The System: Who Rigged It? How We Fix It

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The System – Who Rigged It, How We Fix It by Robert B. Reich, Picador, 2020.


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/////// Quoting Reich (2020, p. 6):

If you want to understand where the system is now and what you might do to help move it in a more humane direction, you will need to look beneath its surface and reassess many of your assumptions.

• First, forget politics as you’ve come to see it, as electoral contests between Democrates and Republicans. Think power. The underlying contest is between a small minority who have gained power over the system and the vast majority who have little or none.

• Don’t assume that a U.S. president or any other head of state unilaterally makes big decisions. Look at the people who enable and encourage those decisions, and whose interests those decisions serve.

• Forget what you may have learned about the choice between the “free market” and government. A market cannot exist without a government to organize and enforce it. The important question is whom the market has been organized to serve.

• Forget the standard economic goals of higher growth and greater efficiency. The issue is who benefits from more growth and efficiency.

• Don’t be dazzled by “corporate social responsibility.” Most of it is public relations. Corporations won’t voluntarily sacrifice shareholder returns unless laws require them to do so. Even then, be skeptical of laws unless they’re enforced and backed by big penalties. Large corporations and the super-rich ignore laws when the penalties for violating them are small relative to the gains for breaking them. Fines are then simply a very manageable cost of doing business.

• Don’t assume that we’re locked in a battle between capitalism and socialism. We already have socialism – for the very rich. Most Americans are subject to harsh capitalism.

• Don’t define “national competitiveness” as the profitability of large American corporations. Those corporations are now global, with no allegiance to America. Real national competitiveness lies in the productivity of the American people – which depends on their education, health, and the infrastructure that links them together.

• You can also forget the ups and downs of the business cycle. Focus instead on systemic changes that have caused the wealth and power of a few to dramatically increase during the last forty years at the expense of the many.

• Forget the old idea that corporations succeed by becoming better, cheaper, or faster than their competitors. They now succeed mainly by increasing their monopoly power.

• Forget any traditional definition of finance. Think instead of a giant gambling casino in which bets are made on large flows of money, and bets are made on those bets (called derivatives). The biggest winners are those who have better inside information than anyone else.

• Don’t confuse attractive policy proposals with changes in the system as a whole. Even if enacted, such proposals at most mitigate systemic problems. Solving those systemic problems requires altering the allocation of power.

• Don’t assume the system is stable. It moves through vicious spirals and virtuous cycles. We are now in a vicious spiral. The challenge is to make it virtuous.

• Don’t believe the system is a meritocracy in which ability and hard work are necessarily rewarded. Today the most important predictor of someone’s future income and wealth is the income and wealth of the family they’re born into.

• Don’t separate race from class. Racial discrimination is aggravating such divides, and wider inequality is worsening racial divides.

• Think systemically. Most people’s incomes haven’t risen for four decades and they are becoming less economically secure.

• Meanwhile, climate change is intensifying competition for arable land and potable water around the world, generating larger flows of refugees and immigrants. Together these facts allow demagogues to fuel bigotry by blaming immigrants for the stagnant incomes and economic insecurity.

• Most important, you will need to understand the nature of power – who possesses it and why, how it is wielded, and for what purposes. Power is the ability to direct or influence the behavior of others. On a large scale, power is the capacity to set the public agenda – to frame big choices, to influence legislators, and to get laws enacted or prevent them from being enacted, to assert one’s will in the world.

• Power has been leached out of conventional discussions about what is occurring. Power doesn’t show up in standard economic texts, finance courses, or even political science and law. But you cannot comprehend today’s system without confronting power head on. It is the most important subterranean force.

• Power is exercised through institutions – big Wall Street banks, global corporations, the executive and legislative branches of government, the Federal reserve and the Supreme Court, the military, elite universities, and the media (including social media as organized by Big Tech).

• But these institutions don’t wield power on their own. Particular people have outsized influence over them. They include CEOs like Jamie Dimon, large investors, hedge fund and private equity managers, media moguls, key lobbying groups like the Business Roundtable, and major donors to political candidates and universities. As Greta Thunberg observes, “If everyone is guilty then no one is to blame. And someone is to blame. Some people – some companies and some decision-makers in particular – have known exactly what priceless values they are sacrificing to continue making unimaginable amounts of money.”

