Robert Reich was secretary of labor under President Bill Clinton and is currently Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California, Berkeley.
Sam Husseini: [On Saturday] Obama said fixing unemployment is going to take some time. How do you think such a statement can be justified given the urgency of helping the banks in 2008 and so on and now middle America is in trouble and there doesn’t seem to be real impetus?
Robert Reich: I don’t think the administration can simply rely on time to mend the economy. It needs to come up with a set of bold ideas, even if they can’t get them enacted, that will get jobs back. And the president has got to fight for them to be enacted.
SH: I want to ask you a historical question: if your analysis of this bears out there’s a lot of talk of fixing the corporate tax rates, you know revenue neutral and lowering the rates and plugging the loop holes. Isn’t that very similar to what was done in the Reagan administration so, correct me if I’m wrong: you have this pattern of doing a revenue-neutral thing that lowers the tax rate, then the loopholes come back and you keep replugging the loopholes and re-lowering the corporate tax rate.
RR: There’s a tendency in this country with regard to tax reform to continuously close loopholes and lower tax rates and then the loopholes open again, and then you close those loopholes and you lower the tax rates again on corporations [laugh]. And also on the very rich. Look the problem over the long-term with regard to the budget deficit is very clear and very simple: number one, you’ve got medical costs rising very, very fast, baby boomers retiring. Number two, you’ve got very rich who are paying a lower and lower rate of taxation as they take in more and more of the national income and wealth. Well you don’t have to be a rocket scientist to see that there’s going to be a long-term budget problem but that is all different from the short-term jobs problem. They are not the same. Solving that long term problem or even making a credible beginning to solve that long-term problem is not going to bring down the rate of unemployment. Government has got to, number one, exempt the first 20,000 dollars of income from the payroll tax for a year, number two, give people the opportunity to declare bankruptcy on their prime rate residence, so they can reorganize they’re mortgages if they’re in distress and give them more bargaining power– that gives them more bargaining power with their mortgage lenders. Number three, a WPA, a civilian conservation corps, some sort of program to hire the long-term unemployed. And we could go on– there are many things that could be done and I think the president has got to put them on the table and fight for them.
SH: And yet the administration isn’t doing that. Is that simply because of money in politics, that they’re getting so much money from Wall Street? Is it because labor hasn’t been as vibrant as the CIO was during the Great Depression and so on? Why is that not happening?
RR: I honestly think that the president figures that nothing can be enacted through this Republican house and given the numbers of Republican senators, and the only thing he needs to do or can do is work around the margins where he can get some agreement. But that leaves out, it seems to me, the possibility of energizing and mobilizing the public around some very simple, bold steps to get some jobs back and forcing the Republicans’ hand. Pardon me, but that’s what leadership is all about.
SH: Didn’t the administration sort of paint itself into the corner with this Republican House by not taking more vibrant steps when they first got into office?
RR: The administration deserves a great deal of credit for making sure that the great recession didn’t turn into another great depression, but we’re not out of the gravitational pull of the great recession. Most Americans are still seeing their wages drop, their housing values drop, most Americans are still in danger of losing their jobs and so they’re not spending. And if they’re not spending, business is not going to create new jobs. That’s where government comes in. We’ve known for 75 years — this is not new — that when consumers and the private sector cannot and will not spend enough, government has got to be the spender of last resort. And you know it defies logic, it defies reason, to say if we just get public spending down, we’re going to create jobs. That’s not true.
SH: You were of course in the Clinton administration. You weren’t in charge of it, but they deregulated Wall Street. Don’t a lot of the current problems stem from decisions made in the 90′s?
RR: Oh listen, undoubtedly. getting read of Glass-Steagall in the late 1990′s, failing to regulate derivatives — there were mistakes being made in the late 1990′s in the Clinton administration, undoubtedly. But with regard to jobs, Bill Clinton presided over the largest job recovery we’ve ever had, 22 million net new jobs and we saw the economy expand. Not just for the rich, but for everyone. One of the deep structural problems in the economy now, and we’ve seen this since really at least 2000, is that most Americans are not gaining from economic growth. Median wages adjusted for inflation are dropping — you saw that even before the great recession, so there’s not enough purchasing power in the great American middle class to get us out the gravitational pull of the great recession.
SH: Wasn’t a lot of that growth illusionary? People holding down more than one job, people going into credit card debt — wages have been stagnant since the 1970′s.
