(Middle) Class War

An Economist Explains How to Make America Fair Again

(Middle) Class War

Perian Flaherty

ROBERT REICH Paying attention to our financial mess.

+ Enlarge this Image

You can't accuse Robert Reich of being wishy-washy. The economist, who has served in the Ford, Carter, and Obama administrations and was secretary of labor under Bill Clinton, lets us know what side he's on with the dedication in his new e-book, Beyond Outrage: "To the Occupiers, and all others committed to taking back our economy and our democracy." Outrage is an e-book-only release intended to find a wide audience. It runs about 100 pages long—give or take, obviously, since font size is fluid in e-books—and it costs $2.99 (or $3.99 for an "expanded version" with three videos). Reich wrote it as a manifesto for progressives who want to promote an Occupy-friendly agenda in the next election.

Outrage is divided into three sections. The first explains the growing division of classes and why the United States' gradual slide into economic conservatism has ruined us. If you've been paying attention to our financial mess, this is the slightest of refresher courses, but Reich—an economics professor at University of California, Berkeley—knows to throw in the occasional head-turner of a fact to keep your attention. As an argument to the conservative and libertarian canard about how the wealthy should be allowed to choose the charities and causes they want to support rather than handing that money over to the government, Reich explains that the majority of tax-deductible donations from wealthy people and corporations go toward "investments in prestige" like universities and high-end artistic enterprises such as operas and museums. "I'm all in favor of supporting the arts and our universities," Reich writes, but "only an estimated 10 percent of all charitable deductions are directed at the poor," who really need those funds.

In an America where "more than one in three young families with children (headed by someone thirty or under) [are] living in poverty," Reich says, this is unacceptable. He argues that the middle class is our nation's true economic engine and that decades of stripping away the safety nets that allow lower-class citizens to become part of the biggest middle class in the world is the cause of 2008's economic collapse.

The second section is an extended rant against conservative economic thought. There's some partisan dickery that's sure to turn off the single brave conservative reader who's already ventured this far into the book, but Reich isn't just name-calling. He points out that the Republican imperative to cut taxes as a debt-reduction tool is disingenuous at best: "Extending the Bush tax cuts will add $1.2 trillion to the nation's budget deficit in just two years."

The final third of the book is devoted to solutions. Reich is full of good, big ideas. His previous—and superior—book about the financial crisis, Aftershock, proposed a bold tax plan that promised to energize the consumer economy by providing poor Americans with large rebates—$15,000 annually for those who make $20,000 a year, $10,000 rebates for those who make $30,000 a year, and so on, up to $50,000, where taxation begins in earnest. In Beyond Outrage, Reich suggests that since corporations are considered people, Democrats should popularize a Corporate Pledge of Allegiance promising "to create more jobs in the United States than we create outside the United States," "to keep a lid on executive pay so no executive is paid more than fifty times the median pay of American workers," and "not to use our money to influence elections."

Like the Pledge of Allegiance that Republicans hold dear, this would be entirely voluntary, and those companies that did sign the Corporate Pledge would get to advertise their products with a special logo displaying their dedication to patriotism and fairness. Ultimately, Beyond Outrage is all about fairness: Reich endorses Barack Obama for a second term, but he is clear that Obama needs to step up his support of middle-class Americans, even as middle-class Americans need to speak up for their own trampled rights.

Reich is absolutely a better bomb-thrower than politician. His new agenda of releasing short, prickly tracts every year or so is a good one, and if this e-book earns the audience it deserves, he could change the political conversation for the better. After a lifetime of serving the people, it turns out that his most important role is as a private citizen, speaking for the people who have no voice. recommended

PSST! Check out The Stranger's New and Improved THINGS TO DO calendar.
It has a complete calendar of what's happening in Seattle's Readings & Talks Scene.

Comments (5) RSS

Oldest First Unregistered On Registered On Add a comment
Unfortunately, Mr. Constant has very little grasp of economics or global finance, so I will first explain what's so very wrong with Reich, then I will examine his work history, the greatest predictor for the present and future conditions for this character.

Reich is first and foremost, a politician, definitely not a real economist although he might be called a pseudo-economist.

Reich cannot comprehend large data sets, nor he does he have any talent with mathematics.

His preposterous Work of Nations speaks for itself as pure drivel.

His past, within the very same Carter administration which began deregulation (for the best treatment of that, please see the Tolchins' The Dismantling of America, published circa 1983), and the overturning of federal anti-usury regulations, plus a few other items.

Later, Reich continued his pitiful and pathetic political job with the Clinton administration responsible for NAFTA, GATT, China's free entrance into the WTO (free as in zero labor oversight nor environmental oversight, etc.) and a host of other "free market" destruction, while presiding over the first two official "jobless recoveries" which Reich, as usual, was completely clueless about.

No, the best American economists, with proven track records, are Prof. Michael Hudson (correct and on target for over 40 years) and Prof. David Graeber and Prof. Joseph Tainter (these last two, of course, are both anthropologists, which should indicate the state of American economics today).

A young and highly intelligent fellow is Mark Blyth at Brown, but the others tend to be a bit down the intellectual ladder, although decent folk: James Galbraith, Ravi Batra, Ha-Joon Chang, etc.

Posted by sgt_doom on April 18, 2012 at 2:19 PM · Report this
EPIC GREED: The Social Singularity Has Been Achieved

Some years back, a poster or commenter in the United Kingdom named Dan, suggested that the social singularity had been achieved, that the economic elites had become so powerful, and their power wielded so subtly and covertly, that few realized just how easily the populace was being manipulated.

