The Coffee Klatch with Robert Reich

Memo to President Biden (and the Democrats)From: Robert ReichRe: Inflation Prices were 8.5 percent higher last month than they were a year ago, the Bureau of Labor Statistics reported this morning — the highest rate of inflation since 1981. The buying power of Americans is being squeezed more and more each day. You must explain what’s happening and put responsibility where it belongs. As America slouches toward the midterm elections, you need an economic message that celebrates your accomplishments to date – job creation and higher wages –- yet also takes aim at the major abuses of economic power that are fueling inflation and widening inequality.You should put these ten indisputable facts centerstage:1. Corporate profits are at a 70-year high. Yet corporations are raising their prices.2. They are not raising prices because of the increasing costs of supplies and components and of labor -- which are real but expected when an economy goes suddenly from a pandemically-induced deep freeze to meeting the soaring demands of consumers who are emerging from the pandemic. Corporations enjoying record profits in a healthy competitive economy would absorb these costs.3. Instead, they’re passing these costs on to consumers in the form of higher prices. In many cases they’re raising prices higher than those cost increases, using the cover of inflation to increase their profit margins even more.4. They’re doing so because they face little or no competition. If markets were competitive, companies would keep their prices down to prevent competitors from grabbing away customers. As the White House National Economic Council put it in a December report: “Businesses that face meaningful competition can’t [maintain high profit margins and pass on higher costs to consumers], because they would lose business to a competitor that did not hike its margins.”5. Since the 1980s, two-thirds of all American industries have become more concentrated. This concentration gives corporations the power to raise prices because it makes it easy for them to informally coordinate price increases with the handful of other companies in their same industry — without risking the possibility of losing customers, who have no other choice.6. Corporations are using these near-record profits to boost share prices by buying back a record amount of their own shares of stock. (Buybacks reduce a company's shares outstanding, pushing its profit-per-share figure higher.) Stock buybacks hit a new record last year. So far this year they’re on track to exceed that record. In the first two months of 2022, S&P 500 companies have disclosed authorizations to buy back $238 billion in stock -- a record pace, according to Goldman Sachs, which expects $1 trillion of buybacks this year – an all-time high.Chevron engaged in $1.4 billion in stock buybacks and spent $500 million more on shareholder dividends than it did in 2020. This year, the oil giants are planning to buy back at least $22 billion more.7. Most American workers have barely had a wage increase in 40 years (adjusted for inflation). Although corporations have recently given out wage increases in response to the post-pandemic surge in demand, these wage increases have been almost completely eroded by price increases. We now know that wages grew 5.6 percent over the past year — but prices rose 8.5 percent. That means that, adjusted for inflation, wages have actually dropped 2.7 percent.Corporations are handing out wage increases to attract or keep workers with one hand, and then eliminating those wage increases by raising prices with the other. When corporations are enjoying near-record profits, we would expect corporations to pay the higher wages out of their profits rather than to pass them on to consumers in higher prices. But they are not. The labor market is not “unhealthily” tight, as Fed Chair Jerome Powell asserts; corporations are unhealthily fat. Workers do not have too much power; corporations do.8. As a result of all this, income and wealth are being redistributed upward from average working people (many of whom live from paycheck to paycheck) to CEOs and shareholders, including the wealthiest people in America. Billionaires have become $1.7 trillion richer during the pandemic. CEO pay (based largely on stock values) is now at a record 350 to 1 ratio relative to median pay.9. Wealthy Americas are now paying a lower tax rate than the working class. Some are paying no taxes at all.10. Big corporations have accumulated a substantial amount of political power, with which they’ve beaten back lower drug prices, prevented higher corporate taxes, and amassed unprecedented corporate welfare.In short, although the American economy is rebounding nicely from recession, the growing imbalance of economic power is bad for most Americans and for the economy as a whole. This must be addressed through (1) tougher antitrust enforcement, (2) a temporary windfall profits tax, (3) higher taxes on the wealthy and on corpora

We begin another gut-wrenching week watching Putin’s barbarity in Ukraine. The Russian people know little about it because Putin has blocked their access to the truth, substituting propaganda and lies. Years ago, pundits assumed the Internet would open a new era of democracy, giving everyone access to the truth. But dictators like Putin and demagogues like Trump have demonstrated how naïve that assumption was.At least America responded to Trump’s lies. Trump had 88 million Twitter followers before Twitter took him off its platform — just two days after the attack on the U.S. Capitol which he provoked, in part, with his tweets. (Trump’s social media accounts were also suspended on Facebook, YouTube, Instagram, Snapchat, Twitch, and TikTok.)Twitter’s move was necessary to protect American democracy. But Elon Musk – the richest man in the world, with 80 million Twitter followers – wasn’t pleased about it. Musk tweeted that U.S. tech companies shouldn’t be acting "as the de facto arbiter of free speech."I would have posted that tweet for you right here, if I had access to it. But ever since I posted a tweet two years ago criticizing Musk for how he treated his Tesla workers, he has blocked me — so I can’t view or reply to his tweets to his 80 million Twitter followers. Seems like an odd move for someone who describes himself as a “free speech absolutist.”Musk advocates free speech but in reality it’s just about power. It’s power that compelled Musk to buy $2.64 billion of Twitter stock, making him the largest shareholder, with a 9.2 percent stake in the company. Last week, Twitter announced that Musk will be joining the company’s board of directors. After the announcement, Musk promised "to make significant improvements" to the platform. (He even changed his investment designation to clarify that he’s not simply a "passive" investor but one who intends to impact the way the company is run.) Yesterday evening, though, it was announced that — contrary to last week’s announcement — Musk would not be joining Twitter’s board. No reason was given but this is typical for Musk. It’s likely part of a bargaining Kabuki dance. Musk wouldn’t have plopped down $2.64 billion for nothing. He probably wants more control. If he is not on Twitter’s board, Musk is not bound by the “standstill” agreement in which he pledged to buy no more than 14.9 percent of Twitter’s stock. Musk now has no restrictions on how much of Twitter’s stock he can buy. I predict he buys more and takes an even more active role trying to influence the platform.By the way, what “improvements” does Musk have in mind for Twitter? Would Musk pressure Twitter to let Trump back on? I fear he would. Musk has long advocated a libertarian vision of an “uncontrolled” Internet. That vision is dangerous rubbish. There’s no such animal, and won’t be. Someone has to decide on the algorithms in every platform — how they’re designed, how they evolve, what they reveal and what they hide. Musk has enough power and money to quietly give himself this sort of control over Twitter. He talks about freedom of speech but his real power is freedom of reach – reaching 80 million twitter followers without accountability to anyone (including critics like me) — and enough money to buy himself a seat on Twitter’s board. Musk has never believed that power comes with responsibility. He's been unperturbed when his tweets cause real suffering. During his long and storied history with Twitter he has threatened journalists and stolen memes. In March 2020 he tweeted that children were “essentially immune” to Covid. He’s pushed cryptocurrencies that he’s invested in. When a college student started a Twitter account to track Musk’s private plane, Musk tried and failed to buy him off, before blocking him. The Securities and Exchange Commission went after Musk after he tweeted that he had funding to take Tesla private, a clear violation of the law. Musk paid a fine and agreed to let lawyers vet future sensitive tweets, but he has tried to reverse this requirement. He has also been openly contemptuous of the SEC, tweeting at one point that the “E” stands for “Elon’s.” (You can guess what the “S” and “C” stand for.) By the way, how does the SEC go after Musk’s ability to tweet now that he owns Twitter?Billionaires like Musk have shown time and again they consider themselves above the law. And to a large extent, they are. Musk has enough wealth that legal penalties are no more than slaps on his wrist, and enough power to control one of the most important ways the public now receives news. Think about it: After years of posting tweets that skirt the law, Musk was given a seat on Twitter’s board (and is probably now negotiating for even more clout). Musk says he wants to “free” the Internet. But what he really aims to do is make it even less accountable than it is now, when it’s often impossible to discover who is making the decisions about how algorithms are designed, who’s filling social media with

This morning I had coffee once again with my colleague Heather Lofthouse (who runs Inequality Media) about the events of the week — Putin, Judge Jackson, and Republicans maneuvers, as well as some personal stuff (including something I’ve never before admitted to publicly). Please feel free to join us. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

Yesterday, CEOs from America’s largest oil companies appeared before a House committee probing why they’re raising prices at the pump while raking in record profits and spending huge sums buying back their shares of stock. (Last year, Chevron, Exxon, BP, and Shell spent more than $44 billion on buybacks and dividends, and plan to spend $74 billion this year — money that should be used instead to lower prices at the pump.) It’s price-gouging and profiteering, and we’re all paying for it. Republicans, meanwhile, are focusing on sex. I’ll explain why in a moment, but first consider the extent of the Republican sex obsession.In her recent confirmation hearings, Judge Ketanji Brown Jackson was barraged with questions from Republican senators about her alleged lenient treatment of child pornographers. It was a baseless claim, but that didn’t matter to the Republicans who kept hammering her. In four days of hearings, the phrase ‘child porn’ (or ‘pornography’ or ‘pornographer’) was mentioned 165 times, along with 142 mentions of “sex” or related terms like “sexual abuse” or “sex crimes.”On March 28, Florida’s Republican Governor Ron DeSantis signed a bill banning kindergarten through third-grade public school teachers from talking about sexual orientation or gender identity, calling it an “anti-grooming bill” and accusing opponents of wanting to groom young children for sexual exploitation. (When the Walt Disney Company, Florida’s largest employer, came out against the measure and promised the company would donate $5 million to LBGTQ organizations, DeSantis called Disney’s opposition “radical” and suggested that the Florida legislature cancel Disney’s special status in Florida that essentially makes it a local government.) In late February, Texas’s Republican Governor Greg Abbott ordered state child welfare officials to launch child abuse investigations into reports of transgender kids receiving gender-affirming care. Last May he signed into law a ban on abortions after about six weeks of pregnancy, and gives private citizens the right to sue anyone who helps someone obtain an abortion. Just yesterday, Oklahoma’s Republican House voted overwhelmingly to make performing an abortion a felony, punishable by up to 10 years in prison. The measure now heads to Oklahoma’s Republican governor, Kevin Stitt, who has signaled he’ll sign it into law. The Republican Party, once a proud proponent of limited government, has turned itself into a font of sexual innuendo and legal intrusion into the most intimate aspects of personal life. Protecting children from predators is a worthy aim, to be sure, but the GOP is obsessing about all aspects of sex. Why?First, it’s part of their culture war, and culture wars sell with voters (and the media) eager for conflict and titillation. A culture war over sex sells even better. It lets Republicans imply that Democrats are somehow on the side of sexual “deviants” who endanger the “natural order.” Also, by focusing on sex, Republicans can court both the evangelical right and the rightwing extreme QAnon vote (with its the loony “Pizzagate” conspiracy claim that Hillary Clinton was a pedophile). Most importantly, a culture war over sex allows Republicans to sound faux populist without having to talk about the real sources of populist anger — corporate-induced inflation at a time of record corporate profits, profiteering and price gouging, monopolization, stagnant wages, union busting, soaring CEO pay, billionaires who have amassed $1.7 trillion during the pandemic but who pay a lower tax rate than the working class, and the flow of big money into the political campaigns of lawmakers who oblige by lowering taxes on the wealthy and big corporations and doling out corporate welfare. Oh, and by focusing on pedophilia, gender identity, gay people, and abortion, Republicans don’t have to talk about Trump and January 6. Democratic politicians, wake up! You have a critical opportunity between now and the midterm elections to reframe the national conversation as it should be framed -- around abuses of economic power by corporations and the super rich. Those abuses are worsening. They affect the everyday lives of all Americans. If you fail to do this, Americans will continue to be inundated with Republican “culture war” messages intended to deflect the public’s attention from how badly big corporations and the super wealthy are shafting them. Americans won’t understand how these economic abuses all relate to record amounts of income and wealth at the top, and what must be done to reverse this imbalance (break up monopolies, enact a windfall profits tax, raise taxes on large corporations and the super wealthy, strengthen labor unions, reform campaign finance, stop corporate welfare, and so on). And some of you will lose your jobs in the midterm elections — allowing Republicans to take over the House and Senate. Please share! PS: Here’s what I said yesterday about Big Oil’s profiteering. This is a public ep

Today’s Office Hours discussion question: Is a windfall profits tax a good idea? How could it get the political support it needs? Would this be helpful for the Democrats in the midterms? Background: Yesterday I testified before the Senate Budget Committee about the power of American corporations — now enjoying the highest profits in 70 years — to raise their prices. And I endorsed a windfall profits tax. (You can see my testimony below.) Lindsey Graham told me he “couldn’t disagree with me more.” He and other Republicans on the Committee blamed inflation on Biden and the Democrats whom, they charged, spent too much on measures such as the American Rescue Plan. Senator Sheldon Whitehouse (also on the Committee) has introduced a windfall profits tax on big oil companies that would tax half the difference between their current profits and their average profits between 2015 and 2019, and then remit the proceeds to Americans in quarterly payments. Senator Bernie Sanders (the Committee chair) has introduced a windfall profits tax on all big corporations that would tax 95 percent of their profits in excess of their average profit level from 2015-2019, adjusted for inflation. It would apply only to large companies with $500 million or more in revenue annually, and be a temporary emergency measure, applying only in 2022, 2023, and 2024. Both bills would tax profits, not revenues, so companies that raise their prices for legitimate reasons related to rising expenses would not be penalized. But companies that have chosen to raise their prices (presumably to further enrich their CEOs and wealthy shareholders) would pay the windfall profits tax. Here’s my testimony yesterday:***Some added thoughts, in response to your very thoughtful comments: Yes, Lindsey Graham wanted to cut me off so he could talk about “securing the southern border” rather than about corporate power. That’s the problem in a nutshell. Democrats have an important opportunity between now and the midterm elections to frame the national conversation as it should be framed -- around corporate power to raise prices, price gouging and profiteering, CEO pay that's now reached almost 350-to-1 relative to median worker pay, billionaire gains of $1.7 trillion during the pandemic while most Americans struggled, illegal union-busting by giant corporations such as Amazon, and hugely profitable corporations and billionaires paying little or no taxes. If Democrats don't focus the public’s anger on these economic abuses, Americans will be inundated with Republican “culture war” messaging intended to deflect attention from them. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

