appeared to be doing well, almost 80 percent were living paycheck to paycheck.

Lesson: Most Americans don't make enough to save money and build wealth.

So as income inequality has widened, the amount that the few high-earning households save—their wealth—has continued to grow. Their growing wealth has allowed them to pass on more and more wealth to their heirs.

Take, for example, the Waltons—the family behind the Walmart empire—which has seven heirs on the Forbes billionaires list. Their children, and other rich millennials, will soon consolidate even more of the nation's wealth. America is now on the cusp of the largest intergenerational transfer of wealth in history. As wealthy boomers pass on, somewhere between $30 to $70 trillion will go to their children over the next three decades.

These children will be able to live off of this wealth, and then leave the bulk of it—which will continue growing—to their own children … tax-free. After a few generations of this, almost all of America's wealth could be in the hands of a few thousand families.

Lesson: Dynastic wealth continues to grow.

III. Why wealth concentration is a problem

Concentrated wealth is already endangering our democracy. Wealth doesn't just beget more wealth—it begets more power.

Dynastic wealth concentrates power into the hands of fewer and fewer people, who can choose what nonprofits and charities to support and which politicians to bankroll. This gives an unelected elite enormous sway over both our economy and our democracy.

If this keeps up, we'll come to resemble the kind of dynasties common to European aristocracies in the seventeenth, eighteenth, and nineteenth centuries.

Dynastic wealth makes a mockery of the idea that America is a meritocracy, where anyone can make it on the basis of their own efforts. It also runs counter to the basic economic ideas that people earn what they're worth in the market, and that economic gains should go to those who deserve them.

Finally, wealth concentration magnifies gender and race disparities because women and people of color tend to make less, save less, and inherit less.
The typical single woman owns only 32 cents of wealth for every dollar of wealth owned by a man. The pandemic likely increased this gap.

The racial wealth gap is even starker. The typical Black household owns just 13 cents of wealth for every dollar of wealth owned by the typical white household. The pandemic likely increased this gap, too.

In all these ways, dynastic wealth creates a self-perpetuating aristocracy that runs counter to the ideals we claim to live by.

Lesson: Dynastic wealth creates a self-perpetuating aristocracy.

IV. How America dealt with wealth inequality during the First Gilded Age

The last time America faced anything comparable to the concentration of wealth we face today was at the turn of the 20th century. That was when President Teddy Roosevelt warned that "a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power" could destroy American democracy.

Roosevelt's answer was to tax wealth. Congress enacted two kinds of wealth taxes. The first, in 1916, was the estate tax—a tax on the wealth someone has accumulated during their lifetime, paid by the heirs who inherit that wealth.

The second tax on wealth, enacted in 1922, was a capital gains tax—a tax on the increased value of assets, paid when those assets are sold.

Lesson: The estate tax and the capital gains tax were created to curb wealth concentration.

But both of these wealth taxes have shrunk since then, or become so riddled with loopholes that they haven't been able to prevent a new American aristocracy from emerging.

The Trump Republican tax cut enabled individuals to exclude $11.18 million from their estate taxes. That means one couple can pass on more than $22 million to their kids tax-free. Not to mention the very rich often find ways around this tax entirely. As Trump's former White House National Economic Council director Gary Cohn put it, "only morons pay the estate tax."

What about capital gains on the soaring values of wealthy people's stocks, bonds, mansions, and works of art? Here, the biggest loophole is something called the "stepped-up basis." If the wealthy hold on to these assets until they die, their heirs inherit them without paying any capital gains taxes whatsoever. All the increased value of those assets is simply erased, for tax purposes. This loophole saves heirs an estimated $40 billion a year.

This means that huge accumulations of wealth in the hands of a relatively few households can be passed from generation to generation untaxed—growing along the way—generating comfortable incomes for rich descendants who will never have to work a day of their lives. That's the dynastic class we're creating right now.

Lesson: The estate tax and the capital gains tax have been gutted.

Why have these two wealth taxes eroded? Because, as America's wealth has concentrated in fewer and fewer hands, the wealthy have more capacity to donate to political campaigns and public relations—and they've used that political power to reduce their taxes. It's exactly what Teddy Roosevelt feared so many years ago.

V. How to reduce the wealth gap

So what do we do? Follow the wisdom of Teddy Roosevelt and tax great accumulations of wealth.

The ultra-rich have benefited from the American system—from laws that protect their wealth, and our economy that enabled them to build their fortunes in the first place. They should pay their fair share.

The majority of Americans, both Democrats and Republicans, believe the ultra rich should pay higher taxes. There are many ways to make them do so: closing the stepped up basis loophole, raising the capital gains tax, and fully funding the Internal Revenue Service so it can properly audit the wealthiest taxpayers, for starters.

Beyond those fixes, we need a new wealth tax: a tax of just 2 percent a year on wealth in excess of $1 million. That's hardly a drop in the bucket for centi-billionaires like Jeff Bezos and Elon Musk, but would generate plenty of revenue to invest in healthcare and education so that millions of Americans have a fair shot at making it.

One of the most important things you as an individual can do is take the time to understand the realities of wealth inequality in America and how the system has become rigged in favor of those at the top—and demand your political representatives take action to unrig it.

Wealth inequality is worse than it has been in a century—and it has contributed to a vicious political-economic cycle in which taxes are cut on the top, resulting in even more concentration of wealth there—while everyone else lives under the cruelest form of capitalism in the world.

We must stop this vicious cycle—and demand an economy that works for the many, not one that concentrates more and more wealth in the hands of a privileged few.

How wealth inequality spiraled out of control

Elon Musk's wealth has surpassed $200 billion. It would take the median U.S. worker over 4 million years to make that much.

Wealth inequality is eating this country alive. We're now in America's second Gilded Age, just like the late 19th century when a handful of robber barons monopolized the economy, kept wages down, and bribed lawmakers.

While today's robber barons take joy rides into space, the distance between their gargantuan wealth and the financial struggles of working Americans has never been clearer. During the first 19 months of the pandemic, U.S. billionaires added $2.1 trillion dollars to their collective wealth and that number continues to rise.

And the rich have enough political power to cut their taxes to almost nothing — sometimes literally nothing. In fact, Jeff Bezos paid no federal income taxes in 2007 or in 2011. By 2018, the 400 richest Americans paid a lower overall tax rate than almost anyone else.

But we can not solve this problem unless we know how it was created in the first place.

Let's start with the basics.

I. The Basics

Wealth inequality in America is far larger than income inequality.

Income is what you earn each week or month or year. Wealth refers to the sum total of your assets — your car, your stocks and bonds, your home, art — anything else you own that's valuable.Valuable not only because there's a market for it — a price other people are willing to pay to buy it — but because wealth itself grows.

As the population expands and the nation becomes more productive, the overall economy continues to expand. This expansion pushes up the values of stocks, bonds, rental property, homes, and most other assets. Of course recessions and occasional depressions can reduce the value of such assets. But over the long haul, the value of almost all wealth increases.

Lesson: Wealth compounds over time.

Next: personal wealth comes from two sources.The first source is the income you earn but don't spend. That's your savings. When you invest those savings in stocks, bonds, or real property or other assets, you create your personal wealth — which, as we've seen, grows over time.

The second source of personal wealth is whatever is handed down to you from your parents, grandparents, and maybe even generations before them — in other words, what you inherit.

Lesson: Personal wealth comes from your savings and/or your inheritance.

II. Why the wealth gap is exploding

The wealth gap between the richest Americans and everyone else is staggering.
In the 1970s, the wealthiest 1 percent owned about 20 percent of the nation's total household wealth. Now, they own over 35 percent.

Much of their gains over the last 40 years have come from a dramatic increase in the value of shares of stock.

For example, if someone invested $1,000 in 1978 in a broad index of stocks — say, the S&P 500 they would have $31,823 today, adjusted for inflation.

Who has benefited from this surge? The richest 1 percent, who now own half of the entire stock market. But the typical worker's wages have barely grown.

Most Americans haven't earned enough to save anything. Before the pandemic, when the economy appeared to be doing well, almost 80 percent were living paycheck to paycheck.

Lesson: Most Americans don't make enough to save money and build wealth.

So as income inequality has widened, the amount that the few high-earning households save — their wealth — has continued to grow. Their growing wealth has allowed them to pass on more and more wealth to their heirs.

Take, for example, the Waltons — the family behind the Walmart empire — which has seven heirs on the Forbes billionaires list. Their children, and other rich millennials, will soon consolidate even more of the nation's wealth. America is now on the cusp of the largest intergenerational transfer of wealth in history. As wealthy boomers pass on, somewhere between $30 to $70 trillion will go to their children over the next three decades.

These children will be able to live off of this wealth, and then leave the bulk of it — which will continue growing — to their own children … tax-free. After a few generations of this, almost all of America's wealth could be in the hands of a few thousand families.

Lesson: Dynastic wealth continues to grow.

III. Why wealth concentration is a problem

Concentrated wealth is already endangering our democracy. Wealth doesn't just beget more wealth — it begets more power.

Dynastic wealth concentrates power into the hands of fewer and fewer people, who can choose what nonprofits and charities to support and which politicians to bankroll. This gives an unelected elite enormous sway over both our economy and our democracy.

If this keeps up, we'll come to resemble the kind of dynasties common to European aristocracies in the seventeenth, eighteenth, and nineteenth centuries.

Dynastic wealth makes a mockery of the idea that America is a meritocracy, where anyone can make it on the basis of their own efforts. It also runs counter to the basic economic ideas that people earn what they're worth in the market, and that economic gains should go to those who deserve them.

Finally, wealth concentration magnifies gender and race disparities because women and people of color tend to make less, save less, and inherit less.
The typical single woman owns only 32 cents of wealth for every dollar of wealth owned by a man. The pandemic likely increased this gap.

The racial wealth gap is even starker. The typical Black household owns just 13 cents of wealth for every dollar of wealth owned by the typical white household. The pandemic likely increased this gap, too.

In all these ways, dynastic wealth creates a self-perpetuating aristocracy that runs counter to the ideals we claim to live by.

Lesson: Dynastic wealth creates a self-perpetuating aristocracy.

IV. How America dealt with wealth inequality during the First Gilded Age

The last time America faced anything comparable to the concentration of wealth we face today was at the turn of the 20th century. That was when President Teddy Roosevelt warned that "a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power" could destroy American democracy.

Roosevelt's answer was to tax wealth. Congress enacted two kinds of wealth taxes. The first, in 1916, was the estate tax — a tax on the wealth someone has accumulated during their lifetime, paid by the heirs who inherit that wealth.

The second tax on wealth, enacted in 1922, was a capital gains tax — a tax on the increased value of assets, paid when those assets are sold.

Lesson: The estate tax and the capital gains tax were created to curb wealth concentration.

But both of these wealth taxes have shrunk since then, or become so riddled with loopholes that they haven't been able to prevent a new American aristocracy from emerging.