• To comprehend the nature of these decision makers’ influence over the system, you’ll need to understand the role of wealth. In the system we now have, power and wealth are inseparable. Great wealth flows from great power; great power depends on great wealth. Wealth and power has become one and the same.

• I don’t intend for these underlying realities to make you more cynical about the system or resigned to its intransigence. To the contrary, the first step to changing the system is to understand it. If we cannot comprehend the truth, we become entrapped in conventional falsehoods and false choices, unable to envision new possibilities. Seeing the system for what it is will empower you to join with others to change it for the better.

/////// End of Quote from (Reich, 2020)

/////// Quoting Reich (2020, p. 13):

Chapter 1 The Obsolescence of Right and Left

A half century ago when America had a large and growing middle class, those on the “left” wanted stronger social safety nets and more public investment in schools, roads, and research. Those on the “right” sought greater reliance on the free market. But as power and wealth have moved to the top, everyone else – whether on the old right or on the old left – has become disempowered and less secure. Today the great divide is not between left and right. It’s between democracy and oligarchy.

The word “oligarchy” comes from the Greek word oligarkhes, meaning “few to rule or command.” It refers to a government of and by a few exceedingly rich people or families who control the major institutions of society and therefore have power over other people’s lives. Oligarchs may try to hide their power behind those institutions, or justify their power with platitudes about the public good, or excuse their power through philanthropy and “corporate social responsibility.” But no one should be fooled. Oligarchs wield power for their own benefit.

Even a system that calls itself a democracy can become an oligarchy if power becomes concentrated in the hands of a corporate and financial elite. Their power and wealth increase over time as they make laws that favor themselves, manipulate financial markets to their advantage, and create or exploit economic monopolies that put even more wealth into their own pockets.

Modern-day Russia is an oligarchy. A handful of billionaires there control most major industries and dominate politics and the economy.

America has experienced oligarchy twice before. Many of the men who founded America were slaveholding white oligarchs. The nation did not have much of a middle class. Most whites were farmers, indentured servants, farmhands, traders, day laborers, and artisans. A fifth of the population was black, almost all of them slaves.

A century later a new oligarchy emerged, comprised of men who amassed fortunes through their railroad, steel, oil, and financial empires – men such as J. Pierpoint Morgan, John D. Rockefeller, Andrew Carnegie, Cornelius Vanderbilt, and Andrew Mellon. They ushered the nation into an industrial revolution that vastly expanded economic output. But they also corrupted government, brutally suppressed wages, generated unprecedented levels of inequality and urban poverty, shut down competitors, and made out like bandits – which is how they earned the sobriquet “robber barons.”

World War I and the Great Depression of the 1930s eroded most of the robber baron’s wealth, and with the elections of Franklin D. Roosevelt in 1932 and Democratic majorities in the House and Senate, their power was curtailed. For the next half century the gains from growth were more widely shared, and democracy became more responsive to the needs and aspirations of the average Americans. During these years America created the largest middle class the world has ever seen. There was still much to do – civil rights and voting rights for African Americans, wider economic opportunities for them and for women and Latinos, protection of the environment. Yet by almost every measure the nation was making progress.

Starting around 1980, a third American oligarchy emerged. Between 1980 and 2019, the share of the nation’s total household income going to the richest 1 percent more than doubled, while the earnings of the bottom 90 percent barely rose (all adjusted for inflation). CEO pay increased 940 percent, but the typical worker’s pay increased 12 percent. In the 1960s the typical CEO of a large American company earned about twenty times as much an the typical worker; by 2019, the CEO earned three hundred times as much.

Wealth inequality has exploded even faster. According to research by economists Emmanuel Saez and Gabriel Zucman, the share of total wealth held by the richest 0.1 percent – about 160,000 American households – went from less than 10 percent to 20 percent over the last four decades. They now own almost as much wealth as the bottom 90 percent of households combined. The entire bottom half of America now owns just 1.3 percent. The only other country with similarly high levels of wealth concentration is Russia.

All this has been accompanied by a dramatic increase in the political power off the super-wealthy and an equally dramatic decline in the political influence of everyone else. As I will show, the average American now has no effect on public policy. Big corporations, CEOs, and a handful of extremely rich people have more influence than any comparable group since the robber barons. Unlike income and wealth, power is a zero-sum game. The more of it there is at the top, the less there is everywhere else.