RR: Certainly the so-called recovery after 2000 was kind of illusionary recovery because so much of it was based on people going deeper and deeper into debt. It was not based on people getting fatter paychecks or people doing better. In the 1990′s some of the 22 million net new jobs created were a matter of double-counting [laughs]. Some people did have to take two or three jobs. But by in large the median wage — and that’s the way you measure overall economic well-being– rose. And it rose in ways that actually generated growth in wages for the bottom fifth as well as the top. We haven’t seen that since then and this is one of the fundamental problems we’re dealing with. But right now, given that the economy is sputtering, given that the recovery is, for all intents and purposes, stalling, there’s got to be bold action out of Washington and the silence, frankly, is deafening.
SH: One last question: you said leadership is necessary, and by that you meant the Obama administration, but let me go back to my question: there’s the famous thing of Roosevelt dealing with a labor leader I think and giving him his list of what he wanted and Roosevelt [saying] go out and make me do it.
RR: Yes, absolutely.
SH: Isn’t there a lack of impetus in labor in going out and making the administration do things?
RR: Well look I wish labor unions and other groups were more powerful in terms of pushing the administration towards a jobs program. People who are unemployed — 13.5 million people who are unemployed in this country, and if you add in people who are too discouraged to look for work it’s close to 14 million — they don’t have much political power. There is no national association of unemployed people in this country. They don’t lobby, they don’t make political contributions, they are not well organized. Washington and New York are existing in an echo-chamber right now that is unrelated to where the rest of the country is. You read the major newspaper of this country — how much news is there about the economic anguish that most Americans are now suffering? Almost none. It’s as if it’s not going on. And that’s what worries me. Out of this kind of economic frustration, anxiety and desperation shared by so many millions and millions of Americans comes a deep cynicism about the capacity of government, about the capacity of any institution, to work. And out of that cynicism comes demagoguery. We have people saying things now, running for president, who make no sense. To talk right now about giving tax breaks to corporations when they’re sitting on $1.9 trillion of cash that they don’t know what to do with is illogical. It defies logic. This is a demand-side problem. Consumers can’t and won’t spend because they are absolutely strapped.
Bold added. Major afterthought is that I wish I’d asked Reich about “welfare reform” done in the Clinton administration and I wish I didn’t use the term “middle America” to describe people who are not wealthy, since it would seem to exclude poor people. Thanks to Richard Wolff for ideas on several of these questions.
[originally published on Washington Stakeout on June 13, 2011; posted on posthaven Nov. 13, 2015]
So I tired to question Goolsbee yesterday for WashingtonStakeout.com -- but he wouldn't take questions. But in the process of researching questions, I came across his statement from two years ago on the Colbert report: "A year from now we’re going to be in a very happy place.” (June 15, 2009). So, with my colleges at the Institute for Public Accuracy today, put out a news release titled "Goolsbee or Colbert: Who's the Clown?" And this evening, it was announced Goolsbee has anounced his resignation. Lesson: Continue provocative headlines on news releases.
Most ironic part: One of the questions I'd wanted to ask Goolsbee -- from Thomas Ferguson -- was about the administration filling regulatory vacancies. But instead of filling vacancies, they are creating them.
Seeking the Republican nomination for president, Herman Cain is former chairman and CEO of Godfather’s Pizza and former deputy chairman of the civilian board of directors to the Federal Reserve Bank of Kansas City. Other reporters questioned him on a poll that allegedly shows him tied with Sarah Palin for second place in Iowa.
I asked him — since he’s been outspoken against welfare allegedly creating a “culture of dependency” for poor people — doesn’t it amount to welfare when Wall Street gets bailouts, Federal Reserve has preferential policies for big banks, mining and broadcasting giants get giveaways from the government — shouldn’t huge corporations get off welfare as well?
Cain responded that “It’s time to get everyone off welfare” and plugged his proposal for a Fair Tax, saying that would stop the government from picking of winners and losers. (But many have stated that such a tax proposal would make further losers of low-income people.)
Cain claimed that he is “against the too big to fail philosophy” but then later said he was for TARP because we “needed to do something drastic” adding that “where I parted ways was when the administration was picking winners and losers.”
Cain wrote in 2008: “Wake up people! Owning a part of the major banks in America is not a bad thing. We could make a profit while solving a problem.” But buying stock would seem to be a way of “picking winners and losers.”
