Thanks for this summary of US economic history pre- and post-Reaganomics. The difference that the values and vision of each President makes to every household in the Nation is made clear. Hopefully, a new generation of American citizens will comprehend the difference between slick image-making and genuine know-how in presidential leadership--between an exploiter and a genuine promoter of the Common Good.
If folks voted on policy rather than personality, Liz Warren would be president. Most Americans don't know policy from a hole in the ground. And I don't expect the next generation to be any different.
It's no accident either. Driven by revenue the MSM is designed to entertain not inform, and this is by design. After all, they are owned by the oligarchy, aren't they?
You're projecting, not that I expect you to even know what that means.
This forum is no place for you. Folks here have intelligent things to say and valuable contributions to make to solving the problems of the country and the world that are created by people like you.
Just more foul mouthed projecting on your part. It's well documented that your fearless leader told 30,573 lies in the four years that he spent trashing America. Obama told eight documented lies in the two terms he served and I can't recall a single lie attributed to Liz.
You can make up any "alternative facts" you want. I'll stick to the real facts.
The sad truth is that you vote against your best interests in every election, if you even bother to vote.
I have more important things to do than entertain your dim witted assertions. I won't be bothering to respond to any more of your B.S. You are welcome to have the last word,
Daniel, I think you are right about Americans becoming more progressive, but so many keep electing regressive, ignorant people to represent them. I don't understand it, but it seems people are stuck on a letter following a candidate's name and don't even try to find out about the candidate they are supporting. Then, there's the gerrymandering, When rich white men rule state legislatures, and the Supreme Court is OK with gerrymandering, I suspect this situation will not improve. Those rural districts keep electing people who smile a lot, lie to them on a regular basis, then proceed to screw them over while blaming the people's troubles on Democrats. It is a remarkable show of constituent abuse.
An interesting article that applies more so today than when written, The GOP Is Dying Off. Literally. The party’s core is dying off by the day.
Since the average Republican is significantly older than the average Democrat, far more Republicans than Democrats have died since the 2012 elections. To make matters worse, the GOP is attracting fewer first-time voters. Unless the party is able to make inroads with new voters, or discover a fountain of youth, the GOP’s slow demographic slide will continue election to election.
I think that the literacy rate is tied to the economy. And both parents have to work now to make it. Who is there to sit at a dinner table and converse with family, or read to the children, or help them with homework? As a retired Chicago Public Schools teacher, calling home never got the parent. Or texting the parent resulted in the child being excused for cutting class.
You've all made good points. I think there's a cultural shift as well. People out of school immediately expect to live life at the economic level of their parents. They take on crushing debt to sustain the lifestyle it took their parents 40 years to achieve. Big houses, new cars, boats, and vacation homes.
Many aren't available (physically or emotionally) to to help their children with homework. They vote against school levies then blame teachers when their children fall behind. They are oblivious to the parent - child - teacher partnership and quick to scapegoat.
Back in the day, my generation drove used cars, lived in modest apartments, and went camping and hiking for vacation. We saved for our "starter home." Our parents expected us to make a good faith effort to learn. "Early intervention" meant privileges were taken away if grades slipped. It's a whole different world out there now.
and I also wonder, with parents over the last 30+ years needing to work so much in order to keep up, I'd guess that they haven't played a role in helping educate their kids. Not putting blame. It's gotten so hard for people to make ends meet.
It is possible, but more likely for the well-to do. That's why we need continued investments in education and not vouchers to the private and parochial schools.
This is why I get impatient with all the yammering about college, college, college. We should plow more attention into primary and secondary education. There's little point in going to college if you're not adequately prepared for high school.
Oh yes how deluded they must be for not feeling the Biden “boom.” Do you not read Robert’s other posts where he outlines how workers are mostly losing power given that wages are not rising as fast as prices?
You misread the poll. It’s on whether they feel that they personally have been affected by Biden’s policies. Not whether they believe he has accomplished a lot. Also, I find this post of Robert’s to be contradictory to the other posts he has made.
Unfortunately our biases might be even more superficial than focusing on personality over policy. The first impression people have about your physical appearance might determine your political success as much as anything else, and we know that generally people hold signs of aging against women more than they do against men.
We need to stop letting our monkey brains decide elections.
May we soon pass an amendment to reverse Citizens United which has contributed significantly to the decline in our democracy as well. And thanks for this excellent article!
Kathleen, yes, Citizens United was an offense against our democracy perpetrated by Supreme Court conservatives who decided they should be the ones to declare corporations to be persons, of course with none of the accountability and responsibility of persons. That court let corporations make unlimited donations to candidates at all levels no matter what state governments wanted. It essentially said that it was OK for corporations to buy and support candidates so they would get them to vote for whatever the corporation/person wanted them to vote for. Rich enough corporations could buy a whole lot of candidates or just the right few (like Sinema of AZ) to keep positive bills from being passed. It is a shameful decision, but just one of so many handed down by Johnny Roberts and his appalling court.
You (and everyone reading this) should know that there is a very robust movement to accomplish this. Visit movetoamend.org to see what's happening. sign the petition, and if so inclined, actively join the effort. It can be done !
Robert, I think the Taft Hartley Act was one of the most destructive anti-labor acts ever passed. I wish Congress had the guts to repeal it. Just that would help workers and unions to develop in ways that would make workplaces more fair, safe, and salaries/wages more realistic for all workers, even thouse at the top when corporations realize they don't need to pay CEOs and others such astronomical salaries while paying their workforce a pittance in comparison.
Thank you Ruth for bringing up Taft-Hartley. We also need to get rid of the carried Interest tax loophole that allows hedge fund operators to treat profit as capital gains, lowering taxes by half for the richest among us. Also, Glass-Steagall went the way of good legislation in about 1992. That bill required separation of investment banking from community banking. In other words, do not gamble with depository receipts.
Janice, it seems so many in power don't want there to be regulation on the areas where they are hoping to rake in the cash. Banks being permitted to "confuse" investments with "community banking" set up all kinds of bad behavior that is no longer overseen by anyone who can stop it. We have a congress filled with Republicans who can't manage to do anything that will help anyone but themselves and their rich friends. Workers are so often at the mercy of corporations who see them as pawns they can push around with no consequences to the corporation. It is shameful but I just don't see how we the people can get ourselves out of this mess. I just heard there is a recent poll that said 62% of the American people don't believe Biden has done anything in his first 2 years when in reality, his first 2 years have been the most consequential first 2 years since the 1930s and the New Deal. How is it we have such a huge disconnect between what people think and reality? No wonder unions are scorned. Potential members don't hear anything good about unions and they see that they will be expected to pay dues and just can't bring themselves to do it, so they vote away their chance to have a say on the job. I don't get it!
I'm not so sure. Common Cause is circulating a petition asking Congress NOT to call for an Article V convention, and ALEC is pushing for an Article V convention. Are we playing right into their hands? Will this open up the proverbial can of worms?
Think about the amendments that might be put forth by evil forces that would stand a much better chance of passing than one that abrogates CU. We could end gaining nothing with respect to election form yet be saddled with the most Draconian new laws imaginable.
All along I've been advocating for Congress to pass some finely crafted legislation to cancel CU, but recently I read that only a constitutional amendment can overrule SCOTUS. Somehow I am dubious of this.
I know of no more scholarly technocrat that Professor Reich. Perhaps if this post catches his eye he can comment on any way we can fix the terrible mess that is CU without opening the Pandora's Box of an Article V convention.
The one I'm referring to at movetoamend.org is working to pass a constitutional amendment specifying " that inalienable rights belong to human beings only, and that money is not a form of protected free speech under the First Amendment and can be regulated in political campaigns."
What you're talking about is a constitutional convention where the entire constitution woukd be up for revision. Very Bad Idea -- for all the reasons you mention, plus more.
Please click on the link here: movetoamend.org and read more about it. I think you'll come away a lot less dubious, and maybe even enthusiastic enough to pitch in and help.
Thanks for educating me. I am embarrassed to admit that I was unaware that the Constitution can be amended either by Congress passing a joint resolution or by an Article V convention.