This power is related to a tsunami of big money into politics. In the election cycle of 2016, the richest one-hundredth of 1 percent of Americans – 24,949 extraordinarily wealthy people – accounted for a record-breaking 40 percent of all campaign contributions. By contrast, in 1980, the top 0.01 percent accounted for only 15 percent of all contributions.

In that same 2016 election cycle, corporations flooded the presidential, Senate, and House elections with $3.4 billion of donations. By contrast, labor unions contributed $213 million. Corporate lobbying has soared. The voices of average people have been drowned out. Meanwhile, and largely because of this vast power shift, taxes on the wealthy and on corporations have been slashed. Safety nets for the poor and middle class have begun to unravel. Public investments in education and infrastructure have waned. The “free market” has been taken over by crony capitalism, corporate bailouts, and corporate welfare. The American oligarchy is back, with a vengeance.

Not all wealthy people are culpable, of course. I am not advocating class warfare. The abuse has occurred at the nexus of wealth and power, where those with great wealth use it to gain power and then utilize that power to accumulate more wealth. This is how oligarchy destroys democracy. As oligarchs fill the coffers of political candidates and deploy platoons of lobbyists and public relations flaks, they buy off democracy. Oligarchs know that politicians won’t bite the hands that feed them. There will be no meaningful response to the failure of most people’s paychecks to rise, nor to climate change, rasism, or the soaring costss of health insurance, pharmaceuticals, college, and housing, because those are not the main concerns of the oligarchy.

As long as they control the purse strings, the oligarchs know there will be no substantial tax increases for them. Instead, their taxes will fall. There will be no antitrust enforcement to puncture the power of their giant corporations. Instead, their corporations will grow larger. There will be no meaningful constraint on Wall Street’s dangerous gambling addiction. the gambling will grow. There will be no limits to CEO pay, and Wall Street hedge fund and private equity managers will rake in billions of dollars more. Government will provide even more corporate subsidies, bailouts, and loan guarantees. It will continue to eliminate protections for consumers, workers, and the environment. It will become a government for, of, and by the oligarchy.

The biggest political divide in America today is not between Republicans and Democratss. It’s between democracy and oligarchy. Hearing and using the same old labels prevents most people from noticing they’re being shafted.

The propagandists and demagogues who protect the oligarchy (Donald Trump included) are pouring salt into the nation’s oldest wounds. They’re stoking racial resentments, describing human beings as illegal aliens, fueling hatred of immigrants, and spreading fears of communists and socialists. This strategy gives the oligarchs freer reign: It distracts Americans from how the oligarchy is looting the nation, buying off politicians, and silencing critics.

The way to overcome oligarchy is for the rest of us to join together and win America back. This will require a multiracial, multiethnic coalition of working-class, poor, and middle-class Americans fighting for democracy and against concentrated power and privilege, determined to rid politics of big money, end corporate welfare and crony capitalism, bust up monopolies, stop voter suppression, and strengthening the countervailing power of labor unions, employee-owned corporations, worker cooperatives, state and local banks, and grassroot politics.

This agenda is neither right or left. It is the bedrock for everything else America must do.


/////// End of Quote from (Reich, 2020)

/////// Quoting Reich (2020, p. 153):

Chapter 12 The Furies

In the fall of 2015, I visited Michigan, Wisconsin, Ohio, Pennsylvania, Kentucky, Missouri, and North Carolina. I was doing research on the changing nature of work in America. During my visits I spoke with many of the same people I had met twenty years before when I was secretary of labor, as well as with some of their grown children. I asked them about their jobs, their views about the economy, and their thoughts on a variety of public issues. What I was really seeking was their sense of the system as a whole and how they were faring in it.

What I heard surprised me. Twenty years before, they said they’d been working hard and were frustrated they weren’t doing better. Now they were angry – angry at their employers, the government, Wall Street; angry that they hadn’t been able to save for their retirement; angry that their children weren’t doing any better than they did at their age. They were angry at those at the top who they felt had rigged the system for their own benefit. Several of them had lost jobs, savings, or homes in the Great Recession following the financial crisis. By the time I spoke with them, most were back in jobs, but the jobs paid no more than they had two decades before in terms of purchasing power.