The Trump Republican tax cut enabled individuals to exclude $11.18 million from their estate taxes. That means one couple can pass on more than $22 million to their kids tax-free. Not to mention the very rich often find ways around this tax entirely. As Trump's former White House National Economic Council director Gary Cohn put it, "only morons pay the estate tax."

What about capital gains on the soaring values of wealthy people's stocks, bonds, mansions, and works of art? Here, the biggest loophole is something called the "stepped-up basis." If the wealthy hold on to these assets until they die, their heirs inherit them without paying any capital gains taxes whatsoever. All the increased value of those assets is simply erased, for tax purposes. This loophole saves heirs an estimated $40 billion a year.

This means that huge accumulations of wealth in the hands of a relatively few households can be passed from generation to generation untaxed — growing along the way — generating comfortable incomes for rich descendants who will never have to work a day of their lives. That's the dynastic class we're creating right now.

Lesson: The estate tax and the capital gains tax have been gutted.

Why have these two wealth taxes eroded? Because, as America's wealth has concentrated in fewer and fewer hands, the wealthy have more capacity to donate to political campaigns and public relations — and they've used that political power to reduce their taxes. It's exactly what Teddy Roosevelt feared so many years ago.

V. How to reduce the wealth gap

So what do we do? Follow the wisdom of Teddy Roosevelt and tax great accumulations of wealth.

The ultra-rich have benefited from the American system — from laws that protect their wealth, and our economy that enabled them to build their fortunes in the first place. They should pay their fair share.

The majority of Americans, both Democrats and Republicans, believe the ultra rich should pay higher taxes. There are many ways to make them do so: closing the stepped up basis loophole, raising the capital gains tax, and fully funding the Internal Revenue Service so it can properly audit the wealthiest taxpayers, for starters.

Beyond those fixes, we need a new wealth tax: a tax of just 2 percent a year on wealth in excess of $1 million. That's hardly a drop in the bucket for centi-billionaires like Jeff Bezos and Elon Musk, but would generate plenty of revenue to invest in healthcare and education so that millions of Americans have a fair shot at making it.

One of the most important things you as an individual can do is take the time to understand the realities of wealth inequality in America and how the system has become rigged in favor of those at the top — and demand your political representatives take action to unrig it.

Wealth inequality is worse than it has been in a century – and it has contributed to a vicious political-economic cycle in which taxes are cut on the top, resulting in even more concentration of wealth there – while everyone else lives under the cruelest form of capitalism in the world.

We must stop this vicious cycle — and demand an economy that works for the many, not one that concentrates more and more wealth in the hands of a privileged few.

Former labor secretary: Don’t believe corporate America’s 'labor shortage' BS

For the first time in years, American workers have enough bargaining leverage to demand better working conditions and higher wages – and are refusing to work until they get them.

This originally appeared on Robert Reich's blog.

Here's where that leverage comes from. After a year and a half of the pandemic, consumers have pent-up demand for all sorts of goods and services. But employers are finding it hard to fill positions to meet that demand.

The most recent jobs report showed the number of job openings at a record high. The share of people working or looking for work has dropped to a near-record low 61.6 percent. In August, 4.3 million Americans quit their jobs, the highest quit rate since 2000.

Republicans have been claiming for months that people aren't getting back to work because of federal unemployment benefits. Rubbish.

The number of people working or looking for work dropped in September – after the extra benefits ran out on Labor Day.

The reluctance of people to work doesn't have anything to do with unemployment benefits. It has everything to do with workers being fed up.

Some have retired early. Others have found ways to make ends meet other than a job they hate. Many just don't want to return to backbreaking or mind-numbing low-wage jobs.

In the wake of so much hardship, illness and death, peoples' priorities have shifted.

The media and most economists measure the economy's success by the number of jobs it creates, while ignoring the quality of those jobs. Just look at the media coverage of the September jobs report: The New York Times emphasized "weak" job growth. For CNN, it was "another disappointment."

But when I was Secretary of Labor, I met with working people all over the country who complained that their jobs paid too little and had few benefits, or were unsafe, or required unwieldy hours. Many said their employers treated them badly.

With the pandemic, it's even worse. That's why, in addition to all the people who aren't returning to work, we're also seeing dozens of organized strikes around the country – 10,000 John Deere workers, 1,400 Kellogg workers, over 1,000 Alabama coal miners, and thousands of others.

Not to mention the unauthorized strikes and walkouts since the pandemic began, like the mostly Black sanitation workers in Pittsburgh or the Amazon warehouse workers in Staten Island.

In order to lure workers back, employers are now raising wages and offering other incentives. Average earnings rose 19 cents an hour in September and are up more than $1 an hour over the last year. But clearly, that's not enough to get workers back.

Corporate America is trying to frame this as a "labor shortage."

But what's really happening is more accurately described as a living-wage shortage, a hazard pay shortage, a childcare shortage, a paid sick leave shortage, and a health care shortage.

Unless these shortages are rectified, this unofficial general strike will continue.

I say it's about time.

America is on Strike | Robert Reich www.youtube.com

The Republican Party now poses a clear and present danger to the values it once espoused

I'm old enough to remember when the Republican Party stood for limited government – when Ronald Reagan thundered "Government is not the solution to our problem, government is the problem."

Today's Republican Party, while still claiming to stand for limited government, is practicing just the opposite: government intrusion everywhere.

Republican states are on the way to outlawing abortions. Texas has just banned abortions after six weeks of pregnancy, before many women even know they're pregnant. Other Republican states are considering similar measures.

Republican lawmakers are stopping schools from requiring students wear masks. Iowa, Tennessee, Utah, Texas, Florida, Arkansas, Oklahoma, Arizona and South Carolina have ordered public schools not to demand them.

Republican lawmakers are forbidding teachers from telling students about America's racist past. State legislatures from Tennessee to Idaho are barring all references to racism in the classroom.

Republican legislators are forcing transgender students to play sports and use bathrooms according to their assigned gender at birth. Thirty-three states have introduced more than 100 bills aiming to curb the rights of transgender people across the country.

Republican lawmakers are making it harder for people to vote. So far, they've enacted more than 30 laws that reduce access to polling places, number of days for voting, and availability of absentee voting.

This is not limited government, folks. To the contrary, these Republican lawmakers have a particular ideology, and they are now imposing those views and values on citizens holding different views and values.

This is big government on steroids.

Many Republican lawmakers use the word "freedom" to justify what they're doing, but that's bogus. What they're really doing is denying people their freedom – freedom to be safe from COVID, freedom over their own bodies, freedom to learn, freedom to vote and participate in our democracy.

Years ago, the Republican Party had a coherent idea about limiting the role of government and protecting the rights of the individual. I disagreed with it, as did much of the rest of America. But at least it was honest, reasoned, and consistent. As such, Republicans played an important part in a debate over what we wanted for ourselves and for America.

Today, Republican politicians have no coherent view. They want only to be reelected, even if that means misusing government to advance a narrow and increasing anachronistic set of values – intruding on the most intimate aspects of life, interfering in what can be taught and learned, risking the public's health, banning what's necessary for people to exercise their most basic freedoms.

This is not mere hypocrisy. The Republican Party now poses a clear and present threat even to the values it once espoused.

The $3.5 trillion bill that terrifies corporate America

Right now, Democrats are working to pass a $3.5 trillion package that will provide long overdue help for working Americans.

The final bill hasn't yet been determined, so we don't know the exact dollar amounts for all its policies. We'll probably find that out in late September or early October. For now, the Democrats' budget resolution frames what's in the bill.

First, on families:

The bill would make permanent key benefits for working families, including the expanded child tax credit in the pandemic relief plan that sends families up to $300 per child each month but is now set to expire in December, and is estimated to cut child poverty by half.

It would also establish universal child care, for which low- and middle-income households would pay no more than 7 percent of their incomes.

And provide a national program of paid leave — worth up to $4,000 a month — for workers who take time off because they are ill or caring for a relative.

Next, on education:

The bill would reduce educational inequality by establishing universal pre-K for all 3- and 4-year-olds, benefiting an estimated 5 million children, and providing tuition-free community college – essentially expanding free public education from 12 years to 16 years.

It will also invest in historically Black colleges and universities and increase the maximum amount of Pell grants for students from lower-income families.

On health care:

The bill expands Medicare to include dental, vision, and hearing benefits and lowers the eligibility age. It also expands Medicaid to cover people living in the 12 states that have not yet expanded Medicaid, and makes critical investments to improve healthcare for people of color.

The big question is how far it will go to reduce prescription drug prices by, for example, allowing Medicare to negotiate prices with pharmaceutical companies. That could reduce Medicare and Medicaid spending, and free up more money for other parts of the bill. But Big Pharma is dead-set against this.

Big corporations and the rich picking up the tab:

In another step toward fairness, all of these are to be financed by higher taxes on the rich and big corporations.

The bill would also increase the Internal Revenue Service's funding so the agency can properly audit wealthy tax cheats, who fail to report about a fifth of their income every year, thereby costing the government $105 billion annually.

In addition, the bill tackles the climate crisis, which also especially burdens lower-income Americans:

There are a range of solutions – subsidizing the use of solar, wind, nuclear and other forms of clean energy while financially penalizing the use of dirty energy like coal; helping families pay for electric cars and energy-efficient homes.

The bill might include something known as a carbon border adjustment tax — a tax on imports whose production was carbon-intensive, like many from China.

The bill would also establish a Civilian Climate Corps, and invest in communities that bear the brunt of the climate crisis.

And the bill helps American workers:

It will hopefully contain much of the PRO Act, the toughest labor law reform in a generation.

Finally, the bill includes a pathway to citizenship for undocumented immigrants.
This is all about making America fairer.

Remember: we won't know the exact details of the bill for at least a month, but these are the main areas that it will focus on. The big challenge will be ensuring Senate Democrats remain united to get it passed. All of us will need to fight like hell.

Don't listen to spending hawks who claim it's too expensive or too radical. For far too long, our government has ignored the needs of everyday Americans, catering instead to the demands of corporations and the super-rich. No more.

It's time to get this landmark bill passed and build a fairer America.

The Republican Supreme Court is squandering what remains of its authority

The U.S. Supreme Court won't block a Texas law that allows private individuals to sue to enforce a ban on abortion after about six weeks of pregnancy – before many women are even aware they're pregnant. The law went into effect Wednesday, September 1.

It's the most restrictive abortion law in the country, imposing a huge burden on women without the means or money to travel to another state where later abortions are legal.

It's also a sign that the Republican-appointed justices, who now hold six of nine seats on the Court, are ready to overturn the Court's 1973 decision in Roe v. Wade, striking down anti-abortion laws across the nation as violating a woman's right to privacy under the fourteenth amendment to the Constitution.

Last week the Court held that Biden's moratorium on evictions was illegal. A few days before, it refused to stay a lower court decision that people seeking asylum at the southern border must remain in Mexico until their cases are heard – often subjecting them to great hardship or violence.

What links these cases? Cruelty toward the powerless.

The U.S. Supreme Court won't block a Texas law that allows private individuals to sue to enforce a ban on abortion after about six weeks of pregnancy – before many women are even aware they're pregnant. The law went into effect Wednesday, September 1.

