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By Robert Reich
Former U.S. Secretary of Labor, Professor at Berkeley

As global capital becomes ever more powerful, giant corporations are holding governments and citizens up for ransom — eliciting subsidies and tax breaks from countries concerned about their nation’s “competitiveness” — while sheltering their profits in the lowest-tax jurisdictions they can find. Major advanced countries — and their citizens — need a comprehensive tax agreement that won’t allow global corporations to get away with this.

Google, Amazon, Starbucks, every other major corporation, and every big Wall Street bank, are sheltering as much of their U.S. profits abroad as they can, while telling Washington that lower corporate taxes are necessary in order to keep the U.S. “competitive.”

Baloney. The fact is, global corporations have no allegiance to any country; their only objective is to make as much money as possible — and play off one country against another to keep their taxes down and subsidies up, thereby shifting more of the tax burden to ordinary people whose wages are already shrinking because companies are playing workers off against each other.

I’m in London for a few days, and all the talk here is about how Goldman Sachs just negotiated a sweetheart deal to settle a tax dispute with the British government; Google is manipulating its British sales to pay almost no taxes here by using its low-tax Ireland subsidiary (the chair of the Parliamentary committee investigating this has just called the do-no-evil firm “devious, calculating, and unethical”); Amazon has been found to route its British sales through a subsidiary in low-tax Luxembourg, and now receives more in subsidies from the British government than it pays here in taxes; Starbucks’ tax-avoidance strategy was so blatant British consumers began boycotting the firm until it reversed course.  (more…)

By Robert Reich
Former U.S. Secretary of Labor, Professor at Berkeley

Many of you soon-to-be college graduates are determined to make the world a better place. Some of you are choosing careers in public service or joining nonprofits or volunteering in your communities.

But many of you are cynical about politics. You see the system as inherently corrupt. You doubt real progress is possible.

“What chance do we have against the Koch brothers and the other billionaires?” you’ve asked me. “How can we fight against Monsanto, Boeing, JP Morgan, and Bank of America? They buy elections. They run America.”

Let me remind you: Cynicism is a self-fulfilling prophesy. You have no chance if you assume you have no chance.

“But it was different when you graduated,” you say. “The sixties were a time of social progress.”

You don’t know your history.

When I graduated in 1968, the Vietnam War was raging. Over half a million American troops were already there. I didn’t know if I’d be drafted. A member of my class who spoke at commencement said he was heading to Canada and urged us to join him.

Two months before, Martin Luther King Jr. had been assassinated. America’s cities were burning. Bobby Kennedy had just been gunned down.

George (“segregation forever”) Wallace was on his way to garnering 10 million votes and carrying five southern states. Richard Nixon was well on his way to becoming president.

America was still mired in bigotry.

I remember a classmate who was dating a black girl being spit on in a movie theater. The Supreme Court had only the year before struck down state laws against interracial marriage.

My entire graduating class of almost 800 contained only six young black men and four Hispanics.

I remember the girlfriend of another classmate almost dying from a back-alley abortion, because safe abortions were almost impossible to get. (more…)

By Robert Reich
Former U.S. Secretary of Labor, Professor at Berkeley

The West, Texas chemical and fertilizer plant where at least 15 were killed and more than 200 injured a few weeks ago hadn’t been fully inspected by the Occupational Safety and Health Administration since 1985. (A partial inspection in 2011 had resulted in $5,250 in fines.)

OSHA and its state partners have a total of 2,200 inspectors charged with ensuring the safety of over more than 8 million workplaces employing 130 million workers. That comes to about one inspector for every 59,000 American workers.

There’s no way it can do its job with so few resources, but OSHA has been systematically hollowed out for the years under Republican administrations and congresses that have despised the agency since its inception.

In effect, much of our nation’s worker safety laws and rules have been quietly repealed because there aren’t enough inspectors to enforce them. That’s been the Republican strategy in general: When they can’t directly repeal laws they don’t like, they repeal them indirectly by hollowing them out — denying funds to fully implement them, and reducing funds to enforce them.