America is on the cusp of the largest inter-generational transfer of wealth in history. As wealthy boomers expire over the next three decades, an estimated $30 trillion will go to their children. Those children will be able to live off of the income these assets generate, and then leave the bulk of them – which in the intervening years will have grown far more valuable – to their own heirs, tax-free. After a few generations of this, almost all of the nation’s wealth will be in the hands of a few thousand family dynasties. Unless Joe Biden’s new tax plan is enacted — the odds of which is moving from unlikely to likely. I’ll explain in a moment. Dynastic wealth runs counter to the ideal of America as a meritocracy. It makes a mockery of the notions that people earn what they’re worth in the market, and that economic gains should go to those who deserve them. It puts economic power into the hands of a small number of people who have never worked but whose investment decisions have a significant effect on the nation’s future. And it is antithetical to democracy. We are well on the way. Already six out of the ten wealthiest Americans alive are heirs to prominent fortunes. The Walmart heirs alone have more wealth than the bottom 42 percent of Americans combined. The richest 1 tenth of 1 percent of Americans already owns almost as much wealth as the bottom 90 percent.The last time America faced anything comparable occurred at the turn of the last century, in the first Gilded Age. Then, President Teddy Roosevelt warned that “a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power,” could destroy American democracy. Roosevelt’s answer was to tax wealth. The estate tax was enacted in 1916 and the capital gains tax in 1922.Since then, both of Roosevelt’s taxes have been eroded by the moneyed interests. As the rich have accumulated more wealth, they have amassed more political power — which they’ve used to reduce their taxes. By now, the estate tax affects only a handful of super-wealthy families that are busily setting up “dynastic trusts” to circumvent what’s left of it. And the capital gains tax has been defanged by what’s known as the “stepped-up-basis-at-death” loophole. More on this in a moment. Last week Joe Biden unveiled two tax proposals that would revive Teddy Roosevelt’s original vision, and could possibly slow or even reverse America’s march toward oligarchy: (1) a minimum income tax that Biden calls a billionaire tax but would in reality apply to households with a net worth of $100 million or more, and (2) a separate tax at death on gains from appreciated assets, even if the assets are not sold. The odds are growing that at least one of these proposals will get through the Senate in April or May via “reconciliation” requiring only a bare majority (i.e., all fifty Democratic senators plus the vice president). I’m told Joe Manchin is mostly on board (which means the other Democratic holdout, Kyrsten Sinema, will sign on as well). Let me go into a bit of detail on each: (1) The minimum tax is a 20 percent levy on households with a net worth of more than $100 million, affecting the top 0.01 percent of earners. It would apply both to taxable earnings and to unrealized capital gains (the increased value of your assets), and would function as a kind of prepayment (analogous to withholding) of taxes that eventually would be owed upon the sale of appreciated assets or death. For example, suppose someone named Mark Zuckerberg owns $100 billion of Facebook stock, for which he paid nothing when he founded the company, and has no other taxable income. For the first year under the Biden plan, he’d owe $20 billion in taxes even if he didn’t sell any Facebook shares. The next year, if his stock increased in value, he’d owe another prepayment equal to 20 percent of any increase in value beyond $100 billion. (There are other provisions to prevent the very wealthy from being taxed twice on the same income.)The Treasury anticipates Biden’s new minimum tax would raise $360 billion in the first 10 years from America’s 20,000 richest households. (2) Biden’s second proposal would close the “stepped-up-basis-at death” loophole. Under today’s tax code, you pay capital gains taxes on the increased value of assets when you sell them. But if you pass your assets on to your heirs, they can sell them and not pay a penny of capital gains. In other words, you escape capital gains taxes by dying. They escape it by inheriting your wealth. (I remember years ago arguing that this loophole should be closed with then Treasury Secretary Lloyd Benson, who at one point pounded his fist on the table and exclaimed “death is an involuntary conversion!”)That’s not all. Under current law, if heirs never sell these assets and they continue to gain value (as they almost certainly will), heirs can borrow against them to pay living expenses and then pass them on to their heirs, who won’t pa

I know the conventional wisdom about midterm elections — the party in power loses big — and I’ve lived through enough midterms to know that the conventional wisdom is mostly correct. Does this make Biden and the Democrats toast when it comes to retaining control of the House and Senate? No — especially because of one huge loose cannon aimed at the Republican Party: Donald Trump.About 30 percent of Americans love the guy, but a majority detest him. He’s toxic. As Republican Governor Chris Sonunu said of him Saturday night, “He's f***ing crazy!” Almost every time Trump moves center stage, Republicans’ odds decline. This is especially true in the swing suburbs that will determine the outcome of the midterms. For a few months I thought Trump would stay quiet, but he’s constitutionally unable to keep his big mouth shut. This past week, he trumped his way into the news:He loudly un-endorsed Alabama Rep. Mo Brooks, now running for a Senate seat, who returned the un-favor by disclosing that Trump repeatedly (including recently) pressed Brooks to overturn the 2020 presidential result. Expect Brooks to be called by Congress’s select committee investigating the reasons for the January 6 insurrection.He called on Vladimir Putin to release dirt on the Bidens. Talk bad timing. Putin’s thugs were at that moment committing atrocities in Ukraine. Trump instantly reminded everyone that he had called on Ukrainian President Zelensky to dig up dirt on the Bidens during the 2020 presidential campaign by threatening to withhold U.S. military aide intended to defend Ukraine against Russia, and in the 2016 campaign had called on Putin to release Hillary Clinton’s emails. But in 2016 and 2020 the American public merely considered Putin to be bad news. Now he’s the arch-villain of the world. He gave an incendiary speech at Michigan Stars Sports Center in Washington Township, Michigan, where he criticized Biden's presidency and teased another presidential campaign. "We're gonna bring back law and order," he told the crowd.It was also revealed last week that Virginia Thomas (wife of Supreme Court justice Clarence Thomas) had, in the weeks following the 2020 election, pressed Trump’s chief of staff to do everything possible to reverse the outcome of the election.And last week Congress recommended to the Justice Department that two former Trump advisers, Dan Scavino and Peter Navarro, be criminally charged with contempt of Congress for refusing to appear before the select committee investigating the January 6 insurrection. (This coming Thursday, Trump’s son-in-law, Jared Kushner, is expected to “voluntarily” appear before the committee. He will not be protected by executive privilege.) Wait. I’m not done. Last Monday, federal Judge David Carter ruled that Trump, along with John Eastman (the lawyer who had advised him on how to overturn the 2020 election) had most likely committed felonies, including obstructing the work of Congress and conspiring to defraud the United States. (The January 6 committee – which is weighing making a criminal referral to the Justice Department -- had used a filing in the case against Eastman to lay out the crimes it believed Trump might have committed.) Judge Carter noted that Trump likely knew that Eastman's plan to throw out electoral votes was illegal because the “illegality of the plan was obvious,” and cited strong evidence of a “corrupt mindset,” such as Trump’s phone call to Georgia Secretary of State Brad Raffensperger in which he famously asked the secretary to "give [him] a break" and "find 11,780 votes" (one vote more than Biden's margin of victory in that state).And this was just one week. Remember, the January 6 committee’s report will be released in a few months. Expect a firestorm that may even force Hamlet-like Attorney General Merrick Garland to charge Trump with crimes. (Some argue that America does not prosecute its former presidents. While that’s historically true, before Trump no former president had launched an attempted coup or criminal insurrection.) As if all this weren’t enough to keep him in the news, Trump has placed big midterm election bets on dozens of ballots across the nation, through Trump-branded “endorsements.” This means Trump will be a central player in campaigns just about everywhere.So whether the Republican Party likes it or not (and even if Democrats are reluctant to talk about Trump because political operatives advise them not to) Trump is going to feature big in the upcoming midterms. As a result, the swing suburbs are more likely to vote Democratic – increasing the odds that Democrats will keep control over the House and Senate.This is no guarantee that Democrats will keep control over the House and Senate, of course. As I’ve said countless times, Democrats need an economic-populist message to put them over the top because most Americans accurately believe the economic game is rigged in favor of the super-wealthy and are furious about it — and if Democrats don’t ta

Yesterday was a big day for American workers. I want to start with the remarkable worker victory at Amazon’s giant warehouse on Staten Island and then move to yesterday’s great jobs report — and the real danger lying within it.First, the victory. America’s wealthiest, most powerful, and fiercest anti-union corporation — with the second-largest workforce in the nation (union-busting Walmart being the largest) — lost out to a group of warehouse workers who voted to form a union, by a remarkable 2,654 to 2,131. Even more remarkably, the workers won without any assistance from an established union or professional organizer. If anyone had any doubts about Amazon’s determination to prevent this from ever happening, the corporation’s scorched-earth anti-union campaign in its Bessemer, Alabama warehouse should have put those doubts to rest. In New York, Amazon used every tool it had used in Bessemer, and then some. Many of its techniques are illegal under the National Labor Relations Act (hence the decision of the National Labor Relations Board to hold another election in Bessemer), but Amazon couldn’t care less. It’s rich enough to pay any fine or bear any public relations hit.To put it bluntly, Amazon is one of America’s worst employers. It treats its warehouse workers like dog dung. The company has repeatedly fired workers who speak out about unsafe working conditions or who even suggest that workers need a voice. The corporation doesn’t mind a yearly turnover rate of warehouse employees exceeding 100 percent, because the jobs are designed to induce burnout so workers don’t stay and organize. As its corporate coffers bulge with profits — and its founder and executive chairman practices conspicuous consumption on the scale not seen since the robber barons of the late 19th century — Amazon has become the textbook exemplar of 21st-century corporate capitalism run amok. Much of the credit for yesterday’s victory over Amazon goes to Christian Smalls (see interview below), whom Amazon fired in the spring of 2020 for speaking out about the firm’s failure to protect its warehouse workers from COVID. Smalls refused to back down. He went back and organized a union. It was an extraordinary feat. Talk about David and Goliath. But Smalls had something else working in his favor — which brings me to yesterday’s jobs report from the Bureau of Labor Statistics. The report showed that the economy continues to roar back to life from the COVID recession. With consumer demand soaring, employers are desperate to hire. This has given American workers more bargaining clout than they’ve had in decades. Wages have climbed 5.6 percent over the past year, according to yesterday’s jobs report. The acute demand for workers has also bolstered the courage of workers (such Amazon’s warehouse workers on Staten Island and Starbuck’s baristas) to demand better pay and working conditions, even from the most virulently anti-union corporations in America. Is something to worry about? Not at all. America workers haven’t had much of a raise in over four decades. Since the late 1970s, most of the economy’s gains have gone to the richest 10 percent, largely to the richest 1 percent of the richest 10 percent. It’s about time average workers took home a piece of the pie. Besides, inflation is running so high that even the 5.6 percent wage gain over the past year is far less in terms of real purchasing power. But corporate America believes these wage gains are contributing to inflation. As the New York Time solemnly reported yesterday, the wage gains “could heat up price increases at a time when the Federal Reserve is trying to cool them down.” This is pure rubbish. Unfortunately, Fed chair Jerome Powell believes it. He worries that “the labor market is extremely tight,” and to “an unhealthy level.” As a result, the Fed is on the way to raising interest rates repeatedly in order to slow the economy and reduce the bargaining leverage of American workers. Pause here to consider this: The Commerce Department reported Wednesday that corporate profits are at a 70-year high. You read that right. Not since 1952 have corporations done as well as they are now doing. Across the board, American corporations are flush with cash. Although they’re paying higher costs (including higher wages), they’ve still managed to increase their profits. You see, they have enough pricing power to pass on those higher costs to consumers, and even add some more for themselves. So when American corporations are overflowing with money like this, why should anyone believe that wage gains will necessarily “heat up price increases,” as the Times blindly reports? In a healthy economy, corporations would not be passing on higher costs — including higher wages — to their consumers. They’d be paying the higher wages out of their profits. But that’s not happening. Corporations are using their record profits to buy back enormous amounts of their own stock in order to keep their share prices high.

Andrew Jackson allegedly defied the Supreme Court in 1832 over a case called Worcester v. Georgia, involving Georgia's attempt to apply state laws to Cherokee lands. As the story goes, Jackson announced “John Marshall has made his decision now let him enforce it.” Whether Jackson actually said this is disputed, but it illustrates a fundamental truth about the Supreme Court: It has no power to enforce its decisions. Alexander Hamilton called it the “least dangerous branch” because it has neither the “purse” of Congress nor the “sword” of the President. So what does it have? Nothing but public trust. That trust is now eroding — faster and more dangerously for the Court’s future than at any time in its history. The Supreme Court confronts a profound crisis of legitimacy.Consider:1. After several days of hearings last week on the confirmation of Judge Ketanji Brown Jackson, Republicans on the Judiciary Committee made it clear they had no interest in knowing anything about her, but only making false charges and smearing her with innuendo. Her credentials are impeccable, but their relentless and baseless attack on Jackson’s sentencing in child pornography cases demeaned her — and further eroded the Supreme Court’s standing and integrity. (Although Judge Jackson appears certain to win Senate confirmation, almost all of the Senate’s 50 Republicans will vote against her.)2. Then came the news that Virginia Thomas, wife of Clarence Thomas, had been actively engaged in trying to overturn the outcome of the 2020 election, including being present at the Trump rally immediately preceding the assault on the U.S. Capitol and sending numerous emails to Mark Meadows, then Trump’s Chief of Staff, urging him to find ways to reverse the election. Yet without recusing himself or revealing his wife’s activities, Thomas was the only justice to dissent in the Supreme Court’s decision in January to reject Trump’s request to block documents from being released to the House select committee investigating the January 6 insurrection. 3. The Court’s legitimacy was already under a cloud because of Trump’s and Mitch McConnell’s relentless packing of it. Starting with the blockade of Merrick Garland’s nomination in 2016 and culminating in the rushed confirmation of Amy Coney Barrett just days before the 2020 election, Republicans have signaled that partisanship is at the heart of the court’s decision-making. (Not to forget the right-wing justices who cut off the Florida recount and handed the 2000 presidential election to George W. Bush and the right-wing justices who effectively nullified the Voting Rights Act after Congress voted nearly unanimously to renew it.)All this worries me on several levels. I know the Supreme Court. (I’m fortunate enough to have argued cases before it. I also clerked for the chief judge of the First Circuit, several of whose decisions went to the Supreme Court.) The Supreme Court can be, and has been, a remarkable institution for the public good. America needs a Supreme Court that can be trusted to make difficult decisions — especially when it comes to protecting the rights of individuals and minorities. The political branches cannot do this because at best they reflect the will of the majority, at worst they reflect the will of the wealthy and powerful. Yet the Court can protect the powerless in our society only if it is trusted by most Americans. When in 1954 the Supreme Court decided that racially segregated schools violated the constitutional rights of Black children, many Americans were outraged. They ultimately came around, in part because of the trusted role the Court held in American society. When in 2015 the Court narrowly ruled that the Constitution guarantees a right to same-sex marriage, it also faced blowback. Yet here again, its decision was considered the law of the land. The only person with the stature and responsibility to rescue the Court from its current death spiral is its chief justice, John Roberts. (Those who claim a chief justice doesn’t have power over his colleagues doesn’t understand the Court. A chief has the power to assign the writing of decisions in cases where he’s in the majority. He also has power over countless perks. And he has the informal authority to speak for the Court with the political branches and, unofficially, with the media.)Roberts must do four things:1. Push the Court to accept a code of ethics similar to the code now governing the lower federal courts. 2. Ask Clarence Thomas to recuse himself from all further cases involving Donald Trump or the January 6 attack on the Capitol. 3. Become an outspoken public advocate of the Court’s impartiality and a critic of those who would use it for partisan ends. 4. Openly and clearly ask the Senate to conduct confirmation hearings in ways that respect the impartiality and integrity of the Court. In September 2005, I testified against Roberts’ confirmation to be chief justice because I was not convinced he would adequately prot