I heard them say “rigged system” so often that I began asking people what they meant by it. They spoke about the bailout of Wall Street, political payoffs, insider deals, CEO pay, and “crony capitalism.” These complaints came from people who identified themselves as Republicans, Democrats, and Independents. A few had joined the Tea Party. A few others had briefly been involved in the Occupy movement. Most of them didn’t consider themselves political. They were white, black, and Latino, from union households and non-union. The only characteristic they had in common apart from the states and regions were I found them was their position on the income ladder. All were middle class and below.

As I’ve noted, in 1964 almost two-thirds of Americans believed that the government was run for the benefit of all the people; by 2013, almost 80 percent believed the opposite – that the government was run by and for a few big interests. The erosion in public trust was particularly steep in the wake of the Wall Street bailout and the Great Recession. In 2006, 59 percent of Americans thought government corruption was widespread; by 2013, 79 percent did. In Rasmussen polls undertaken in the fall of 2014, 66 percent believed most members of Congress didn’t care what their constituents thought, and 51 percent said that even their own representative didn’t care what they thought.

The people I spoke with no longer felt they had a fair chance to make it. They were sure the game was rigged against them. Here again, national polls told much the same story. In 2001, a Gallup poll found that 77 percent of Americans were satisfied with opportunities to get ahead by working hard, and only 22 percent were dissatisfied. By 2014, only 54 percent were satisfied and 45 percent were dissatisfied. According to the Pew Research Center, the percentage of Americans who felt most people who want to get ahead can do so through hard work dropped by 13 points between 2000 and 2015.

With the 2016 political primaries looming, I asked people which candidates they found most attractive. At that time, the leaders of the Democratic Party favored Hillary Clinton to be their candidate, and the leaders of the Republican Party favored Jeb Bush to be theirs. Yet no one I spoke with mentioned either Clinton or Bush. They talked about Bernie Sanders and Donald Trump. When I asked why, they said Sanders or Trump would “shake things up” or “make the system work again” or “stop the corruption” or “end the rigging.”

In the following year, Sanders – a seventy-four-years-old Jew from Vermont who described himself as a democratic socialist and who wasn’t even a Democrat until the 2016 presidential primary – came within a whisker of beating Hillary Clinton in the Iowa caucus, routed her in the New Hampshire primary, garnered more than 47 percent of the caucus-goers in Nevada, and ended up with 46 percent of the pledged delegates from Democratic primaries and caucuses. Trump – a sixty-nine-year-old egomaniacal billionaire reality-TV star who had never held elective office or had anything to do with the Republican party and who lied compulsively about almost everything – won the Republican primaries and then went on to beat Clinton, one of the most experienced and well-connected politician in modern America (though he didn’t win the popular vote, and he had some help from the Kremlin).

Something very big had happened, and it wasn’t due to Sander’s magnetism or Trump’s likability. It was a rebellion against the establishment. Hillary Clinton and Jeb Bush had all the advantages – deep bases of funders, well-established networks of political insiders, experienced political advisers, all the name recognition you could want – but neither of them could credibly convince voters they weren’t part of the system. For decades the Clintons had built their family political enterprise on contributions from the ultra-rich. Between their campaigns and their foundations, the couple had raised, according to the Washington Post, $3 billion. The financial sector forked over $21 million to Clinton’s campaign, making it the largest source of her donations. Trump made the most of her establishment connections. He posed as an anti-establishment populist. It would prove to be one of the biggest cons of modern American history.

The standard economic indicators don’t reflect the economic insecurity most Americans continue to feel, nor the seeming arbitrariness and unfairness they continue to experience. The indicators don’t show the linkages many Americans still see between wealth and power, crony capitalism, stagnant real wages, soaring CEO pay, their own loss of status, and a billionaire class that has turned our democracy into an oligarchy. The standard measures don’t show what most Americans have caught on to, how wealth has translated into political power to rig the system with bank bailouts, corporate subsidies, special tax loopholes, shrunken unions, and increasing monopoly power, all of which have further pushed down wages and pulled up profits.