It's the most restrictive abortion law in the country, imposing a huge burden on women without the means or money to travel to another state where later abortions are legal.

It's also a sign that the Republican-appointed justices, who now hold six of nine seats on the Court, are ready to overturn the Court's 1973 decision in Roe v. Wade, striking down anti-abortion laws across the nation as violating a woman's right to privacy under the fourteenth amendment to the Constitution.

Last week the Court held that Biden's moratorium on evictions was illegal. A few days before, it refused to stay a lower court decision that people seeking asylum at the southern border must remain in Mexico until their cases are heard – often subjecting them to great hardship or violence.

What links these cases? Cruelty toward the powerless.

Sitting not far away from him was Thurgood Marshall – who succeeded in having the Supreme Court declare segregated public schools unconstitutional in the landmark 1954 case Brown v. Board of Education, and who did more than person then alive to break down the shameful legal edifice of Jim Crow.

Today's Supreme Court majority is a group of knee-jerk conservatives whose intellectual leader (to the extent they have one) is Samuel Alito, perhaps the most conceptually rigid and cognitively dishonest justice since Chief Justice Roger Taney.

Five of today's Supreme Court majority were appointed by presidents who lost the popular vote; three of them by a president who instigated a coup against the United States.

The authority of the Supreme Court derives entirely from Americans' confidence and trust in it. As Alexander Hamilton wrote in The Federalist Papers 78, the judiciary has "neither the sword" (the executive branch's power to compel action) "nor the purse" (the Congress's power to appropriate funds).

The Court I was privileged to argue before almost fifty years ago had significant authority. It protected the less powerful with arguments that resonated with the core moral values of the nation. Americans didn't always agree with its conclusions, but they respected it.

Today's cruel and partisan Supreme Court is squandering what remains of its authority. It is also imposing unnecessary suffering on those least able to bear it.

The Constitution's framers knew a filibuster would be a huge mistake

You've probably been hearing a lot about the filibuster these days. But here's one thing about this old Senate rule you might not know: the filibuster actually violates the Constitution.

41 Senate Republicans, who represent only 21 percent of the American population, are blocking the "For the People Act," which is supported by 67 percent of Americans. They're also blocking an increase in the minimum wage to $15 an hour, supported by 62 percent of Americans. And so much else.

Even some so-called moderate Democrats, like Joe Manchin and Krysten Sinema, have outsized power to block crucial legislation thanks to the filibuster.

Many of those who defend the filibuster consider themselves "originalists," who claim to be following the Constitution as the Framers intended.

But the filibuster is not in the Constitution. In fact, the Framers of the Constitution went to great lengths to ensure that a minority of senators could not thwart the wishes of the majority.

After all, a major reason they called the Constitutional Convention was that the Articles of Confederation (the precursor to the Constitution) required a super-majority vote of nine of the thirteen states, making the government weak and ineffective.

James Madison argued against any super-majority requirement, writing that "the fundamental principle of free government would be reversed," and "It would be no longer the majority that would rule: the power would be transferred to the minority."

Alexander Hamilton, meanwhile, warned about "how much good may be prevented, and how much ill may be produced" if a minority in either house of Congress had "the power of hindering the doing what may be necessary."

Hence, the Framers required no more than a simple majority vote in both houses of Congress to pass legislation. They carved out specific exceptions, requiring a super-majority vote only for rare, high-stakes decisions:

Impeachments.

Expulsion of members.

Overriding a presidential veto.

Ratification of treaties.

Constitutional amendments.

By being explicit about these exceptions where a super-majority is necessary, the Framers underscored their commitment to majority rule for the normal business of the nation.

They would have balked at the notion of a minority of senators continually obstructing the majority, which is now the case with the filibuster.

So where did the filibuster come from?

The Senate needed a mechanism to end debate on proposed laws, and move laws to a vote — a problem the Framers didn't anticipate. In 1841, a small group of senators took full advantage of this oversight to stage the first filibuster. They hoped to hamstring the Senate and force their opponents to give in by prolonging debate and delaying a vote.

This was what became known as the "talking filibuster" as popularized in the film Mr. Smith Goes to Washington. But the results were hardly admirable.

After the Civil War, the filibuster was used by Southern politicians to defeat Reconstruction legislation, including bills to protect the voting rights of Black Americans.

In 1917, as a result of pressure from President Woodrow Wilson and the public, the Senate finally adopted a procedure for limiting debate and ending filibusters with a two-thirds vote (67 votes). In the 1970s, the Senate reduced the number of votes required to end debate down to 60, and no longer required constant talking to delay a vote. 41 votes would do it.

Throughout much of the 20th century, despite all the rule changes, filibusters remained rare. Southern senators mainly used them to block anti-lynching, fair employment, voting rights, and other critical civil rights bills.

That all changed in 2006, after Democrats won a majority of Senate seats. Senate Republicans, now in the minority, used the 60-vote requirement with unprecedented frequency. After Barack Obama became president in 2008, the Republican minority blocked virtually every significant piece of legislation. Nothing could move without 60 votes.

In 2009, a record 67 filibusters occurred during the first half of the 111th Congress — double the entire 20-year period between 1950 and 1969. By the time the 111th Congress adjourned in December 2010, the filibuster count had ballooned to 137.

Now we have a total mockery of majority rule. And it bears repeating that just 41 Senate Republicans, representing only 21 percent of the country, are blocking critical laws supported by the vast majority of Americans.

This is exactly the opposite of what the framers of the Constitution intended. They unequivocally rejected the notion that a minority of Senators could obstruct the majority.

Every time Republicans use or defend the filibuster they're directly violating the Constitution — the document they claim to be dedicated to. How can someone profess to be an "originalist" and defend the Constitution while repeatedly violating it?

Senators whose votes have been blocked by a minority should have standing to take this issue to the Supreme Court. And the Court should abolish the filibuster as violating the U.S. Constitution.

The media is dangerously distorting the truth about American politics

The mainstream media has historically tried to balance left and right in its political coverage, and present what it views as a reasonable center.

That may sound good in theory. But the old politics no longer exists and the former labels "left" versus "right" are outdated.

Today it's democracy versus authoritarianism, voting rights versus white supremacy. There's no reasonable center between these positions, no justifiable compromise. Equating them is misleading and dangerous.

You hear the mainstream media say, for example, that certain "Republican and Democratic lawmakers are emerging as troublemakers within their parties." These reports equate Republican lawmakers who are actively promoting Trump's big lie that the 2020 election was stolen, with Democratic lawmakers who are fighting to extend health care and other programs to help people.

These are not equivalent. Trump's big lie is a direct challenge to American democracy. Even if you disagree with providing Americans better access to health care, it won't destroy our system of government.

You also hear that both sides are gripped by equally dangerous extremism. Labeling them "radical left" and "radical right" suggests that the responsible position is somehow between these so-called extremes.

Can we get real? One side is trying to protect and preserve voting rights. The other side is trying to suppress votes under the guise of "election integrity."

But there isn't and never was a problem of "election integrity." The whole issue of "election integrity" in the 2020 election was manufactured by Donald Trump and his big lie about voter fraud, and was bought and propagated by the Republican Party.

Today's Republican Party is behind what historians regard as the biggest attack on voting rights since Jim Crow, but the media frames this as a right-versus-left battle that's just politics as usual. Equating the two sides is false and dangerous.

Or compare the coverage of Marjorie Taylor Greene and Lauren Boebert, on one hand, with the coverage of Alexandria Ocasio-Cortez and Ilhan Omar on the other. You'd think they were all equally out of the mainstream, some on the extreme right, some on the extreme left. That's bunk.

Marjorie Taylor Greene and Lauren Boebert, in addition to spreading dangerous conspiracy theories, harassing colleagues, and promoting bigotry, don't actually legislate or do anything for their constituents. Alexandria Ocasio-Cortez and Ilhan Omar both organize to help everyday people, deliver for their constituents, and have pushed legislation to provide universal school meals, expand affordable housing, and combat the climate crisis.

Equating all these lawmakers suggests that the responsible position is halfway between hateful, delusional conspiracy theories on the one hand, and efforts to fight white supremacy, save the planet, and empower working people on the other.

It's similar to what the media did following Donald Trump's infamous condemnation of "both sides" after the deadly violence sparked by neo-Nazis and white supremacists in Charlottesville, Virginia in 2017. In the ensuing weeks, America's six top mainstream newspapers used just as much space condemning anti-Nazi counter-protesters as they did actual neo-Nazis.

But research shows white supremacists pose a significantly graver threat than those trying to stop them. White supremacists are animated by racism, sexism, anti-Semitism, and other forms of bigotry, violence and hate.

Battling white supremacy is not the same as advocating it. Passing laws to prevent voter suppression is not the same as passing laws to suppress votes. Fighting for our democracy is not the same as seeking to destroy it.

The media equating both sides, one "left" and one "right," suggests there's a moderate middle between hate and inclusion, between democracy and proto-fascism.

This is misleading, dangerous, and morally wrong. Don't fall for it.

Why young people are broke

There's a narrative out there that millennials and the Generation Zs behind them are lazy.

Well, that is just bunk.

The reason a lot of young people are not doing nearly as well as their parents at this stage is that they're paying huge amounts – much more than their parents ever paid, as a proportion of their paychecks, for education, higher education or student debt, housing for rent, health care, even transportation.

All of these costs have increased faster than inflation, and at the same time, jobs are not paying that much more.

One in 10 college graduates are underemployed. By underemployed, we mean they are not spending 40 hours a week doing things that are challenging and taking advantage of their education. One out of 20 is unemployed.

In the post World War II era, we have never seen anything like this. We have always expected that we're going to do better. Individuals and families are going to do better. They're going to be trading upward, and their children are expected to do better than they have done.

For the first time now, we see the pendulum moving in exactly the opposite direction. Today, your chance of getting ahead as a young person is hugely dependent on the parents you have and their income and their wealth.

Meanwhile, we are on the verge of the largest inter-generational wealth transfer in history. You've got 74 million baby boomers. They've never done so well, raking it in. This extra resource is going to be going to those small slice of Millennials and Generation Zs who have wealthy parents and grandparents.

If nothing changes, the two-tiered society we have now is going to become a chasm between the haves and the have nots.

The most important things America can do is make college free, make healthcare cheaper, and provide more affordable housing.

We cannot continue on the way we are right now.

Trump Republicans are falling back on their old game as Covid surges

As the highly contagious Delta variant surges, public health officials are trying to keep the focus on the urgent need for more vaccinations.

But with increasing vehemence, Trump Republicans are falling back on their old game of deflecting attention by blaming immigrants crossing the southern border.

Last week, Trump issued a characteristic charge: "ICYMI: "Thousands of COVID-positive migrants passing through Texas border city," linking a New York Post article claiming that "nearly 7,000 immigrants who tested positive for COVID-19 have passed through a Texas city that has become the epicenter of the illegal immigration surge."