A pandemic that hasn’t ended. Inflation that’s soaring. Putin’s war in Ukraine that could escalate into a nuclear confrontation. A climate crisis that’s worsening. Trump and his followers’ continued attacks on our democracy. I could go on. I don’t know about you, but I’m feeling a degree of stress I don’t remember feeling in a very long time. So here’s today’s Office Hours question: How are you staying hopeful in these trying times? At least, what are your coping mechanisms?Please let us know. I’ll give you my two cents as well. Okay, it’s now time for me to weigh in. Several of you have asked me how I stay hopeful, and what are my coping strategies in stressful times like these. I rely on six.1. Young people. My students (all 750 of them this semester) are mostly around 20 years old. My colleagues at Inequality Media are mostly in their late 20s. In other words, all are about a half-century younger than I am. Their energy, optimism, laughter, and hopefulness are hugely infectious.2. Laughter. I try to find at least five things to laugh at each day (including myself). As I age, I find that the world is brimming with ironies, that the cosmos is deviously humorous, and that most of the people I know or read about are hilarious (whether they know it or not).3. Activism. I not only stay active physically, but also try to help push my small corner of the world toward truth and social justice. The more I do, the better I feel. I love this Substack because it gives me an opportunity to share some thoughts and ideas with you, and hear your own thoughts and ideas. 4. Nature and personal time. I’m blessed to live in a beautiful place, with gorgeous flora and with mountains descending into glorious valleys and to the sea, along with easily accessible trails. Quiet walking through this fabulous environment puts me at ease.5. Dance. There is nothing that lifts my spirits more quickly than clicking on a song by Paul Simon, the Doobie Brothers, Stevie Wonder, Ray Charles, James Brown, Marvin Gaye, Sam Cooke, Buena Vista Social Club, or Dolly Parton – and dancing. My preference is to dance with someone, but I’m perfectly happy to dance alone in my kitchen. 6. History. Not only do I love to read it, but I learn a great deal from reading it – especially the truism that we’ve been here before. Lately I’ve been focusing my attention on the years between 1870 and 1916 – the first Gilded Age, followed by the Progressive Era. I’ve found many parallels between then and now, along with quite a bit that’s encouraging.What I’ve left out and why:Friends? I have them, and sometimes they contribute to one of the six-mentioned coping mechanisms above. But (and here again, probably age-related) I’ve found that too often our get-togethers descend into gripe sessions about the nation, the world, or personal health. Ugh.Family? I love them dearly. But I don’t rely on them to buoy my spirits. That’s too much of a burden to place on them. And, of course, families are complicated in all sorts of ways.Work? I’m trying to cut back on the parts of my work that don’t fit under the six-mentioned coping mechanisms, because they’re mostly meetings about processes or they’re paperwork or they require bureaucratic problems. I don’t really enjoy any of this, and I have less and less time for them.Any of this helpful to you?(Oh, and here’s a video …) This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

President Biden’s budget, which came out yesterday, proposes a new minimum tax of 20 percent on households worth more than $100 million — which the White House says will reduce federal budget deficits by $1 trillion over a decade. The tax would apply only to the top 0.01 percent -- the richest 1 percent of the richest 1 percent. Half of the expected $1 trillion in revenue would come from 704 households worth $1 billion or more.If enacted, it would effectively prevent the wealthiest sliver of America from paying lower rates than middle-class families, while helping to generate revenues to fuel Biden’s domestic ambitions and keep the deficit in check relative to the U.S. economy.Recall that America’s 704 billionaires have increased their wealth by $1.7 trillion since the start of the pandemic in February 2020, while most Americans have struggled to make ends meet. That means the billionaires could theoretically pay for everything Joe Biden and House Democrats have proposed — from childcare to climate measures — and still be as wealthy as they were at the start of the pandemic. Elon Musk’s pandemic gains, for example, could cover the cost of tuition for 5.5 million community college students and feed 29 million low-income public-school kids, while still leaving Musk richer than he was before Covid.The dirty little secret is the ultra-rich don’t live off their paychecks. They live off their stock portfolios. Jeff Bezos’s salary from Amazon was $81,840 in 2020 yet he rakes in some $149,353 every minute from the soaring value of his Amazon stocks, which is how he affords five mansions, including one in Washington DC with 25 bathrooms. (Why would anyone want 25 bathrooms?)So if you want to tax billionaires, you have to go after their wealth. But does Biden’s plan have a snowball’s chance of getting this enacted in the hell called Washington? The problem is the old political chicken-and-egg: A big reason why the super-wealthy have done so well is they’ve bankrolled politicians who alter laws (such as tax laws) to give them even more wealth. They’ve bought armies of lobbyists to keep their taxes minuscule and create tax loopholes large enough to drive their Lamborghinis through.ProPublica’s bombshell report last June showing America’s super-wealthy paying little or nothing in taxes revealed not only their humongous wealth but also how they’ve parlayed that wealth into political power to shrink their taxes. Jeff Bezos, the richest man in America, reportedly paid no federal income taxes in 2007 and 2011. Elon Musk, the second richest, paid none in 2018. Warren Buffett, often ranking number 3, paid a tax rate of 0.1 percent between 2014 and 2018.All previous efforts to tax America’s super-rich have failed amid major political head winds. Republican senators obviously won’t bite the billionaire hands that feed them, and so – yet again – Biden needs every Democratic senator’s vote. But why would any sane person who has followed politics over the last year suppose that Joe Manchin and Kyrsten Sinema will go along? Haven’t we been here before?Yes, except that for months now Manchin has been on the receiving end of unremitting horse dung — not just from progressives but from establishment Democrats who accuse him of torpedoing any chance Biden and the Democrats have of retaining control over Congress after the midterms. Manchin has also been criticized by the mainstream press for taking big money from coal interests and then voting down climate measures (see yesterday’s New York Times front page feature story, here). In other words, Manchin badly needs some cred.Manchin has also expressed concern about the size of the federal budget deficit. And in December, he told the White House he would support some version of a tax targeting billionaire wealth. What really convinces me Biden’s billionaire tax stands a chance is that I doubt the White House would risk another big public loss to Manchin. After getting all hell beat out of them for building public expectations of passing Build Back Better, only to have Manchin kill it, Biden and his staff would not propose another big initiative unless Manchin had already given it the green light. What about Sinema? She’ll go along with whatever Manchin ultimately votes for. So a billionaire tax is by no means dead. Even in this disappointing year, I’m staying hopeful. (By the way, check out our latest video:) This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

In a speech on Friday delivered from his office in the Kremlin, Putin criticized the West’s “cancel culture” which, he charged, is “canceling” Russia -- “an entire thousand-year-old country, our people.” It was the third time in recent months Putin has blasted the so-called “cancel culture.”Which is exactly what Trump, Tucker Carlson, and the GOP have blasted for several years."The goal of cancel culture is to make decent Americans live in fear of being fired, expelled, shamed, humiliated and driven from society as we know it," Trump said as he accepted his party's nomination at the Republican National Convention in 2020.Tucker Carlson, one of Fox News’s most prominent personalities, has charged that liberals have been trying to cancel everything from Space Jam to the Fourth of July.Putin’s fixation on transgender and gay people has also been echoed on the American right. Republican state bills aimed at limiting LGBTQ rights or discussion in schools are soaring. Last fall — months before Texas Republican Governor Greg Abbott threatened to criminalize parents who give their transgender children gender-affirming care — Putin argued that teaching children about different gender identities was “on the verge of a crime against humanity.”Then there’s admiration for Putin himself. Just before Putin ordered a full-scale invasion of Ukraine, Trump deemed him "savvy," "genius," and "smart” for “taking over a country, literally, a vast, vast, location, a great piece of land with a lot of people, and just walking right in.”On his Fox News program Carlson asked, rhetorically, “why do I hate Putin so much? Has Putin ever called me a racist? Has he threatened to get me fired for disagreeing with him?” But Carlson called Ukraine “an obedient puppet of the Biden State Department,” and suggests Putin’s invasion was nothing more than a “border dispute.” Putin’s lies and the lies coming from America’s extreme right are mutually reenforcing. Carlson’s Fox News segments show up in Russian propaganda. And when the American site “Infowars” resurrected an unfounded Russian claim that the United States funded biological weapons labs in Ukraine, Putin repeated the Infowars story.To conclude from all of this that authoritarians think alike is to miss a deeper truth. Putin, Trump, Carlson, and a growing number of rightwing commentators and activists have been promoting much the same narrative — for much the same reason. Remember, Putin was put into power by a Russian oligarchy made fabulously rich by siphoning off the wealth of the former Soviet Union. Likewise, Trump and the radical right in America have been bankrolled by an American oligarchy — Rupert Murdoch, Charles Koch, Rebekah Mercer (daughter of hedge fund tycoon Robert Mercer), Blackstone CEO Stephen Schwarzman, and other billionaires. What do these two sets of oligarchs get in return? Strongmen divert the public’s attention away from the oligarchs’ hijacking of their economies toward cultural fears of being overwhelmed by the “other.” Putin’s MO has been to fuel Russian ethnic pride and nationalism. The Trump-Carlson-radical right’s MO has been to fuel white American nationalism.In both cases, strongmen and their allies have mythologized a “superior” culture (replete with creation stories of blood ties, motherlands, and religion) supposedly endangered by decadent forces intent on attacking and overwhelming it.To Putin, the decadent force is the West. As he put it Friday, “domestic culture at all times protected the identity of Russia,” which “accepted all the best and creative, but rejected the deceitful and fleeting, that which destroyed continuity of our spiritual values, moral principles and historical memory.” Hence, a mythic justification for taking Ukraine back from a seductive but inferior Western culture that threatens to overwhelm it and Russia. The Trump-Carlson-white nationalist narrative is similar: America’s dominant white Christian culture is endangered by Black people, immigrants, and coastal elites who threaten to overwhelm it. The culture wars now being orchestrated by the Republican Party against transgender people, gay people, poor women seeking abortions, and schools that teach about sex and America’s history of racism, emerge from the same narrative as Putin’s culture war against a “decadent” West filled with “sociocultural disturbances.” As does the right’s claim that “secularists” have, in the words of former Trump Attorney General William Barr, mounted “an unremitting assault on religion and traditional values.”These tropes have served to distract attention from the systemic economic looting that oligarchs have been undertaking, leaving most people poor and anxious. Which is why the grievances that Putin, Trump, Carlson, and the GOP use are unremittingly cultural; they are never economic, never about class, and most assuredly not about the predations of the super-rich. Reduced to basics, today’s oligarchs and strongmen (along with their mouthpieces an

As Putin’s war shakes up the world economy, the Fed last week raised interest rates by a quarter point and penciled in six more increases by the end of the year. Fed Chair Jerome Powell says he’s ready to do whatever it takes to bring inflation down, including following the example of his predecessor Paul Volcker, who increased interest rates to 20 percent in 1981.Volcker’s rate rise triggered a deep recession and double-digit unemployment. We can debate whether that harsh medicine in 1981 was necessary. What should be clear is that the current inflation is nothing like the inflation of the late 1970s — a time when nearly a quarter of all private-sector workers were unionized and American corporations couldn’t easily outsource production. Today, only 6 percent of private-sector workers are unionized — which means workers have almost no long-term bargaining leverage. And today American corporations can outsource almost anywhere (although China is becoming more complicated, and Russia is now off limits).Inflation is running almost 8 percent annually, which is surely a problem. But it’s not due to permanent wage or price hikes. In fact, it has nothing to do with the business cycle. So expecting the Federal Reserve to remedy today’s inflation by raising interest rates to slow the economy is like trying to cool off on a hot day by aiming a battering ram at your head. Wrong diagnosis. Wrong remedy. The current inflation is the consequence of a perfect storm of unique events that won’t recur — and won’t be remedied by higher rates. We’re emerging from a once-a-century pandemic during which much of the world economy closed down. In March through May 2020, demand evaporated as people retreated into their homes. Because the nation’s (and world’s) productive capacity couldn’t be closed down all at once (productive capacity includes factories, offices, warehouses, and so on, all of which take a while to wind down), the resulting excess of supply over demand caused a deep recession. Now, at the other end, and without much opportunity to buy for the last two years, American consumers are flush with cash (the national savings rate is at its highest level in decades). So they want to buy lots of stuff (and they haven’t yet gone back to spending much on services such as restaurants, hotels, air travel, movies and other places where COVID reigned for two years). Yet the nation’s (and the world’s) productive capacity can’t be fully operational all at once. The resulting excess of demand over supply is causing major inflation. That inflation is being driven by other unique events as well. In housing, the real engine of rising prices is demographics. The huge Millennial generation (the largest in American history), born in the 1980s, is now storming into the housing market after COVID closed their world for two years. Making matters worse, the Great Recession clobbered the construction industry, dramatically reducing the number of available houses to buy or rent. Energy prices are soaring mostly because of Putin’s war (they were rising even in anticipation of it). So are food costs. (Russia and Ukraine together provide about one-quarter of all the planet’s wheat exports.)Another culprit is the pricing power of big corporations. In a White House briefing last fall, National Economic Council Director Brian Deese noted that half of the overall increase in food prices is due to spikes in the cost of beef, pork, and poultry, which has fueled record profits among the four biggest producers that control most of the market. "It raises a concern about pandemic profiteering — about companies that are driving price increases in a way that hurts consumers who are going to the grocery store, and also isn't benefiting the actual producers — the farmers and the ranchers," Deese said.Profiteering is occurring over much of American industry, as I’ve chronicled on these pages, here and here.If you don't believe that corporations are taking advantage of their pricing power and inflation to raise prices, just listen to corporate executives themselves. The Chief Financial Officer of Constellation Brands, the parent company of Modelo and Corona beers, told investors in January that the company wants to “take as much as [we] can” from customers. (Publicly, however, the company has blamed rising material costs for their increased prices.) Here’s another: The grocery food brand Hormel saw a 19 percent increase in their operating income in the first quarter of 2022. Their CFO’s response to these soaring profits? “We’ve done a great job with our pricing.”Of course corporate financial officers want to brag about profits. But if their corporations were actually competing against other corporations in the same industry, they’d absorb cost increases in order to keep their prices as low as possible so consumers didn't abandon them. Today, however, corporations have been raising prices even as they rake in record profits by coordinating price hikes with the ha

