Beyond Outrage by Robert Reich

Robert Reich was Secretary of Labor under President Bill Clinton.  I was first exposed to Reich two years ago by a speech he gave at the St Louis Speaker Series.  In that speech he explained that the average male worker’s salary has not increased in real terms in over 40 years.  Instead to raise our standard of living in our generation, we have done three things: 1) we work longer hours, 2) our wives have gone to work and 3) we have gone deeper into debt. Reich’s observation resonated with me so I decided to give his latest book a try.

In Beyond Outrage: What has gone wrong with our economy and our democracy, and how to fix it, Reich blames the 2008 recession on the fact that there is not enough money in circulation to sustain a healthy economy because too much of our nation’s wealth in concentrated at the top.  He says that 50 years ago, 9 to 10% of the wealth in the U.S. was controlled by the top one percent of the population.  By 2007, that top one percent controlled 23% of the wealth.  This has been caused by two things: 1) stagnation of working class wages while top management salaries have exploded and 2) A series of tax cuts and tax loop holes for the rich that allow them to maintain their wealth.  Reich claims the ultra-rich tend to save their wealth and invest it offshore whereas the working middle class will spend their earnings and stimulate the economy at home.  This thought disclaims the premise that the wealthy create jobs when we tax them less… a notion our politicians recite repeatedly with little objection.

 

Reich also bashes our political election process which basically is ‘the guy with the most money wins.’  When the Supreme Court ruled that money is speech and it can’t be limited under the First Amendment, the amount of money an individual or corporation can give to a candidate became unlimited.  With 23% of the wealth in the hands of one percent of the population, they give massive amounts of money to super PACs to get politicians elected.  Guess who then gets the ear of our politicians?  And this isn’t just at the Federal level… did you know that most states have voted away estate and inheritance taxes in recent years?  How exactly does a politician rationalize that?

Generally, I hate politics and don’t like to hear either side when their views are so extreme… especially when they scream at each other or act so sanctimonious when others disagree.  But I think Reich has a point.  Our system (both political and economic) is broken.  It isn’t the Republicans or Democrats gaining too much power that is the problem.  They both equally have proven they can screw it up when they hold the power.  The problem is that increasingly the vast majority of the population has no voice… that’s not a democracy. As Reich points out, the only way to fix it is for more people to get involved.  That’s good advice regardless of your political persuasion.