With that said, I think the chance that two out of three of the pols in Washington will vote to divorce their sugar daddy corporate sponsors is nil.
Thank you for this crystal clear explanation. It's like the choral part of Beethoven's 9th. Bring the people together to sing and celebrate a good life, a life they can control, a decent, safe life and place us in relation to the economy as it returns to serve us and not the mega-rich and their CEOs.
I couldn't agree more with virtually every word you have written above. It is not dissimilar to my understanding of this neoliberal world. Its very strange that I have had about 100 people sending me congratulations for my terribly simple thanks to Robert Reich for his clarity and his humanity. It was not meant to be a congrats for Biden. I live in the UK where as a film-maker/photographer and increasingly a writer rjgolden.substack.com/ I have been increasingly barred at the doors of the galleries, the distributors, the agents etc. Here they don't shoot you in the back of the head, they simply isolate and ignore you as in the US. Can I hear some of your music somewhere?
THIS IS ABSOLUTELY FANTASTIC. You have described so cogently the philosophy and the historical proof that President Biden’s policies will return America to a position of strength in every aspect. The human frailties of hatred, racism, I can only win if you lose, self-interest and a social construct in which corruption is never punished are enormous hurdles for the President. They are the imponderables. But Biden’s eye is on the prize and America will be more powerful, more resilient and more humanistic as a result of his leadership.
Dr. Reich, this is your very best piece yet. Wow. Just Wow.
Now all we have to do is figure out how to reach a public that has indeed forgotten, or never learned the lessons of 1929– 1980. Before we – baby boomers leave – we need to focus on the young (ages 5 to 45).
Near as I can tell, the question we need to answer is this. What makes everyone and the country richer? Money sitting in rich men’s bank accounts? Or money circulating in the economy?
When I raise this question in conversations with young people, they conclude that money needs to work. Of their many analogies, this one was my favorite so far. Like people, money needs to work. The more money circulating “in” the economy, the harder it works. The harder money works, the more it accomplishes. Today, the amount of money sitting in rich men’s bank account, is like half of the entire labour force taking a permanent vacation on some Caribbean Island.
A lot of their money probably is. A few years ago a British university study estimated that as much as 30 plus trillion dollars was sitting in offshore accounts (of course to evade taxes.)
Fred, so how can we get those "off-shore" countries to see that it is not in their best interest to hide money for the rich slackers around the world who don't feel they should be expected to pay taxes on the money they "earn?" Then how do we get that money in circulation to help get some positive things happening, particularly related to global warming?
Right now these tax havens are legal, including here in the US. Also the tax loopholes in our 9 thousand page IRS tax code are legal. Also the IRS has been defunded so the rich are not being audited as much as the rest of us.
1 Reform the IRS and enact new tax codes.
2 Disincentivise states from creating tax subsidies and havens to lure corporate business to their states at the expense of the rest of us.
3 Corporations are not people:
Money is not speach: Lobbiest are not law makers.
We need to reform our laws to get the corrupting influence of money out of our democratic process.
Fred, I like your suggestions related to the role money plays in our nation. I would love to see President Biden with members of both parties, form a committee on reworking the tax code. No tax code should be 9,000 pages. That means all kinds of things that are unfair are taking place, then cutting funding for the IRS over the past couple of decades has made tax-paying even less fair. Citizens United was a terrible breach of faith perpetrated by our Supreme Court. They put corporations over the citizens of our nation and permitted those corporations to behave badly in buying candidates, and most of it is legal. A couple of quick changes could be that lobbyiests cannot be a tax break for corporations. They could possibly be counted for non-profits but only partially. That would start cutting the number of them roaming our nation's capitol as well as the state capitols. The committee could get input as to what is a reasonable business activity that should be kept as a deduction and which need to be dropped. They should look at the code as a whole, then make priority decisions about which things should remain unchanged and which should be changed. The latter could be prioritized. The American people should be kept aware of what the committee is doing and be able to make comments. It's a thought.
I am not a boomer, I'm gen X and I remember how bad the 1930's were...Reagan was the crescendo that opened up America for the looting of our current Oligarchs. I think, we've gone from a society considering the community as a whole, to that of the individual. The mentality of I have mine and if you're poor it's your own fault- which is illogical. Of course we all know that the wealthiest in society are not self made, they rode up on the backs of the rest of us, the infrastructure or our society.
Don't the banks lend out the money "sitting in rich men's bank account" to people to start businesses, buy a house, buy a car, fix their teeth, etc.? Isn't that money therefore "working" and "circulating in the economy"?
Tim, today’s uber-rich are not putting their money into American banks. They are putting it into offshore accounts, Swiss banks and stock markets all over the world.
Today’s uber-rich usurped the role of banks and made themselves the "investor class" with the power to pick and choose which new businesses and products will or will not make it to the market - and shutting down any competition before they even open their doors (e.g. alternative energy companies).
Today’s uber-rich are also buying massive amounts of productive agricultural and recreational lands and water rights all over the world. IOW, they are literally buying strategic portions of the planet humanity needs to stay alive. They are also constructing doomsday facilities stocked with food, water, etc. for themselves.
Today’s uber rich are also buying up 21st century infrastructure that people need to live and work including:
Healthcare systems such as hospitals, doctors, dental-care, eyecare, hearing aids, prosthetics, pharmaceuticals, vaccines, disease, and medical research and development labs.
Schools, Universities and research centers
Homes and apartments for use as rental housing
Digital infrastructure - cable and satellite necessary to connect to, and utilize the internet, cell phones, apps, programs, etc.
Private armies of mercenaries for sale or for rent.
Privately controlled foundations and Think Tanks aimed at social engineering.
Today the back yard of the uber rich is the entire planet – each of them are building several tens of thousands of square foot homes and vacation homes on ranchland, cities, ski slopes, ocean fronts/ They are commuting via private yachts, private jets, and limousines. They are buying such things as $50,000. bras, solid gold faucets and cars.
The uber rich of yesterday, aka the Robber Barons, or Industrialists were so rich, they make Jeff Bezos, Elon Musk and Mark Zucerberg look like paupers. Conversely, the lifestyles of today’s uber rich make the Robber Barons’ lifestyle look poverty stricken.
it's not sustainable. They still rely on 'serfs' to do their bidding, clean their toilets and take care of their kids. If Serfs cannot earn a living wage, they won't bother going to work...as we're seeing now. What's the point if there's no reward for work?
So stupid. A diamond studded undergarment! Does the lady periodically open her top or dress to show everyone her bra? I guess the next step is a diamond studded jock strap! This proves that being rich does not mean that the person is not an fool!
Raffey, you are right about the rich people's money going to buy up the services people need. That should never be permitted, but when it is big money involved, it seems what is and is not legal is tossed away and antitrust laws and all kinds of other laws forbidding entities buying up large numbers of properties are ignored and never prosecuted unless it serves some political end to harm someone's career. We the People need to stop it here but there does not seem to be much push to end it.
Fracking consumes huge amounts of water, which is so polluted by the process, it needs to be disposed of in toxic waste dumps. As the west goes dry, ranching and farming is moving east. It won't be long before ranchers and farmers discover they are competing with fracking for water.
Its all such a frigging mess it boggles me wittle mind.
not to mention the earthquake fracking causes when they re introduce the muck they took out of the earth. Oklahoma is seeing historical numbers of quakes. but the oil barons say shhhhh....
Raffey, I like your analogy. I can understand that it could work well to help young people connect with how the economy works and that standing with and for people who want money to be working is a really good idea for everyone. So, how do we get it to happen? Maybe public schools and colleges can start using that analogy in economics classes. I suspect the young people may come up with some really good ideas for making this happen for the benefit of all of us.
Whatever you call it, it is working. The proof is in the results. And please Republicans don't give me a bunch of malarkey like you have done in the past. Just sit down shut up and pay attention.
