Robert Reich: The President Ignored the Elephant in the Room

[highplainsdem]

http://www.huffingtonpost.com/robert-reich/the-president-ignored-the_b_814515.html

Robert Reich

Posted: January 26, 2011 05:09 PM

The President Ignored the Elephant in the Room

-snip-

But the president's failure to address the decoupling of American corporate profits from American jobs, and explain specifically what he'll do to get jobs back, not only risks making his grand plans for reviving the nation's "competitiveness" seem somewhat beside the point but also cedes to Republicans the dominant narrative.

-snip-

Although the economy is more than twice as large as it was thirty years ago, the median wage has barely budged. Most of the gains from growth have gone to the richest Americans, whose portion of total income soared from around 9 percent in the late 1970s to 23.5 percent in 2007. Americans kept spending anyway by using their homes as ATMs but the bursting of the housing bubble put an end to that - leaving them without enough purchasing power to reboot the economy. So the central challenge is put more money into the pockets average Americans.

This narrative would be politically risky (opening Mr. Obama to the charge of being a "class warrior") but at least honest. And it would allow him to connect the dots -- explaining why his new health-care law is critical to reducing medical costs for most working families, why tax reform requires cutting taxes on the middle class while raising them on the rich, why the Bush tax cuts shouldn't be extended for the wealthy, why deficit reduction must not sacrifice education and infrastructure (both important to rebuilding middle-class prosperity) and why any cuts in Social Security or Medicare must be on the backs of the wealthy rather than average working families.

Importantly, it would give him a convincing counter-narrative to the Republican anti-government one. Government exists to protect and advance the interests of average working families. Without it, Americans have to rely mainly on big and increasingly global corporations, whose only interest is making money wherever it can be made.

[unkachuck]

1. K&R....n/t

[msongs]

2. uh oh people might think he is a democrat if he does those things lol nt

[emsimon33]

14. Excellent point!

He might also gain popularity with and support of those who elected him.

[bjobotts]

35. Saying what needs to be done without having any idea of how to accomplish it.

The president is not KING. He needs to make it just as costly to make or produce or provide services off shore as it would be to just do or make it or provide it in the USA. He 'needs' to make sure these corporations pay taxes from offshoring to the treasury of the USA.

Dems tried to close a tax incentive to offshore and it was filibustered in the senate. DUH! and yet senate dems refuse to limit or change filibuster rules so they actually have to do it and the American public can see how pathetic their obstructionism really is.

The right wing members of the SC should be impeached and should have recused themselves from Citizens United case. Thomas lied on his taxes for years...it was no "mistake". He knew his wife was getting income and just lied about it.

Imagine the corporate plutocracy has already taken over the government except for a small band who refuse them and are still working in the interests of the American people. Now imagine the biggest catastrophic collapse is happening which does not affect the wealthy and One man is elected to combat and straighten it out against tremendous odds. How much do you think he will be able to even address, much less fix? Yet Obama has managed to pull us back from another republican great depression, get some kind of health care and financial regulations in place while trying to make sure the people don't suffer anymore than they have to...while being called names from both sides.

TELL ME HOW OBAMA IS SUPPOSED TO ACCOMPLISH WHAT WE WANT DONE...HOW.

We don't just need to be bigger than republicans but bigger than corporations also to back our elected leader or we really will have a stooge on a leash like Palin, McCain, Bachman etc...hell they're all the same in getting orders from lobbyists and not understanding how a Democracy works.

btw...it's not a mandate forced on you anymore than you're 'forced' to have children to get the child tax credit or forced to buy instead of rent to get the mortgage tax credit. If you don't have ins. coverage then you don't get the tax credit. No one is going to come after you but an emergency room visit will be very costly. When you file if you don't have the income then the gov. will buy the health ins for you. Now 80% of funds received by private ins. must go to actual medical care...not the pockets of its CEO. Wow. Medicare operates at a 3% overhead but imagine if it covered everybody...then we could "vote" to have it cover dental as well as medical (would not have that choice with private ins.)

Teabaggers calling in to see if they can still get the child tax credit if their child is not 100% human needs to be worked out with Bachman.