Joe Biden is in Europe today, consulting with NATO allies about how to ratchet up the pressure on Putin. I’ve been mulling how we might respond to Putin’s war not just by ratcheting up pressure but also by doing something positive for the world. As Europe and America cope with the energy problems resulting from the war, it strikes me that this is the perfect time to face the climate crisis and conserve energy. I think Biden should be asking Europeans and Americans to make this sacrifice. Let me explain. United Nations secretary general Antonio Guterres said on Monday that the world is “sleepwalking to climate catastrophe” by continuing to rely on fossil fuels, and that nations racing to replace Russian oil with their own dirty energy are hastening the catastrophe. Guterres noted that the climate goals agreed to in Glasgow last year are being neutered by Putin’s war. The pollution that’s dangerously heating the planet continues to increase.Joe Biden promised a rapid transition to clean energy in America but hasn’t started it yet. Legislation to accelerate America’s shift to renewables has been stalled in Congress, largely courtesy of West Virginia coal baron Joe Manchin. Biden has moved on to other priorities, such as containing Putin.But climate change is completely entwined with Putin’s aggression. The world is experiencing the grave consequences of its dependence on oil from dictators like Putin, Venezuela’s Nicolás Maduro, and Saudi Arabia’s repressive regime.So why not make Putin’s war into an urgent invitation to conserve energy? While Ukrainians are on the front line in the battle between democracy and tyranny, shouldn’t the rest of us be summoned to sacrifice in that battle by conserving energy? Shouldn’t we be asked to do everything we can -- from small acts such as turning off lights, traveling less, and reducing meat consumption to larger ones like switching to electric cars and putting up solar panels?Yet Biden has not even asked Americans to conserve. Political pollsters are telling him not to. Lee Maringoff, director of the Marist College Institute for Public Opinion, warns that Biden would face a backlash if he did. “People are becoming turned off to the whole notion of masks, so the message of personal sacrifice – having to alter their behavior in some way – gets into a freedom discussion that the White House doesn’t want to generate right now,” Maringoff says, echoing the views of other political operatives. Rubbish.Asking us to sacrifice is precisely what’s needed now. By asking Americans and Europeans to conserve, Biden would send a clear message that we’re in this together – not just the working middle class and poor who are now being shafted at the gas pump and on heating bills, but all of us duty bound to preserve both democracy and the planet.Why not a “freedom discussion” focused on the true predicate of freedom: the necessity that we all sacrifice for it, as in John F. Kennedy’s famous Cold War message “ask not what your country can do for you, but what you can do for your country.”The common good consists of our shared values about what we owe one another as citizens who are bound together in the same society—the norms we abide by, the sacrifices we make. A concern for the common good—keeping the common good in mind—is a moral attitude. It recognizes that we’re all in it together. If there is no common good, there is no society, no civilization. If the current moment should show us anything, it’s how we tightly we are bound together. Like the ongoing global pandemic, the escalating crisis in Ukraine and the escalating impacts of climate change reveal in stunning clarity the necessity of common sacrifice for the common good. World leaders -- starting with the President of the United States -- should state this clearly and loudly, starting today. What do you think? This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

Has it been six months already? I hadn’t intended to write every day but with so much going on in the world, I had no choice. One of my hopes when I began this newsletter six months ago was that you’d find sustenance here, particularly during these difficult times. The past six months have been grueling. I’ve felt the same anxieties many of you have felt, spilling over into some sleepless nights. Although the former guy is no longer in the Oval Office and the worst of the pandemic seems behind us (fingers crossed), the dark forces of authoritarianism, bigotry, and violence are still very much with us. I’m getting to be an older man. I’ve served in several administrations. I’ve known and worked with many fine people. I’ve taught two (getting on three) generations of wonderful students. Along the way I have encountered spin, hype, falsehoods, and outright propaganda. But I’ve never before experienced such blatant attacks on the truth as we are now witnessing — both abroad and in America. Getting the truth out and showing what’s really happening is a vital part of what I’m trying to do here. There is no simple solution, but part of the answer is to grow a community like you — people who believe in social justice, human rights, and democracy. Which is why I’m here and presumably why you are.When I post on social media, it feels one-directional. Here it’s more like a conversation. I enjoy reading your comments and am moved by the stories of what brings you here. A few of you, like Jason, who had once been Republican, are drawn here because of arguments that you find logical and clearly expressed. I'm a retired MD & lifelong Republican. I've been noticing a decline in ethics and reality in the Republican party for some time now but was especially stunned after the popularity of Sarah Palin. Then Trump seemed like Sarah Palin on steroids and was even more popular. Trump turned me into a Democrat though I've voted as an independent my entire life. (I've always voted for who I thought was the best person for the job regardless of party). I'm drawn to your posts because you seem to make complete sense and express it such a way as it's so easy to understand.Others of you, like Patrick, a union member, are here because you want to understand how the economy really works. I’m a member of the Teamsters Union and I appreciate your simple explanations of how the economy works. And your encouragement to have conversations with others who has a different perspective.Some of you, like Valinda, have come because you want to make a difference, and you find here a community dedicated to telling the truth and preserving democracy.Like so many others, I am frustrated with a status quo that the vast majority WANT to change, yet seem able to affect so little. Positive change seems so slow, and seems so quickly wiped out. I want to make a difference. I want to have contributed to making a more just and equitable society. Not to have simply grown increasingly bitter or apathetic. Living in Texas, it's particularly difficult to think lasting equality is achievable, and our governor, Abbott, terrifies me. He is as evil as the former guy, but far more capable of achieving his goals, and I suspect he has presidential aspirations. Forming a community aware of the implications of current events and dedicated to fighting growing authoritarianism is important to me. I am a former analyst in the Air Force; I worked to limit proliferation of WMD for 20 years. Now I am a retired/disabled veteran, a mother and grandmother. This is not the legacy I want to leave these new generations.Some of you tell me you enjoy my drawings, such as the Sunday caption contest. Some of you say you are getting a lot out of my Friday class on Wealth and Poverty. Many of you have offered helpful feedback (thanks, and keep it coming!). Whatever your reason for joining me on these pages, I’ve been overwhelmed by your enthusiasm and your kindness — and mostly by your determination to create a better world. Thank you. (And a special thanks to Kara Segal and Heather Lofthouse for their help and insights along the way.)But rather than make assumptions, please tell me: What does bring you here? Also please let me know how these pages can be even better: Don’t hold back on suggestions and constructive criticism! Finally, thanks to so many of you who have joined this community as paying subscribers. If you have found these pages useful but are not a paid subscriber, please consider becoming one (or giving a gift subscription) so we can do even more. And please share this newsletter with others.My abiding thanks,RR This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

Here’s the paradox: The higher you rise in any hierarchy, your decisions are likely to have larger and larger consequences. Yet the higher you rise, the harder it is to get accurate feedback about your decisions. I’ve worked with several presidents. All have made big blunders. I’ve also known and written about CEOs of big corporations who have made terrible mistakes. In every case, they had flawed systems for getting useful, accurate, and reliable feedback. Donald Trump (whom I didn’t work with but watched his every move) had no reliable feedback. Why? Because he surrounded himself with toadies and sycophants who didn’t dare tell him the truth. He demanded that everyone around him confirm his preferred self-image of invincibility. His White House was filled with fawning lackeys (he fired anyone who didn’t grovel). He refused to hear bad news. He rejected the validity of negative media coverage. As a result, Trump made among the dumbest decisions of any American president in history -- suppressing evidence of a potential crime, asking a foreign power for help with his reelection, inciting an attack on the Capitol. Some might say that all this was inevitable; it was built into his character. But his key character flaw was his unwillingness to hear anything negative. None of his horrific acts was necessary. Trump could have accomplished any number of goals far more easily had he not kept digging himself into ever-deeper holes. He was his own worst enemy.Vladimir Putin is in a similar position. He has isolated himself and banned dissenting voices. He has placed obedient lapdogs even in the Fifth Service, which is supposed to provide him intelligence. So, like Trump, Putin has no reality check. According to a new report by a respected independent reporter with sources inside the Kremlin, the Fifth Service was “afraid of angering” Putin, so “simply told him what he wanted to hear.”As a result, Putin’s attack on Ukraine has backfired terribly — on him. He badly overestimated the Russian military and underestimated Ukraine’s capacity to resist. Instead of weakening NATO, his attack has strengthened it. And now that the world’s democracies have cut off Russia’s access to the world banking system, Russia’s foreign exchange reserves have become nearly worthless.Dictators like Putin are particularly vulnerable to inaccurate feedback. Instead of independent truth-tellers, they’re often surrounded by truth-deniers. Rather than experts and investigative journalists, their world is filled with pseudo-scientists and propaganda. In place of a free press, they have agitprop and disinformation.Or look at China’s Xi Jinping. Why would he decide to enter into a “no limits” partnership with Moscow on the eve of Putin’s disastrous military campaign? Talk about blunders. Xi’s alliance with Russia has undermined China’s reputation and aggravated concerns among its neighbors about China’s global ambitions. It’s already prompted Taiwan to strengthen its defenses and pushed other regional powers such as Australia and Japan to declare their own interests in Taiwan’s security.Trump, Putin, Xi — these men aren’t stupid. What’s stupid is their systems for making decisions. They don’t include naysayers. They have no way of eliciting, recognizing, or assessing useful criticism. All are trapped in halls of mirrors that reflect back at them what they want to see and hear.The inverse relation between how high people rise in a hierarchy and the accuracy of the feedback they receive can be overcome if a leader aggressively seeks out dissenting views. But it’s almost impossible to find dissenting views in a totalitarian system where dissent is often punished. One of the great virtues of a democracy is its multiple feedback loops – its many channels for expressing alternative viewpoints and voicing uncomfortable truths. After all, American democracy stopped Trump from doing even more damage than he did.Yet when people like Trump, Putin, and Xi make terrible decisions, the world suffers. Worse: Putin and Xi have the power to blow up the world. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

This morning I had coffee with my colleague Heather Lofthouse, who runs Inequality Media. We talked about generational change (boomers; millennials, and today’s children), and the idea of progress. Feel free to pull up a chair. I’ve enjoyed experimenting with this Substack newsletter — including sending you my written posts, drawings, and audio recordings, and exchanging comments with you. Would you find it interesting if I added informal conversations (such as this morning’s coffee klatch with Heather)? Please chime in with thoughts and ideas below, as always. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

Okay, I’m going to go out on a limb today and suggest something that would have seemed utter nonsense as late as a month ago: I’m seeing the stirrings in Washington of a new era of … I’m not sure what to call it. “Unity” is way too strong. “Bipartisanship” is premature. “De-partisanship” is too clunky. But something new seems to be happening, and Vladimir Putin is responsible. Don’t get me wrong. Democrats and Republicans won’t join hands and sing Kumbaya anytime soon. Mitch McConnell and Kevin McCarthy will continue to ambush Democrats every chance they get. Expect bitter battles over background checks, immigration reform, civil rights protections, and Ketanji Brown Jackson’s confirmation to the Supreme Court. Trump won’t stop telling his big lie. Your Fox News-obsessed Uncle Bob will remain in his hermetically sealed alternative universe.Yet ever since the run-up to Putin’s invasion of Ukraine, I’ve noticed something in Washington that I haven’t seen since in three decades –- a quiet understanding that we’re on the cusp of a new Cold War, potentially even a hot one. Which requires that we join together in order to survive. It’s a subtle shift – more of tone than anything else. I saw it yesterday when Volodymyr Zelensky addressed Congress from Ukraine. When he showed lawmakers a gut-wrenching video of the war’s consequences, many eyes filled with tears. The lawmakers shared, according to Maine’s independent Senator Angus King, “a collective holding of breath.” That Republicans and Democrats shared anything — that they were even capable of a collective emotion — is itself remarkable. With bipartisan support, Ukraine is receiving unprecedented military and humanitarian aid to fight Putin’s war, including anti-aircraft systems that many experts say can defend against bombs and missiles from Russia’s land-based weaponry.Beyond Ukraine, you can also discern the shift in a series of recent across-the-aisle agreements. After literally two hundred failed attempts, the Senate just passed an anti-lynching law. The Senate has also given sexual misconduct claims firmer legal footing with a new law ending forced arbitration in sexual assault and harassment cases. The Senate also just approved sweeping postal reform. And unanimously decided to keep Daylight Savings Time year-round. And it has given the green light to long-awaited reauthorization of the Violence Against Women Act as part of a massive spending bill.I’m hearing from Senate staffers that they’re close to bipartisan agreement to strengthen antitrust laws. Also on a measure to expand semiconductor manufacturing in America, as part of a new China competitiveness bill. And another measure to limit the cost of insulin.Okay, none of this is as dramatic as protecting voting rights or controlling prescription drug costs. But compared to the last few years, it’s extraordinary. (You may not have heard much about these initiatives because the media only picks up on bitter conflict and name-calling.)Something new is happening in Washington, and I think I know why.You see, I came to Washington in 1974, in the Ford administration, and then worked in the Carter administration. The Cold War was raging during those years, serving as a kind of silent backdrop for everything else. Democrats and Republicans had different views on a host of issues, but we worked together because it was assumed that we had to. We faced a common threat.The Cold War had produced an array of bipartisan legislation involving huge investments in America — legislation that was justified by the Soviet threat but in reality had much more to do with the needs of the nation. The National Interstate and Defense Highway Act was designed to “permit quick evacuation of target areas” in case of nuclear attack and get munitions rapidly from city to city. Of course, in subsequent years it proved indispensable to America’s economic growth.America’s huge investment in higher education in the late 1950s was spurred by the Soviets’ Sputnik satellite. The official purpose of the National Defense Education Act, as it was named, was to “insure trained manpower of sufficient quality and quantity to meet the national defense needs of the United States.” But it trained an entire generation of math and science teachers, and expanded access to higher education. The Defense Department’s Advanced Research Projects Administration served as America’s de facto incubator for new technologies. It was critical to the creation of the Internet as well as new materials technologies. John F. Kennedy launched the race to the moon in 1962 so that space wouldn’t be “governed by a hostile flag of conquest” (i.e., the Soviet Union). But it did much more than this for America. Then, in November 1989, the Berlin Wall came down. And in December 1991 the Soviet Union collapsed.Just three years later, Newt Gingrich became Speaker of the House -- and instigated the angriest and most divisive chapter in modern American political history. I was the

Welcome to Wednesday, friends.Biden’s advisers are saying that the crisis in Ukraine presents a chance for a reset — Biden’s best opportunity to restore his standing before the November midterms. But what’s the message for the reset?Despite falling coronavirus positivity rates, a bipartisan infrastructure package, and rising employment numbers — and even foreign policy leadership — Biden’s approval ratings remain in the 40s. With inflation soaring and gas prices spiking, the Democrats could soon find themselves in the basement.Biden’s advisers point to the State of the Union address — which emphasized pragmatism over bold progressive goals — as a blueprint for his message in coming months. They note that, according to their research, cutting drug costs was among the most popular proposals in the speech. But this is a policy, not a message. The problem isn’t just Biden. To Democrats, a “message” consists of policies they’ve enacted or want to enact. Republicans don’t bother with policies. For seventy years they’ve stayed relentlessly “on message” with a narrative about Democrats as socialists and communists who want to take away peoples’ freedoms. More recently they’ve also used thinly-veiled racism, xenophobia, misogyny, homophobia, and transphobia to suggest that Democrats are allowing the nation to be taken over by “them.”Democrats offer white papers and they talk in paragraphs. Republicans offer fearful stories and talk in bumper stickers.Republicans have their own message problems, of course. As long as the former guy retains his grip on the GOP, Democrats have a chance to remind up-for-grabs voters what is at stake this year and beyond.So today’s Office Hours question: What should be the Democrats’ message in coming months? (Please give us your thoughts in the comments section below. I’ve got some ideas, and will chime in as well.) This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