You may recall Trump employing this racist-nationalist theme before. For years he fixed his ire on Mexicans and Central Americans from "shitholes," as he has so delicately put it. He began his 2016 campaign by charging that "criminals, drug dealers and rapists" were surging across America's southern border, and then spent much of the subsequent four years trying to erect a fence to keep them out.

Trump acolytes are adopting the same demagoguery for the Delta surge. As hospitalizations in Florida soared past 12,000 this week, exceeding a record already shattered last weekend, Florida Governor Ron DeSantis accused President Biden of facilitating the virus by not reducing immigration through the southern border.

"Why don't you do your job?" DeSantis snapped after Biden suggested DeSantis stop opposing masks. "Why don't you get this border secure? And until you do that, I don't want to hear a blip about Covid from you, thank you."

Texas Governor Greg Abbott has also been quick to blame the Delta surge on immigrants crossing into Texas from Mexico, while barring Texas municipalities from mandating masks or inoculations.

On July 28 Abbott issued an order allowing state troopers to stop vehicles suspected of carrying illegal immigrants on the grounds they might be spreading COVID. (The order was subsequently blocked by a federal judge.) Days later, Abbott issued the order prohibiting Texas counties, cities, or universities from mandating masks or inoculations.

The Trumpist media is quickly falling in line behind this nativist rubbish. In the last week, Fox News' Sean Hannity has asserted the "biggest super-spreader" is immigrants streaming over the southern border rather than the lack of vaccinations.

The National Review claims "Biden's border crisis merges with his Covid crisis" and asserts that "the federal government is successfully terrifying people about COVID while it is shrugging at the thousands of infectious illegal aliens who are coming into the country and spreading the virus." A headline in the Fort Worth Star Telegram demands we "Stop pretending that crush of immigrants at Texas border isn't driving COVID cases."

Hold it. Can we please look at the actual data?

The Delta variant was first detected in India in December, and then moved directly to the United States in March and April according to the CDC.

GISAID, a nonprofit organization that tracks the genetic sequencing of viruses, has shown that each of the four variants now circulating in the United States arrived here before spreading to Mexico and Central America. International travel rather than immigration over the southern border brought the viruses to America.

Haven't we had enough demagoguery and deflection? Haven't Trump and his ilk done enough damage already?

The blame game must stop. Let's be clear. The best way to contain deaths and hospitalizations from Covid is to get more Americans vaccinated. Period.

The solutions to the climate crisis no one is talking about

In light of the latest IPCC report on climate change, it's crucial we remember these four steps to avoiding a climate catastrophe.

First, create green jobs. Investing in renewable energy could create millions of family sustaining, union jobs and build the infrastructure we need for marginalized communities to access clean water and air.

Second, stop dirty energy. A massive investment in renewable energy jobs isn't enough to combat the climate crisis. If we are going to avoid the worst impacts of climate change, we must tackle the problem at its source: Stop digging up and burning more oil, gas, and coal.

Third, kick fossil fuel companies out of our politics. For decades, companies like Exxon, Chevron, Shell, and BP have been polluting our democracy by pouring billions of dollars into our politics and bankrolling elected officials to enact policies that protect their profits. The oil and gas industry spent over $103 million on the 2016 federal elections alone.

Fourth, require the fossil fuel companies that have profited from environmental injustice to compensate the communities they've harmed. As if buying off our democracy wasn't enough, these corporations have also deliberately misled the public for years on the amount of damage their products have been causing. If these solutions sound drastic to you, it's because they are. They have to be if we have any hope of keeping our planet habitable. The climate crisis is not a far-off apocalyptic nightmare — it is our present day.

DC insider: A Trump bombshell quietly dropped last week and it should shock us all

We've become so inured to Donald Trump's proto-fascism that we barely blink an eye when we learn that he tried to manipulate the 2020 election. Yet the most recent revelation should frighten every American to their core.

On Friday, the House oversight committee released notes of a 27 December telephone call from Trump to then acting attorney general Jeffrey Rosen, in which Trump told Rosen: "Just say the election was corrupt + leave the rest to me and the R congressmen." The notes were taken by Richard Donoghue, Rosen's deputy, who was also on the call.

The release of these notes has barely made a stir. The weekend news was filled with more immediate things – infrastructure! The Delta strain! Inflation! Wildfires! In light of everything else going on, Trump's bizarre efforts in the last weeks of his presidency seem wearily irrelevant. Didn't we already know how desperate he was?

In a word, no. This revelation is hugely important.

Rosen obviously rejected Trump's request. But what if Rosen had obeyed Trump and said to the American public that the election was corrupt – and then "left the rest" to Trump and the Republican congressmen? What would Trump's and the Republicans' next moves have been? And which Republican congressmen were in cahoots with Trump in this attempted coup d'état?

Make no mistake: this was an attempted coup.

Trump knew it. Just weeks earlier, then attorney general William Barr said the justice department had found no evidence of widespread fraud that could have overturned the results.

And a few days after Trump's call to Rosen – on 2 January – Trump told Brad Raffensperger, Georgia's secretary of state, to "find" votes to change the election outcome. He berated Raffensperger for not doing more to overturn the election.

Emails released last month also show that Trump and his allies in the last weeks of his presidency pressured the justice department to investigate totally unsubstantiated claims of widespread election fraud – forwarding them conspiracy theories and even a draft legal brief they hoped would be filed with the supreme court.

Some people, especially Republican officeholders, believe we should simply forget these sordid details. We must not.

For the first time in the history of the United States we did not have a peaceful transition of power. For the first time in American history, a president refused – still refuses – to concede, and continues to claim, with no basis in fact, that the election was "stolen" from him. For the first time in history, a president actively plotted a coup.

It would have been bad enough were Trump a mere crackpot acting on his own pathetic stage – a would-be dictator who accidentally became president and then, when he lost re-election, went bonkers – after which he was swept into the dustbin of history.

We might then merely regret this temporary lapse in American presidential history. At best, Trump would be seen as a fool and the whole affair an embarrassment to the country.

For the first time in the history of the United States we did not have a peaceful transition of power. For the first time in American history, a president refused – still refuses – to concede, and continues to claim, with no basis in fact, that the election was "stolen" from him. For the first time in history, a president actively plotted a coup.

It would have been bad enough were Trump a mere crackpot acting on his own pathetic stage – a would-be dictator who accidentally became president and then, when he lost re-election, went bonkers – after which he was swept into the dustbin of history.

We might then merely regret this temporary lapse in American presidential history. At best, Trump would be seen as a fool and the whole affair an embarrassment to the country.

This final revelation – Trump's 27 December call to the acting attorney general in which he pleads "Just say the election was corrupt + leave the rest to me" – should trigger section 3 of the 14th amendment, which bars anyone from holding office who "engaged in insurrection" against the US. The current attorney general of the United States, Merrick Garland, should issue an advisory opinion clearly stating this. If Trump wants to take it to the supreme court, fine.

How Republicans’ cynical exploitation of lies and anti-scientific rubbish to divide and divert us

I don't know about you, but I was elated earlier this spring when it seemed as if Trump and COVID were gone, and Biden seemed surprisingly able to get the nation rapidly back on track.

Now much is sliding backwards. It's not Biden's fault; it's Trump's ongoing legacy.

The new Delta strain of the virus requires, according to the CDC, that we go back to wearing masks inside in public places where the virus is surging, even if we're fully inoculated.

This would be nothing more than a small disappointment and inconvenience were it not for Republicans using it as another opportunity to politicize public health.

House Minority Leader Kevin McCarthy responded to the new CDC recommendation with the kind of unhinged hyperbole Trumpers have perfected. "The threat of bringing masks back is not a decision based on science, but a decision conjured up by liberal government officials who want to continue to live in a perpetual pandemic state," he said.

Republican politicizing of public health will get worse if the Delta variant continues to surge. At some point vaccines will have to be mandated because being inoculated is not solely a matter of personal choice. Herd immunity is a common good. If infections mount, that common good can only be achieved if nearly everyone is vaccinated.

But those eager to exploit the virus's resurgence – the know-nothings, Trump wannabe's, vilely ambitious political upstarts, Tucker Carlsons and similarly cynical entertainers – are already howling about "personal freedom" threatened by "socialism."

The investigation into the attack on the U.S. Capitol on January 6 is further evidence of how far the Republican Party has descended into opportunistic treachery.

We need to know what happened and why if we are to have half a chance of avoiding a repeat. Just as with the history of systemic discrimination and brutality against Black people in America – which Republicans are calling "critical race theory" and trying to ban from classrooms – the truth shapes our responses to the future.

Here again, the dispiriting aspect of the present moment is Republican denial and obfuscation.

As Officer Michael Fanone – who suffered traumatic brain injury on Jan 6 when rioters attacked him – testified yesterday at the start of the hearings, "What makes the struggle harder and more painful is to know so many of my fellow citizens — including so many of the people I put my life at risk to defend — are downplaying or outright denying what happened."

With the exception of Rep. Liz Cheney – whom I never expected to hold up as a model of integrity – Republicans are eager to divert the public's attention. Republican Conference Chair Elise Stefanik declared at a press conference yesterday that "Nancy Pelosi bears responsibility, as speaker of the House, for the tragedy that occurred on Jan. 6."

This is absurd on its face. The Speaker of the House shares responsibility for Capitol security with the Senate majority leader, who at the time of the attack was Mitch McConnell. If Pelosi was negligent – and there's zero evidence she was – McConnell was as well.

Stefanik and other Republican leaders don't want the public to know about Republican members of Congress who were almost certainly involved in the travesty, either directly or indirectly. The list includes Representatives Jim Jordan, Mo Brooks, Paul Gosar, Matt Gaetz, Marjorie Taylor Greene, Lauren Boebert, Andrew Biggs, and McCarthy himself. Senator Josh Hawley also seems to have been on the know, given his fist-salute to the rioters.

And then there's Trump himself, cheerleader and ringleader.

All should be subpoenaed. All, presumably, will fight the subpoenas in court.

Meanwhile, Trump continues to stage rallies for his avid followers as he did last weekend in Phoenix, where he declared "Our nation is up against the most sinister forces… This nation does not belong to them, this nation belongs to you."

Wrong. America belongs to all of us. And we all have a responsibility to protect its public health and its democratic institutions. The real sinister force is the Trump Republicans' cynical exploitation of lies and anti-scientific rubbish to divide and divert us.

Months ago, it seemed as if this darkness was behind us. It is not.

The GOP reveals itself to be the anti-family party

Last Thursday, 39 million American parents began receiving a monthly child allowance ($300 per child under 6, and $250 per child from 6 through 17). It's the biggest helping hand to American families in more than 85 years.

They need it. Even before the pandemic, child poverty had reached post-war records. Even non-poor families were in trouble, burdened with deepening debt and missed payments. Most were living paycheck to paycheck – so if they lost a job, they and their kids could be plunged into poverty. It's estimated that the new monthly child allowance will cut child poverty by more than half.

But every single Republican in both the House and Senate voted against the measure.