Oh Ben, asking Republicans to sit down, shut up, and listen is yelling into the wind. Republicans are so far past any kind of logical thinking based on listening to anyone but Fox Not Nearly News and that ilk they can't see what Biden has done as a positive. They have already twisted it to show how more crime has happened because of it, more money going to those who don't deserve it, and other nonsense that Republican constituents listen to (they actually sometimes listen to the lies, dysinformation, and gaslighting their leaders participate in). As long as there is an "R" behind the name, they are conditioned to vote for the candidate even if he is not the person he claims to be (Santos). It will be an uphill struggle to get Repubs to be able to see the truth.
Jack, is this a joke or are you just trolling? You know well what Biden has done if you are keeping up with the news. If you are not, that is on you and probably this is not the thread for you.
Thank you for this. I saw as a 17 year old what damage Reaganomics did to my family. I decided then that I would vote democratic and have never looked back. We need to reverse Citizens United to get the money out of politics. The hold big corporations have on this country is doing such damage. As I do my taxes this year, I promise you I am paying substantially more than some CEO’s and that makes me very unhappy.
I think “democratic capitalism” is a contradiction in terms. Capitalism is for profit, and by its very nature it encourages exploitation. I’m glad for Biden’s accomplishments, but we really need socialism, because it isn’t based on profit, which tends to keep wages down. Unions have to fight that. Capitalism favors, not individual freedom, but free enterprise for the few. It’s what’s trying to privatize our Medicare, leaving less money to spend on healthcare and more money to go for profit. It also promotes fossil fuels and war, because existing fossil fuel companies are looking to hold into their profits, and weapons manufacturers are seeking to increase their wealth. It promotes cigarette smoking with all its ills, so that cigarette companies can keep making billions while putting people in the ground. We are not free as long as corporations run the show.
If the Nordic countries can have democratic socialism why can't we have democratic capitalism?. I think your criticism a bit pedantic. And if nothing else, read what Bob means without imposing your stiff definitions on the words he used that you sap it of his meaning.
Carol, Contrary to your understanding of capitalism (which, in my view, seems synonymous with “corporate” v. “democratic” capitalism), wherein you explain yourself in some detail, you offer no explanation of your understanding of socialism, despite promoting it.
Because in several postings (including several rounds with you), I methodically have differentiated socialism from democratic socialism (the latter seeming relatively similar to democratic capitalism, which I equate as capitalism for all), I won’t repeat myself. However, if you wish to make a case for socialism, I suggest you start by establishing your way of understanding it, of describing or defining it. Otherwise, no intelligent, reasoned discussion can proceed.
Spot on Barbara. People hear Socialism and equate it with Communism and since they don't understand either system they decide it's unAmerican. And you're also right that there is a vast difference between Socialism (which wouldn't work in a Country as large and as populated as ours) and Democratic Socialism. They also seem to equate all the above with "free" government handouts, never understanding that in the US today the largest government 'handouts' go to the wealthiest not the poorest.
We've had a "mixed" economy from onset. "Capitalism:" is not a form of government and its application doesn't have to be antagonistic to the idea of the commons. Even some socialistic societies practice "capitalism" in commerce. E,G, Amana refrigerators were bought and sold to fund the Amana society. .
Completely agree. There needs to be some entity that cares more about the people than it cares about the profits. WE are not capitalists bc NONE of us regular folks own any of the capital. THEY are the democratic capitalists. I have no issue with capitalism. What I take issue with is that capitalism is not regulated at all, at the people's expense and detriment.
Bradford Delong, is also at Berkeley, in his book Slouching Towards Utopia, describes how many times in the last 150 years that economic and racial equality get trashed by greed and hubris. Government helps the general population after the rich screw it beyond repair.
Right now, the Republican Party is owned by greedy people who are trying to keep the rich industrialists, many from the fossil fuel industry, in charge of the whole economy.
That only works if it is a true free market which we are not! In a free market nothing would be "too big to fail". Not to mention all the tax breaks and loopholes for them!
One should be careful of wishing for a market as a magic solution. Competitive market systems are inherently designed to eliminate competition and aggregate power. Some moderation of this tendency needs to be available. Even Adam Smith realized this in his book "The Theory of Moral Sentiments".
Spot on reference: "The Theory of Moral Sentiments"! People need to know he wrote more than "The Wealth of Nations". They should also
check out "Economic and Philosophic Manuscripts of 1844" by Karl Marx for historical context. This was required reading in The Intellectual History of 19th Century Europe, a great class I had in college.
Isn't "bartering" an example of "free market" capitalism? The buyer and seller mutually agree on the transaction, and both leave satisfied with the result. Little to no government involvement to "tilt" the playing field to the advantage of one of the parties!
Maybe in the 20s the market was close to free. I guess once the government stops bailing companies out when the economy is bad, we shall see how free markets really work and like then without regulations they will ruin the economy.
And many times they are close to ruining it now. Text book economy does not work bc anti-trust laws and penalties are non-existent bc they have been lobbied out of existence. We are all workers. There are a very few oligarchical families in the US that run it all and they are the capitalists.
Pure capitalism presumes homo economics is ENTIRELY rational in decision making AND that the market provides COMPLETE information for ALL participants. The free market has never existed nor will it.
As worded, I say No. What is ‘true’ capitalism? Wouldn’t even owning capital require a form of government for owning capital to have any meaning? Otherwise ownership is really just whoever happens to be the biggest caveman.
Are we in a teaching moment, seeing from the comments that you also were a teacher? Love all the discourse on this particular comment from Carol and Adna!
I believe my response the totality of your question, by somewhat expounding on my prior response, is that capitalism cannot be self-regulating without government playing a role because it is itself a creation of government. Government has the ability to mold capitalism into any form it chooses and that many different forms of capitalism are possible.
Capitalism is a theory, not a form of government. "Modern capitalist theory is traditionally traced to the 18th-century treatise An Inquiry into the Nature and Causes of the Wealth of Nations by Scottish political economist Adam Smith" It is not referred to or incorporated into any Constitution that I'm aware of nor is it considered part of British or American Common law.
I believe what you are referring to when you say that capitalism is a creation of a government (its not) is that governments are responsible for creating Corporations. Governments can also pass laws to support capitalism (or socialism) and corporations......or not.
It's only a contradiction if you fall for the false definition of capitalism Republicans have given us. Capitalism as Adam Smith envisioned it, is a feedback system where consumers reward efficiency and innovation with profit. Profit is an element, not the entire system. In order for the market to serve the consumer majority, democracy is vital. We lost our democracy long before Trump appeared. Corporate money captured the courts to rig the system for the corporations breaking the vital feedback element. Profit without a consumer controlled market is the extortion of feudal barons. Dr. Reich called it corporate capitalism, but it's more like corporate feudalism. The serfs subjugated themselves to the land barons for land to farm and protection, and now we subjugate to corporate barons for a paycheck and health care. We do need some socialism, but only where competition is not practical, such as for utilities and some infrastructure, and where the private sector fails to deliver. Socialism has become a pejorative for government services. The smart thing is to pick the best system for each problem, not pick one and try to force it to work for everything. We have a mixed economic system, and Republicans are planting the false idea that the profit motive is all we need for everything. That's Ayn Rand, not Adam Smith. (Rand's mistake is that the union workers her oligarch heroes abandoned are their customers, so that fantasy economy would implode. Henry Ford got it right. Real (democratic) capitalism is an ecosystem, not a zero-sum game for the greedy.) Don't confuse the greed of capitalists with the capitalist system. They are not the same thing except under laissez faire. Smith warned that a capitalists system left to its own devices would degenerate into cartels and monopolies. The reader at that point understood that cartels and monopolies are feudalism, not the capitalist SYSTEM he was describing and defending. Reich's term corporate capitalism alliterates better, but as defined by Smith, corporate capitalism is an oxymoron. It's really democratic capitalism versus corporate feudalism.
I've got a Henry Ford story for you.A woman I know told me that her A relative of hers Got badly injured in an accident at a Ford plant.Henry Ford came by that person's house To see how they were doing. There may have been a gift or money involved as well.