Hello friends, and welcome to Tuesday.This morning I filled my car with gas costing over five dollars a gallon. My car is a Mini Cooper that I bought years ago, partly because it wasn’t a gas guzzler. Now it’s guzzling dollars. But when I consider what’s happening in Ukraine, I say what the hell. It’s a small sacrifice. Yet guess who’s making no sacrifice at all — in fact, who’s reaping a giant windfall from this crisis? As crude oil prices hit levels not seen in more than 13 years, Big Oil has hit a gusher. Even before Putin’s war, oil prices had begun to rise due to the recovery in global demand and tight inventories. Last year, when Americans were already struggling to pay their heating bills and fill up their gas tanks, the biggest oil companies (Shell, Chevron, BP, and Exxon) posted profits totaling $75 billion. This year, courtesy of Vladimir Putin, Big Oil is on the way to a far bigger bonanza.How are the oil companies using all this windfall? I can assure you they’re not investing in renewables. They’re not even increasing oil production. As Chevron’s top executive Mike Wirth said in September, “we could afford to invest more” but “the equity market is not sending a signal that says they think we ought to be doing that.” Translated: Wall Street says the way to maximize profits is to limit supply and push up prices instead. So they’re buying back their own stock in order to give their stock prices even more of a boost. Last year they spent $38 billion on stock buybacks — their biggest buyback spending spree since 2008. This year, thanks largely to Putin, the oil giants are planning to buy back at least $22 billion more. Make no mistake. This is a direct redistribution from consumers who are paying through the nose at the gas pump to Big Oil’s investors and top executives (whose compensation packages are larded with shares of stock and stock options). Though it’s seldom discussed in the media, lower-income earners and their families bear the brunt of the burden of higher gas prices. Not only are lower-income people less likely to be able to work from home, they’re also more likely to commute for longer distances between work and home in order to afford less expensive housing. Big oil companies could absorb the higher costs of crude oil. The reason they’re not is because they’re so big they don’t have to. They don’t worry about losing market share to competitors. So they’re passing on the higher costs to consumers in the form of higher prices, and pocketing record profits. It’s the same old story in this country: when crisis strikes, the poor and working class are on the frontlines while the biggest corporations and their investors and top brass rake it in. What to do? Hit Big Oil with a windfall profits tax. Days ago, the European Union advised its members to seek a windfall profits tax on oil companies taking advantage of this very grave emergency to raise their prices. Democrats just introduced similar legislation here in the United States. The bill —introduced by Senator Sheldon Whitehouse and Representative Ro Khanna — would tax the largest oil companies, which are recording their biggest profits in years, and use the money to provide quarterly checks to Americans facing sticker shock as inflation continues to skyrocket. (The bill would require oil companies producing or importing at least 300,000 barrels of oil per day to pay a per-barrel tax equal to half the difference between the current price of a barrel and the average price from the years 2015 to 2019. This is hardly confiscatory. Those were years when energy companies were already recording large profits. Quarterly rebates to consumers would phase out for individuals earning more than $75,000 or couples earning $150,000.)Republicans will balk at any tax increase on Big Oil, of course. (They’re even holding up the nomination of Sarah Bloom Raskin to the Fed because she’s had the temerity to speak out about the systemic risks that climate change poses to our economy. ) But a windfall profits tax on Big Oil is exactly what Democrats must do to help average working people through this fuel crisis. It’s good policy, it’s good politics, and it’s the right thing to do. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

It’s like watching a three-hundred-pound bully beat up a kid half his size, for no reason — bloodying the poor kid, pulverizing him. Yet you don’t dare try to stop the mayhem because the bully has a gun that he’ll use on you if you intervene. You look for police, but there are none. You round up your friends, who join you in shouting at the bully. But he pays no attention. They threaten that if he doesn’t stop they’ll no longer go bowling with him or invite him out for drinks. Their threats have no effect. The bully continues beating up the kid. Your friends refuse to take further action. They don’t want to provoke his wrath. They’re as afraid of the bully’s gun as you are.By now the kid is desperate. You give him some water. He pleads for a knife. You slip him some brass knuckles. The kid puts up a good fight. You marvel at the kid’s courage and stamina in the face of such brutality. Maybe he can hold the bully off for a while, you think. But the kid’s resistance infuriates the bully even further. The bully clobbers the kid with everything he has. The barbarism is occurring in front of your eyes. It’s revolting to watch. Every moral fiber of your being shouts “do something!” Yet you’re paralyzed. It’s suicide if you intervene, but it’s moral suicide if you don’t. You want to believe the kid can force the bully to retreat, but you know the kid doesn’t stand a chance. You can no longer bear witness to this slaughter. You have to avert your eyes. Or you have to act. What do you do? This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

I used to believe several things about the twenty-first century that Putin’s invasion of Ukraine and Donald Trump’s election in 2016 have shown me are false. I assumed:Nationalism is disappearing. I expected globalization would blur borders, create economic interdependence among nations and regions, and extend a modern consumer and artistic culture worldwide.I was wrong. Both Putin and Trump have exploited xenophobic nationalism to build their power. (Putin’s aggression has also ignited an inspiring patriotism in Ukraine.)Nations can no longer control what their citizens know. I assumed that emerging digital technologies, including the Internet, would make it impossible to control worldwide flows of information and knowledge. Tyrants could no longer keep their people in the dark or hoodwink them with propaganda.Wrong again. Trump filled the media with lies, as has Putin. Putin has also cut off Russian citizens from the truth about what’s occurring in Ukraine.Advanced nations will no longer war over geographic territory. I thought that in the “new economy” land was becoming less valuable than technological knowhow and innovation. Competition among nations would therefore be over the development of cutting-edge inventions.I was only partly right. While skills and innovation are critical, land still provides access to critical raw materials and buffers against potential foreign aggressors.Major nuclear powers will never risk war against each other because of the certainty of “mutually assured destruction.” I bought the conventional wisdom that nuclear war was unthinkable.I fear I was wrong. Putin is now resorting to dangerous nuclear brinksmanship.Civilization will never again be held hostage by crazy isolated men with the power to wreak havoc. I assumed this was a phenomenon of the twentieth century, and that twenty-first century governments, even totalitarian ones, would constrain tyrants.Trump and Putin have convinced me I was mistaken. Thankfully, America booted Trump out of office — but his threat to democracy remains. Advances in warfare, such as cyber-warfare and precision weapons, will minimize civilian casualties. I was persuaded by specialists in defense strategy that it no longer made sense for sophisticated powers to target civilians.Utterly wrong. Civilian casualties in Ukraine are mounting.Democracy is inevitable. I formed this belief in the early 1990s when the Soviet Union had imploded and China was still poor. It seemed to me that totalitarian regimes didn’t stand a chance in the new technologically driven, globalized world. Sure, petty dictatorships would remain in some retrograde regions. But modernity came with democracy, and democracy with modernity.Both Trump and Putin have shown how wrong I was on this, too.Meanwhile, Ukrainians are showing that Trump’s and Putin’s efforts to turn back the clock on the twenty-first century can only be addressed with a democracy powerful enough to counteract autocrats like them.They are also displaying with inspiring clarity that democracy cannot be taken for granted. Democracy is not a spectator sport. It’s not what governments do. Democracy is what people do.Ukrainians are reminding us that democracy survives only if people are willing to sacrifice for it. Some sacrifices are smaller than others. You may have to stand in line for hours to vote, as did tens of thousands of Black people in America’s 2020 election. You may have to march and protest and even risk your life so others may vote, as did iconic civil rights leaders like the late John Lewis and Martin Luther King, Jr.You may have to knock on hundreds of doors to get out the vote. Or organize thousands to make your voices heard. And stand up against the powerful who don’t want your voices heard.You may have to fight a war to protect democracy from those who would destroy it.The people of Ukraine are also reminding us that democracy is the single most important legacy we have inherited from previous generations who strengthened it and who risked their lives to preserve it. It will be the most significant legacy we leave to future generations — unless we allow it to be suppressed by those who fear it, or we become too complacent to care.Putin and Trump have convinced me I was wrong about how far we had come in the twenty-first century. Technology, globalization, and modern systems of governance haven’t altered the ways of tyranny. But I, like millions of others around the world, have been inspired by the Ukrainian people — who are reteaching us lessons we once knew. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

Among the most heartrending casualties in Ukraine are the children. So far, a million of them have fled the nation. Many are on their own, without parents or relatives to protect them. The 6 million who remain in Ukraine are in grave danger of being maimed or killed. Yesterday Ukraine accused Russia of bombing a children’s hospital. Of all the victims of war, children are the most innocent. If they survive, their physical and psychological injuries may last a lifetime. Children are also the most innocent casualties of poverty. I’ve been so fixated on Ukraine lately that I haven’t shared with you something important we’ve just learned about how to dramatically reduce child poverty here in the United States.From July 15, 2021 to December 15, 2021, the United States conducted a remarkable experiment. It was called the expanded Child Tax Credit. It featured direct monthly payments to families of up to $300 per child under 6 and $250 per month for children between 6 and 17 – phasing out for families earning more than $112,000 a year. We didn’t think of it as an experiment. It was simply part of the American Rescue Plan designed to help Americans survive the pandemic. It turned out to be a real-world experiment because we now know what happened before, during, and after it. This has given us an astonishingly precise understanding of its effects. Before the experiment, America’s child poverty rate was among the highest of all advanced nations. Nearly 16 percent of our children under 5 were impoverished. During the experiment, child poverty in America dropped by roughly a third, down to 12 percent. The number of households with kids reporting not having enough to eat also fell by about a third. After the experiment, the rate of child poverty rose again, from 12 percent to 17 percent. More than a third of families with children in the U.S. now say they are struggling to cover ordinary costs (food, utilities, housing).Naysayers predicted the payments would cause people not to work. That didn’t happen. In fact, researchers found that during these five months self-employment among lower-income families actually increased. Other naysayers said the cost of the program would be prohibitive. Not so. The Congressional Budget Office estimates that permanently expanding the Child Tax Credit would cost $1.7 trillion over the next 10 years. That’s less than what America’s rich and big corporations will save over the next ten years from the Trump Republican tax cut, which went into effect in 2018. Repeal it, and there’s plenty of money to pay for our children. Besides, the future cost to America of not reducing child poverty is astronomical, considering everything from social services to lost productivity.So why did the experiment end? Because the votes of 60 senators were needed to extend it (the filibuster requires sixty votes even to get to an actual vote), and 50 Republican senators and two Democratic senators didn’t want to. At this moment, millions of Ukrainian children are hungry or homeless. Tragically, there is very little we can do for them. At this moment, millions of American children are hungry or homeless. But we can alleviate their suffering. We now know how, because between July 15, 2021 and December 15, 2021 we conducted an experiment that worked. If we were a sane and decent society we would turn that experiment into the law of the land. We still can. Will we? This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

I’m becoming increasingly worried that a growing segment of the American public is pushing for a war with Russia. Needless to say, that would be suicidal. This morning I saw an open open letter to the Biden administration signed by a group of 27 foreign policy heavyweights, calling for a limited no-fly zone over Ukraine — “starting with protection for humanitarian corridors that were agreed upon in talks between Russian and Ukrainian officials.” The proposal sounds reasonable until you think about how this “limited” no-fly zone would be enforced. NATO would have to engage Russian forces that violate it. That would mean war. There’s also the question of whether Poland will donate to Ukraine Russian-made MiG-29 fighter jets, which Ukraine pilots know how to fly, in return for America supplying fighter jets to Poland. This also brings NATO frighteningly close to war with Russia. So today’s Office Hours question: Should we worry that America and the West are heading toward a war with Russia? If so, how do we avoid it?***Having read through your comments, I want to thank you for your thoughtfulness. I'm as spooked by this as any of you, having spent the first ten years of my life worrying that the Soviet Union would drop a bomb on America at any moment. I even remember urging my father to build a bomb shelter (to which his wise response was "not unless you, Bobby, are willing to kill neighbors who will want to crowd into it").American foreign policy is dominated by two metaphoric enemies -- either Hitler (whom appeasement only encouraged) and Ho Chi Min (whose nationalism had nothing to do with Soviet expansionism). Putin seems to exist more in the former camp, which means we need to do everything possible to make his invasion of Ukraine as painful as possible for him. But there's also an element of ethnic nationalism to his aggression, which suggests he might be willing to settle for Russian-dominated parts of Ukraine and not threaten NATO.I'm no expert in foreign policy, but I do think it important for us to be clear-eyed about all this and succumb neither to war-mongering jingoism that could lead to nuclear annihilation (as exemplified by today's letter from foreign-policy heavyweights calling for a "limited" no-fly zone) nor to a naive isolationism. Secretary of State Anthony Blinken said today that the U.S. wants to get fighter jets to Ukraine “in the right way,” which leaves open the door to helping Poland supply them to Ukraine. Is this a slippery slope? At what point does the U.S. become a combatant?Like many of you, I trust Biden and his foreign policy advisers. I think they've done an excellent job so far. And I'm thankful that the former guy is far from the Oval Office. But I'm still deeply worried. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

Nothing good comes from war except, on occasion, the prevention of something even worse. As pressure increases on the Biden Administration to take more aggressive action against Putin, the question is how to minimize the collateral damage to Americans and use the crisis to move toward a more humane future. Here are five possible ways. 1. Help Americans endure higher fuel prices. The best way to stop Putin’s war machine would be to put economic sanctions on anyone buying Russian oil or gas, because oil and gas revenue makes up about half of the Kremlin’s budget. But such sanctions would also drive the prices of oil and natural gas through the roof. (Biden’s decision today to stop imports of Russian oil to the U.S. will have far less consequence because only a tiny fraction of the oil we use comes from Russia.)Gas prices in America are already topping four dollars a gallon (here in California, five dollars). That’s less of a problem for higher-wage workers who can work from home, but it’s a huge burden on lower-wage workers who have to make longer and longer commutes.What to do? Help Americans caught in the energy squeeze. Revive the refundable expanded Child Tax Credit, which enabled millions of poor and working-class families to survive the COVID recession.2. Move the nation toward green energy. Oil companies are pocketing windfall profits while their lobbyists are using the crisis to demand that the U.S. build new Liquid Natural Gas terminals, allow more oil pipelines, and approve new leasing of federal lands for oil drilling. That’s the exact opposite of what we need to do. However we invest in new energy infrastructure, none of it will have an immediate impact on energy prices. The practical longer-term choice is between an energy infrastructure that supports the production of more fossil fuels (such as the additional LNG terminals, pipelines, and oil leases that energy lobbyists are now pushing) or one that moves the nation more quickly to renewable energy sources (such as subsidies for electric cars, batteries, and charging stations). Now is the time to redouble our efforts toward the latter. We need to use this opportunity to build more of the green infrastructure America needs for the long term. Meanwhile, there’s no reason American oil producers should enjoy windfall profits from rising energy prices. Congress should enact a windfall profits tax on them, and use the proceeds for additional green infrastructure. (The European Union is urging member countries to do exactly this. Why can’t we?)3. Trim the military-industrial complex. Though the U.S. and other Western allies have stopped short of sending troops to Ukraine, they are sending weapons. Even Sweden, a non-NATO member, has announced it will send anti-tank weapons, helmets and body armor to Ukraine. Finland has pledged assault rifles and anti-tank weapons. In America, budget analysts expect defense spending in the 2023 federal budget to rise to between 3.5 percent and 4 percent of GDP.All this military spending comes at the expense of domestic priorities in the United States and abroad. It also increases the likelihood of armed conflict. The big winners: U.S. aerospace and defense contractors that are making many of these weapons systems and whose share prices are surging. America’s defense budget is already bloated — bigger than the next ten defense budgets put together. There’s no reason for more defense spending. If anything, we should use the current crisis to reexamine defense spending and make our armed forces more efficient — using the savings to finance more humanitarian aid around the world. 4. Put democracy and human rights at the center of American foreign policy. In one way, Putin’s war is elevating democracy and human rights in U.S. foreign policy. That’s why Biden has unified and mobilized much of the rest of the free world. But in pursuit of oil sources to replace Russian oil, America seems to be recalibrating its emphasis on human rights. That would be a tragic mistake. This past weekend Biden officials met in Venezuela with the government of President Nicolás Maduro. Why? Because Venezuela’s petroleum exports are seen as a potential substitute for Russian oil. But Maduro’s government has been responsible for extrajudicial executions and short-term forced disappearances. It has jailed opponents, prosecuted civilians in military courts, tortured detainees, and cracked down on protesters. Judicial authorities have participated or been complicit in the abuses. Maduro used a state of emergency implemented in response to Covid-19 as a pretext to intensify his control over the population.Last year, a United Nations fact-finding mission concluded that the Maduro regime has committed crimes against humanity. The exodus of Venezuelans fleeing repression and the humanitarian emergency represents the largest migration crisis in recent Latin American history.Biden’s advisers are also discussing a possible visit to Saudi Arabia to help repa