Then I referenced (unfortunately mangling the quote in the process), Jesus: “it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God” and asked how that related to Cain’s philosophy.
Cain said that his view was to “help those that help themselves.” After a bit of back and forth, Cain briefly mentioned “my giving and my compassion” — which would seem to run afoul of another of Jesus’ statements.
I sort of regret saying “Isn’t it time to get big business off welfare as well” at the beging of my questioning — the “as well” would make it seem that I agree with the notion that poor people should not be on welfare, which in any case was gutted during the Clinton administration. I also think I sort of bought into Cain’s tacit assumption in the back and forth that there aren’t alot of poor people who are working very hard and still can’t make ends meet. Full transcript of our exchange:
Sam Husseini: You’ve spoken against welfare creating a culture of dependency for poor people. Doesn’t it amount to welfare when Wall Street gets bailouts, when the Federal Reserve does preferential economic policies towards the big banks, mining get handouts, broadcasters get free airwaves? Isn’t it time to get big business off welfare as well?
Herman Cain: It’s time to get everybody off welfare and the only way you’re going to do that is to totally eliminate the tax code and replace it with the Fair Tax, which is a national consumption tax. Look, as long as we have the current tax code, politicians and administrations will always have the discretion to pick winners and losers whether they’re picking it for Wall Street, whether they’re picking it for corporations. And so the only way to solve the problem isn’t to just say we’re just going to get rid of all of it unless we get rid of the entire tax code. That’s the ultimate solution.
SH: But are you for getting rid of “too-big-to-fail” type things, getting the broadcasters to pay for their licenses?
HC: Yes I am against the too big to fail philosophy. The way you sort out winners and losers is not by having the government making that decision; you let the marketplace make that decision. That’s why we have bankruptcy laws. But the bigger problem is eliminating the tax code, replacing it, such that we don’t have the opportunity for a lot of those kind of programs to be interested into the economic process.
SH: But weren’t you for the bailouts, Goldman Sachs, AIG and all of them were on the verge of going under? I thought you were for that.
HC: No, let’s clarify. I hope you run this clip over and over and over and over. I was for the concept of TARP because of the financial meltdown we were looking at because I studied the financial meltdown, which was drastic, and we needed to do something drastic. Where I parted ways with TARP was when the administration started to pick and choose winners and come up with ideas like “too big to fail.” I didn’t agree with that. I think the administration of the TARP funds was too discretionary. And even on top of that they tried to get some banks to take money that they didn’t want. That wasn’t how I expected the administration to utilize those funds. That’s how I parted ways with the whole concept.
SH: How do you explain something like Jesus’ teaching that it’s easier for a rich man to pass through the eye of a needle with your own philosophy?
HC: I believe in a philosophy of “help those that help themselves.”
SH: And what happens to the others who can’t for some reason?
HC: Help those that help themselves. And if people can help themselves, and they don’t want to help themselves, well yes, there will always be some compassionate people out there with some compassionate ways to help them.
SH: But that’s not you?
HC: Oh no it is me. If you were familiar with my giving and my compassion, I help people who help themselves. One of the fundamental things I want to change as president of the United States is that I want to get away from this entitlement society to an empowerment society. And if people aren’t willing to help themselves. Now the good news is that more people are willing to help themselves but I happen to believe that a lot of the programs encourage people to stay on government programs rather than encourage people to get off of government programs. That’s what I mean by restructuring these programs and converting it to an empowerment society.
[originally published on Washington Stakeout on June 6, 2011; posted on posthaven Nov. 13, 2015]
Marwan Muasher — now vice president at the Carnegie Endowment and former Jordanian deputy prime minister, ambassador to Israel and the U.S. — has written: “The traditional argument put forward in and out of the Arab world is that there is nothing wrong,everything is under control.” This was dubbed the Muasher Doctrine by Noam Chomsky. Transcript of our exchange:
Sam Husseini: Obama gave his recent speech towards the Middle East. He didn’t mention Saudi Arabia. Saudi Arabia barely came up in your discussion—only in terms of fighting Al Quaeda did it come up in your discussion right now with Christiane Amanpour. Do you think the lack of discussion of meaningful democracy in places like Saudi Arabia an example of what’s been called the Mausher Doctrine, that ‘don’t worry, everything is alright.’ It’s been coined by Chomsky and attributed to you. Why this incredible blind-spot? Can the U.S. have meaningful credibility?