After I posted a tweet reminding people of this indisputable fact, Republican Senator Mike Lee of Utah responded Friday with a perfectly bizarre tweet: "If you're one of the 39 million households receiving their first Child Tax Credit payment today, don't forget that every single Democrat voted against making it larger."

Hello? Did we just go through the funhouse mirror?

In point of fact, when the American Rescue Plan was being debated last February, Lee and Senator Marco Rubio did propose slightly larger payments. But here's the rub: They wanted to restrict them only to "working parents." Children of the unemployed would be out of luck. Yet those kids are the poorest of the poor. They're most at risk of being hungry without a roof over their heads.

In a joint press release at the time, Lee and Rubio said they refused to support what they termed "welfare assistance" to jobless parents, warning against undercutting "the responsibility of parents to work to provide for their families." Then Lee, Rubio, and every other Republican voted against the whole shebang – help for working and non-working parents. And now Lee wants to take credit for wanting to make the payments larger to begin with? Talk about both sides of the mouth.

As we move toward the gravitational pull of the midterm elections – and polls show how popular the monthly child payments are – I expect other Republicans to make the same whopper of a claim.

But underneath this hypocritical Republican rubbish lie two important questions. The first: will a payment of up to $300 per child every month – totaling up to $3,600 per child per year – invite parents to become couch potatoes?

That seems doubtful. Even a family with three kids under six would receive no more than $10,800 a year. That's way below what's needed to pay even subsistence expenses, and still far below what a full-time job at the federal minimum wage would pull in.

But even if the payment caused some parents to work a bit less, it's far from clear their children are worse off as a result. Maybe they benefit from additional parenting time.

Which only raises a second question: should children be penalized because their parents aren't working, or are working less than they would without the child payment?

This question has been debated in America for many years – ever since Franklin D. Roosevelt first provided "Aid for Families with Dependent Children" (AFDC) in the Social Security Act of 1935.

It can't be decided based on facts; it comes down to values. We know, for example, that child poverty soared after Bill Clinton and congressional Republicans ended AFDC in 1996 and substituted a work requirement. Many people – myself included – look back on that decision as a horrible mistake.

But many of its proponents call it a success because it resulted in additional numbers of poor adults getting jobs and thereby setting good examples for their children of personal responsibility. In the view of these proponents, a country where more parents take responsibility to provide for their children is worth the collateral damage of a greater number of impoverished children.

Since the 1990s, the Republican view that public assistance should be limited to families with breadwinners has taken firm hold in America. Only now, with the American Rescue Plan – put into effect during the worst public health crisis in more than a century and one of the fiercest periods of unemployment since World War II – has that view been rejected in favor of a universal family benefit.

It's too early to know whether this about-face is permanent. The Act's payments will end a year from now unless Congress passes Biden's proposed $3.5 trillion addition. Almost every Senate Democrat has signaled a willingness to go along. But here again, not a single Senate Republican has signed on.

Let's be clear. Mike Lee's Republican Party – the putative party of "family values" – doesn't support needy families. It supports a pinched and, in these perilous times, unrealistic view of personal responsibility – children be damned.

How Joe Manchin responded to Biden's thinly veiled criticism

Sunday morning, West Virginia Senator Joe Manchin announced in the Charleston Gazette-Mail that he's a "no" on the For the People Act – and a no for ending the filibuster.

This is a direct in-your-eye response to President Biden's thinly-veiled criticism of Manchin last Tuesday in Tulsa.

If it means the end of the For the People Act, it would open the way for Republican-dominated states to continue their shameless campaign to suppress the votes of likely Democratic voters – using Trump's baseless claims of voter fraud as pretext. That's the beginning of the end of American democracy as we know it.

Manchin's support for extending the John Lewis Voting Rights Act to all fifty states is better than nothing, but it would depend on an activist Justice Department willing to block state changes in voting laws that suppress votes, and an activist Supreme Court willing to uphold such Justice Department decisions.

Don't bet on either. We know what happened to the Justice Department under Trump, and we know what's happened to the Supreme Court.

So without Manchin, is the For the People Act dead? Probably, unless Biden can convince one Republican senator to join him in supporting it.

Would Mitt Romney or Lisa Murkowski or Susan Collins be willing to do so and buck the voter-suppressing, Trump-dominated GOP? Or will history record that Republican senators were more united in their opposition to democracy than Democratic senators are in their support for it?

The optimist in me says Romney will do it because he's an institutionalist who's appalled the authoritarianism that Trump has unleashed in the GOP. The cynical realist in me says no way.

Robert Reich: Why the PRO Act is critical

Something I've just learned about Amazon – one of America's most profitable and fastest-growing corporations, headed by the richest man in the world:

According to the Labor Department's Occupational Safety and Health Administration, Amazon warehouse workers sustained nearly double the rate of serious injury incidents last year as did workers in non-Amazon warehouses.

In addition, largely because Amazon failed to provide its workers adequate protective equipment during the pandemic, the corporation admits that nearly 20,000 employees were presumed positive for the coronavirus.

Workers who spoke out about these unsafe workplace conditions were fired.

Amazon boasts of paying its workers at least $15 an hour. But that comes to about $30,000 a year, hardly enough for a family to get by on.

The explosive growth of Amazon's army of poorly-paid and ill-treated hourly workers is emblematic of the long-term decline of America's middle class and levels of economic inequality America hasn't seen since the late nineteenth century's Gilded Age.

This has strained the social fabric of the nation – fueling anger and frustration, a rising tide of drug overdoses and deaths of despair, even tempting some working-class people to embrace Trumpism and white nationalism.

The success of Amazon's "shock and awe" campaign against workers who dared try to bring a union to their Bessemer, Alabama warehouse exemplifies the immense political power the architects of this growing inequality now wield.

It's an alarming omen of the future.

In Amazon warehouses like Bessemer, workers are treated like robots. Algorithms relentlessly impose dangerous production quotas. They get two 30-minute breaks each ten-hour day. Every movement is monitored.

Amazon delivery drivers report being instructed to turn off their safety apps so they can meet their quotas.

Others report having to urinate into bottles because of delivery timing pressures.

Even though public support for unions is as high as it's been in 50 years – 60 million American workers would join a union today if they could – Bessemer workers were outgunned by a behemoth whose market capitalization exceeds Australia's GDP.

The National Labor Relations Act makes it illegal for employers to fire workers for trying to organize a union. But the penalties employees for violating the Act are so laughably small (rehiring the worker and providing back pay) that employers like Amazon routinely do it anyway.

Amazon may be the future of the American economy, but if that future is to have room for the kind of prosperous working families that fifty years ago defined American capitalism, unions are critical.

In March, the House of Representatives passed legislation designed to level the field. It's called the Protect the Right to Organize Act (PRO Act). The Senate version has 47 Democratic co-sponsors. It needs three more to give the PRO Act a fighting chance of getting to Joe Biden's desk.

The PRO Act would end many of the practices Amazon used to defeat the union effort in Bessemer. Real penalties would be imposed on companies and corporate officers who retaliate against union advocates or otherwise violate the National Labor Relations Act.

The PRO Act would make it easier for workers to form a union, with the aim of protecting them from unfair working conditions.

The PRO Act alone won't end economic inequality or return prosperity and opportunity to America's working families. But passage of the PRO Act would help.

It would also send a clear signal that ours is truly a government "of the people" – such as the million people who work for Amazon today, not the one multi-billionaire at the top, and of the vast majority of Americans who are working harder than ever today and getting nowhere, in America's Second Gilded Age.

The unchecked power of police unions

Police unions abuse collective bargaining to shield their members from accountability for the killings of unarmed Black people and other heinous misconduct. No progress can be made without reining in the unchecked power of police unions.

Look, I was Secretary of Labor. I'm in favor of unions. But police unionizing can have deadly consequences.

One study found that extending collective bargaining rights to Florida sheriffs' offices led to an estimated 40 percent increase in violent police misconduct.

Another study found that the protections built into the police union contracts in America's 100 largest cities were significantly correlated with the killing of unarmed civilians.

Another study suggests that the increase in police unionization from the 1950s through the 1980s resulted in "about 60 to 70" additional civilians killed by police each year — the majority of whom were people of color.

Experts believe the protections in police union contracts give too many officers the sense they can abuse their power.

Police contracts often have provisions allowing departments to erase disciplinary records within a few years, enabling officers with histories of misconduct to clear their records.

Others allow accused officers to access their investigative files before being questioned, letting them manipulate their story. Others set strict time limits for citizens to file complaints about officers; some prevent anonymous complaints from being investigated at all.

All these provisions allow officers with histories of misconduct to stay on the force.

Derek Chauvin, for instance, had at least 17 complaints lodged against him, and never faced any discipline beyond two letters of reprimand. Needless to say, other public sector employees are not afforded these extraordinary protections.

Even if an officer is fired, there's an extensive appeals process that usually works out in their favor.

In Philadelphia, 62 percent of officers fired from 2006 to 2017 were reinstated. In San Antonio, 70 percent were. When New York police officer Daniel Pantaleo was finally fired, five years after choking Eric Garner to death, the NYPD's largest union responded by threatening a work slowdown.

Police unions fight cities that enact even mild reforms, like establishing civilian review boards. The result? Review boards are notoriously ineffective by design.

Some police union contracts with cities forbid them even creating a review board. In the tragic case of Breonna Taylor, Louisville's review board could not start an investigation, take complaints from citizens, or recommend discipline for the officers. All it could do was make recommendations for policy or training changes.

It's the same in other cities: oversight boards have no investigative power, no subpoena power, and no discipline power.

Police unions also wield enormous political clout. A Guardian investigation found police unions spent about $87 million influencing state and local legislation over the past two decades, and at least $47.3 million on campaign contributions and lobbying at the federal level. In 2017, police unions spent $2 million to influence legislation in California alone.

Now, don't get me wrong. Stopping the abuses of police unions must not become a stalking horse for attacking public sector unions generally. But the unchecked powers of police unions urgently need to be addressed.

To start, lawmakers must change state labor laws to restrict the subjects police unions can bargain over.

They should limit negotiations to pay and benefits, not how police do their jobs, how and when they use force, and how and when they are disciplined.

For decades, police unions have shielded officers from accountability, bullied cities into doing their bidding, and attacked lawmakers who took them on. It's past time to ensure they can no longer block accountability under the guise of collective bargaining.

The greatest danger to American democracy is not coming from inside the House

The greatest danger to American democracy right now is not coming from Russia, China, or North Korea. It is coming from the Republican Party.

Only 25 percent of voters self-identify as Republican, the GOP's worst showing against Democrats since 2012 and sharply down since last November. But those who remain in the Party are far angrier, more ideological, more truth-denying, and more racist than Republicans who preceded them.

And so are the lawmakers who represent them.

Today's Republican Party increasingly is defined not by its shared beliefs but by its shared delusions.

Last Friday, 54 U.S. senators voted in favor of proceeding to debate a House-passed bill to establish a commission to investigate the causes and events of the January 6th insurrection. This was 6 votes short of the number of votes needed for "cloture," or stopping debate – meaning any further consideration of the bill would have been filibustered by Republicans indefinitely.