We’re sanctioning Russian oligarchs up the wazoo, hoping it’s a way to get Putin to stop his deadly attack on Ukraine. But for this tactic to work (1) the U.S. and our allies must be able to locate and tie up Russian oligarchic wealth, and (2) Russian oligarchs must have enough power to stop Putin. Let’s take them one at a time: Can we locate and tie up the wealth of Russian oligarchs? Anecdotally, sanctions on the oligarchs appear to be working. Last Sunday, billionaire industrialist Oleg Deripaska (on the U.S. sanctions list) and banker Mikhail Fridman (on the EU’s) both publicly urged an end to Putin’s war. Billionaire businessman Roman Abramovich has put his British soccer club up for sale and vowed to donate the proceeds to “all victims of the war in Ukraine.” Banker and entrepreneur Oleg Tinkov told his 634,000 Instagram followers last week that “innocent people are dying in Ukraine now, every day, this is unthinkable and unacceptable.”But are these sanctions really biting? This is where a comparison of Russian oligarchs with American oligarchs comes in. While Russian oligarchs (Russia’s richest 0.01 percent) have hidden an estimated $200 billion offshore (over half of their financial wealth), American oligarchs — America’s 765 billionaires — have hidden $1.2 trillion (about 4 percent of their wealth), mostly to avoid paying taxes on it. While American oligarchs park their income and wealth in tax havens such as the Cayman Islands, Russian oligarchs have hidden their most valuable assets in the United States and Europe. The reason they do so is telling: Western democracies follow the rule of law. Under such laws, before a government can seize property it must follow lengthy and elaborate legal processes. As a result, American and European governments are finding their hands tied in actually taking control of the assets of Russian oligarchs. American law makes it difficult even to discover what Russian oligarchs own in the United States because they’ve hidden their assets behind complex trusts and shell corporations. American laws governing taxes, corporations, transportation, and banking are wonderfully convenient for the world’s oligarchs. One out of every six aircraft in the United States, for example, is registered through trusts, Delaware corporations, and even post office box addresses, making it almost impossible to discover their true owners. This isn’t an argument against sanctioning Russian oligarchs. It’s just that we need to be clear-eyed about how difficult it is to do so.[Russian oligarch Roman Abramovich’s yacht:[American billionaire Rick Caruso’s yacht:Do Russia’s oligarchs have enough political clout in Russia to stop Putin’s aggression, or perhaps even depose him?American oligarchs have enormous political clout. In the 2012 presidential election (the most recent for which we have detailed data on individual contributions), the richest 0.01 percent of Americans (that is, the richest 1 percent of the richest 1 percent) accounted for 40 percent of all campaign contributions. (See the graph below.)What have American oligarchs got out of these campaign contributions? The lowest tax rates on the highest incomes in over a generation — and the lowest among all wealthy nations. They’ve also gotten an IRS so starved of resources it’s barely able to enforce the law. Russian oligarchs who have pledged loyalty to Putin arguably have less political power in Russia than do American oligarchs in the U.S. In Putin’s Russia, power is exercised by a narrow circle of officials and generals appointed by Putin, whom he has drawn largely from the former KGB. According to several Russian specialists I’ve spoken with over the last few days, this circle has become very small in recent months, now numbering perhaps a half dozen. We should use whatever means at our disposal to make Vladimir Putin end the brutal war he started. But it is proving difficult to use sanctions on specific oligarchs to get Putin to stop. Perhaps we should be more ambitious. My Berkeley colleague Gabriel Zucman recommends that the United States and the European Union freeze all offshore holdings of Russian nationals in excess of $10 million. This would affect about 10,000 to 20,000 Russians who have benefitted the most from Putin’s rule.Meanwhile, blanket sanctions against the Russian economy are having an effect. Over the past week they have caused the ruble to collapse and decimated Russian markets. But the major burden has fallen on ordinary Russians, many of whom have already suffered from Putin’s brutal regime. As we’ve seen in North Korea and Iran, dictatorships don’t depend on popular approval. In fact, widespread hardship can lead to even more repression and violence. We should remind ourselves that Putin is not synonymous with the Russian people. Xenophobia of whatever form has no place in the fight against vicious authoritarianism.PS: Here’s a video that I and my terrific colleagues at Inequality Media did on the meaning and f

The waitperson where I had breakfast this morning broke down in tears over Ukraine. “I just don’t know what to do,” she said.She’s not alone. I feel the same way. You probably do, too. That one tyrant can cause this much human suffering defies whatever progress we assumed civilization had made since Hitler’s rise almost a century ago. That Putin can wreak such havoc on innocent people, seemingly unconstrained by others in Russia’s government, makes a mockery of modern ideas about governance in even totalitarian regimes. That he has control over a nuclear stockpile capable of annihilating much of humanity lays bare — even more starkly than does climate change — how far humanity has fallen behind in the primal race between technology and survival.But bear in mind several encouraging things. The rich nations of the world that still practice democracy are exercising a unity of resolve not seen in decades. Thankfully as well, we in the United States have as president a person who is sane, thoughtful, experienced, and even-tempered. Can you imagine where we’d be with the former guy? Beyond this, there is no reason to suppose that the grim calculus behind “mutually-assured destruction,” which has so far prevented a nuclear holocaust, has changed. Finally, by all accounts Putin is not having an easy time of it. The people of Ukraine are mounting a fierce resistance. He cannot “win” this war. Even if he establishes a puppet government there, the resistance will continue.So what can you do to help Ukraine? Four things. 1. First, you can contribute to Ukrainian relief efforts. Here are organizations I trust: — Ukraine Crisis Fund. The international humanitarian group is providing food, water and other items to families fleeing violence in Ukraine. Contribute here.— Doctors without Borders. Staffers with the medical relief organization remain in Ukraine and are "seeking ways to respond to the medical and humanitarian needs as the conflict evolves." Offer support here.— ICRC. The Swiss-based organization is supporting the work of the Ukrainian Red Cross in helping those impacted by the war. Donate to the ICRC.— Keep Ukraine’s Media Going is a GoFundMe campaign for journalists around Ukraine that also aims to help reporters relocate and continue their work from neighboring countries. Donations can be made here. 2. Second, you can write your members of Congress expressing your view that the United States should sanction Russian oil and gas, and that you are willing to make the financial sacrifice of higher prices at gas pumps and for home heating oil that will almost certainly result. 3. Third, you can urge your members of Congress to open wide America’s borders to Ukrainians fleeing Putin’s war, and help them transport themselves and their families here. 4. Fourth and finally, whatever your political persuasion, you can put aside your anger and frustration with Americans who disagree with you on other issues and recognize our shared commitment to democracy and human rights and our mutual loathing for the murderous rampage we are witnessing in Ukraine. Even former VP Mike Pence declared last night that “there is no room in this party for apologists for Putin” (drawing another contrast with the Trump wing of the GOP). Bearing witness to this calamity and unambiguously condemning it should, at the very least, be something we can all agree on. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

If Europe and the United States do what must be done next to contain Putin’s despicable invasion – blocking Russian exports of gas and oil – energy prices will soar. That means consumers will have less money to spend on everything else. This could well push the U.S. economy back into recession.Which makes all the more bizarre Federal Reserve Chairman Jerome Powell’s statement yesterday to the House Financial Services Committee that he will propose increasing interest rates at the central bank’s meeting in two weeks. Really? The Fed plans to whip inflation by throttling the US economy at a time when a war in Europe threatens to engulf it? Yes, inflation is very high. That’s because demand for goods exceeds supply. But inflation will slow as the pandemic winds down and Americans continue to shift their purchases back to services (retail stores, restaurants, hotels, and airlines are already rebounding), and as the supply of goods and components continues to rise to meet demand.Yes, demand is strong. That’s because after two years of pandemic, American consumers have pent-up needs and wants. They’ve also managed to save a bit. But these conditions are also temporary. The household savings rate continues to drop. Government pandemic relief programs are over. Most Americans are back to living paycheck to paycheck.Powell worries about a tight labor market. But a tight labor market improves the bargaining leverage of the bottom half of American workers, who haven’t had much of a raise in 40 years. If the Fed slows the economy, those workers will lose any prospect of a pay increase. If the slowdown tips the economy into recession, they’ll also be the first to lose their jobs. Don’t believe anyone who warns of an “overheated” labor market. The only people whose paychecks have been overheated are in C-suites and on Wall Street. With Putin’s war raging, this is the worst time for the Fed to slow the economy. The war is doing enough damage as is. It threatens to worsen inflation by further disrupting supply chains and pushing energy and commodity prices even higher — thereby forcing consumers to cut back on other purchases. If Europe and the United States block Russian exports of gas and oil — as they should, in order to contain Putin’s barbarity — energy prices will soar, and the US and global economy could fall into recession. (Over the longer term, higher gas and oil prices aren’t a bad thing; they’ll help propel the U.S. economy toward renewable sources of energy.) Raising interest rates at a time like this is like trying to cure a flu with an enema. The underlying problem has nothing to do with permanently excessive demand or permanently limited supply, or with a tight labor market, or with Putin’s war. The real problem is big corporations in America have too much pricing power. As the New York Times pointed out last week, “corporate executives have spent recent earnings calls [with Wall Street] bragging about their newfound power to raise prices, often predicting that it will last.”A better alternative to raising interest rates and slowing the economy would be a windfall profits tax on profitable corporations that have been taking advantage of the turmoil by raising prices -- including energy companies. But such an initiative would have to come from Congress, where the political clout of corporate America -- especially over Republicans and corporate Democrats -- makes it nearly impossible.If Putin’s aggression continues, though, a windfall profits tax isn’t out of the question.(For more on the real source of inflation, see the video below that I just did with terrific my colleagues at Inequality Media about the real source of inflation.) This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

When I was in elementary school in the 1950s, I was periodically required to “duck and cover” by huddling under my desk in case the Soviet Union dropped an atomic bomb on my town. If I didn’t survive, I was also issued a dog tag with my name and address to help my parents identify my body. (I remember thinking that if the bomb dropped my parents wouldn’t be around to identify me anyway.) The whole thing was terrifying. Years later, when I had my own children, I learned that the only means by which America prevents a far worse nuclear attack — featuring much more powerful bombs capable of reaching anywhere in the United States — is through “mutually assured destruction,” the morbid reality that if Russia launches an attack on us it would be annihilated, as would we. No more duck and cover. Which gets me to today’s Office Hours discussion. Putin’s invasion of Ukraine is escalating. The United States and our allies have already imposed severe economic sanctions, but a dictator can withstand the consequences of sanctions for quite some time (Exhibit A: Kim Jong-un). The most severe sanctions would be on Russia’s oil and gas exports, but imposing them would cause oil and gas prices to soar in the United States at a time when Americans are already facing near record inflation. Should we be willing to make this sacrifice? And what happens if Putin takes over Ukraine, establishes a puppet government there, and then amasses Russian troops along the borders of NATO members Poland, Hungary, Estonia, Latvia, or Lithuania? By treaty, we are obligated to defend these nations. But are we willing to risk full-scale war? And what does war possibly mean between two nations armed with the most nuclear warheads in the world? None of this is pleasant to think about, but we have no choice. Hence this week’s Office Hours question: As a practical matter, what should we be prepared to sacrifice to stop Putin’s aggression? (Please comment below. I’ll weigh in mid-day with some thoughts of my own.)**My two cents. Putin is escalating his attack on Ukraine, now reportedly using vacuum bombs on civilians, which are barred by the Geneva Convention. A humanitarian catastrophe is unfolding in real time before our eyes.Russian gas and oil now come soaked in blood. I do not believe it any longer morally justifiable for the West to purchase them. I agree with Ken and Keith on this. To be sure, cutting off Russian gas and oil will result in substantially higher energy prices in the US and Europe, at a time when inflation is already soaring. Although we are not prepared to sacrifice the lives of Americans, we should be willing to sacrifice our pocketbooks. This is the minimum we should be willing to endure. (We should protect lower-income Americans from the worst economic consequences by enlarging subsidies for heating oil and gas at the pump, for example). One ancillary benefit could be speeding up our conversion to renewable energy. Germany – which is highly dependent on Russian natural gas – has committed itself to 100 percent renewables by 2030, just 8 years from now. We must do the same. It is no longer “green energy” versus Big Oil and Big Coal. American security has now converged with the necessity of slowing and reversing climate change. But what if Putin amasses tanks and troops along the borders of a NATO country? I think our best hope at the moment is that fierce financial pressure — including a ban on Russian oil and gas exports — convinces Russian oligarchs and generals that Putin must be deposed. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

In a few minutes, Joe Biden will give his first State of the Union address. It’s his best opportunity between now and November’s midterm elections to shape the narrative — describing the key choices ahead and explaining where he’s leading America. But there’s far more at stake than mere politics. Biden needs to frame not only what he’s accomplished and wants to accomplish but also what America stands for at this precarious point in our nation’s history. That should be the choice between democracy and authoritarianism. Biden should emphasize that America’s role in the world is to lead democracies against aggressors like Putin. And then he should connect this to voting rights here in America and the dangers posed by the ongoing assault on democracy spawned by Donald Trump. Biden should hold senate Republicans accountable for thwarting every attempt to protect the right to vote — rejecting the comprehensive For the People Act, the John Lewis Voting Rights Advancement Act (which would have restored those parts of the Voting Rights Act of 1965 that the Supreme Court gutted in 2013), and most recently, the Freedom to Vote Act — which was expressly designed to attract at least ten Republicans in order to overcome a filibuster, but did not. Biden should unequivocally state that this intransigence is undermining what generations of Americans have fought and died for — the defining legacy lying at the heart of the nation: our democracy. Biden should also make clear that record levels of concentrated wealth inside America also poses a danger to democracy, as big money engulfs politics. (It wouldn’t hurt to use the quote attributed to the great Justice Louis Brandeis — “America has a choice: We can have great wealth concentrated in the hands of a few, or we can have a democracy, but we cannot have both.”) He could also use this opportunity to show the connection between inflation and increasing levels of corporate concentration and market power — requiring stepped-up antitrust enforcement. At this point in the nation’s history when several existential challenges are converging — Putin’s war and the fearful prospect of nuclear armageddon, COVID, climate change, the attacks Trump has provoked on democracy at home, along with racism and xenophobia — what Biden says tonight could be profoundly important. His address begins in about fifteen minutes. Please watch or listen, and let us know whether in your view he has risen to the occasion. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