MM: We’ve seen different reactions to the crisis in different Arab countries. Some of them, such as in the Gulf, are trying to react to this through economic financial means. What I believe is that this is a political issue, this is an issue about the low levels of government that exists in many Arab countries, and people aren’t going to basically accept a solution that is purely economic. There is a need to address this through a serious opening up of the system, a serious reform process. For the United States obviously, which has followed the policy of prioritizing stability over democracy for many decades, switching to a policy that pursues stability through reform rather than stability over reform is not proving to be a very easy process. As we have seen in the relationship between the Saudis and the U.S., there are interests still involved. That is the issue of oil, the issue of Iran. You’re going to find more cases in the future, I think, where the issue of interests, will, at least in the short run, be prioritized over reform.
SH: As you know there were protests by Palestinian refugees today and an international flotilla of ships is headed to Gaza in June to protest the Israeli blockade. The New York Times reported this week the flotilla will include an American ship, the Audacity of Hope, 25 percent of the passengers of which are Jewish. The Israeli government has vowed to stop the flotilla by any means. What’s your view of the flotilla, the threatened Israeli response, and should the United States attempt to ensure the free passage of the flotilla.
I think there’s a feeling of empowerment in the Arab state today that’s finding its way to the Palestinian state. In other words, the feeling of powerlessness that has permeated in the Arab world for so long is no longer there. And I think the Palestinian state will not stay silent if there are no sort of serious moves to end the Arab-Israeli conflict. I expect, frankly, more of these moves to take place, particularly after September when the issue of recognizing the Palestinian state will go before the United Nations. And I think there is a new feeling in the Arab world that is shifting from a feeling that the United States holds all the cards and needs to resolve the conflict, something that I agree with. You’re seeing a shift towards a feeling that the street can affect peaceful change in a way that has not been done before.
SH: Final question: American politicians often brag about Israel being the only democracy in the Middle East and talk about their “shared values” and “unshakeable commitment,” absent such assertions in dealing with Jordan or when referring to Jordan. Is it because of the absence of constitutional democracy, or for other reasons?
MM: Well Jordan is a case where the monarchy enjoys wide legitimacy unlike some of the other countries that we have seen. There is no one in the opposition today in Jordan calling for the overthrow of the monarchy. What is being called for is a reform of the system, including sometimes some of the monarchy’s authority. And I think that in places in Jordan, which does enjoy time [sic], that this time will be a serious reform process. Jordan has taken some moves towards opening up the system and the hope that they will continue with such moves. I think a measure of seriousness that people are looking for, not just in Jordan, but across the Arab world, is a process that leads to power sharing and stronger legislative and judicial bodies. A process in other words that would dilute the dominant executive power that exists in the Arab world.
Some obvious issues with what Mausher is saying: Of course the Palestinian intifadas were popular struggles to change things, but they are omitted here. And of course he has been in the Jordanian regime and is clearly sympathetic to it.
[originally published on Washington Stakeout on June 6, 2011; posted on posthaven Nov. 13, 2015]
Stakeout was blessed with lots of great questions for Austan Goolsbee, chairman of Obama’s Council of Economic Advisers and a member of the cabinet. We also found this priceless tidbit from an interview he did with Colbert on June 15, 2009: “A year from now we’re going to be in a very happy place.” Colbert: “Really?” Goolsebee: “Yes.” [see video at 1:40]
Apparently no one has pointed it out since right after the interview took place, not even Colbert — even though Goolsbee has been back on Colbert’s show twice (Oct 13, 2010 and May 18, 2011). In the most recent interview, in the full web version, Goolsbee can’t get himself to object to Colbert’s repeated comment that the “government has never created a single job.”
Unfortunately, Goolsbee didn’t stop for questions from us or any of the other media assembled at the stakeout.
Among the insightful questions we got in the wake of the awful Friday unemployment numbers:
Dean Baker:”How high the unemployment rate would have to rise before they start talking about stimulus again?”
Thomas Ferguson: “Why doesn’t the administration nominate people for regulatory vacancies? — Or whether he think cuts in Social Security have any justification given that the Trustees Report concedes the program is stable through 2036.”
It is remarkable that the response to the Great Depression was to create Social Security, while the Great Recession is being used as a pretext by some to slash Social Security.