Carol, socialism and capitalism do not work on their own. To keep any economy running, they must be adjusted, updated, revised, adapted and tinkered with constantly.
Who do we want tinkering with our economy? Do we want the wealthy to manage our economy? Or do we want our government to manage our economy?
Democracy is a form of government although democratic principles can be used by other institutions including the family. Capitalism is an economic theory. Democracy at its purest is the polar opposite of Tyranny. Capitalism is closest to being the polar opposite of Statism. Socialism in its purest form is actually closer to Democracy as all decisions are made at the lowest level possible. Historically speaking I am unaware of any successful form of government or economics which is 'pure'.
No I don't. My world is medium size businesses (< $1 billion in revenue) consulting. Ownership is interested is things standing on their own. No hand outs. The vast majority are hard working and honest.
Perhaps there are large corporations that think they will be bailed out. But, if the feds don't let failures fail, that's on them not the corporations.
The new element in our post 1990s world order is the expansion of world markets. China became the world’s producer of manufactured goods. They invested their profits in American debt which was backstopped by our agricultural efficiency and our knowledge economy. The hope of such a framework was world peace. Each nation needed the other to succeed. The new order was symbiotic. But cheaper goods meant an implosion on US labor markets that created the discontent Trump so successfully exploits . And explosion in world trade fed increased market liquidity which spawned the derivatives market that an unregulated Wall Street manipulated to satisfy greed rather than healthy growth. The failure of regulation lead to the 2008 crisis which was met with Government backstopping of bank counterparties notably AIG and other insurance companies. That backstop destroyed the traditional function of bond markets with zero interest rates. Equities became the only option for a return on investment and stock markets soared, fueled by the liquidity central banks provided. COVID led to another explosion in liquidity and perhaps fueled the creation of the crypto currency market whose purpose is to launder criminal gains from drugs and kleptocrats. This the state of our world economy. COVID contracted world trade and Putin’s war aggravated the contraction even more, creating a new inflation caused by scarcity of supply. Global warming’s acceleration threatens future prosperity even more. Can central banks hold the system together? Will our politics elect politicians with the skills to create real growth that satisfies the needs of the majority of the world’s desperately poor people. Will our politics allow international agreements which are the only hope of reversing the climate crisis ? This is an age of existential challenge that surpasses previous epochs.
Now if we can get those people who ignorantly support republicans as if they are members of that special, elitist, capitalist club to "wise the hell up" we may see better days for all. And not just better days for the 'real money' that has corrupted the system.
Robert Reich, this contribution toward a 'greater good' is important. Thank you.
“The economy that collapsed in 1929 was the consequence of decisions that had organized the market for a monied elite — allowing nearly unlimited borrowing, encouraging people to gamble on Wall Street, suppressing labor unions, holding down wages, and permitting the Street to take huge risks with other people’s money.”
Communist governments saw their populations as one thing: workers, of whom much was demanded, and little given (“From each according to his abilities; to each according to his needs,” wrote Karl Marx in 1875).
In short, the people were screwed.
Governments promoting free-market economies for the benefit of the rich and corporations saw their populations as two things: workers AND consumers.
As such, the people were screwed twice — three times if one cares to view falling into debt to keep up with the Joneses — since the same free-marketeers believed, and still believe, that workers should be paid the absolute minimum the traffic will bear, with few or no worker or consumer protections, ability to bargain collectively, health care, pensions or retirement funds (manifested in their incessant lies that Social Security and Medicare are “entitlements.” They are NOT, they are not gifts from the government, but merely deferred salary that people earned during their working lives).
Free-marketeers believe that workers should be left to fend for themselves (what possibly confers more freedom than THAT?) which, in short, is actually the closest equivalent to slavery achievable in a modern, technological society.
Soviet communism was essentially a very cruel state capitalism. The repression of the population was needed to keep the system in place. Unemployment was kept in check with purges. It was not a system to model or glorify in any way.
The attempt by some to equate Soviet communism with socialism relies on the very deceptions that the Soviets used to justify their system. It as not a socialist system but a repressive state capitalism model.
While it was difficult to enter the old USSR old Berlin and the one road you could drive on from Braunschweig to Berlin was a bit of a lesson ( northern Germany,the UK armed forces occupation rather than southern Germany USA occupation).
The poverty was bad,East Berlin was terrible . Repressive state capitalism may be an understatement .I always thought it was capitalism taken to extremes,the extremely rich at the top,no middle class just poverty and shortages of basics
Perhaps this carried on through the breakup and the state owned oil companies etc suddenly enabled people to buy British football teams and large areas of London
I remember the bumpy "Autobahn" with unobtainable speed limits of 100 KpH and requirements to have the blinker on at all times in the left lane.
There was also a racist undertone at work in that state capitalist system. The Soviets in charge viewed Germans as not humans worthy of acknowledgment but useful to exploit. What wealth was produced in the GDR was for the benefit of the Russian elite in Moscow and Leningrad. We see the modern incantation with viewing Ukraine as a non-country and its people as something to be cleansed.
Thank you for this! Perhaps YOU should be giving the State of the Union Address!
Your comments also need to reach a wider audience and I humbly suggest that you submit this as a contributing author on the progressive website: Daily Kos (Dailykos.com)
Totally agree with everything you say here. Your description and explanation is spot on. No wonder life has been so demoralizing for me for so long - since Reagan. And now he is lionized more than ever but he opened the door to devastation for most of us, many of whom worked our “fingers to the bone” only to end up impoverished, in ill health from obscene working conditions, and watching our children die in despair.
I pass a few small tent cities and one huge tent city on my way to work. Maybe this seems better but I heard recently that they will "clear them out" soon. This revival is helping some but I don't know. I feel sad and helpless to resolve the issues. We need corporations money out of law-making or there will be more growing tent cities, I think. It is like a third world country out here in some places.
Thanks for this summary of US economic history pre- and post-Reaganomics. The difference that the values and vision of each President makes to every household in the Nation is made clear. Hopefully, a new generation of American citizens will comprehend the difference between slick image-making and genuine know-how in presidential leadership--between an exploiter and a genuine promoter of the Common Good.
If folks voted on policy rather than personality, Liz Warren would be president. Most Americans don't know policy from a hole in the ground. And I don't expect the next generation to be any different.
It's no accident either. Driven by revenue the MSM is designed to entertain not inform, and this is by design. After all, they are owned by the oligarchy, aren't they?
Sadly...
❤️ Liz
What a smart and mature comment /s
You're projecting, not that I expect you to even know what that means.
This forum is no place for you. Folks here have intelligent things to say and valuable contributions to make to solving the problems of the country and the world that are created by people like you.
Just more foul mouthed projecting on your part. It's well documented that your fearless leader told 30,573 lies in the four years that he spent trashing America. Obama told eight documented lies in the two terms he served and I can't recall a single lie attributed to Liz.
You can make up any "alternative facts" you want. I'll stick to the real facts.
The sad truth is that you vote against your best interests in every election, if you even bother to vote.
I have more important things to do than entertain your dim witted assertions. I won't be bothering to respond to any more of your B.S. You are welcome to have the last word,
They SEEM to be doing so. Americans are getting more and more PROGRESSive, not the REGRESSive that trumplicans need to hold onto power.
Daniel, I think you are right about Americans becoming more progressive, but so many keep electing regressive, ignorant people to represent them. I don't understand it, but it seems people are stuck on a letter following a candidate's name and don't even try to find out about the candidate they are supporting. Then, there's the gerrymandering, When rich white men rule state legislatures, and the Supreme Court is OK with gerrymandering, I suspect this situation will not improve. Those rural districts keep electing people who smile a lot, lie to them on a regular basis, then proceed to screw them over while blaming the people's troubles on Democrats. It is a remarkable show of constituent abuse.
An interesting article that applies more so today than when written, The GOP Is Dying Off. Literally. The party’s core is dying off by the day.