The world is currently and frighteningly locked in a battle to the death between democracy and authoritarianism. Yesterday, Vladimir Putin issued a new threat to the West — telling his defense minister and his top military commander to place Russia’s nuclear forces on alert. It is a new cold war. The biggest difference between the old cold war and the new one is that authoritarian neo-fascism is not just an external threat. A version of it has also taken over one of the major political parties in the United States.The Trump-led Republican Party does not openly support Putin, but the GOP’s animus toward democracy is expressed in ways familiar to Putin and other autocrats. Trump Republicans continue to refuse to acknowledge the outcome of the 2020 election, claiming without evidence that it was “stolen” from Trump. In many states, on the basis of this big lie, they are making it more difficult for people who don’t share their beliefs to vote. In several states they are laying the groundwork for ignoring the popular vote altogether and throwing a future presidential election to Trump or another strongman. They have stopped even pretending to be the party of free speech: They are banning books from schools and prohibiting teachers from talking about America’s struggles against racism and homophobia. Putin’s attack on Ukraine, starting February 24, 2022, and the attack by followers of Donald Trump on the United States Capitol on January 6, 2021 are different, of course, but they resemble one another in their contempt for democratic institutions and their attempts to justify violence by asserting a threat to a dominant racial or ethnic group. Each also represents the logical culmination of leadership by a dangerous narcissist who flagrantly lies about his intentions and his opponents and who sees the world only in terms of his personal power.Donald Trump has long admired Vladimir Putin who, evidence shows, personally authorized a secret spy agency operation to support a “mentally unstable” Donald Trump in the 2016 U.S. presidential election. Believing that a Trump White House would help secure Moscow’s strategic objectives, Russia’s spy agencies were ordered to use “all possible force” to ensure Trump’s victory. Again in the 2020 election, according to a recently unclassified report by the U.S. Office of the Director of National Intelligence, Putin authorized "influence operations” aimed at “supporting Trump” and “denigrating President Biden's candidacy.”Presumably Putin supported Trump in 2016 and in 2020 in part because of Trump’s disdain for NATO. As president, Trump did all he could to undermine the organization, even suggesting the U.S. should withdraw from it. Is it pure coincidence that once Trump was out of office and NATO remained intact, Putin attacked Ukraine?Defending democracy and standing up against authoritarian neo-fascism requires courage. In 2019, Ukrainian President Volodymyr Zelensky refused Trump’s demand for help in rigging the 2020 election in the United States, even after Trump threatened to withhold money Congress had appropriated to help Ukraine resist Russian expansion. Today, Zelensky won’t be bullied by Putin. He turned down America’s offer to evacuate him, saying “I need ammunition, not a ride.” Zelensky’s courage in the face of overwhelming brute force has fortified Ukrainians now defending their country against invaders.Contrast this with the toadies at the Republican National Committee who in February censured Republican Representatives Liz Cheney of Wyoming and Adam Kinzinger of Illinois for participating in Congress’s select committee investigating the events of January 6, and who called the January 6 attack on the Capitol "legitimate political discourse​." Also contrast Zelensky’s courage with most elected Republicans who still refuse to stand up to Trump. Just yesterday on national television, Senator Tom Cotton refused four times to condemn Trump for calling Putin “smart” and “savvy” and NATO and the US “dumb.” Make no mistake. Putin’s authoritarian neo-fascism has rooted itself in America. We may be able to prevent Putin’s aggression from spreading to the rest of Europe. But we cannot win a cold civil war inside America without destroying this nation — another of Putin’s objectives when he ordered his spy agencies to help Trump. In the months and years ahead, those of us who believe in democracy, the rule of law, human rights, and truth, must do everything we can to win back our fellow countrymen to these same overriding values. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

In the midst of Putin’s attack on Ukraine, it’s hard to keep our minds on domestic priorities — such as protecting voting rights, delivering economic security, and fixing our woefully expensive and unfair healthcare system. Yet maybe this is exactly the time to focus on these domestic goals. Doing what’s right for our people strengthens our moral authority to defend democracy and human rights abroad. Protecting voting rights lends credibility to our claims of the superiority of democracy to autocracy. Providing more economic security shows the world that our system is fair and just. Fixing our healthcare system enables more Americans to live fuller and more productive lives. Surely we can afford to do far more than we are now doing. Containing Putin while also attending to our domestic priorities fortifies opponents of tyranny in Russia and elsewhere who know they don’t have the luxury of supporting a vast military while also attending to domestic needs. Last week (which seems like an eternity ago) I testified before Congress on why we need Medicare for All. I’ve posted below a video of my testimony and my responses to followup questions from members of Congress. I can guess what you’re thinking: But what about Manchin, Sinema, and senate Republicans? Maybe you don’t believe there’s a chance in hell of protecting voting rights or strengthening social safety nets or enacting Medicare for All. The window of opportunity never opened wide enough to do any of this, and if Democrats lose the House and Senate it will close. But before you throw in the towel, you should know how strong the green shoots of reform are right now. For example, the powerful Congressional Budget Office, led by a Bush administration economist, just issued a report suggesting how a Medicare for All–style system could fix the mess of our current healthcare system — and save money at the same time. As I told Congress last week, Medicare for All — or some variant of a single-payer system — is inevitable because current healthcare trends are unsustainable. The only real question is how much unnecessary pain, suffering, and cost Americans will have to endure before we get there. Stopping Vladimir Putin from taking over Ukraine will be difficult if not impossible in the short term. Containing his aggressiveness beyond Ukraine will demand great energy and resolve, both from us and our allies. Compared to this, reforming America — so the richest nation in the history of the world improves the lives of most Americans instead of only a super-wealthy elite — is straightforward. It should be part of our strategy for strengthening democracy everywhere. In 1941, on the eve of America’s entrance into World War II, when the darkening shadow of fascism was spreading across Europe, Franklin D. Roosevelt delivered his “Four Freedoms” address to a joint session of Congress. He proposed that people “everywhere in the world” should enjoy the freedom of speech and freedom of worship, and also the freedom from want and freedom from fear. The benefits of democracy, FDR asserted, included economic opportunity, employment, social security, and adequate health care. Roosevelt was speaking both to Americans and to the rest of the free world. He was saying, in essence, that the sacrifices we were about to make should be understood as investments in our collective future. It is much the same today. I hope you have a good and safe weekend, despite all the troubling news in the world. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

We must do what we can to contain Vladimir Putin’s aggression in Ukraine. But we also need to be clear-eyed about it, and face the costs. As I’ve said before, economics can’t be separated from politics, and neither can be separated from history. Here are eight sobering realities: 1. Will the economic sanctions now being put into effect stop Putin from seeking to take over all of Ukraine? No. They will complicate Russia’s global financial transactions but they will not cripple the Russian economy. After Russia annexed Ukraine’s Crimean Peninsula in 2014, the U.S. and its allies imposed economic sanctions which slowed the Russian economy temporarily, but Russia soon rebounded. Since then, Russia has taken steps to lessen its reliance on foreign debt and investment, which means that similar sanctions will have less effect. In addition, the rise of cryptocurrencies and other digital assets allow Russia to bypass bank transfers, which are the control points for sanctions. Bottom line: The sanctions already imposed or threatened could reduce Russia’s gross domestic product, but only by a few percentage points. 2. What sort of sanctions would seriously damage Russia? Sanctions on Russia’s enormous oil and gas exports could cause substantial harm. Russia produces 10 million barrels of oil a day, which is about 10 percent of global demand. It ranks third in world oil production (behind the United States and Saudi Arabia). It ranks second in natural gas (behind the United States), according to the U.S. Energy Information Administration. 3. Then why not impose sanctions on them? Because that would seriously harm consumers in Europe and the US — pushing up energy prices and worsening inflation (now running at 7.5 percent annually in the US, a 40-year high). Although the US imports very little Russian oil or natural gas, oil and natural gas markets are global — which means shortages that push up prices in one part of the world will have similar effects elsewhere. The price of oil in the US is already approaching $100 a barrel, up from about $65 a year ago. The price of gas at the pump is averaging $3.53 a gallon, according to AAA. For most Americans, that gas-pump price is the single most important indicator of inflation, not just because they fuel their cars with gas but because the cost is emblazoned in big numbers outside every gas station in America. (The biggest beneficiaries of these price increases, by the way: Energy companies like Halliburton, Occidental Petroleum and Schlumberger, which are now leading the S&P 500. Anyone in favor of putting a windfall profits tax on them?)4. Will stronger sanctions weaken Putin’s control over Russia? Possibly. But they could also have the opposite effect — enabling Putin to fuel Russia’s suspicions toward the West and stir up even more Russian nationalism. The harshest U.S. measures would cause the average Russian to pay higher prices for food and clothing or devalue pensions and savings accounts because of a crash in the ruble or Russian markets, but these might be seen as necessary sacrifices that rally Russians around Putin.5. Any other foreign policy consequences we should be watching? In a word: China. Russia’s concern about the West has already led to a rapprochement with China. A strong alliance between the two most powerful world autocracies could be worrisome.6. What about domestic politics here in the US? Foreign policy crises tend to drive domestic policy off the headlines, and weaken reform movements. Putin’s aggression in Ukraine has already quieted conversations in America about voting rights, filibuster reform, and Build Back Better — at least for now. Large-scale war, if it ever comes to that, deadens reform. World War I brought the progressive era to a halt. World War II ended FDR’s New Deal. The Vietnam War stopped Lyndon Johnson’s Great Society. Wars and the threat of wars also legitimate huge military expenditures and giant military bureaucracies. America is already spending $776 billion a year on the military, a sum greater than the next ten giant military powers (including Russia and China) together. Wars also create fat profits for big corporations in war industries.The possibility of war also distracts the public from failures of domestic politics, as the Spanish-American War did for President William McKinley and the wars in Afghanistan and Iraq did for George W. Bush. (Hopefully, Biden’s advisors aren’t thinking this way.)7. Could the sanctions lead to real war between Russia and the West? Unlikely. Americans don’t want Americans to die in order to protect Ukraine (most Americans don’t even know where Ukraine is, let alone our national interest in protecting it). And neither Russia nor the US wants to be annihilated in a nuclear holocaust. But international crises such as this one always run the risk of getting out of hand. Russia and the US have giant stockpiles of nuclear weapons. What if one is set off accidentally? More likely: What if Russia cyb

The stock market is gyrating wildly in light of Putin’s aggression in Ukraine, but Wall Street traders are doing just fine. Bad news is good news for traders who make money off volatility. After all, in the year of Delta and Omicron, climate chaos, Trump Republican attacks on democracy, bitter divisiveness, a calamitous exit from Afghanistan, and accelerating inflation, the Street’s biggest banks have reaped record profits. Bonuses are through the front Porsche. Hundreds of traders have racked up seven and eight-figure bonanzas. Morgan Stanley paid out $35 million to its CEO, James Gorman. Goldman Sachs, $35 million to David Solomon. Bank of America, $32 million to Brian Moynihan. Citigroup, $22.5 million to Jane Fraser. Not the least, JPMorgan, which paid out $34.5 million to Jamie Dimon — plus a retention bonus of $50 million. Dimon has become a spokesman for the Street and one of the most influential CEOs on Capitol Hill. His public statements are a barometer for what America’s financial oligarchs are thinking. They are not fretting about what the Fed’s incipient fight against inflation is likely to do to jobs and wages. They’re not worried about the shrinkage of America’s middle class or the precariousness of the working class and poor. They aren’t even particularly worried about Putin’s invasion of Ukraine. But they have been unsettled by what they consider to be creeping socialism. In an annual letter to JPMorgan shareholders, Dimon warned that socialism would be a “disaster for our country” because it produces “stagnation, corruption and often worse.” It should be remembered that Dimon was at the helm in 2008 when JPMorgan received a $25 billion socialist-like bailout after it and other Wall Street banks almost tanked because of their reckless loans. Instead of letting the market punish the banks (which is what capitalism is supposed to do), the Obama administration bailed them out and eventually levied paltry fines which the banks treated as the cost of doing business. According to the Justice Department, JPMorgan acknowledged it had regularly and knowingly sold mortgages that should have never been sold. (Presumably this is where the “stagnation, corruption and often worse” come in.) Millions of Americans lost their homes, savings, and jobs in the financial crisis. But neither Dimon nor any other top Wall Street executive was held accountable. If this isn’t socialism for rich bankers, what is it?America’s five largest banks, including Dimon’s JPMorgan, now control almost half of all deposits, up from 12 percent in the early 1990s. Because of their size, these banks are now considered “too big to fail.” This translates into a hidden subsidy of some $83 billion a year — the total estimated discount that creditors and depositors give banks whose solvency is effectively guaranteed by the government. More socialism for rich bankers.Dimon was instrumental in getting the big Trump tax cuts through Congress. They have saved JPMorgan and the other big banks over $50 billion so far. But Dimon and JPMorgan are doing their bit to make sure average Americans experience the full consequences of harsh capitalism. Although federal regulators waived overdraft fees for big banks when the economy took a dive in 2020, Dimon and JPMorgan refused to waive overdraft fees for borrowers struggling to make ends meet amid pandemic lockdowns. Dimon and JPMorgan reaped $1.46 billion in overdraft fees — the most of any big bank. Dimon is a registered Democrat and a major fundraiser for the Democratic Party. He warns that income inequality is dividing America, and laments that a “big chunk” of Americans have been left behind. Announcing a $350m program to train workers for the jobs of the future, he expressed concern that 40 percent of Americans made less than $15 an hour.If Dimon were serious about the problem of widening inequality, presumably he’d use his lobbying prowess to help raise the federal minimum wage and to make the refundable Child Tax Credit permanent. He’d also try to make it easier for workers to unionize, and to raise taxes on the super-wealthy like himself. Do not hold your breath. Dimon isn’t really concerned about widening inequality. He’s not really concerned about socialism, either. Nor about any of the other crises hitting America, which expose Americans to more economic uncertainty and insecurity than the citizens of any other advanced economy. His real worry is that one day America might end the type of socialism he and other denizens of Wall Street depend on – bailouts, regulatory loopholes, subsidies, and tax breaks. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