So there will be no investigation.

The 54 Senators who voted yes to cloture – in favor of the commission – represent 189 million Americans, or 58% of the American population. The 35 who voted no represent 104 million Americans, or 32% of the population.

In other words, 32% of American voters got to decide that the nation would not know about what happened to American democracy on January 6.

Furthermore, the 35 who voted against the commission were all Republicans. They did not want such an inquiry because it might jeopardize their chances of gaining a majority of the House or Senate in the 2022 midterm elections. They also wanted to stay in the good graces of Donald Trump, whose participation in that insurrection might have been more fully revealed.

Eight of these Republicans voted against certifying Joe Biden as president on January 6. Some of their constituents were responsible for the insurrection in the first place.

The Republican Party is also pursuing new laws in many states making it harder for likely Democrats to vote and opposing voting reforms in Congress.

It is actively purging any Republican who has temerity to criticize Trump. They have removed from her leadership position Liz Cheney, who called Trump's efforts to overturn the election and his role in inciting the deadly Jan. 6 riot the greatest "betrayal by a president of the United States of his office and his oath to the Constitution."

Local Republicans leaders have either stepped down or been forced out of their party positions for not supporting Trump's baseless election claims or for criticizing the former president's role in inciting the deadly Capitol riot.

American democracy is at an inflection point.

Senate Democrats must get rid of the filibuster and push through major reforms – voting rights, as well as policies that will enable more Americans in the bottom half – most of them without college educations, many of whom cling to the Republican Party – to do better.

In the 1930s, Franklin D. Roosevelt noted that the survival of American democracy depended on the adoption of policies that comprised the New Deal. In that Depression decade, democracy was under siege around the world, and dictators were on the rise.

Joe Biden understands that America and the world face a similar challenge. And like FDR, Biden is making a strong case that the adoption of his policies will buttress democracy against the forces of tyranny, not only as an example to the rest of the world but here at home.

Trump's accomplices in the 'big lie' are getting away with it — and the media is letting them

At the risk of being the skunk at the picnic, I feel compelled to warn you that if we forget and move on from the tragedies of this past year, we're setting ourselves on a dangerous path. Of course I understand the desire to forget all the unpleasantness and start a new chapter. But if we do, we're inviting greater tragedies in the future.

Let me remind you: Donald Trump lied about the results of the last election. And then – you remember, don't you? – he tried to overturn the results.

Trump twisted the arms of state election officials. He held a rally to stop Congress from certifying the election, followed by the violent attack on the Capitol. Five people died. Senators and representatives could have been slaughtered.

Several Republican members of Congress encouraged the attempted coup by joining him in the big lie and refusing to certify the election — even after the mob desecrated the halls of our democracy.

This was in January of this year, yet we seem to be doing everything we can to blot it out of our memory. Meanwhile, those responsible for instigating the attack haven't been held accountable in any respect — including by the media.

The Washington Post hosted a live video chat with Missouri Republican senator Josh Hawley, a ringleader in the attempt to overturn the results of the election. Hawley had even made a fist-pump gesture toward the mob at the Capitol before the attack.

But the Post billed the interview as being about Hawley's new book on big tech. It even posted a biography of Hawley that made no mention of Hawley's sedition, referring instead to his supposed reputation "for taking on the big and the powerful to protect Missouri workers" and as "a fierce defender of the Constitution."

CBS This Morning interviewed Florida Republican Rick Scott, another senator who tried to overturn the election by not certifying the results. But there was no mention of his sedition, either. The CBS interviewer confined his questions to Biden's spending plans, which Scott unsurprisingly opposed.

Senators Ted Cruz and Ron Johnson and House Minority Leader Kevin McCarthy also repeatedly appear on major news programs without being questioned about their attempts to undo the results of the election, or their continued promotion of Trump's lies.

The media is supposed to serve as a crucial check on those in power. But in its breathless desire to cover the "news" it is failing to remind us of our recent past.

The consequences of this failure are dire.

Trump's big lie that the 2020 election was stolen, and that President Biden is not legitimate, is not disappearing. A majority of Republican voters believe him.

That big lie is being used by Republican state legislatures to justify an all-out assault on the right to vote.

Hours after Florida enacted new voting restrictions, Texas's Republican-led legislature pushed ahead with its own bill that would make it one of the hardest states in which to cast a ballot.

The Republican-controlled Arizona Senate launched a private recount of the 2020 presidential election results in Maricopa County – farming out 2.1 million ballots to GOP partisans with no experience in ballot counting or election monitoring. At least one person involved in the recount participated in the Capitol attack.

The Republican Party even purged one of its leaders, Wyoming representative Liz Cheney, for telling the truth about the election.

Meanwhile, Republican state legislatures are muscling their way into election administration, as they attempt to dislodge or bully local election officials who have always run our voting systems.

Trump's big lie will continue to flourish unless the lawmakers who went along with it and have failed to renounce it face real consequences.

That means no book promotions, no cushy interviews, no guest op-eds in the Sunday paper.

What possible excuse is there for booking them if they have not publicly retracted their election lies? If they must appear, they should be asked if they continue to deny the election results and precisely why.

It also means a thorough independent 9-11 type inquiry into what happened, whether members of Congress were involved, how Donald Trump and others were involved.

Republican leaders must not duck this. History is watching.

They must be held accountable to the truth. Otherwise the trauma of 2020 will return — perhaps in even more terrifying form.

The secret tax loophole making the rich even richer

How do we prevent America from becoming an aristocracy, while also funding the programs that Americans desperately need?

One way is to get rid of a tax loophole you've probably never heard of. It's known as the "stepped-up basis" rule.

Here's how the stepped-up-basis loophole now works. Take a man named Jeff. At his death, Jeff owns $30 million-worth of stocks he originally bought for a total of $10 million. Under existing law, neither Jeff nor his heirs would owe federal tax on the $20 million of gains because they're automatically "stepped up" to their value when he dies — $30 million.

Under Biden's proposal, Jeff's $20 million of gains would be taxed. And don't worry: Biden's proposal doesn't touch tax-favored retirement accounts, such as 401-Ks, and it only applies to the very richest Americans.

As it is now, the stepped-up basis loophole enables the super-rich, like Jeff, to avoid paying more than $40 billion in taxes each year. It has allowed them to skip taxes on the increased values of mansions and artworks as well as shares of stock.

In fact, it's one of the chief means by which dynastic wealth has grown and been passed from generation to generation, enabling subsequent generations to live off that growing wealth and never pay a dime of taxes on it.

Unless the stepped-up basis loophole is closed, we will soon have a large class of hugely rich people who have never worked a day in their lives.

Over the next decades, rich baby boomers will pass on an estimated $58 trillion of wealth to their millennial children — the largest intergenerational transfer of wealth in history.

Closing this giant tax loophole for the super-rich is how Biden intends to fund part of his American Families Plan, which would provide every child with 2 years of pre-school and every student with 2 years of free community college, as well as provide paid family and medical leave to every worker.

Close this stepped-up basis loophole, and we help finance the programs the vast majority of Americans desperately need and deserve. We also end the explosion of dynastic wealth. It should be a no-brainer.

The media is trying to let the GOP get away with the inexcusable

America prefers to look forward rather than back. We're a land of second acts. We move on.

This can be a strength. We don't get bogged down in outmoded traditions, old grudges, obsolete ways of thinking. We constantly reinvent. We love innovation and disruption.

The downside is a collective amnesia about what we've been though, and a corresponding reluctance to do anything about it or hold anyone accountable.

Now, with Covid receding and the economy starting to rebound – and the 2020 election and the attack on the Capitol behind us – the future looks bright.

But at the risk of being the skunk at the picnic, let me remind you:

We have lost more than 580,000 people to COVID-19. One big reason that number is so high is our former president lied about the virus and ordered his administration to minimize its danger.

He also lied about the results of the last election. And then – you remember, don't you? – he tried to overturn the results.

He twisted the arms of state election officials. He held a rally to stop Congress from certifying the election, followed by the violent attack on the Capitol. Five people died. Senators and representatives could have been slaughtered.

Several Republican members of Congress joined him in the big lie and refused to certify the election. They thereby encouraged the attempted coup.

This was just over four months ago, yet we seem to be doing everything we can to blot it out of our collective memory.

Last Tuesday, the Washington Post hosted a live video chat with Missouri Republican senator Josh Hawley, a ringleader in the attempt to overturn the results of the election. Hawley had even made a fist-pump gesture toward the mob at the Capitol before they attacked.

But the Post billed the interview as being about Hawley's new book on the "tyranny of big tech." It even posted a biography of Hawley that made no mention of Hawley's sedition, referring instead to his supposed reputation "for taking on the big and the powerful to protect Missouri workers," and as "a fierce defender of the Constitution."

Last week, "CBS This Morning" interviewed Florida Republican senator Rick Scott, another of the senators who tried to overturn the election by not certifying the results. But there was no mention of any of his sedition. The CBS interviewer confined his questions to Biden's spending plans, which Scott unsurprisingly opposed.

Senators Ted Cruz and Ron Johnson, and House minority leader Kevin McCarthy also repeatedly appear on major news programs without being questioned about their attempts to undo the results of the election.

What possible excuse is there for booking them if they have not publicly retracted their election lies? At the least, if they must appear, ask them if they continue to deny the election results and precisely why.

Pretending nothing happened promotes America's dangerous amnesia, which invites more attempts to distort the truth.

Trump is consolidating his power over the Republican Party, based on his big lie. The GOP is about to purge one of its leaders, Wyoming Representative Liz Cheney, for telling the truth.

The big lie is being used by Republican state legislatures to justify new laws to restrict voting. On Thursday, hours after Florida installed a rash of new voting restrictions, Texas's Republican-led Legislature pushed ahead with its a bill that would make it one of the hardest states in which to cast a ballot.

The Republican-controlled Arizona senate is mounting a private recount of the 2020 presidential election results in Maricopa County – farming out 2.1 million ballots to GOP partisans, including at least one who participated in the January 6 raid on the Capitol.

Last Monday, Trump even lied about his big lie, issuing a "proclamation" to co-opt the language of those criticizing the lie. "The Fraudulent Presidential Election of 2020 will be, from this day forth, known as the BIG LIE!" he wrote.

Most Republican voters believe him.

It is natural to want to put all this unpleasantness behind us. We are finally turning the corner on the pandemic and the economy.

Why look back to the trauma of the 2020 election? Because we cannot put it behind us. Trump's big lie and all that it has provoked are still with us. If we forget what has occurred the trauma will return, perhaps in even more terrifying form.

Robert Reich exposes the truth behind the Republican Party's attempt to rebrand itself

The Republican Party is trying to rebrand itself as the party of the working class.

Rubbish. Republicans can spout off all the catchy slogans about blue jeans and beer they want, but actions speak louder than words. But let's look at what they're actually doing.Did they vote for the American Rescue Plan? No. Not a single Republican in Congress voted for stimulus checks and extra unemployment benefits needed by millions of American workers.So what have they voted for? Well, every single one of them voted for Trump's 2017 tax cut for the wealthy and corporations, of which 83 percent of the benefits go to the richest 1 percent over a decade.