Much of the political establishment still denies what has occurred. They prefer to attribute Trump’s rise solely to racism. Racism did play a part. But to understand why racism (and its first cousin, xenophobia) had such a strong impact in 2016, especially on the voting of whites without college degrees, it’s important to see what drove the racism. After all, racism in America dates back long before the founding of the Republic, and even modern American politicians have had few compunctions about using racism to boost their standing. Richard Nixon’s “law and order” campaign on behalf of “the silent majority” was an appeal to racism. So was Ronald Reagan’s condemnation of “welfare queens,” and George H. W. Bush’s use of Willie Horton – a black convicted felon who while on a weekend furlough committed assault and rape – to whip up white fears that Bush’s opponent, Michael Dukakis, the governor of Massachusetts, where Horton had been incarcerated, would release other black convicts. Racism was also behind Bill Clinton’s promise to “end welfare as we know it” and to “crack down on crime.” All were illustrations of what Berkeley professor Haney López has called dog-whistle politics – the use of racially coded language to exploit the prejudices of white Americans.

What gave Trump’s racism – as well as his hateful xenophobia, misogyny, and jingoism – particular virulence was his capacity to channel the intensifying anger of the white working class into it. It is hardly the first time in history that a demagogue has used scapegoats to deflect public attention from the real causes of their distress. The white working-class people whom sociologist Arlie Hochschild documents in her 2018 book Strangers in Their Own Land, who live in a Tea Party stronghold around lake Charles, Louisiana, are not racist. Rather, they feel marginalized by flat or falling wages, rapid demographic change, and a liberal culture that mocks their faith and patriotism. The story she kept hearing from them, in one form or another, is similar to the story I kept hearing in 2015:

You are patiently standing in a long line for something called the American dream. You are white, Christian, of modest means, and getting along in years. You are male. There are people of color behind you, and in principle you wish them well. But you’ve waited long, worked hard, and the line is barely moving. Then you see people cutting in line ahead of you. Who are these interlopers? Some are black, others immigrants, refugees. They get affirmative action, sympathy, and welfare – checks for the listless and idle. The government wants you to feel sorry for them. The liberal media mocks you as racist or homophobic. Everywhere you look, you feel betrayed.

While Hochschild finds that “race is an essential part of this story,” the other essential parts are feelings of declining social status and betrayal. These have nothing to do with people of color. None of the people Hochschild meets are directly hurt by competition from blacks, Latinos, or immigrants. The root cause of their distress is unchecked corporate power that has squeezed all people of modest means. The residents of the community understand this. Harold Areno, a seventy-seven-year-old Cajun man from Bayou d’Inde, Louisiana, tells Hochschild:

The state always seems to come down on the little guy. Take this bayou. If your motorboat leaks a little gas into the water, the warden’ll write you up. But if companies leak thousands of gallons of it and kill all life here? The state lets them go. If you shoot an endangered brown pelican, they’ll put you in jail. But if a company kills the brown pelican by poisoning the fish he eats? They let it go. I think they overregulate the bottom because it’s harder to regulate the top.

In 2016 Trump galvanized millions of blue-collar voters living in communities that never recovered from the tidal wave of factory closings. He understood what resonated with these voters: He promised to bring back jobs, revive manufacturing, and get tough on trade and immigration. “We can’t continue to allow China to rape our country, and that’s what they’re doing,” he said at one rally. “In five, ten years from now, you’re going to have a workers’ party. A party of people that haven’t had a real wage increase in eighteen years, that are angry.” Speaking at a factory in Pennsylvania in June 2016, he decried politicians and financiers who had betrayed Americans by “taking away from the people their means of making a living and supporting their families.”

Worries about free trade used to be confined to the political left. But by 2016, according to the Pew Research Center, people who said free-trade deals were bad for America were more likely to be Republican. The problem wasn’t trade itself. It was a political-economic system that had failed to cushion working people against trade’s downsides or to share trade’s upsides – in other words, a system that was rigged against them. Big money was at the root of the rigging. This was the premise of Sanders’s 2016 campaign. It was also central to Trump’s appeal (“I’m so rich I can’t be bought off”), although once elected he delivered everything big money wanted. A 2016 Economist/YouGov poll found that 80 percent of GOP primary voters who preferred Donald Trump as the nominee listed money in politics as an important issue. According to Bloomberg Politics poll, a similar percentage of Republicans were opposed to the Supreme Court’s 2010 Citizens United v. FEC decision. Getting big money out of politics has become increasingly important to voters in both parties. A June 2016 New York Times/CBS News poll showed that 84 percent of Democrats and 81 percent of Republicans wanted to fundamentally change or completely rebuild our campaign finance system. A January 2016 Des Moines Register poll of likely Iowa caucus-goers found 91 percent of Republicans and 94 percent of Democrats unsatisfied or “mad as hell” about money in politics.

