“The most important political competition over the next decade will not be between the right and the left or between Republicans and Democrats. It will be between a majority of Americans who have been losing ground and an economic elite that refuses to recognize or respond to the majority’s growing distress.”
That quote is the core and the central tenet of Robert Reich’s new book, “The System: Who Rigged It, How We Fix It.”
I finished reading it last week. Ironically, the same week featured news that 56,843 Americans had died from COVID-19. Unemployment, according to Fortune magazine, was at 20.6% with 26.5 million Americans out of work, (the highest since 1934). There was also a statement from President Donald Trump in a news conference that disinfectants and ultraviolet light administered internally might be a treatment for the coronavirus.
Elsewhere on health care and economic matters, it was reported in the Star Tribune that David Wichmann, UnitedHealth Group’s CEO, and Stephen Hemsley, its former CEO and executive chairman, both walked away with over $50 million in salary, bonus and stock option compensation. Meanwhile, hospitals were furloughing staff in the midst of the pandemic because revenues from elective surgeries and other procedures were down. Pandemics, evidently, aren’t as profitable as gall bladder surgeries.
Coincidence? Think about it.
Robert Reich is an economist and professor of public policy at the University of California Berkeley. He is a former U.S. secretary of labor and the author of 17 books on economic and public policy.
Reich is a “liberal” and a Keynesian on economic matters. I’ve followed his work for many years out of a lifelong interest in history and public policy — an interest that’s taken me to other writers and economists, notably Paul Krugman, Joseph Stiglitz, Thomas Piketty, Milton Freeman, Paul Samuelson, and George Will.
I’ve kept an open mind and a balanced view on social and economic policy. I supported Barry Goldwater in college and dabbled in Ayn Rand. I even voted for Nixon, but with the events of the last few years I’ve shifted leftward as I watched more and more of the nation’s wealth slip into fewer and fewer hands and government move from a democracy of equals to an oligarchy of the rich and powerful. That shift is the essence of Reich’s book. It’s also a plea for change.
We’ve been there before. America was once an agrarian nation. The Industrial Revolution changed all that. Names like Morgan, Rockefeller, Vanderbilt, Carnegie and Hill emerged at the turn of the 20th century, amassing great fortunes in railroads, oil, steel and banking and finance. Along the way they learned how to buy and sell politicians and political influence, destroy competitors and suppress wages. It was all about money and power.
But there was also opposition from farmers, small businesses and organized labor. The progressive movement and leaders like Teddy Roosevelt held them in check. Then came the market crash of 1929 and the Great Depression and New Deal reforms, a strengthened labor movement, World War II and the postwar emergence of a healthy middle class. I grew up in those postwar years and benefited from them. Today, it’s mostly nostalgia.
Reich picks 1980 and the election of Ronald Reagan as a benchmark year coinciding with the emergence of a new oligarchy more powerful and insidious than the first.
The metrics are frightening. Between 1980 and 2019, thanks to trickle-down economics and public policy, the share of the nation’s total income going to the wealthiest 1% more than doubled. CEO pay increased 940%, while worker’s pay went up a mere 12%.
In the 1960s, a CEO of a large company made 20 times as much as the lowest paid worker; by 2019 a CEO was making 300 times as much. According to Reich, overall wealth inequality has exploded. Today the wealth held by the richest 0.1%, about 160,000 households, has gone from less than 10% 40 years ago to 20% today — and that same 0.1% owns and controls as much wealth as the bottom 90% of households combined. The bottom half owns just 1.3%.
These are good times if you’re a CEO, a technocrat, a financial type, had a prosperous parent or grandparent or know how to play football — less so if you’re not similarly privileged. This is the stuff of revolution. The disparities and stresses are only getting worse as the current pandemic squeezes income and opportunities. More than 56,843 dead Americans and 20.6% unemployment are not good omens.
In 1968, Dr. Martin Luther King said, “This country has socialism for the rich and rugged individualism for everyone else.” In 1968 I voted for Richard Nixon and would have disagreed — not so today. Personally, the question for me is what to do about it. I think I’ll know by November.