Richard Wolff: “Why no federal jobs program financed by taxes on the rich in the manner of FDR 1934-1940 — is it just because the dependence of Democrats and Obama on financing from those who would be taxed? … Or, more provocatively: so is it then the case that only because there is now no CIO or Communist or Socialist party making gains and growing that you dont see any need to do other than pander to the corporations wanting less taxes rather tha helping the mass of people as FDR did?”
I think Wolff’s last point is critical and frequently overlooked by lots of people who have been calling on and off the last two years plus for a “new New Deal” — the New Deal didn’t happen because people asked for it; it happened because the establishment was terrified of far more radical change.
Timothy Canova: “Why rely on the private sector to lead the recovery? Is this a political assessment that the Republican House will not go along wtih any public sector initiative? President Obama was saying much the same as Goolsbee even before the Republicans took control of the House last November. Obama and Goolsbee have both said that it’s the private sector that must be the engine of job creation. Why no public sector jobs programs? We’re heading into forest fire season and there’s no Civilian Conservation Corp (CCC). Like millions of Americans, Ronald Reagan’s father survived the Great Depression working for the Works Project Administration. Even during the Carter administration, hundreds of thousands of Americans were employed in major jobs training programs. With more than twenty million Americans either officially unemployed, underemployed, or discouraged, and many more millions of consumers under water on their mortgages, how can we expect the private sector to lead the recovery? U.S. businesses are sitting on more than $2 trillion in earnings with insufficient incentives to invest given labor market conditions.”
[originally published on Washington Stakeout on June 6, 2011; posted on posthaven Nov. 13, 2015]
Manal Al Sharif: “I would like to thank our leaders, on top of whom is the Custodian of the two Holy Mosques (King Abdullah) for their instructions to release me,” she said in comments carried by the London-based Saudi daily Alhayat.
“As for driving by women in Saudi Arabia, I will now leave this issue to our leaders who are more aware and better acquainted of its advantages and disadvantages…on this occasion, I would like to say that I will always be the Moslem Saudi woman who is keen to serve her country and satisfy her Lord.”
Not that I'm one to fuss over every utterance by Martin Indyk, but this morning, my colleague Hollie Ainbinder told me that Indyk on NPR on Sunday made some interesting remarks that touched on the farcical nature of the alleged Obama-Netanyahu standoff. So I check the "transcript" and didn't really find anything like that. But then I listened to the audio, and there were some such remarks.
The "transcript" provided on the NPR web page begins with Indyk saying "I think that there is the big hanging question of once you've laid this out, what is the next step?" But before that, this occurs (thanks to intern Sam McCann for transcribing):
LIANE HANSEN: What do you think the president is trying to accomplish in setting those terms?
MARTIN INDYK: Well in that clip you just played in part of his speech, he kind of made clear that he doesn’t expect there’s going to be any negotiations anytime soon. In fact the effort to re-launch negotiations, which he’s been pursuing for the last two years, has failed. Instead what’s coming down the track is a unilateral effort by the Palestinians to get the UN General Assembly to recognize a Palestinian state and welcome it into the United Nations and I think the President is much more focused on short-term damage control and longer-term laying down a place marker about what the Palestinian state will need to look like. In the short term, Netanyahu’s fairly extreme reaction has actually helped, I think, in his tactic, which is to show the Europeans that the United States is serious and that they should get behind the United States’ effort rather than the UN General Assembly effort.
LIANE HANSEN: How effective will that strategy be do you think?
MARTIN INDYK: Well, we’ll have to see but the great irony of this situation is that the more that Bibi protests, the more credible the President looks to his European allies, where he’s going later today, when he says to them, ‘Come on, get behind me and let’s see if we can move things forward instead of going down the UN General Assembly which is the exact opposite of negotiations, it’s unilateral actions, which will only put the United States and the Europeans, the British and French, in a very difficult position because it will end up in the Security Council. And the President, in the context of this Arab Awakening which he’s just spoken about in the other part of the speech, the main part of the speech, does not want to be in a situation in which, come September, he has to veto a UN Security Council resolution declaring a Palestinian State because that will put him on completely the wrong side of Arab opinion.
Now, this isn't a matter of missing a word of two, and I don't know how common it is, but that's rather problematic. An even bigger problem is that I'm not sure there's any record, either on the web in audio or in transcript form of the "audio headlines" NPR gives. They are frequently the most bias part of programming and, if I'm correct, there's a real accountability problem with them.