[erodriguez]

43. Step 1. Tell the truth. Step 2. Fight for it.

[FogerRox]

47. Thank you.

[Newest Reality]

3. Gasp!

Could it be that the American middle-class is no longer a big deal to the MIC? There is still a lot to be made from an Underclass by way of basic needs and commodities while you focus on the global markets both for cheap, exploitable, abusable labor and for expanding, new groups of middle-class in other countries who are newbies and cheaper to manage.

Both automation and outsourcing have changed labor and how many will be employed, as well as the wages payed. So, as long as you have a powerful media to create a facade and politicians that will support it with boondoggles and the right PR/rhetoric, it is best to let the failing, American middle-class find out their fate by experience as the wave hits them. It would be too dangerous to let anything damage their hopes that finite resources and profit-skimming greed-based exploitation will bring them back to where they once were, let alone anything resembling security or prosperity. Those days are over as long as this system is firmly entrenched and we do not collectively embrace a new vision based on facts and geared towards cooperation, sustainability and realism about our finite resources.

[DirkGently]

4. Dead-on, Mr. Reich.

[ProSense]

5. Well,

This narrative would be politically risky (opening Mr. Obama to the charge of being a "class warrior") but at least honest. And it would allow him to connect the dots -- explaining why his new health-care law is critical to reducing medical costs for most working families, why tax reform requires cutting taxes on the middle class while raising them on the rich, why the Bush tax cuts shouldn't be extended for the wealthy, why deficit reduction must not sacrifice education and infrastructure (both important to rebuilding middle-class prosperity) and why any cuts in Social Security or Medicare must be on the backs of the wealthy rather than average working families.

...the President spoke about all those things.

Reich also made this point:

<...>

A similar call for economic patriotism and public investment emerged in the 1950s and 1960s, when the competitive threat was the Soviet Union. John F. Kennedy challenged America to get to the moon ahead of the Soviets. Before him, Republican president Dwight Eisenhower committed the nation to building the interstate highways system – forty-one thousand miles of four-lane (sometimes even six-lane) freeways to replace the old two-lane federal roads that meandered through cities and towns – in order to speed troops, tanks, and munitions across the nation in the event of war. And a National Defense Education Act to educate a generation of mathematicians and scientists to catch up with the Soviets in space.

President Obama made the parallel explicit:

Half a century ago, when the Soviets beat us into space with the launch of a satellite called Sputnik, we had no idea how we’d beat them to the moon. But after investing in better research and education, we didn’t just surpass the Soviets’ we unleashed a wave of innovation that created new industries and millions of new jobs. This is our generation’s Sputnik moment.

Reviving these ideas, and the feelings they provoke, is politically astute. A call for national unity and economic patriotism places the President above partisan rancor, and gives him a rationale for a strong and effective government at a time when Republicans want nothing so much as to shrink it.

But the new theme also poses a danger of appearing to ignore the elephant in the room – the nation’s continuing scourge of high unemployment that shows little sign of abating any time soon.

<...>

It was politically astute, and it resonated with a majority of Americans.

[zipplewrath]

17. But the core of his point was this

"What the president should have done is talk frankly about the central structural flaw in the U.S. economy -- the dwindling share of its gains going to the vast middle class, and the almost unprecedented concentration of income and wealth at top -- in sharp contrast to the Eisenhower and Kennedy years."

You can't talk about the allusions he made to historical events, without acknowledging the significant differences Reich feels he under sold/over looked.

[girl gone mad]

6. k & r

[Laelth]

7. Excellent essay. Recommended. n/t

-Laelth

[highplainsdem]

8. kick

[DirkGently]

9. Re - kicked because Reich's words are so worthy. Thanks again for posting this.

[decidedlyso]

10. We are being gamed by both political parties and it is too late to

fix the system. My question is when we will we finally do an Egypt ourselves? If we do it now, we might succeed. If we wait until the troops are back from their unnecessary wars, it will be too late. I think revolution is imminent and this is the main reason Bush repealed Posse Comitatus.

[Juche]

11. I don't get why people thought that speech was so great

America has too much underutilized talent, not too little. There are tons and tons of people trained in math, physics, science, engineering, law, business, etc. who are unemployed and underemployed. Tons. To pretend that we don't have enough talented people and that is why the economy sucks is a lie. We have more than enough educated talented people. We just don't use them properly. Money that could go to creating good jobs goes to pushing corporate profits and income for the top 1% up.