They claimed corporations would use the savings from the tax cut to invest in their workers. In reality, corporations used their tax savings to buy back shares of their own stock in order to boost share values. And some corporations then fired large portions of their workforce. Not very pro-worker, if you ask me.

Have they voted for any taxes on the wealthy? No. Quite the opposite. Republicans refuse to tax the rich. They've even been trying to get rid of the estate tax, which only applies to estates worth at least $11.7 million for individuals and $23.4 million for married couples. Working class my foot.

Have they backed a bill to raise the minimum wage to $15 an hour, which a majority of Americans favor? No. Republicans refuse to raise the minimum wage even though it would give 32 million workers a raise. That's about a fifth of the entire U.S. workforce.

Do they support unions, which empower workers to get better pay and benefits? No again. To the contrary: Republicans have enacted right-to-work laws in 28 states, decimating unions' bargaining power and enabling businesses to exploit their workers.

And when it comes to strengthening labor laws, only five out of 211 Republicans voted for the PRO Act in the House – the toughest labor law legislation in a generation.

How about the historic union drive at the Bessemer, Alabama Amazon warehouse, which Joe Biden and almost all Democrats have strongly backed? Just one Republican spoke out in support. All others have been dead silent.

What about backing regulations that keep workers safe? Nope. In fact, they didn't bat an eye when Trump rolled back child labor protections, undid worker safeguards from exposure to cancerous radiation, and gutted measures that shield workers from wage theft.

Do they support overtime? No. They allowed Trump to eliminate overtime for 8 million workers, and continue to repeat the corporate lie about "job-killing regulations."

What about expanding access to healthcare to all working people? Not a chance. Republicans at the state level have blocked Medicaid expansion and enacted Medicaid work requirements, while Republicans in Congress have tried for years to repeal the entirety of the Affordable Care Act. If they succeeded, they would have stripped healthcare away from more than 20 million working Americans.

So don't fall for the Republican Party's "working class" rebrand. It's a cruel hoax. The GOP doesn't give a fig about working people. It is, and always will be, the party of big business and billionaires.

Senate Democrats face a simple, stark choice

Republican-controlled state legislatures have introduced over 361 voter suppression bills in 47 states, and some states, like Georgia, have already enacted them into law.

There's only one way to stop this assault on our democracy. It's called the FOR THE PEOPLE ACT, and the window for Congress to pass it is closing.

These Republican voter suppression bills are egregious—they shrink early voting periods, add onerous voter ID requirements, limit eligibility for mail-in ballots, ban ballot drop boxes and drive-through voting, and even make it a crime to give voters in line water.

The FOR THE PEOPLE ACT, on the other hand, would prevent these tactics and make it easier to vote. In addition, gerrymandering would be reduced and the power of small political donors would be amplified.

It could not come at a more critical time.

The Republican assault on our democracy is based on the lie that there was widespread voter fraud in the 2020 election. Multiple recounts in battleground states like Georgia found nothing. Investigations by the Department of Homeland Security and the Justice Department found nothing. 61 out of 62 courts found nothing.

Republicans claim they're just listening to the concerns of their voters and restoring "trust" in our elections. Rubbish. The real purpose of these restrictions is to hamper voting by Black people, people of color, young people, and lower-income Americans.

After Black voters and organizers in Georgia flipped the state blue for the first time in decades, the GOP is pulling out all the stops to prevent the same from happening in other states. The situation is even more dire given the upcoming once-in-a-decade redistricting process, allowing Republican-controlled states to further gerrymander congressional districts.

Their assault on the right to vote is a coordinated, national strategy led by top party leaders and outside dark-money advocacy groups like the Heritage Foundation. That group is working directly with state legislatures to provide them with "model legislation" and gearing up to spend $24 million in eight states to advance these bills ahead of the midterms.

Unless the FOR THE PEOPLE ACT becomes law, these restrictive state bills will go into effect before the upcoming 2022 midterm elections, and entrench Republican power for years to come. So it's essential we protect voting rights now, while we still can.

This is not a partisan fight. It's a battle between forces that want to go backward to an era of Jim Crow, and the majority of Americans who want to build a more inclusive democracy.

Yet the FOR THE PEOPLE ACT faces an uphill battle in the Senate because of the archaic filibuster rule that requires a 60-vote supermajority to pass legislation.

The good news is Senate Democrats have the power to end the filibuster and thereby allow the FOR THE PEOPLE ACT to become law. It's time for Democrats to unite on this, without hesitation.

The stakes could not be higher. Simply put, it's democracy or authoritarianism.

How corporations crush the working class

The most dramatic change in the system over the last half-century has been the emergence of corporate giants like Amazon and the shrinkage of labor unions.

The resulting power imbalance has spawned near-record inequalities of income and wealth, corruption of democracy by big money, and the abandonment of the working class.

Fifty years ago, General Motors was the largest employer in America. The typical GM worker earned $35 an hour in today's dollars and had a major say over working conditions.

Today's largest employers are Amazon and Walmart, each paying far less per hour and routinely exploiting their workers, who have little recourse.

The typical GM worker wasn't "worth" so much more than today's Amazon or Walmart worker and didn't have more valuable insights about working conditions.

The difference is those GM workers had a strong union. They were backed by the collective bargaining power of more than a third of the entire American workforce.

Today, most workers are on their own. Only 6.4% of America's private-sector workers are unionized, providing little collective pressure on Amazon, Walmart, or other major employers to treat their workers any better.

Fifty years ago, the labor movement had enough political clout to ensure labor laws were enforced and that the government pushed giant firms like GM to sustain the middle class.

Today, organized labor's political clout is minuscule by comparison.

The biggest political players are giant corporations like Amazon. They've used that political muscle to back "right-to-work" laws, whittle down federal labor protections, and keep the National Labor Relations Board understaffed and overburdened, allowing them to get away with egregious union-busting tactics.

They've also impelled government to lower their taxes; extorted states to provide them tax breaks as a condition for locating facilities there; bullied cities where they're headquartered; and wangled trade treaties allowing them to outsource so many jobs that blue-collar workers in America have little choice but to take low-paying, high-stress warehouse and delivery gigs.

Oh, and they've neutered antitrust laws, which in an earlier era would have had companies like Amazon in their crosshairs.

This decades-long power shift – the ascent of corporate leviathans and the demise of labor unions – has resulted in a massive upward redistribution of income and wealth. The richest 0.1% of Americans now have almost as much wealth as the bottom 90% put together.

The power shift can be reversed – but only with stronger labor laws resulting in more unions, tougher trade deals, and a renewed commitment to antitrust.

The Biden administration and congressional Democrats appear willing. The House has just passed the toughest labor reforms in more than a generation. Biden's new trade representative, promises trade deals will protect American workers rather than exporters. And Biden is putting trustbusters in critical positions at the Federal Trade Commission and in the White House.

And across the country, labor activism has surged – from the Amazon union effort, to frontline workers walking out and striking to demand better pay, benefits, and safety protections.

I'd like to think America is at a tipping point similar to where it was some 120 years ago, when the ravages and excesses of the Gilded Age precipitated what became known as the Progressive Era. Then, reformers reined in the unfettered greed and inequalities of the day and made the system work for the many rather than the few.

It's no exaggeration to say that we're now living in a Second Gilded Age. And today's progressive activists may be on the verge of ushering us into a Second Progressive Era. They need all the support we can give them.


How Corporations Crush the Working Class | Robert Reich www.youtube.com

The basic deal between corporate America and the GOP is alive and well

For four decades, the basic deal between big American corporations and politicians has been simple. Corporations provide campaign funds. Politicians reciprocate by lowering corporate taxes and doing whatever else corporations need to boost profits.

The deal has proven beneficial to both sides, although not to the American public. Campaign spending has soared while corporate taxes have shriveled.

In the 1950s, corporations accounted for about 40 percent of federal revenue. Today, they contribute a meager 7 percent. Last year, more than 50 of the largest U.S. companies paid no federal income taxes at all. Many haven't paid taxes for years.

Both parties have been in on this deal although the GOP has been the bigger player. Yet since Donald Trump issued his big lie about the fraudulence of the 2020 election, corporate America has had a few qualms about its deal with the GOP.

After the storming of the Capitol, dozens of giant corporations said they would no longer donate to the 147 Republican members of Congress who objected to the certification of Biden electors on the basis of the big lie.

Then came the GOP's recent wave of restrictive state voting laws, premised on the same big lie. Georgia's are among the most egregious. The chief executive of Coca Cola, headquartered in the peach tree state, calls those laws "wrong" and "a step backward." The CEO of Delta Airlines, Georgia's largest employer, says they're "unacceptable." Major League Baseball decided to relocate its annual All-Star Game away from the home of the Atlanta Braves.

These criticisms have unleashed a rare firestorm of anti-corporate Republican indignation. The senate minority leader, Mitch McConnell, warns corporations of unspecified "serious consequences" for speaking out. Republicans are moving to revoke Major League Baseball's antitrust status. Georgia Republicans threaten to punish Delta Airlines by repealing a state tax credit for jet fuel.

"Why are we still listening to these woke corporate hypocrites on taxes, regulations & antitrust?" asks Florida Senator Marco Rubio.

Why? For the same reason Willy Sutton gave when asked why he robbed banks: That's where the money is.

McConnell told reporters that corporations should "stay out of politics" but then qualified his remark: "I'm not talking about political contributions." Of course not. Republicans have long championed "corporate speech" when it comes in the form of campaign cash – just not as criticism.

Talk about hypocrisy. McConnell was the top recipient of corporate money in the 2020 election cycle and has a long history of battling attempts to limit it. In 2010, he hailed the Supreme Court's "Citizens United" ruling, which struck down limits on corporate political donations, on the dubious grounds that corporations are "people" under the First Amendment to the Constitution.

"For too long, some in this country have been deprived of full participation in the political process," McConnell said at the time. Hint: He wasn't referring to poor Black people.

It's hypocrisy squared. The growing tsunami of corporate campaign money suppresses votes indirectly by drowning out all other voices. Republicans are in the grotesque position of calling on corporations to continue bribing politicians as long as they don't criticize Republicans for suppressing votes directly.

The hypocrisy flows in the other direction as well. The Delta's CEO criticized GOP voter suppression but the company continues to bankroll Republicans. Its PAC contributed $1,725,956 in the 2020 election, more than $1 million of which went to federal candidates, mostly to Republicans. Oh, and Delta hasn't paid federal taxes for years.

Don't let the spat fool you. The basic deal between the GOP and corporate America is still very much alive.

Which is why, despite record-low corporate taxes, congressional Republicans are feigning outrage at Joe Biden's plan to have corporations pay for his $2 trillion infrastructure proposal. Biden isn't even seeking to raise the corporate tax rate as high as it was before the Trump tax cut, yet not a single Republicans will support it.

