Blog

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

Washington was built on a swamp. In the summer, temperatures can reach over 100 degrees — as they did over the last few days when I made the rounds of Washington Democrats, repeatedly asking why no bold jobs plan is emerging.

Here’s a sample of their responses:

“Dead in the water. We’ll be lucky if we get votes to raise the debt ceiling without major spending cuts this year and next.”

“Are you kidding? It’s all budget deficit, budget deficit, budget deficit. Nobody’s thinking about anything else.” (more…)

Robert Reich

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

“I am concerned about the fact that the recovery that we’re on is not producing jobs as fast as I want it to happen,” President Obama said Tuesday, amid the flood of bad economic news, including last Friday’s alarming jobs report.

Does this mean we’re about to see a bold package of ideas from the White House for spurring growth of jobs and wages? Sadly, it doesn’t seem so.

Obama says he’s interested in exploring with Republicans extending some of the measures that were part of that tax-cut package “to make sure that we get this recovery up and running in a robust way.” (more…)

Robert Reich

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

The silence is deafening. While the rest of the nation is heading back toward a double-dip, Washington continues to obsess about future budget deficits. Why?

Republicans don’t want to do anything about jobs and wages. They’re so intent on unseating Obama they’d like the economy to remain in the dumps through Election Day. They also see the lousy economy as an opportunity to sell Americans their big lie that government spending is the culprit — and jobs will return if spending is cut and government shrinks. (more…)

Robert Reich

Robert Reich
Chancellor’s Professor of Public Policy,
University of California at Berkeley; Author, ‘Aftershock’

Finally, it seems, the economic burdens of America’s vast middle class may be catching up with the Street. The Dow lost 2.22 percent Wednesday; the Standard & Poor’s 500-stock index was down 2.28 percent. Both marked their worst declines since August 11, 2010. The Nasdaq composite index fell 2.33 percent.

We’re coming full circle: The stock market is dropping because corporate earnings are slowing. Corporate earnings are slowing because consumers are pulling back. Consumers are pulling back because they don’t have enough jobs or adequate wages. (more…)

Robert Reich

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

The U.S. economy continues to stagnate. It’s growing at the rate of 1.8 percent, which is barely growing at all. Consumer spending is down. Home prices are down. Jobs and wages are going nowhere.

It’s vital that we understand the truth about the American economy.

How did we go from the Great Depression to 30 years of Great Prosperity? And from there, to 30 years of stagnant incomes and widening inequality, culminating in the Great Recession? And from the Great Recession into such an anemic recovery? (more…)

Robert Reich

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

Forty Senate Republicans have now joined their colleagues in the House to support Paul Ryan’s plan that would turn Medicare into vouchers that funnel money to private health insurers. They thumbed their nose at the special election in upstate New York earlier this week that delivered a victory to Democrat Kathy Hochul, who made the plan the focus of her upset victory.

So now it’s official. The 2012 campaign will be about the future of Medicare. (Yes, it will also be about jobs, but the Republicans haven’t come up with any credible ideas on that front, and the Democrats seem incapable of doing what needs to be done.)

This spells trouble for the GOP. Polls show an overwhelming majority of Americans — even a majority of Republican voters — want to preserve Medicare. They don’t want to turn it over to private insurers. (more…)

Robert Reich

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

President Obama is mulling an executive order to force big government contractors to disclose details of their political spending. Big businesses are already telling their political patrons in Congress to oppose it — and the pressure is building.

The president should issue the executive order immediately. And he should go even further by banning all political activity by companies receiving more than half their revenues from the U.S. government.

Lockheed Martin, the nation’s largest contractor, has already got more than $19 billion in federal contracts so far this year. But we know very little about Lockheed Martin’s political spending other than its Political Action Committee contributions. We don’t know how much money it gives to the Aerospace Industries Association to lobby for a bigger defense budget.

We don’t even know how much Lockheed is giving the U.S. Chamber of Commerce to lobby against Obama’s proposed executive order requiring disclosure of its political activities. (more…)

Robert Reich

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

Technically, the federal government has now reached the limit of its capacity to borrow money.

Raising the debt ceiling used to be a technical adjustment, made almost automatically. Now it’s a political football.

Democrats should never have agreed to linking it to an agreement on the long-term budget deficit.

But now that the debt ceiling is in play, there’s no end to what the radical right will demand. John Boehner is already using the classic “they’re making me” move, seemingly helpless in the face of Tea Party storm troopers who refuse to raise the ceiling unless they get their way. Their way is reactionary and regressive — eviscerating Medicare, cutting Medicaid and programs for the poor, slashing education and infrastructure, and using most of the savings to reduce taxes on the rich. (more…)

Robert Reich

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

The real battle for the soul of the GOP started Monday with a speech on Wall Street by Speaker of the House John Boehner.

Wall Street and big business fear Tea Partiers won’t allow House Republicans to raise the debt ceiling without major spending cuts — and without tax increases on the wealthy. Wall Street and big business know this would be unacceptable to the White House and congressional Democrats.

The Street and big business want to tame the budget deficit but they don’t want to play games with the debt ceiling. Credit markets are fine at the moment, but if the debt ceiling isn’t not raised within the month — weeks before August 2, when the Treasury predicts the nation will run out of money to pay its creditors and its other bills — credit markets could go into free fall. The full faith and credit of the United States would be jeopardized. Interest rates would skyrocket. The dollar could plummet.

The Tea Partiers don’t care about the debt ceiling. To them, it’s a giant bargaining chit to shrink government. Nor do they worry about credit markets. If the full faith and credit of the U.S. government is no longer honored, so much the better. (more…)