Trump also used explicitly racial and gendered rhetoric in 2016. But to conclude from this that racism and xenophobia caused Trump’s success misses the bigger picture. To quote three academics at the University of Massachusetts, Amherst, who did a detailed study of Trump voters, “In a campaign that was marked by exceptionally explicit rhetoric on race and gender, it is perhaps unsurprising to find that voters’ attitudes on race and sex was strongly associated with their vote choices.” More to the point, blue-collar voters didn’t see Hillary Clinton as their champion. As political analyst Ruy Teixeira and his coauthors put it in The American Prospect, “The Democrats allowed themselves to become the party of the status quo – a status quo perceived to be elitist, exclusionary, and disconnected from the entire range of working-class concerns, but particularly from those voters in white working-class areas. Rightly or wrongly, Hillary Clinton’s campaign exemplified a professional-class status quo that failed to rally enough working-class voters of color and failed to blunt the drift of white working-class voters to Republicans.” In 2016, Bernie Sanders did far better than Clinton with blue-collar voters. He did this by attacking trade agreements, Wall Street greed, income inequality, and big money in politics.

In other words, racism and xenophobia were proximate causes of Trump’s 2016 victory, and they continue to contribute to his support. But racism was not, and is not, the underlying cause. However much the oligarchy may want Americans to believe that racism was responsible for Trump, in fact it was anti-establishment fury.

Democrats had occupied the White House for sixteen of the twenty-four years before Trump’s election, and in that time they scored some important victories for working families – the Affordable Care Act, an expanded Earned Income Tax Credit, and the Family and Medical Leave Act, for example. I take pride in being part of a Democratic administration during that time. But Democrats did nothing to change the vicious cycle of wealth and power that rigged the economy for the benefit of those at the top and undermined the working class. In some respect, Democrats were complicit in it. As Democratic pollster Stanley Greenberg concluded after the 2016 election “Democrats don’t have a ‘white working-class’ problem. They have a ‘working class problem’ which progressives have been reluctant to address honestly or boldly. The fact is that Democrats have lost support with all working-class voters across the electorate.”

In the first two years of Bill Clinton’s and Barack Obama’s administrations. Democrats controlled both houses of Congress in addition to the presidency. Yet Clinton and Obama ardently pushed for free-trade agreements without providing millions of blue-collar workers who consequently lost their jobs and means of getting new ones that paid at least as well. Clinton pushed for NAFTA and for China joining the World Trade Orgagnization, and embraced a balanced budget. Obama sought to restore the confidence of investors in finacial markets instead of completely overhauling the banking system.

Both allowed antitrust enforcement to ossify, enabling large corporations to grow far larger and major industries to become more concentrated. Both stood by as corporations hammered trade unions, the backbone of the white working class. They failed to reform labor laws to allow workers to form unions with a simpe up-or-down majority vote, or even to impose meaningful penalties on companies that violated labor protections. Clinton deregulated Wall Street before the crash; Obama allowed the Street to water down attempts to re-regulate it after the crash. Obama protected Wall Street from the consequences of the Street’s gambling addiction through a giant taxpayer-funded bailout, but he allowed millions of underwater homeowners to drown. Both Clinton and Obama turned their backs on campaign finance reform. In 2008, Obama was the first presidential nominee since Richard Nixon to reject public financing in his primary and general election campaigns, and he never followed up on his reelection campaign promise to pursue a constitutional amendment overturning Citizens United v. FEC, the 2010 Supreme Court opinion opening wider the floodgates to big money in politics.