Consider taxes. Republicans have been unable to round up enough votes to cut taxes on big corporations and the wealthy as much as they’d like, so what do they do? They’re hollowing out the IRS. As they cut its enforcement budget – presto! — tax collections decline.

Despite an increasing number of billionaires and multi-millionaires using every tax dodge imaginable – laundering their money through phantom corporations and tax havens (Remember Mitt’s tax returns?) — the IRS’s budget has been cut by 17 percent since 2002, adjusted for inflation.

To manage the $594.5 million in additional cuts required by the sequester, the agency has announced it will furlough each of its more than 89,000 employees for at least five days this year. (more…)

By Robert Reich
Former U.S. Secretary of Labor, Professor at Berkeley

The Fed’s policy of keeping interest rates near zero is another form of trickle-down economics.

For evidence, look no further than Apple’s decision to borrow a whopping $17 billion and turn it over to its investors in the form of dividends and stock buy-backs.

Apple is already sitting on $145 billion. But with interest rates so low, it’s cheaper to borrow. This also lets Apple avoid U.S. taxes on its cash horde socked away overseas where taxes are lower.

Other big companies are doing much the same on a smaller scale.

Who gains from all this? The richest 10 percent of Americans who own 90 percent of all shares of stock.

But little or nothing is trickling down. The average American can’t borrow at nearly the low rates Apple or any other big company can. Most Americans no longer have a credit rating that allows them to borrow much of anything.

It would be one thing if Apple and other giant companies were borrowing in order to expand operations and create new jobs. But that’s not what’s going on. Apple, remember, is still sitting on $145 billion. (more…)

By Robert Reich
Former U.S. Secretary of Labor, Professor at Berkeley

In the election of 1952 my father voted for Dwight Eisenhower. When I asked him why he explained that “FDR’s debt” was still burdening the economy — and that I and my children and my grandchildren would be paying it down for as long as we lived.

I was only six years old and had no idea what a “debt” was, let alone FDR’s. But I had nightmares about it for weeks.

Yet as the years went by my father stopped talking about “FDR’s debt,” and since I was old enough to know something about economics I never worried about it. My children have never once mentioned FDR’s debt. My four-year-old grandchild hasn’t uttered a single word about it.

By the end of World War II, the national debt was 120 percent of the entire economy. But by the mid-1950s, it was half that.

Why did it shrink? Not because the nation stopped spending. We had a Korean War, a Cold War, we rebuilt Germany and Japan, sent our GI’s to college and helped them buy homes, expanded education at all levels, and began constructing the largest public-works program in the nation’s history — the interstate highway system.

“FDR’s debt” shrank in proportion to the national economy because the national economy grew so fast.

I was reminded of this by the recent commotion over an error in a research paper by Carmen Reinhart and Kenneth Rogoff.

The two Harvard economists had analyzed a huge amount of data from the United States and other advanced economies linking levels of public debt to economic growth. They concluded that growth turns negative (that is, economies tend to collapse into recession) when public debt rises above 90 percent of GDP.

That finding, in turn, fueled austerics, who insisted that the budget deficit (and debt) had to be cut in order to revive economic growth. (more…)

By Robert Reich
Former U.S. Secretary of Labor, Professor at Berkeley

The xenophobia has already begun.

Senator Rand Paul (R-Ky.) in a letter to Senate Majority Leader Harry Reid today urged him to reconsider immigration legislation because of the bombings in Boston. “The facts emerging in the Boston Marathon bombing have exposed a weakness in our current system,” Paul writes. “If we don’t use this debate as an opportunity to fix flaws in our current system, flaws made even more evident last week, then we will not be doing our jobs.”

Senator Chuck Grassley (R-Iowa), senior Republican senator on the Senate Judiciary Committee, which is responsible for an immigration reform bill, is using much the same language — suggesting that the investigation of two alleged Boston attackers will “help shed light on the weaknesses of our system.”