Since the average Republican is significantly older than the average Democrat, far more Republicans than Democrats have died since the 2012 elections. To make matters worse, the GOP is attracting fewer first-time voters. Unless the party is able to make inroads with new voters, or discover a fountain of youth, the GOP’s slow demographic slide will continue election to election.
the literacy rate alone...or lack of it, is shocking in this country. Children clearly have been put on the back burner.
I think that the literacy rate is tied to the economy. And both parents have to work now to make it. Who is there to sit at a dinner table and converse with family, or read to the children, or help them with homework? As a retired Chicago Public Schools teacher, calling home never got the parent. Or texting the parent resulted in the child being excused for cutting class.
Janet, Alison, Jeanne
You've all made good points. I think there's a cultural shift as well. People out of school immediately expect to live life at the economic level of their parents. They take on crushing debt to sustain the lifestyle it took their parents 40 years to achieve. Big houses, new cars, boats, and vacation homes.
Many aren't available (physically or emotionally) to to help their children with homework. They vote against school levies then blame teachers when their children fall behind. They are oblivious to the parent - child - teacher partnership and quick to scapegoat.
Back in the day, my generation drove used cars, lived in modest apartments, and went camping and hiking for vacation. We saved for our "starter home." Our parents expected us to make a good faith effort to learn. "Early intervention" meant privileges were taken away if grades slipped. It's a whole different world out there now.
and I also wonder, with parents over the last 30+ years needing to work so much in order to keep up, I'd guess that they haven't played a role in helping educate their kids. Not putting blame. It's gotten so hard for people to make ends meet.
It is possible, but more likely for the well-to do. That's why we need continued investments in education and not vouchers to the private and parochial schools.
This is why I get impatient with all the yammering about college, college, college. We should plow more attention into primary and secondary education. There's little point in going to college if you're not adequately prepared for high school.
Newspapers were typically written at that grade level for a reason. We need to meet people where they are and explain in language they can understand.
Oh yes how deluded they must be for not feeling the Biden “boom.” Do you not read Robert’s other posts where he outlines how workers are mostly losing power given that wages are not rising as fast as prices?
You misread the poll. It’s on whether they feel that they personally have been affected by Biden’s policies. Not whether they believe he has accomplished a lot. Also, I find this post of Robert’s to be contradictory to the other posts he has made.
Unfortunately our biases might be even more superficial than focusing on personality over policy. The first impression people have about your physical appearance might determine your political success as much as anything else, and we know that generally people hold signs of aging against women more than they do against men.
We need to stop letting our monkey brains decide elections.
https://www.scientificamerican.com/article/the-look-of-a-winner/
May we soon pass an amendment to reverse Citizens United which has contributed significantly to the decline in our democracy as well. And thanks for this excellent article!
Kathleen, yes, Citizens United was an offense against our democracy perpetrated by Supreme Court conservatives who decided they should be the ones to declare corporations to be persons, of course with none of the accountability and responsibility of persons. That court let corporations make unlimited donations to candidates at all levels no matter what state governments wanted. It essentially said that it was OK for corporations to buy and support candidates so they would get them to vote for whatever the corporation/person wanted them to vote for. Rich enough corporations could buy a whole lot of candidates or just the right few (like Sinema of AZ) to keep positive bills from being passed. It is a shameful decision, but just one of so many handed down by Johnny Roberts and his appalling court.
Absolutely Katherine!
You (and everyone reading this) should know that there is a very robust movement to accomplish this. Visit movetoamend.org to see what's happening. sign the petition, and if so inclined, actively join the effort. It can be done !
Maybe all that is needed is to repeal the Taft-Hartley Act, or get rid of the National Labor Relations Act altogether.
As a predicate, purge insurrectionists.
Robert, I think the Taft Hartley Act was one of the most destructive anti-labor acts ever passed. I wish Congress had the guts to repeal it. Just that would help workers and unions to develop in ways that would make workplaces more fair, safe, and salaries/wages more realistic for all workers, even thouse at the top when corporations realize they don't need to pay CEOs and others such astronomical salaries while paying their workforce a pittance in comparison.
Thank you Ruth for bringing up Taft-Hartley. We also need to get rid of the carried Interest tax loophole that allows hedge fund operators to treat profit as capital gains, lowering taxes by half for the richest among us. Also, Glass-Steagall went the way of good legislation in about 1992. That bill required separation of investment banking from community banking. In other words, do not gamble with depository receipts.
Janice, it seems so many in power don't want there to be regulation on the areas where they are hoping to rake in the cash. Banks being permitted to "confuse" investments with "community banking" set up all kinds of bad behavior that is no longer overseen by anyone who can stop it. We have a congress filled with Republicans who can't manage to do anything that will help anyone but themselves and their rich friends. Workers are so often at the mercy of corporations who see them as pawns they can push around with no consequences to the corporation. It is shameful but I just don't see how we the people can get ourselves out of this mess. I just heard there is a recent poll that said 62% of the American people don't believe Biden has done anything in his first 2 years when in reality, his first 2 years have been the most consequential first 2 years since the 1930s and the New Deal. How is it we have such a huge disconnect between what people think and reality? No wonder unions are scorned. Potential members don't hear anything good about unions and they see that they will be expected to pay dues and just can't bring themselves to do it, so they vote away their chance to have a say on the job. I don't get it!
That, too!
I'm not so sure. Common Cause is circulating a petition asking Congress NOT to call for an Article V convention, and ALEC is pushing for an Article V convention. Are we playing right into their hands? Will this open up the proverbial can of worms?
Think about the amendments that might be put forth by evil forces that would stand a much better chance of passing than one that abrogates CU. We could end gaining nothing with respect to election form yet be saddled with the most Draconian new laws imaginable.
All along I've been advocating for Congress to pass some finely crafted legislation to cancel CU, but recently I read that only a constitutional amendment can overrule SCOTUS. Somehow I am dubious of this.
I know of no more scholarly technocrat that Professor Reich. Perhaps if this post catches his eye he can comment on any way we can fix the terrible mess that is CU without opening the Pandora's Box of an Article V convention.
What do you say, Professor?
Art, these are two separate movements.
The one I'm referring to at movetoamend.org is working to pass a constitutional amendment specifying " that inalienable rights belong to human beings only, and that money is not a form of protected free speech under the First Amendment and can be regulated in political campaigns."
What you're talking about is a constitutional convention where the entire constitution woukd be up for revision. Very Bad Idea -- for all the reasons you mention, plus more.
Please click on the link here: movetoamend.org and read more about it. I think you'll come away a lot less dubious, and maybe even enthusiastic enough to pitch in and help.
Thanks for educating me. I am embarrassed to admit that I was unaware that the Constitution can be amended either by Congress passing a joint resolution or by an Article V convention.
With that said, I think the chance that two out of three of the pols in Washington will vote to divorce their sugar daddy corporate sponsors is nil.
Thank you for this crystal clear explanation. It's like the choral part of Beethoven's 9th. Bring the people together to sing and celebrate a good life, a life they can control, a decent, safe life and place us in relation to the economy as it returns to serve us and not the mega-rich and their CEOs.
Halleluiah..
https://www.youtube.com/watch?v=HljSXSm6v9M
Thanks! So long since I last heard that piece. Wasn't Beethoven supposed to have been deaf by the time he wrote that symphony? Amazing!
Daniel, thanks for the concert. It was the musical lift I needed for the middle of the day of cleaning and laundry.
Thanks, what a treat and story behind orchestra is amazing, I have often thought that music has the capacity to change the world!
Alle Menschen werden Brüder
Wo dein sanfter Flügel weilt
The explanation of the economic change does make Schiller's poetry ring true.
danke
I couldn't agree more with virtually every word you have written above. It is not dissimilar to my understanding of this neoliberal world. Its very strange that I have had about 100 people sending me congratulations for my terribly simple thanks to Robert Reich for his clarity and his humanity. It was not meant to be a congrats for Biden. I live in the UK where as a film-maker/photographer and increasingly a writer rjgolden.substack.com/ I have been increasingly barred at the doors of the galleries, the distributors, the agents etc. Here they don't shoot you in the back of the head, they simply isolate and ignore you as in the US. Can I hear some of your music somewhere?
thanks robert
THIS IS ABSOLUTELY FANTASTIC. You have described so cogently the philosophy and the historical proof that President Biden’s policies will return America to a position of strength in every aspect. The human frailties of hatred, racism, I can only win if you lose, self-interest and a social construct in which corruption is never punished are enormous hurdles for the President. They are the imponderables. But Biden’s eye is on the prize and America will be more powerful, more resilient and more humanistic as a result of his leadership.