A peek behind the curtain, at the inner working of the Koch brothers, their astroturfing, their political and media manipulation, was long in coming; from their Liberty Lobby reaching widespread circulation in 1960, to the present, is a very lengthy period. Little traction was achieved when, at the beginning of the Bush administration, we tried to publicize that President Bush’s sister was Mrs. Koch, and that Dick Cheney’s godson, D.G. Gribbin IV, was a Koch company employee, and the Kochs aren’t even at the top of the power pyramid!

Today we are assaulted by the usual political theater on taxes; the so-called media babbling about a “broken tax code” --- obfuscating the obvious truth of a tax code designed to favor the super-rich while discriminating against the workers and the poor.

When the IRS tax rule 401(a)(5) states: “A classification shall not be considered discriminatory merely because it is limited to salaries or clerical employees” --- the intent should be obvious.

When private equity firms – private banks such as Fortress and the Blackstone Group – go public, yet continue to pay the lower capital gains tax rate (when they do actually pay taxes), instead of the higher corporate tax rate which they should be paying, the absolute corruption should be obvious.

Confused and ignorant people, people who are used to being classified as “consumers” and are bewildered as to what true citizenship means, sincerely believe themselves to be team members, either on the Blue Team (the democratic wing of the Bankster Party) or the Red Team (the republican wing of the Bankster Party) --- wallowing within the political theater of the absurd!

When several economists from Goldman Sachs were quoted in a New York Times article (Aug. 28, 2006) explaining the obvious:

“The most important contributor to higher profit margins over the past five years has been a decline in labor’s share of national income

they were blithely repeating the number one commandment and strategy of the plutocrats, or the Transnational Capitalist Class; namely, absolute wealth transfer so they could realize the greatest concentration of wealth imaginable!

What has occurred with each successful presidential administration since Reagan?

Has economic inequality and the concentration of wealth decreased or increased during each administration, from Reagan to Obama’s?

Increased ! ! !

What is the oldest and largest private bank in America?

Brown Brothers Harriman.

Someone connected with them has been in a senior power position in America for thirty-some years: either a Bush in the presidency or vice-presidency (effectively the presidency under Reagan), or Alan Greenspan at the Federal Reserve.

And where did Brown Brothers’ wealth originate from prior to their merger with Harriman?

Slavery and the slave trade, of course.

Harriman was responsible for bringing over boatloads of Chinese scab workers during the late 1800s and early 1900s to undercut the American gandy dancers (white, black, Japanese and immigrant gandy dancers), working the majority of them (the Chinese workers) literally to death!

Today, they offshore jobs to China, offshore technology to China and offshore investment (and foreign aid) to China --- and still bring over Chinese scab workers ---- now that’s progress!

Few comprehend the financial power and connections between JP Morgan Chase, Goldman Sachs, Morgan Stanley, Bank of America, Citigroup, Brown Brothers Harriman, Blackstone Group, Carlyle Group, Rockefeller Financial Services, etc. (and the oil companies, biopharmaceutical companies and weapons makers they own).

Only a few Americans comprehend the total surveillance state America is today; for few have both the time and resources to keep current, or aren’t technically astute enough to understand EPs or IXPs, Narus boxes, MASINT, Unit 8200, NDA NXX NPA, IMSI, etc.

Today, 99% of economists, or pseudo-economists, are paid to simply serve as apologists for differential income inside a system of arbitrary and functionless ownership.

Thorstein Veblen once remarked, “There are no iron economic laws; there are only man-made institutions.”

Veblen explained what economic surplus was, and how the economic elites routinely steal it and destroy it --- the ultimate amoral wealth transfer!

(Whenever a brilliant and honest analysis by Prof. Michael Hudson is posted generally on the Web, a chatbot --- automated software --- is programmed to counterpost that he’s a “kook.”)

Empires are not about the efficient use of resources and the spread of happiness.

Empires are about epic greed!
Posted by sgt_doom on April 18, 2012 at 2:23 PM · Report this
Obama and the Naked Swap

I agree with everything President Obama says about oil speculation --- but I disagree and despise his actions in support of massive speculation.

President Obama reappointed the author of much of the Gramm-Leach-Bliley Act, Neal Wolin, and two major supporters of the Commodity Futures Modernization Act, Gary Gensler to the CFTC and Larry Summers, who is no longer with his administration.

President Obama’s Treasury Secretary Geithner, and his treasury department, strongly supported keeping naked swaps --- the most valuable tool in large-scale commodities speculation.

To date, all actions of the Obama administration have allowed and encouraged the very speculation he denounces!

Much of the entire speculation spectrum: (1) unlimited number of credit default swaps allowed against bonds, etc. (naked swaps); (2) unlimited number of commodity futures contracts allowed against specific commodities or categories; (3) unlimited number of investors allowed per hedge fund; and (4) naked short selling via DTCC’s Stock Borrow Program, were realized during the Clinton administration, and expanded under the Bush and Obama administrations!

I am a lifelong democrat --- I would love to support Obama, but Obama, Biden, and both Clintons are simply just some more neocons.
Posted by sgt_doom on April 18, 2012 at 2:25 PM · Report this
And a tremendous graphical view of derivatives in the present:…
Posted by sgt_doom on April 19, 2012 at 4:26 PM · Report this
And should anyone really want to understand what took place, and what's taking place, the reality....not their might peruse some of the books below, which taken together comprehensively explain things (because you'll only be confused by listening to a complete f**kwad like Reich, along with his fellow UC-prof f**kwad, Jon Burgstone):

Wall Street Capitalism: a theory of the bondholding class, by E. Ray Canterbery

Extreme Money, by Satyajit Das

Retirement Heist, by Ellen Schultz

Treasure Islands, by Nicholas Shaxson

Other People's Money, by Nomi Prins
Posted by sgt_doom on April 20, 2012 at 10:13 AM · Report this

Add a comment