Why haven’t Democrats fought harder to reverse the powershift? Although Clinton and Obama faced increasingly hostile Republican congresses, they could have rallied the working class and built a coalition to grab back power from the emerging oligarchy. Yet they chose not to. Why not? My answer is not just hypothetical, because I directly witnessed much of it: It was because Clinton, Obama, and most congressional Democrats sought the vote of the suburban swing voters – so-called soccer moms in the 1990s and affluent politically independent professionals in the 2000s – who supposedly determine electoral outcomes, and turned their backs on the working class. They also drank from the same campaign funding trough as the Republicans – big corporations, Wall Street, and the very wealthy. “Business has to deal with us whether they like it or not, because we’re the majority,” crowed Democratic sentative Tony Coelho, head of the Democratic Congressional Campaign Committee in the 1980s, when Democrats assumed they’d continue to run the House for years. Coelho’s Democrats soon achieved a rough parity with Republicacns in contributions from corporate and Wall Street campaign coffers, but the deal proved to be a Faustian bargain: Democrats became financially dependent on big corporations and the Street.

Nothing in politics is ever final. Democrats could still win back the working class by putting together a huge coalition of the working class, middle class, and poor, of whites, blacks, and Latinos, of everyone who has been shafted by the shift on wealth and power to the top. This would give Democrats the political clout to get systemic reform, rather than merely enact palliative measures that paper over the increasing concentration of wealth and power in America. To do this, Democrats would have to stop obsessing over upper-income suburban swing voters and end their financial dependence on big corporations, Wall Street, and the wealthy. They would have to come down squarely on the side of democracy and against oligarchy. They would have to break with democratss like Jamie Dimon.

Decades ago, a general election was like a competition between two hot-dog vendors on a long boardwalk extending from the right to the left. Each had to move to the middle to maximize sales. If one strayed too far left or too far right, the other would move beside him and take all sales from the rest of the boardwalk. But this view of American politics is outdated. Nowadays, it’s the boardwalk versus the private jets on their way to the Hamptons. Forget left versus right. It’s democracy or oligarchy. The most powerful force in American politics today is anti-establishment fury at a rigged system. There’s either authoritarian populism (Trump) or democratic populism (represented in 2016 by Bernie’s “political revolution”). As Rahm Emanuel told The New York Times in July 2019, “This is really the crackup. Usually fights are Democrats versus Republicans, one end of Pennsylvania Avenue versus the other, or the left versus the right. Today’s squabbles are internal between the establishment versus the people that are storming the barricades.”

Democrats cannot defeat authoritarian populism without an agenda of radical democratic reform, a palpable anti-establishment movement. Trump harnessed the frustrations of working-class America. Even though he was a smokescreen for the emerging oligarchy – giving the oligarchy all it wanted in terms of tax cuts, regulatory rollbacks, and more wealth and power – he convinced much of the working class that he represented them. Unless Democrats stand squarely on the side of democracy against oligarchy, much of America will continue to believe him or any future politician who imitates Trump’s authoritarian demagoguery.


The challenge we face is large and complex, but I do want to remind you of how resilient America has been and how well situated we are for the fight ahead. The forces of greed and and hate would prefer that you give up fighting for a more just society because that way they win. We have no choice but to continue the fight. The American economy cannot be sustained if the richest 10 percent continue to reap almost all the economic gains while the poorest 90 percent are left behind. American democracy cannot be maintained if the voices of the vast majority continue to be ignored. Democracy will prevail, if we fight for it.

/////// End of Quote from (Reich, 2020)

/////// Quoting Reich (2020, p. 182):

Chapter 14 Why Democracy Will Prevail

If stagnant wages, near-record inequality, climate change, nuclear standoffs, assault weapons and mass killings, Russian trolls, kids locked in cages at our borders, and Donald Trump’s presidency don’t at least occationally cause you feelings of impending doom, you’re not human. But as bad as it looks right now, as despairing as you can sometimes feel, the great strength of this country is our resilience. We bounce back. We will again.

Not convinced? Come back in time with me to when I graduated college in 11968. That year, Martin Luther King Jr. and Robert F. Kennedy were assassinated. Our cities were burning. Tens of thousands of young Americans were being ordered to Vietnam to fight an unwinnable and unjust war, which ultimately claimed more than 58,000 American lives and the lives of more than 3 million Vietnamese. The nation was deeply divided. In November of that year, Richard Nixon was elected president. I recall thinking America would never recover. Somehow, though, we bounced back.