Dr. Reich, this is your very best piece yet. Wow. Just Wow.
Now all we have to do is figure out how to reach a public that has indeed forgotten, or never learned the lessons of 1929– 1980. Before we – baby boomers leave – we need to focus on the young (ages 5 to 45).
Near as I can tell, the question we need to answer is this. What makes everyone and the country richer? Money sitting in rich men’s bank accounts? Or money circulating in the economy?
When I raise this question in conversations with young people, they conclude that money needs to work. Of their many analogies, this one was my favorite so far. Like people, money needs to work. The more money circulating “in” the economy, the harder it works. The harder money works, the more it accomplishes. Today, the amount of money sitting in rich men’s bank account, is like half of the entire labour force taking a permanent vacation on some Caribbean Island.
Have a good day folks.
A lot of their money probably is. A few years ago a British university study estimated that as much as 30 plus trillion dollars was sitting in offshore accounts (of course to evade taxes.)
That's exactly what our national debt is..this is where they hide the taxes they evaded..
Excellent point!
Fred, so how can we get those "off-shore" countries to see that it is not in their best interest to hide money for the rich slackers around the world who don't feel they should be expected to pay taxes on the money they "earn?" Then how do we get that money in circulation to help get some positive things happening, particularly related to global warming?
Right now these tax havens are legal, including here in the US. Also the tax loopholes in our 9 thousand page IRS tax code are legal. Also the IRS has been defunded so the rich are not being audited as much as the rest of us.
1 Reform the IRS and enact new tax codes.
2 Disincentivise states from creating tax subsidies and havens to lure corporate business to their states at the expense of the rest of us.
3 Corporations are not people:
Money is not speach: Lobbiest are not law makers.
We need to reform our laws to get the corrupting influence of money out of our democratic process.
Fred, I like your suggestions related to the role money plays in our nation. I would love to see President Biden with members of both parties, form a committee on reworking the tax code. No tax code should be 9,000 pages. That means all kinds of things that are unfair are taking place, then cutting funding for the IRS over the past couple of decades has made tax-paying even less fair. Citizens United was a terrible breach of faith perpetrated by our Supreme Court. They put corporations over the citizens of our nation and permitted those corporations to behave badly in buying candidates, and most of it is legal. A couple of quick changes could be that lobbyiests cannot be a tax break for corporations. They could possibly be counted for non-profits but only partially. That would start cutting the number of them roaming our nation's capitol as well as the state capitols. The committee could get input as to what is a reasonable business activity that should be kept as a deduction and which need to be dropped. They should look at the code as a whole, then make priority decisions about which things should remain unchanged and which should be changed. The latter could be prioritized. The American people should be kept aware of what the committee is doing and be able to make comments. It's a thought.
The left is so oblivious to the real world. Eliminate the income tax and fund the feds with a national sales tax.
I am not a boomer, I'm gen X and I remember how bad the 1930's were...Reagan was the crescendo that opened up America for the looting of our current Oligarchs. I think, we've gone from a society considering the community as a whole, to that of the individual. The mentality of I have mine and if you're poor it's your own fault- which is illogical. Of course we all know that the wealthiest in society are not self made, they rode up on the backs of the rest of us, the infrastructure or our society.
Right on! I respect your intellect and knowledge of economic history!
Don't the banks lend out the money "sitting in rich men's bank account" to people to start businesses, buy a house, buy a car, fix their teeth, etc.? Isn't that money therefore "working" and "circulating in the economy"?
Tim, today’s uber-rich are not putting their money into American banks. They are putting it into offshore accounts, Swiss banks and stock markets all over the world.
Today’s uber-rich usurped the role of banks and made themselves the "investor class" with the power to pick and choose which new businesses and products will or will not make it to the market - and shutting down any competition before they even open their doors (e.g. alternative energy companies).
Today’s uber-rich are also buying massive amounts of productive agricultural and recreational lands and water rights all over the world. IOW, they are literally buying strategic portions of the planet humanity needs to stay alive. They are also constructing doomsday facilities stocked with food, water, etc. for themselves.
Today’s uber rich are also buying up 21st century infrastructure that people need to live and work including:
Healthcare systems such as hospitals, doctors, dental-care, eyecare, hearing aids, prosthetics, pharmaceuticals, vaccines, disease, and medical research and development labs.
Schools, Universities and research centers
Homes and apartments for use as rental housing
Digital infrastructure - cable and satellite necessary to connect to, and utilize the internet, cell phones, apps, programs, etc.
Private armies of mercenaries for sale or for rent.
Privately controlled foundations and Think Tanks aimed at social engineering.
Today the back yard of the uber rich is the entire planet – each of them are building several tens of thousands of square foot homes and vacation homes on ranchland, cities, ski slopes, ocean fronts/ They are commuting via private yachts, private jets, and limousines. They are buying such things as $50,000. bras, solid gold faucets and cars.
The uber rich of yesterday, aka the Robber Barons, or Industrialists were so rich, they make Jeff Bezos, Elon Musk and Mark Zucerberg look like paupers. Conversely, the lifestyles of today’s uber rich make the Robber Barons’ lifestyle look poverty stricken.
The uber rich in today's world are like a black hole. The money keeps flowing into it, and we are watching as we, too, get sucked into this anomaly.
it's not sustainable. They still rely on 'serfs' to do their bidding, clean their toilets and take care of their kids. If Serfs cannot earn a living wage, they won't bother going to work...as we're seeing now. What's the point if there's no reward for work?
"Black Hole": Excellent analogy. The money goes in but never comes out!
No argument from me. Wealth inequality is much worst than income inequality! Curious what a $50,000 bra looks like though! LOL!
Tim, those bras are diamond studded (no pun intended).
So stupid. A diamond studded undergarment! Does the lady periodically open her top or dress to show everyone her bra? I guess the next step is a diamond studded jock strap! This proves that being rich does not mean that the person is not an fool!
Raffey, you are right about the rich people's money going to buy up the services people need. That should never be permitted, but when it is big money involved, it seems what is and is not legal is tossed away and antitrust laws and all kinds of other laws forbidding entities buying up large numbers of properties are ignored and never prosecuted unless it serves some political end to harm someone's career. We the People need to stop it here but there does not seem to be much push to end it.
Through a real estate broker, I learned that fracking corporations are buying huge ranch lands all over Montana and elsewhere.
Fracking consumes huge amounts of water, which is so polluted by the process, it needs to be disposed of in toxic waste dumps. As the west goes dry, ranching and farming is moving east. It won't be long before ranchers and farmers discover they are competing with fracking for water.
Its all such a frigging mess it boggles me wittle mind.
not to mention the earthquake fracking causes when they re introduce the muck they took out of the earth. Oklahoma is seeing historical numbers of quakes. but the oil barons say shhhhh....
The rich don't invest money to benefit citizens and country, they invest to make more money, . Unfortunately, these goals are often at odds.
which is why they need to pay their fair share of taxes. We should not be relying on them for their philanthropical generosity.
Again and again. A national sales tax.
Raffey, I like your analogy. I can understand that it could work well to help young people connect with how the economy works and that standing with and for people who want money to be working is a really good idea for everyone. So, how do we get it to happen? Maybe public schools and colleges can start using that analogy in economics classes. I suspect the young people may come up with some really good ideas for making this happen for the benefit of all of us.
Whatever you call it, it is working. The proof is in the results. And please Republicans don't give me a bunch of malarkey like you have done in the past. Just sit down shut up and pay attention.