A few Democrats, such as West Virginia's Joe Manchin, don't want to raise corporate taxes as high as Biden does, either. Yet almost two-thirds of Americans support the idea.

The basic deal between American corporations and American politicians has been a terrible deal for America. Which is why a piece of legislation entitled the "For the People Act," passed by the House and co-sponsored in the Senate by every Democratic senator except Manchin, is so important. It would both stop states from suppressing votes and also move the country toward public financing of elections, thereby reducing politicians' dependence on corporate cash.

Corporations can and should bankroll much of what America needs. But they won't as long as corporations keep bankrolling American politicians.

How America has come to a tipping point in our Second Gilded Age

The most dramatic change in the system over the last half-century has been the emergence of corporate giants like Amazon and the shrinkage of labor unions.

The resulting power imbalance has spawned near-record inequalities of income and wealth, corruption of democracy by big money, and the abandonment of the working class.

Fifty years ago, General Motors was the largest employer in America. The typical GM worker earned $35 an hour in today's dollars and had a major say over working conditions.

Today's largest employers are Amazon and Walmart, each paying far less per hour and routinely exploiting their workers, who have little recourse.

The typical GM worker wasn't "worth" so much more than today's Amazon or Walmart worker and didn't have more valuable insights about working conditions.

The difference is those GM workers had a strong union. They were backed by the collective bargaining power of more than a third of the entire American workforce.

Today, most workers are on their own. Only 6.4% of America's private-sector workers are unionized, providing little collective pressure on Amazon, Walmart, or other major employers to treat their workers any better.

Fifty years ago, the labor movement had enough political clout to ensure labor laws were enforced and that the government pushed giant firms like GM to sustain the middle class.

Today, organized labor's political clout is minuscule by comparison.

The biggest political players are giant corporations like Amazon. They've used that political muscle to back "right-to-work" laws, whittle down federal labor protections, and keep the National Labor Relations Board understaffed and overburdened, allowing them to get away with egregious union-busting tactics.

They've also impelled government to lower their taxes; extorted states to provide them tax breaks as a condition for locating facilities there; bullied cities where they're headquartered; and wangled trade treaties allowing them to outsource so many jobs that blue-collar workers in America have little choice but to take low-paying, high-stress warehouse and delivery gigs.

Oh, and they've neutered antitrust laws, which in an earlier era would have had companies like Amazon in their crosshairs.

This decades-long power shift – the ascent of corporate leviathans and the demise of labor unions – has resulted in a massive upward redistribution of income and wealth. The richest 0.1% of Americans now have almost as much wealth as the bottom 90% put together.

The power shift can be reversed – but only with stronger labor laws resulting in more unions, tougher trade deals, and a renewed commitment to antitrust.

The Biden administration and congressional Democrats appear willing. The House has just passed the toughest labor reforms in more than a generation. Biden's new trade representative, promises trade deals will protect American workers rather than exporters. And Biden is putting trustbusters in critical positions at the Federal Trade Commission and in the White House.

And across the country, labor activism has surged – from the Amazon union effort, to frontline workers walking out and striking to demand better pay, benefits, and safety protections.

I'd like to think America is at a tipping point similar to where it was some 120 years ago, when the ravages and excesses of the Gilded Age precipitated what became known as the Progressive Era. Then, reformers reined in the unfettered greed and inequalities of the day and made the system work for the many rather than the few.

It's no exaggeration to say that we're now living in a Second Gilded Age. And today's progressive activists may be on the verge of ushering us into a Second Progressive Era. They need all the support we can give them.

Here's why Biden doesn't want to sound like Trump

Joe Biden is embarking on the biggest government initiative in more than a half century, "unlike anything we have seen or done since we built the interstate highway system and the space race decades go," he says.

But when it comes to details, it sounds as boring as fixing the plumbing.

"Under the American Jobs Plan, 100% of our nation's lead pipes and service lines will be replaced—so every child in America can turn on the faucet or fountain and drink clean water," the president tweeted.

Can you imagine Donald Trump tweeting about repairing lead pipes?

Biden is excited about rebuilding America's "infrastructure," a word he uses constantly although it could be the dullest term in all of public policy. "Infrastructure Week" became a punchline under Trump.

The old unwritten rule was that if a president wants to do something really big, he has to justify it as critical to national defense or else summon the nation's conscience.

Dwight Eisenhower's National Interstate and Defense Highway Act was designed to "permit quick evacuation of target areas" in case of nuclear attack and get munitions rapidly from city to city. Of course, in subsequent years it proved indispensable to America's economic growth.

America's huge investment in higher education in the late 1950s was spurred by the Soviets' Sputnik satellite. The official purpose of the National Defense Education Act, as it was named, was to "insure trained manpower of sufficient quality and quantity to meet the national defense needs of the United States."

John F. Kennedy launched the race to the moon in 1962 so that space wouldn't be "governed by a hostile flag of conquest."

Two years later, Lyndon Johnson's "unconditional war on poverty" drew on the conscience of America reeling from Kennedy's assassination.

But Joe Biden is not arousing the nation against a foreign power – not even China figures prominently as a foil – nor is he basing his plans on lofty appeals to national greatness or public morality.

"I got elected to solve problems," he says, simply. He's Mr. Fix-it.

The first of these problems was a pandemic that's killed hundreds of thousands of Americans – Biden carries a card in his pocket updating the exact number – and its ensuing economic hardship.

In response, Congress passed Biden's $1.9 trillion American Rescue Plan – the most important parts of which aren't $1,400 checks now being mailed to millions of Americans but $3,600 checks a child paid to low-income families, which will cut child poverty by half.

Now comes his $2 trillion American Jobs Plan, which doesn't just fund roads and bridges but a vast number of things the nation has neglected for years: schools, affordable housing, in-home care, access to broadband, basic research, renewable energy, and the transition to a non-fossil economy.

Why isn't Biden trumpeting these initiatives for what they are – huge public investments in the environment, the working-class and poor – instead of rescue checks and road repairs? Why not stir America with a vision of what the nation can be if it exchanges fraudulent trickle-down economics for genuine bottom-up innovation and growth?

Even the official titles of his initiatives – Rescue Plan, Jobs Plan, and soon-to-be-unveiled Family Plan – are anodyne, like plumbing blueprints.

The reason is Biden wants Americans to feel confident he's taking care of the biggest problems but doesn't want to create much of a stir. The country is so bitterly and angrily divided that any stir is likely to stir up vitriol.

Talk too much about combatting climate change and lose everyone whose livelihood depends on fossil fuels or who doesn't regard climate change as an existential threat. Focus on cutting child poverty and lose everyone who thinks welfare causes dependency. Talk too much about critical technologies and lose those who don't believe government should be picking winners.

Rescue checks and road repairs may be boring but they're hugely popular. 61 percent of Americans support the American Rescue Plan, including 59 percent of Republicans. More than 80 percent support increased funding for highway construction, bridge repair and expanded access to broadband.

Biden has made it all so bland that congressional Republicans and their big business backers have nothing to criticize except his proposal to pay for the repairs by raising taxes on corporations, which most Americans support.

This is smart politics. Biden is embarking on a huge and long-overdue repair job on the physical and human underpinnings of the nation while managing to keep most of a bitterly divided country with him. It may not be seen as glamorous work, but when you're knee-deep in muck it's hard to argue with a plumber.

Here's the real deficit problem that America is facing

America has a deficit problem. But the country's biggest deficit isn't the federal budget deficit. It's the deficit in public investment.

The public investment deficit is the gap between what we should be investing in our future — on infrastructure, education, and basic research — and the relatively little we are investing.

Increasing public investment needs to be a major goal of the Biden administration.

Public investment is similar to private investment in that we invest today because of the payoff in the future. The difference is public investment pays off for all of us, for America.

In the 1960s, we used to make a lot of public investments. But they've been steadily declining ever since.

That decline has been largely driven by so-called "deficit hawks" who argue against more federal spending. But as I've been saying for years, reducing the federal deficit just for the sake of reducing it makes no sense.

Any business person knows that you borrow money for the sake of investing in the future of your business. Those are wise borrowings. Because then you can pay those debts off when they get bigger.

A national economy works exactly the same way. It doesn't matter that we're borrowing money, if we're investing those monies that we borrowed from abroad — in education, training, infrastructure, factories — but we're not.

The public return on infrastructure investment, based on 2020 report taking into account the pandemic, averages $2.70 for every single public dollar invested — yet we haven't made those investments. Our infrastructure today is crumbling.

The return on early childhood education is between 10 and 16 percent — but only a handful of our children have access to early childhood education.

Public investment on clean energy has an annual return of over 27 percent. But federal tax breaks favor fossil fuels over renewables by about 7 to 1.

The public return on investments in basic research and development are huge. America's competitiveness depends on them, because no individual company has an incentive to make them. The lithium-ion battery that powers iPhones and electric cars was developed by federally sponsored materials science research, while the Internet itself was borne out of the Advanced Research Projects Administration.

And yet in recent years, public investment in basic research has declined as well.

Are you seeing a pattern yet? Federal investments in all these areas have shrunk — even though the payoffs from these investments are gigantic, and the costs of not making them are astronomical. American productivity is already suffering.

Now, some say we don't need to worry about this public investment deficit because private investments fill the gap. Baloney.

Corporations are focused on getting the best return for themselves, not for America. For most of the last four decades, they've made money by lowering their costs, at the expense of working people: capping wages, reducing taxes, and deregulating.

A common assumption is that when American corporations are profitable, Americans are better off. But that's false. Trickle-down economics is a sham. Tax cuts and subsidies to big corporations and the wealthy don't build the economy. Economies don't grow from the top down — they grow from the bottom up, through public investment.

So if private investment won't fill the gap, how do we fill it? Two ways: tax the wealthy and large corporations, and borrow.

Tax rates on the wealthy and on corporations have continued to drop over the past 40 years, just as the deficit in public investment has grown. In the 1950s, the highest tax rate on individuals was over 90 percent. Even after tax deductions and credits, it was still over 40 percent. But since then, tax rates have dropped dramatically. For the first time on record, the 400 richest Americans now pay a lower effective tax rate than people in the bottom half.
Revenue from corporate taxes has also plummeted.

If wealthy individuals and corporations want all the advantages that come with being American, they have to pay taxes so America can afford the public investments necessary for a high-wage, high-productivity society.

The other way to pay for public investment is through public borrowing. This kind of borrowing doesn't burden future generations, because it's used to build a better future for those future generations.

Remember: There's a difference between borrowing for the future and borrowing for today. You might not want to borrow to pay for a vacation, but it's perfectly rational to borrow to purchase a house, because a vacation doesn't have any future return, while a home does. Right now, the federal budget irrationally treats all government borrowing the same.

The government needs a public investment budget separate from the current spending budget to clarify what we're investing in and allow us to keep borrowing for investments as long as the returns justify it.

Public investment is the biggest and most important deficit you've never heard of.

Don't listen to people who claim we can't afford to invest in the American people. We can afford it. We can't afford not to. Joe Biden needs to recognize this, and make public investment a central part of his economic strategy.

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