Can we just get a grip? Dzhokhar Tsarnaev is a naturalized American citizen. He came to the United States when he was nine years old. He attended the public schools of Cambridge, Massachusetts, not far from where I lived.

Immigration reform is not about national security, in any event. It’s about doing what’s right, and giving the estimated 11 million undocumented immigrants in America — many of them here for years, working at jobs and paying withholding taxes, and many of them children — a path to citizenship.

It’s about making sure they aren’t exploited by employers and others who know they won’t complain to authorities. And giving their families the security of knowing that they can live peacefully and securely without fearing deportation. (more…)

By Robert Reich
Former U.S. Secretary of Labor, Professor at Berkeley

So far, the much-dreaded “sequester” — some $85 billion in federal spending cuts between March and September 30 — hasn’t been evident to most Americans.

The dire warnings that had issued from the White House beforehand — threatening that Social Security checks would be delayed, airport security checks would be clogged, and other federal facilities closed — seem to have been overblown.

Sure, March’s employment report was a big disappointment. But it’s hard to see any direct connection between those poor job numbers and the sequester. The government has been shedding jobs for years. Most of the losses in March were from the Postal Service.

Take a closer look, though, and Americans are starting to feel the pain. They just don’t know it yet.

That’s because so much of what the government does affects the nation in local, decentralized ways. Federal funds find their way to community housing authorities, state unemployment offices, local school districts, private universities, and companies. So it’s hard for most Americans to know the sequester is responsible for the lost funding, lost jobs, or just plain inconvenience.

A tiny sampling: Brandeis University in Waltham, Massachusetts, is bracing for a cut of about $51 million in its $685 million of annual federal research grants and contracts. The public schools of Syracuse, New York, will lose over $1 million. The housing authority of Joliet, Illinois, will take a hit of nearly $900,000. Northrop Grumman Information Systems just issued layoff notices to 26 employees at its plant in Lawton, Oklahoma. Unemployment benefits are being cut in Pennsylvania and Utah.

The cuts — and thousands like them — are so particular and localized they don’t feel as if they’re the result of a change in national policy. (more…)

By Robert Reich
Former U.S. Secretary of Labor, Professor at Berkeley

Their agreement on is very preliminary and hasn’t yet even been blessed by the so-called Gang of Eight senators working on immigration reform, but the mere fact that AFL-CIO President Richard Trumka and Chamber of Commerce President Thomas J. Donohue agreed on anything is remarkable.

The question is whether it’s a good deal for American workers. It is, and I’ll explain why in a moment.

Under the agreement (arrived at last weekend) a limited number of temporary visas would be issued to foreign workers in low-skilled occupations, who could thereafter petition to become American citizens.

The agreement is an important step toward a comprehensive immigration reform package to be introduced in the Senate later this month. Disagreement over allowing in low-skilled workers helped derail immigration reform in 2007.

The unions don’t want foreign workers to take jobs away from Americans or depress American wages, while business groups obviously want the lowest-priced workers they can get their hands on.

So they’ve compromised on a maximum (no more than 20,000 visas in the first year, gradually increasing to no more than 200,000 in the fifth and subsequent years), with the actual number in any year depending on labor market conditions, as determined by the government. Priority would be given to occupations where American workers were in short supply.

The foreign workers would have to receive wages at least as high as the typical (“prevailing”) American wage in that occupation, or as high as the prospective employer pays his American workers with similar experience — whichever is higher.

The unions hope these safeguards will prevent American workers from losing ground to foreign guest-workers. (more…)

By Robert Reich
Former U.S. Secretary of Labor, Professor at Berkeley

Who says American politics is gridlocked? A tidal wave of politicians from both sides of the aisle who just a few years ago opposed same-sex marriage are now coming around to support it. Even if the Supreme Court were decide to do nothing about California’s Proposition 8 or DOMA, it would seem only matter of time before both were repealed.