In subsequent years we enacted the Environmental Protection Act. We achieved marriage equality for gays and lesbians. We elected a black man to be president of the United States. We passed the Affordable Care Act.

Even now, it’s not as bleak as it sometimes seems. In 2018, a record number of women, people of color, and LGBTQ were elected to Congress, including the first Muslim women. Eighteen states raised their minimum wages. Surprising things are happening even in traditionally conservative states. In Tennessee, a Republican legislature has enacted free community college and raised taxes for infrastructure. Nevada has expanded voting rights and gun controls. New Mexico has increased spending by 11 percent and raised its minimum wage by 60 percent. Teachers have gone on strike in Virginia, Oklahoma, West Virginia, Kentucky, and North Carolina – and won. The public sided with the teachers.

In several states, after decades of tough-on-crime policies, conservative groups have joined with liberals to reform criminal justice systems. Early childhood education and alternative energy promotion have also expanded nationwide, largely on a bipartisan basis. In 2018, South Carolina passed a law giving pregnant workers and new mothers more protection in the workplace. The law emerged from an unlikely coalition – supporters of abortion rights and religious groups that oppose them. A similar alliance in Kentucky enacted laws requiring that employers provide reasonable accommodations for pregnant workers and new mothers.

The arc of American history reveals an unmistakable pattern. Whenever privilege and power conspire to pull us backward, we eventually rally and move forward. Sometimes it takes an economic shock like the bursting of a giant speculative bubble; sometimes we just reach a tipping point where the frustrations of average Americans turn into action. Look at the progressive reforms between 1900 and 1916; the New Deal of the 1930s; the civil rights struggle of the 1950s and 1960s; the widening opportunities for women, minorities, people with disabilities, and gays, starting in the 1960s and continuing, in fits and starts, to the present day; and the environmental reforms of the 1970s.

Now come forward in time with me. Look at the startling diversity of younger Americans. The majority of Americans now under eighteen years old are ethnically Latino, Asian or Pacific Islanders, African American, or bi- or multiracial. In ten years, it’s estimated that most Americans under thirty will be. That diversity will be a huge strength. It means, I hope, we will be more tolerant, less racist, less xenophobic.

Our young people are also determined to make America better. They voted in record numbers in the 2018 midterms. I’ve been teaching for almost forty years, and I’ve never taught a generation of students as dedicated to public service, as committed to improving the nation and the world, as is the generation I’m now teaching. That’s another sign of our future strength.

Meanwhile, the majority of college students today are women, which means that in future years even more women will be in leadership positions – in science, politics, education, nonprofits, and corporate suits. That will also be a great boon to America.

To state it another way, there is ample reason for hope. But hope is not enough. In order for real change to occur, the locus of power in the system will have to change.

We don’t lack for policy ideas – Medicare for All, a Green New Deal, better schools and opportunities for all our children, a tax on great wealth to pay for all this, and many others. Yet even the best policy ideas are meaningless without the power to implement them. Some policy victories can still be achieved within the system, and policy advocates must continue their hard work. But as wealth and power concentrate at the top, systemic change is becoming more urgent. Policy advocates have no hope of long-term success without the efforts of change insurgents who mobilize the public to protect democracy itself, and shift power from the oligarchy to the majority. It is not possible to respond to the nation’s or the world’s urgent problems without a fully functioning democracy, and democracy cannot be achieved unless power is reallocated.

This will not happen automatically or easily. A just society will not emerge simply because a few green shoots are visible or because demographics are on our side. History shows that whenever we have stalled or slipped, the nation’s forward movement has depended on the active engagement and commitment of vast numbers of Americans who are morally outraged by how far our economy and our democracy have strayed from our ideal and are committed to move beyond outrage to real reform.

Your outrage and your commitment are needed once again. Millions will need to be organized and energized, not just for a particular policy but to reclaim democracy so an abundance of good policies are possible. Americans must understand the system, where the status quo is most entrenched, and where change is most readily possible. They must also comprehend the corrosive relationship between great wealth and great power. If wealth continues to concentrate at the top, it will be impossible to contain the corrupting influence of big money. As Justice Louis D. Brandeis once said. “We can have democracy in this country or we can have great wealth concentrated in the hands of a few, but we can’t have both.”


/////// End of Quote from (Reich, 2020)

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