COrporate profits are at about 11% of GDP. Corporate cash reserves are at 2 trillion. Wall Street self pay is at about 1% of GDP, the top 1% earn about 1/4 of all income. Think about the fact that 1% of the entire economy is wall street bankers paying themselves, one street in New York where many people who collapsed the economy work gets 1% of the entire economy. The real problem (as a non-economist, this is my view) is what Reich said. The decoupoling of corporate profits, GDP growth and income at the top from middle class wages.

Sadly it won't get better. Outsourcing, insourcing and a labor surplus combined with advances in fields like robotics or engineering will likely make laborers even less influential in the market. There is no incentive for those at the top to 'share the wealth'. What are those at the bottom going to do? Start their own business (and compete with multinational multi billion dollar companies that have changed the laws to benefit themselves and harm the competition)? Find a new job? MOve to India and make 10k a year? Nope. Just sit back and take it. ANd we are so divided along cultural lines (race, religion, sexuality) that we are at each others throats too much to notice the plutocratic raping of the culture. Even tea party members, when you poll them on the issues, tend to be 50% or more opposed to plutocracy. They don't want to eliminate medicare and use the money for corporate profits. THey don't want citizens united. But politics and the issues are decoupled in the US too.

Obama instead took the pablum route of pretending it was education, not plutocracy. He has never met the endless hundreds of thousands of people with undergrad and graduate degrees in science, engineering, law, etc who can't find good jobs with benefits. What is more likely is he has, and he knows that is the real problem, but pretending it is education is safer politically. So pursue ineffective, counterproductive solutions rather than the real problem. How is creating another generation of people trained in math or science who have 40k in student loans and can't find work going to change anything?

It sucks. I really had more hope when I helped elect the guy.

[DirkGently]

13. A+ Mistakes were made (by people with money). Others (w/o so much money) will be blamed.

[hfojvt]

22. I would like to see a measurement of that

which I could point to.

Myself, I have a master's degree, in math and economics, and 3 of the 4 janitors where I work have college degrees. But I need more stats than just a few anecdotes.

[hfojvt]

12. a counter-narrative to Republicans??

We cannot have that. It's not bi-partisany enough.

[Populist_Prole]

15. I think Reich ignores the trade elephant in the room, indeed he always has

while he is ostensibly "for" the working class, he is also consistently and adamantly opposed to blaming trade/outsourcing. He's constantly labling those who bring this issue up as either xonophobes or luddites. His idea of helping is more of government helping us after the fact, rather than the source.

His heart is in the right place but his ideology isn't.

[Citizen Worker]

21. Reich just cannot bring himself to criticize the trade agreements. He just can't and until the

political leadership gets to that issue forward progress is stalled and we're cascading downhill toward third world status.

[ProSense]

16. Reich:

But the president's failure to address the decoupling of American corporate profits from American jobs, and explain specifically what he'll do to get jobs back, not only risks making his grand plans for reviving the nation's "competitiveness" seem somewhat beside the point but also cedes to Republicans the dominant narrative.

The President clearly stated:

<...>

We are poised for progress. Two years after the worst recession most of us have ever known, the stock market has come roaring back. Corporate profits are up. The economy is growing again.

But we have never measured progress by these yardsticks alone. We measure progress by the success of our people. By the jobs they can find and the quality of life those jobs offer. By the prospects of a small business owner who dreams of turning a good idea into a thriving enterprise. By the opportunities for a better life that we pass on to our children.

That’s the project the American people want us to work on. Together.

<...>

[zipplewrath]

18. So where does he mention that this had been decoupled?

He mentions what we measure by, but not that those measurements have been decoupled from those predecessors. It is this connection he is ignoring.

[ProSense]

19. Did you think

that he meant literally decoupled? Businesses operate for a profit. The point is not that they shouldn't be profitable. It's that their profitability shouldn't be equated with Americans' well-being.

[RobinA]

25. His Point Is

is that they HAVE been literally decoupled. Profits have gone up, up,up, but the workers have not benefitted from the dramatic increase in profits.

I happen to agree with Reich in a slightly different way. I recently got a newsletter from the financial guys who are managing some old 401k money of mine. It's all about the dramatic change in retirement outlook because of the lost retirement money from the 2007-8 Wall Street crash. Uh...no. I lost a bunch of money at that time, but let's face it, that amount of money spread over my retirement age 'til life expectancy age is NOT the difference between me eating cat food or not. Unless you are very rich, you can't save your way to a healthy retirement, you have to have money coming in, as in SS, pension. What IS threatening retirement is pricy, exclusionary medical care, threats to SS, and the deplorable decrease in pensions. The very pensions that the remarkably increased corporate profits cited by Reaich don't seem to stretch far enough to fund. Look, saving is good, but on the typical salary today, the typical family today is not going to be able to save their way out of the cat food aisle at the grocery store.