A significant number of elected officials who had been against allowing undocumented immigrants to become American citizens is now talking about “charting a path” for them; a bipartisan group of senators is expected to present a draft bill April 8.

Even a few who were staunch gun advocates are now sounding more reasonable about background checks.

It’s nice to think logic and reason are finally catching up with our elected representatives, but the real explanation for these changes of heart is more prosaic: public opinion.

The latest ABC News/Washington Post poll finds support for marriage equality at the highest in the ten years the question has been asked, with 58 percent of Americans in favor and 36 percent opposed.

A similar swing has occurred in favor of immigration reform. A new Pew survey finds that seven in 10 Americans (71 percent) say there should be a way for people in the United States illegally to remain in this country if they meet certain requirements, while 27 percent say they should not be allowed to stay legally. And most who favor providing illegal immigrants with some form of legal status — 43 percent of the public — say they should be allowed to apply for citizenship.

Support for gun control is less clear-cut, which may explain why Senate Majority Leader Harry Reid won’t seek a renewal of the assault-weapon ban. But polls show broad support for universal background checks, and for closing the so-called gun-show loophole.

It’s possible that public opinion is being influenced by courageous political leaders who are urging action on these issues, but the reverse is more likely. Most politicians have a keen sense for tipping points in public opinion, when, say, support for equal marriage rights or immigration reform becomes broad-based, and advocates become sufficiently organized and mobilized to make life hell for officials who won’t change their minds.

The exception is in the economic sphere, where public opinion seems beside the point.

Before January’s fiscal cliff deal, for example, at least 60 percent of Americans, in poll after poll, expressed strong support for raising taxes on incomes over $250,000. As you recall, though, the deal locked in the Bush tax cut for everyone earning up to $400,000.

Yes, legislative deals require compromise. But why is it that deals over economic policy almost always compromise away what a majority of Americans want?

Most Americans weren’t particularly concerned about the budget deficit to begin with. They’ve been far more concerned about jobs and wages. Yet maneuvers over the deficit have consistently trumped jobs and wages.

Recent polls show Americans would rather reduce the deficit by raising taxes than by cutting Medicare, Medicaid, Social Security, education, and transportation. Yet Congress seems incapable of making that kind of deal. (more…)

By Robert Reich
Former U.S. Secretary of Labor, Professor at Berkeley

We’re still legislating and regulating private morality, while at the same time ignoring the much larger crisis of public morality in America.

In recent weeks Republican state legislators have decided to thwart the Supreme Court’s 1973 decision in Roe v. Wade, which gave women the right to have an abortion until the fetus is viable outside the womb, usually around 24 weeks into pregnancy.

Legislators in North Dakota passed a bill banning abortions after six weeks or after a fetal heart beat had been detected, and approved a fall referendum that would ban all abortions by defining human life as beginning with conception. Lawmakers in Arkansas have banned abortions within twelve weeks of conception.

The morality brigade worries about fetuses, but not what happens to children after they’re born. They and other conservatives have been cutting funding for child nutrition, healthcare for infants and their mothers, and schools.

The new House Republican budget gets a big chunk of its savings from programs designed to help poor kids. The budget sequester already in effect takes aim at programs like Head Start, designed to improve the life chances of poor kids.

Meanwhile, the morality brigade continues to battle same-sex marriage.

Despite the Supreme Court’s willingness to consider the constitutionality of California’s ban, no one should assume a majority of the justices will strike it down. The Court could just as easily decide the issue is up to the states, or strike down California’s law while allowing other states to continue their bans.

Conservative moralists don’t want women to have control over their bodies or same-sex couples to marry, but they don’t give a hoot about billionaires taking over our democracy for personal gain or big bankers taking over our economy.

Yet these violations of public morality are far more dangerous to our society because they undermine the public trust that’s essential to both our democracy and economy.

Three years ago, at the behest of a right-wing group called “Citizens United,” the Supreme Court opened the floodgates to big money in politics by deciding corporations were “people” under the First Amendment. (more…)