Oh Ben, asking Republicans to sit down, shut up, and listen is yelling into the wind. Republicans are so far past any kind of logical thinking based on listening to anyone but Fox Not Nearly News and that ilk they can't see what Biden has done as a positive. They have already twisted it to show how more crime has happened because of it, more money going to those who don't deserve it, and other nonsense that Republican constituents listen to (they actually sometimes listen to the lies, dysinformation, and gaslighting their leaders participate in). As long as there is an "R" behind the name, they are conditioned to vote for the candidate even if he is not the person he claims to be (Santos). It will be an uphill struggle to get Repubs to be able to see the truth.
Please make a list of the positive things Biden has done.
Jack, is this a joke or are you just trolling? You know well what Biden has done if you are keeping up with the news. If you are not, that is on you and probably this is not the thread for you.
And why is this not a thread for everyone?
Thank you for this. I saw as a 17 year old what damage Reaganomics did to my family. I decided then that I would vote democratic and have never looked back. We need to reverse Citizens United to get the money out of politics. The hold big corporations have on this country is doing such damage. As I do my taxes this year, I promise you I am paying substantially more than some CEO’s and that makes me very unhappy.
thank you for the reminder that things were better for the working class in america.
And everybody else.
thank you....i assume you believe this to be the best of it?
I think “democratic capitalism” is a contradiction in terms. Capitalism is for profit, and by its very nature it encourages exploitation. I’m glad for Biden’s accomplishments, but we really need socialism, because it isn’t based on profit, which tends to keep wages down. Unions have to fight that. Capitalism favors, not individual freedom, but free enterprise for the few. It’s what’s trying to privatize our Medicare, leaving less money to spend on healthcare and more money to go for profit. It also promotes fossil fuels and war, because existing fossil fuel companies are looking to hold into their profits, and weapons manufacturers are seeking to increase their wealth. It promotes cigarette smoking with all its ills, so that cigarette companies can keep making billions while putting people in the ground. We are not free as long as corporations run the show.
If the Nordic countries can have democratic socialism why can't we have democratic capitalism?. I think your criticism a bit pedantic. And if nothing else, read what Bob means without imposing your stiff definitions on the words he used that you sap it of his meaning.
Well said!
Carol, Contrary to your understanding of capitalism (which, in my view, seems synonymous with “corporate” v. “democratic” capitalism), wherein you explain yourself in some detail, you offer no explanation of your understanding of socialism, despite promoting it.
Because in several postings (including several rounds with you), I methodically have differentiated socialism from democratic socialism (the latter seeming relatively similar to democratic capitalism, which I equate as capitalism for all), I won’t repeat myself. However, if you wish to make a case for socialism, I suggest you start by establishing your way of understanding it, of describing or defining it. Otherwise, no intelligent, reasoned discussion can proceed.
Spot on Barbara. People hear Socialism and equate it with Communism and since they don't understand either system they decide it's unAmerican. And you're also right that there is a vast difference between Socialism (which wouldn't work in a Country as large and as populated as ours) and Democratic Socialism. They also seem to equate all the above with "free" government handouts, never understanding that in the US today the largest government 'handouts' go to the wealthiest not the poorest.
Fay, While I value your affirming reply, I mostly appreciate your astuteness.
We've had a "mixed" economy from onset. "Capitalism:" is not a form of government and its application doesn't have to be antagonistic to the idea of the commons. Even some socialistic societies practice "capitalism" in commerce. E,G, Amana refrigerators were bought and sold to fund the Amana society. .
Point well taken, Daniel.
Completely agree. There needs to be some entity that cares more about the people than it cares about the profits. WE are not capitalists bc NONE of us regular folks own any of the capital. THEY are the democratic capitalists. I have no issue with capitalism. What I take issue with is that capitalism is not regulated at all, at the people's expense and detriment.
Question: Isn't true capitalism self-regulating with no part for the government to play? Correct answer is yes or no. No qualifiers.
Bradford Delong, is also at Berkeley, in his book Slouching Towards Utopia, describes how many times in the last 150 years that economic and racial equality get trashed by greed and hubris. Government helps the general population after the rich screw it beyond repair.
Right now, the Republican Party is owned by greedy people who are trying to keep the rich industrialists, many from the fossil fuel industry, in charge of the whole economy.
Liked and,,,
Thanks for the musical memory.
That only works if it is a true free market which we are not! In a free market nothing would be "too big to fail". Not to mention all the tax breaks and loopholes for them!
Right. Plus, most Americans were petit bourgeois farmers, professionals or small business people.
When will we have a free market then? When was the last time we had a free market? And what happened to end it?
One should be careful of wishing for a market as a magic solution. Competitive market systems are inherently designed to eliminate competition and aggregate power. Some moderation of this tendency needs to be available. Even Adam Smith realized this in his book "The Theory of Moral Sentiments".
Spot on reference: "The Theory of Moral Sentiments"! People need to know he wrote more than "The Wealth of Nations". They should also
check out "Economic and Philosophic Manuscripts of 1844" by Karl Marx for historical context. This was required reading in The Intellectual History of 19th Century Europe, a great class I had in college.
Isn't "bartering" an example of "free market" capitalism? The buyer and seller mutually agree on the transaction, and both leave satisfied with the result. Little to no government involvement to "tilt" the playing field to the advantage of one of the parties!
Less government please.
assumes elasticity of supply and demand, plus an entity that validates and protects transactions.
Bartering is a taxable event in the US.
Maybe in the 20s the market was close to free. I guess once the government stops bailing companies out when the economy is bad, we shall see how free markets really work and like then without regulations they will ruin the economy.
And many times they are close to ruining it now. Text book economy does not work bc anti-trust laws and penalties are non-existent bc they have been lobbied out of existence. We are all workers. There are a very few oligarchical families in the US that run it all and they are the capitalists.
Isn't a true 'free market' free of ANY government interference by definition? When was the last time that was true? and where?
Terry. What do you do for a living?
Long retired. Past: Elementary teacher, Law, IT, business sales.
Pure capitalism presumes homo economics is ENTIRELY rational in decision making AND that the market provides COMPLETE information for ALL participants. The free market has never existed nor will it.
Homo economics?
Homo econonomis I wish post. allowed edits! 🤷🏻♂️
As worded, I say No. What is ‘true’ capitalism? Wouldn’t even owning capital require a form of government for owning capital to have any meaning? Otherwise ownership is really just whoever happens to be the biggest caveman.
Yes pure capitalism or a mixed economy both require government. I was only asserting that the free market does not exist
No....then "Of course' Its a 2 part question.
Are we in a teaching moment, seeing from the comments that you also were a teacher? Love all the discourse on this particular comment from Carol and Adna!
I believe my response the totality of your question, by somewhat expounding on my prior response, is that capitalism cannot be self-regulating without government playing a role because it is itself a creation of government. Government has the ability to mold capitalism into any form it chooses and that many different forms of capitalism are possible.
Capitalism is a theory, not a form of government. "Modern capitalist theory is traditionally traced to the 18th-century treatise An Inquiry into the Nature and Causes of the Wealth of Nations by Scottish political economist Adam Smith" It is not referred to or incorporated into any Constitution that I'm aware of nor is it considered part of British or American Common law.
I believe what you are referring to when you say that capitalism is a creation of a government (its not) is that governments are responsible for creating Corporations. Governments can also pass laws to support capitalism (or socialism) and corporations......or not.
Hell no
NO
Somebody please tell me what is wrong with a profit.
I don't believe that 'profit' as such is the issue. The issue, at least to me, is how one comes by that profit.