[decidedlyso]

26. Good understandable post. Life in 20 years will look as different

from today as black and white.

[zipplewrath]

39. I think Reich did.

I think Robert is saying that profitability and the well being of the middle class HAVE been decoupled (i.e. the rising tide didn't raise all boats) and that it was intentional and needs to be "fixed". Companies and industries should be profitable, and the workers should SHARE in that profit.

[okieinpain]

20. i don't get it all of these people know more then the president

but none of the run for the job. why is that.

[DirkGently]

23. Because politics and astute, unfettered analysis are wholly unrelated fields of endeavor?

[montanto]

29. Well spoken truth.

[okieinpain]

32. yeah I know everyone has a right to critize. I just get tired of all of

nick picking, if you know what needs to be done then get in there and do it. other wise give the man a break.

[liberation]

40. Wow... so that is what logical dissonance sounds like.

... you make it sound as if being president was some kind of mandatory prison sentence bestowed upon an unsuspecting innocent person whose last wish in the world was to be president.

[FogerRox]

48. Thanks,

[Fuddnik]

24. Have Wall Street give me $50 million, and I'll run.

I don't think my reduced pension and the $3.00 in my checking account will do the trick.

[okieinpain]

31. get your booty out there and hustle them dollars up, that's what

president obama did. if you got the cure for what ails american don't let some dollars get in the way of your truth.

[Art_from_Ark]

37. If you aren't groomed for the job, you don't have a chance to get it

Look at all the average citizens who try for the job each election cycle-- the media doesn't even give them the time of day. When was the last time an "average citizen" got the job? No time in the last century, that's for sure. You either have to be a military hero or have served in some previous political office to even be considered.

[MasonJar]

27. Thank yiu, Mr. Reich for speaking truth to power.

Obama is a wealthy lawyer, an establishment President, which would be fine, if he had run as one and gotten elected as such. I'd have no complaints...well, fewer anyway.

[mopinko]

28. i really don't understand why we didn't raise the minimum

wage on jan 21, 2009. it would have done so much for the economy, and for the tax base. we know that many of these companies are making plenty of money. they are just sitting on it. so pry it loose with a boost.
nah, that would be too simple.

[Enthusiast]

30. K&R nt

[BrklynLiberal]

33. Mr Reich is correct...Excellent analysis.

[mmonk]

34. I can't imagine him ignoring any elephants.

[Maineman]

36. Rich getting richer and poorer getting poorer indicates corruption

At least that's the way it looks to me.

[Name removed]

38. Deleted message

Sub-thread removed by moderator. Click here to review the message board rules.

[inna]

41. Reich is being way too kind.

[EndElectoral]

42. Reich gets it. Wish Obama did. He seems more intent in avoiding conflict.

[defendandprotect]

44. Obama is creating jobs -- but elsewhere ... two new trade agreements which will take US jobs again..

[dflprincess]

46. Creating jobs elsewhere

and no doubt securing a very lucrative retirement for himself. Look how well Clinton has done since he left office.

[defendandprotect]

50. That's another question ....

and there seems to be very little interest in it.

[inna]

49. wait... what's the second one?

Korea FTA, of course, and a whole odious BUNCH in the negotiations (including TTP), but...


is there something i missed in terms of ratified FTAs on Obama's watch?

[defendandprotect]

51. South Korea is only one I'm sure of ...

but think others are Panama and Columbia -- ?

Obama Backs Free Trade Agreements Between Panama and Colombia ...
Obama backs free trade agreements with Panama and Colombia ... 2011 Annual Review and Outlook ... that he intended to make a new push for a free trade agreement with ...
www.joc.com/.../obama-backs-free-trade-agreements - Cached

[TheMadMonk]

45. A verbal spanking might be appropriate if he hadn't been the one to lead...

...that element into the room and hide it under an antimascar.

[leeroysphitz]

52. Hopefully the President will extend an olive branch to the business community.

That should solve the problem.