It's only a contradiction if you fall for the false definition of capitalism Republicans have given us. Capitalism as Adam Smith envisioned it, is a feedback system where consumers reward efficiency and innovation with profit. Profit is an element, not the entire system. In order for the market to serve the consumer majority, democracy is vital. We lost our democracy long before Trump appeared. Corporate money captured the courts to rig the system for the corporations breaking the vital feedback element. Profit without a consumer controlled market is the extortion of feudal barons. Dr. Reich called it corporate capitalism, but it's more like corporate feudalism. The serfs subjugated themselves to the land barons for land to farm and protection, and now we subjugate to corporate barons for a paycheck and health care. We do need some socialism, but only where competition is not practical, such as for utilities and some infrastructure, and where the private sector fails to deliver. Socialism has become a pejorative for government services. The smart thing is to pick the best system for each problem, not pick one and try to force it to work for everything. We have a mixed economic system, and Republicans are planting the false idea that the profit motive is all we need for everything. That's Ayn Rand, not Adam Smith. (Rand's mistake is that the union workers her oligarch heroes abandoned are their customers, so that fantasy economy would implode. Henry Ford got it right. Real (democratic) capitalism is an ecosystem, not a zero-sum game for the greedy.) Don't confuse the greed of capitalists with the capitalist system. They are not the same thing except under laissez faire. Smith warned that a capitalists system left to its own devices would degenerate into cartels and monopolies. The reader at that point understood that cartels and monopolies are feudalism, not the capitalist SYSTEM he was describing and defending. Reich's term corporate capitalism alliterates better, but as defined by Smith, corporate capitalism is an oxymoron. It's really democratic capitalism versus corporate feudalism.
I've got a Henry Ford story for you.A woman I know told me that her A relative of hers Got badly injured in an accident at a Ford plant.Henry Ford came by that person's house To see how they were doing. There may have been a gift or money involved as well.
Nice take!
Carol, socialism and capitalism do not work on their own. To keep any economy running, they must be adjusted, updated, revised, adapted and tinkered with constantly.
Who do we want tinkering with our economy? Do we want the wealthy to manage our economy? Or do we want our government to manage our economy?
The government of course. We, the people, HIRE them (vote) to serve our interests!
People seem to forget that we, the people ARE the boss. Unfortunately these reps (even though paid
handsomely in money and perks and often achieve celebrity status) can become greedy
(think Manchin and Synema) and refuse to cooperate. Perhaps humanity is just not quite evolved enough! Maybe if we just had some Vulcan DNA ....
Yes Carol, I agree. I've always thought Democracy and Capitalism make strange bedfellows.
Democracy is a form of government although democratic principles can be used by other institutions including the family. Capitalism is an economic theory. Democracy at its purest is the polar opposite of Tyranny. Capitalism is closest to being the polar opposite of Statism. Socialism in its purest form is actually closer to Democracy as all decisions are made at the lowest level possible. Historically speaking I am unaware of any successful form of government or economics which is 'pure'.
Socialism has worked so well in the past.
Socialising losses while privatizing profits is pretty much the game plan for American corporations don't you think?
No I don't. My world is medium size businesses (< $1 billion in revenue) consulting. Ownership is interested is things standing on their own. No hand outs. The vast majority are hard working and honest.
Perhaps there are large corporations that think they will be bailed out. But, if the feds don't let failures fail, that's on them not the corporations.
Pretty naive given all the lobbyists they employ and politicians they buy.
The natural course of capitalism is the monopolies we see screwing us every day in every way. One ring to rule them all
AND to let them fail. Let the market rule, if that is what we're doing. No one is too big to fail, if we are actually in a free market.
The new element in our post 1990s world order is the expansion of world markets. China became the world’s producer of manufactured goods. They invested their profits in American debt which was backstopped by our agricultural efficiency and our knowledge economy. The hope of such a framework was world peace. Each nation needed the other to succeed. The new order was symbiotic. But cheaper goods meant an implosion on US labor markets that created the discontent Trump so successfully exploits . And explosion in world trade fed increased market liquidity which spawned the derivatives market that an unregulated Wall Street manipulated to satisfy greed rather than healthy growth. The failure of regulation lead to the 2008 crisis which was met with Government backstopping of bank counterparties notably AIG and other insurance companies. That backstop destroyed the traditional function of bond markets with zero interest rates. Equities became the only option for a return on investment and stock markets soared, fueled by the liquidity central banks provided. COVID led to another explosion in liquidity and perhaps fueled the creation of the crypto currency market whose purpose is to launder criminal gains from drugs and kleptocrats. This the state of our world economy. COVID contracted world trade and Putin’s war aggravated the contraction even more, creating a new inflation caused by scarcity of supply. Global warming’s acceleration threatens future prosperity even more. Can central banks hold the system together? Will our politics elect politicians with the skills to create real growth that satisfies the needs of the majority of the world’s desperately poor people. Will our politics allow international agreements which are the only hope of reversing the climate crisis ? This is an age of existential challenge that surpasses previous epochs.
Our main challenge is that the forces of Fascism control the Republican Party.
Now if we can get those people who ignorantly support republicans as if they are members of that special, elitist, capitalist club to "wise the hell up" we may see better days for all. And not just better days for the 'real money' that has corrupted the system.
Robert Reich, this contribution toward a 'greater good' is important. Thank you.
Shout it out folks!
Thanks for telling it like it is.
“The economy that collapsed in 1929 was the consequence of decisions that had organized the market for a monied elite — allowing nearly unlimited borrowing, encouraging people to gamble on Wall Street, suppressing labor unions, holding down wages, and permitting the Street to take huge risks with other people’s money.”
Communist governments saw their populations as one thing: workers, of whom much was demanded, and little given (“From each according to his abilities; to each according to his needs,” wrote Karl Marx in 1875).
In short, the people were screwed.
Governments promoting free-market economies for the benefit of the rich and corporations saw their populations as two things: workers AND consumers.
As such, the people were screwed twice — three times if one cares to view falling into debt to keep up with the Joneses — since the same free-marketeers believed, and still believe, that workers should be paid the absolute minimum the traffic will bear, with few or no worker or consumer protections, ability to bargain collectively, health care, pensions or retirement funds (manifested in their incessant lies that Social Security and Medicare are “entitlements.” They are NOT, they are not gifts from the government, but merely deferred salary that people earned during their working lives).
Free-marketeers believe that workers should be left to fend for themselves (what possibly confers more freedom than THAT?) which, in short, is actually the closest equivalent to slavery achievable in a modern, technological society.
Soviet communism was essentially a very cruel state capitalism. The repression of the population was needed to keep the system in place. Unemployment was kept in check with purges. It was not a system to model or glorify in any way.
The attempt by some to equate Soviet communism with socialism relies on the very deceptions that the Soviets used to justify their system. It as not a socialist system but a repressive state capitalism model.
While it was difficult to enter the old USSR old Berlin and the one road you could drive on from Braunschweig to Berlin was a bit of a lesson ( northern Germany,the UK armed forces occupation rather than southern Germany USA occupation).
The poverty was bad,East Berlin was terrible . Repressive state capitalism may be an understatement .I always thought it was capitalism taken to extremes,the extremely rich at the top,no middle class just poverty and shortages of basics
Perhaps this carried on through the breakup and the state owned oil companies etc suddenly enabled people to buy British football teams and large areas of London
I remember the bumpy "Autobahn" with unobtainable speed limits of 100 KpH and requirements to have the blinker on at all times in the left lane.
There was also a racist undertone at work in that state capitalist system. The Soviets in charge viewed Germans as not humans worthy of acknowledgment but useful to exploit. What wealth was produced in the GDR was for the benefit of the Russian elite in Moscow and Leningrad. We see the modern incantation with viewing Ukraine as a non-country and its people as something to be cleansed.
Thank you for this! Perhaps YOU should be giving the State of the Union Address!
Your comments also need to reach a wider audience and I humbly suggest that you submit this as a contributing author on the progressive website: Daily Kos (Dailykos.com)
Totally agree with everything you say here. Your description and explanation is spot on. No wonder life has been so demoralizing for me for so long - since Reagan. And now he is lionized more than ever but he opened the door to devastation for most of us, many of whom worked our “fingers to the bone” only to end up impoverished, in ill health from obscene working conditions, and watching our children die in despair.
I pass a few small tent cities and one huge tent city on my way to work. Maybe this seems better but I heard recently that they will "clear them out" soon. This revival is helping some but I don't know. I feel sad and helpless to resolve the issues. We need corporations money out of law-making or there will be more growing tent cities, I think. It is like a third world country out here in some places.