Happy Presidents Day. It’s a good day to contemplate whether Joe Biden has a prayer of keeping a Democratic House and Senate next year. Call me a hopeless optimist, but I think he does. Yes, I know: Republicans are suppressing votes, Democrats are hopeless at messaging, Biden’s poll numbers are in the basement. But let me give you ten reasons why I think there’s a decent chance Democrats can maintain control of both the House and the Senate, and maybe even gain some seats. First: It’s likely that job growth between now and November will remain strong (if the Fed doesn’t ruin everything by raising interest rates too high, too soon). We’re still 3.5 million jobs short of where we were in February 2020 — giving the economy lots of room to grow. Biden and the Democrats can take credit for putting the economy back on track. Second: Inflation will begin edging downward, as supplies of goods increase and demand shifts back to services — removing the one big economic negative. If Omicron infections continue to drop, the decline in inflation could start as early as April.Third: When the pandemic seems to be over — and there’s a good chance it will feel over by the spring — the nation will breathe a huge collective sigh of relief, and Biden can take credit for getting shots into the arms of 80 percent of Americans.Fourth: If tensions continue or escalate with Russia over Ukraine – or, lord help us, Russia invades Ukraine – America will unite behind its Commander-in-Chief. Republicans and Democrats in Congress are already demonstrating a remarkable degree of unity over Russia. War is horrific, of course, but it tends to garner support for those in power (at least in its months). Fifth: Democrats will almost certainly pass Build Back Better in some form this spring. It won’t be nearly as ambitious as the original, but probably enough to generate some visible benefits for families. Republicans will, of course, oppose it, which means even more help for Democrats in November. To pay for Build Back Better, Democrats will increase taxes on corporations and the super-rich (even Joe Manchin is in favor of doing this). Republicans will surely fight these measures to protect rich corporations. Another big plus for Democrats.Sixth: The courts are pushing back against Republican gerrymandering, giving Democrats better opportunities to hold on to or gain seats. Seventh: In late spring, Republican appointees on the Supreme Court are likely to overturn Roe v. Wade. Evangelicals will be delighted, but most Americans will be horrified – adding to their motivation to back Democrats in November. Eighth: The findings of the January 6 Committee will be reported. It won’t be a pretty picture for Trump or the Republican Party. If Democrats are wise, they’ll let Republican Liz Cheney, vice-chair of the committee, lead the charge – presenting the findings and blasting traitorous Trump and seditionist Republicans on every TV network, radio outlet, and whistle-stop around the country. Reminded of the sedition, more voters will swing toward Democrats. Ninth: In light of this report – and desperate to keep the 2024 Republican nomination for himself – Trump will increase the volume and intensity of his wacko conspiracy theories and other lies. This will motivate even more Democrats as well as Independents and moderate Republicans to vote for Democrats in November. Tenth and finally: If they’re smart, Joe Biden and the Democrats will center their midterm campaign message on the vulnerability of average working Americans to big corporations and Wall Street, which continue to siphon off most economic gains while the typical American is barely holding on. Biden and other Democrats will show that the GOP remains the party of trickle-down economics, corporate welfare, and crony capitalism – a party that’s been blocking a slew of common-sense Democratic measures to help working Americans — which, they’ll argue, is why we need more Democrats in the House and Senate. Presto. A huge turnout in favor of Democrats this November, which results in Democrats retaining or even increasing their margins in the House and Senate. Is this really possible? Democrats have snatched defeat out of the jaws of victory too many times for me to feel confident. But the scenario I’ve sketched is far from being out of the question. What do you think? This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

Hello again, friends. Thank you for joining me for the second week of my Wealth and Poverty class. In today’s class, we begin to explore why such inequalities have soared since the late 1970s and early 1980s. The questions we’ll focus on today are: How did the market for financial capital contribute to inequalities of income and wealth? Did the accepted purpose of the American corporation change over the last fifty years, and, if so, when and how? More generally, for whom should the corporation exist? Is there such a thing as “corporate social responsibility?” You’ll find recommended readings below the video. Just click on the links. Ready? Here we go. Please double-click the video box below. Thanks again for joining me! (And as always, let me know what you think in the comments below.) Click here for the Class 2 slides.Looking for another session? Click the link for: Class 1, Class 3, Class 4, Class 5, Class 6, Class 7, Class 8, Class 9, Class 10, Class 11, Class 12, Class 13, Class 14.P.S. If you’re enjoying this course and think your friends, family, colleagues, or social media networks would find it interesting and helpful as well, please share!Select Readings:* Bethany McLean, “Too Big to Fail, COVID-19 Edition: How Private Equity Is Winning the Coronavirus Crisis,” Vanity Fair, April 9, 2020* Andrew Winston, “Is the Business Roundtable Statement Just Empty Rhetoric?” Harvard Business Review, August 30, 2019* Neil Irwin, “To Understand Rising Inequality, Consider the Janitors at Two Top Companies, Then and Now,” The New York Times, Sept. 3, 2017If you’d like to help support our efforts, please consider a paid or gift subscription. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

For many years, my right ankle has been losing cartilage that keeps my ankle bones from scraping up against each other. The result: increasing inflammation and pain. An orthopedic surgeon suggested replacing the ankle with an artificial one, but the procedure is costly, takes months to heal, and requires lots of physical therapy. So I’ve taken a different route. I cut way back on sugar, began an exercise program aimed at strengthening the muscles around my ankle, and lost twenty pounds. Now, six months later, the ankle pain is almost gone. I share this with you because I’m testifying today before a House committee that’s considering the future of healthcare in America. The fact is, we have too many high-priced specialists who know how to do a few complicated and costly things such as replacing a bum ankle, and too few generalists who know enough about the whole body that they’re able to avoid the complicated and costly things. The big money is in the complicated things, so that’s where the talent goes and what hospitals aim for. And if you can pay for it, great. The complicated stuff is what America excels at. But we’re terrible at the uncomplicated things — not just my cutting back on sugar, exercising, and keeping the weight down, but making sure everyone gets regular checkups from general practitioners who are trained to prevent serious illnesses. The terrible tolls of diabetes, heart disease, and some cancers, for example, are preventable if caught in time. Even before the pandemic, the typical American family was spending more than $6,000 a year on health insurance premiums. Add in copayments and deductibles that doctors, hospitals, and drug companies also charge, and that sum rises to $6,400. Add in typical out-of-pocket expenses for pharmaceuticals, and it’s at least $6,800. That’s not all, because some of the taxes the typical family pays are for health insurance, too — for Medicare and Medicaid and the Affordable Care Act. Add them in, and the typical household pays $8,975 a year for health insurance. This number doesn’t include what typical workers’ employers spend on their health insurance – which might otherwise go to their wages. American spending on healthcare per person is more than twice the average in the world’s other thirty-five advanced nations. Yet the United States ranks near the bottom among advanced nations for life span and infant mortality. Americans are sicker, our lives are shorter, and we have more chronic illnesses. Canadians, for example, can expect to live on average almost four and a half years longer than Americans, even though health care spending per person is only about half as high as in the U.S.Healthcare is so expensive that many Americans put off seeing a doctor until their health has seriously deteriorated. Even with the Affordable Care Act, some 30 million Americans have no health insurance coverage at all. Not only do too many dollars go to super-specialists and too few to preventive generalists, but the administrative costs involved in private for-profit insurance are humongous. About a third of what the typical American pays for health insurance goes to the people who oversee billing and collections. And then of course there are marketing and advertising expenses, and the profits that go to shareholders or private-equity managers.Finally, if the pandemic taught us anything, it’s that we need to decouple health insurance from employment. Losing a job shouldn’t mean the loss of a family’s lifeline to healthcare. The Affordable Care Act was a good start at reform, but today I’m urging Congress*to replace private for-profit health insurance with Medicare for all. This would lead to far lower total costs — including premiums, co-payments, deductibles, and taxes — and it would cover all Americans. People could keep their same doctor or other health-care provider, and could buy private insurance to supplement it — just as some people now buy private insurance to supplement Medicare and Social Security. But as Medicare and Social Security have demonstrated, we shouldn’t need to pay private for-profit insurers boatloads of money to get the insurance we need.I have no illusions this will happen soon. But the road we’re now on is unsustainable — economically, politically, and socially. Eventually, we’re going to have some version of Medicare for All (and hats off to members of Congress who are leading the way, such as Representatives Pramila Jayapal, Debbie Dingel, and Ro Khanna). The question is how much unnecessary cost and hardship must we bear before we do?* The hearing was well-attended by members, and the conversation was thoughtful and intelligent. A few Republicans got into their age-old “socialism” rant, but I quietly pointed out that Social Security and Medicare — both hugely popular with the public — were also criticized by Republicans as being “socialist” when first proposed. ** I hope you’ll join me for tomorrow’s second class on Wealth and Poverty — right her

I got my start in American politics about 50 years ago. America was in many ways a different country then, but my political views weren’t all that different than they are now. I was against the Vietnam War and the military-industrial complex, pro civil and voting rights, and against the growing power of big corporations. That put me just left of the center. Today I’m much further left of center than I used to be — because the “center” has moved to the right and the right has become far far more extreme. So today’s Office Hours question: What does this trend mean for the future of American politics? What, if anything, can be done to reverse it? (I’ll chime in starting midday.)PS: Here’s a video I just did on this, with my talented colleagues at Inequality Media (special shoutout to Whittney Suggs for fabulous animation!). This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

I mentioned yesterday that I’ve been inspired by the young Starbucks baristas who are leading the charge to unionize the company. The number of unionizing stores has risen to seventy-two since the fall. The weekly spate of new Starbucks election filings represents a breakthrough for labor.Starbucks executives are counterattacking. Last week, they fired seven Memphis baristas who had led the organizing in that city. I urge you to watch my interview with leaders of the Starbucks baristas (just double-click below).Starbucks baristas are part of a movement of food service workers across the nation. These workers have not only endured the pandemic (they’ve been deemed “essential” and suffered high rates of COVID) but also lousy pay and insecure work. A brief strike in Colorado last month by Kroger workers in Colorado revealed the scope of the problem. Kroger is the biggest supermarket chain in the United States and the fourth-largest employer in the Fortune 500. It owns more than 2,700 locations (its brands include Harris Teeter, Fred Meyer, Ralphs, Smith’s, Pick ’n Save and even Murray’s Cheese in New York City). Kroger’s business has boomed during the pandemic. Its stock has risen about 36 percent over the past year. Its CEO, Rodney McMullen, earned $22.4 million in 2020. But the median Kroger employee earned just $24,617 last year. That’s a CEO-to-worker ratio of 909 to 1 — one of the country’s starkest gaps between a CEO and typical employee. About 75 percent of Kroger employees report being food insecure, meaning they lack consistent access to enough food for a healthy life. About 14 percent report being homeless, now or within the last year. Over 62 percent say they do not earn enough money to pay basic monthly expenses. And their pay keeps dropping: Kroger’s top-paid grocery clerks today earn 22 percent less than they did in 1990 (adjusted for inflation). About two-thirds of all Kroger’s hourly employees work part-time, even though they want more hours. Yet more than half are given schedules that change at least every week, making it difficult for them to commit to another employer. As I noted last week, keeping workers part time is a strategy employers use to encourage turnover and reduce costs.Hopefully, the Starbucks’s baristas I interviewed — and others like them — will lead the way to better pay and working conditions for all food service workers, including Krogers. Food service workers and the giant corporations that employ them reveal the shambles of labor-management relations in America today, and the hypocrisy of so-called “corporate social responsibility.” This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

When I began this newsletter almost five months ago I had no idea what I was doing. I still don’t. But your enthusiastic response, thoughtful comments, and helpful feedback have guided me — and continue to make it all worthwhile. It has been a journey into the unknown. We’re figuring it out together. A big thanks to you. I hope you’re finding my course on inequality (which began here last Friday, and will be continuing for the next 13 weeks) helpful. I hope you’re also finding useful (and sometimes entertaining) my short essays and drawings, as well as the videos I’m making with my talented colleagues at Inequality Media. A big thanks to them in addition for helping me bring this newsletter to you. I’m groping my way toward providing you with a larger context for what is happening in America and the world. Although faced with existential challenges of a deathly pandemic, climate change, widening inequality, systemic racism, and direct attacks on democracy, America is strangely immobilized. Why? Because for years most of the gains from our political-economic system have gone to the top. Almost everyone else is working harder, getting nowhere, and feeling less secure. This has generated widespread anger and cynicism — which has increased many peoples’ receptivity to conspiracy theories and demagogues. (A similar dynamic is playing out in much of the rest of the world.) In 2016, we elected a sociopath who spouted racist nationalism while giving the oligarchy whatever it wanted. Since then, the alliance of oligarchs and racist nationalists has continued. It appears to be growing. Oligarchic economics combined with racist nationalism is treacherous for democracy. Oligarchs support racist nationalism because it divides people and diverts attention from how much wealth and power the oligarchy is accumulating. Racist nationalists thrive on oligarchs who provide almost limitless funding.As early as 2012, more than 40 percent of all money spent in US federal elections came from the wealthiest of the wealthiest—not the top one percent or even the top tenth of the one percent, but from the top one percent of the one percent. Peter Thiel, a staunch Trump supporter whose net worth is estimated by Forbes to be $2.6 billion, has become one of the Republican’s Party’s largest donors. The oligarchs don’t just support Republicans, though. Last year, at least 13 billionaires who had previously donated to Trump lavished campaign donations on Democratic senators Joe Manchin and Kyrsten Sinema, according to an analysis of Federal Election Commission records. The alliance between oligarchic economics and racist nationalism marks the failure of progressive politics. When the people are no longer defended against the powerful, they look elsewhere. We must focus the national debate on this monumental and growing imbalance of power, and do whatever we can to rebalance it. I am hopeful we can. What gives me hope? The new activism among workers struggling to unionize, young progressives who are giving new energy and purpose to the Democratic Party, people of color who are leading the way to social justice, and the young people I meet almost every day — such as the young baristas who are organizing Starbucks — who are building new centers of economic power.Which brings me back to you. By becoming part of this community — subscribing to and sharing this newsletter and, offering your comments and feedback, and, if you can, supporting our work — you are part of this movement as well. Today seems like a good time to declare my appreciation for our partnership in this experiment. Thank you, and Happy Valentine’s Day This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

Labor Secretary Marty Walsh says he’s ready to step up to the plate and help end Major League Baseball’s lockout. My advice to Marty, as former labor secretary to the current one: Stay away from baseball. I wouldn’t touch another baseball labor dispute if Babe Ruth asked me in person. In 1995, the owners and players were at loggerheads, too. I tried to mediate. Bill Clinton (on phone): “Bobby, this is Bill. How you doing on the strike?” Translated: What the hell’s going on? The World Series may be canceled for the first time in a century – and on my watch – unless you settle this thing soon.Me: “We’re doing a lot of talking. Players want free agency, owners want a salary cap. The only way to give players free agency and not have the stars all end up in the wealthiest clubs is for the big clubs to share some of their revenues with the smaller ones, maybe through a tax on team payrolls. Each side would have to give a bit. That’s what we’re working on now.” Translated: I’m getting nowhere.Bill was eager to get involved. He smelled a deal. He wanted to be savior of the national pastime. He had heard that the two sides were in Washington. “Why don’t we just call them over to the White House and see how far we can get?” he said. Hours later, Bill, Al Gore, and I were in the Roosevelt Room with Bud Selig, who represented the owners; Don Fehr, the players; and the other owners and players from the two bargaining committees. The owners were middle-aged, gray and corporate. The players were big, hulking young men who looked stiff and awkward in white shirts, ties, and jackets. All sat motionless around the giant mahogany table. Down the corridor and around the corner, the White House press room was crowded with reporters and cameras, anticipating a story about how the President settled the baseball strike.Al began ponderously. “As I understand it, the players don’t want their salaries to be capped, and the owners say a salary cap is the only way to keep the smaller teams competitive. Now, if the owners would agree to tax themselves so that the larger teams would subsidize the smaller teams, we’d be halfway home. And if the players would agree to some sort of ceiling on their individual contracts, that would get us the other half. S-o-o-o …” Gore seemed to be talking to five-year-olds. “The real question here is how far both sides are willing to come in order to strike a fair balance. Am I correct?”No answer. One of the young pitchers cleared his throat. “Mr. President, Mr. Vice President, I love baseball. We all love baseball. This isn’t really a dispute over money.” He looked intently around the table. “Hell, I’d be willing to play the game for $3 million a year if I get some respect.” I couldn’t repress a cough. After two hours, we were still nowhere. “Let’s take a break,” Bill said quietly. “Maybe if we just talk informally we can make some progress.”Bill was an eternal optimist, convinced that there was always a deal lying out there somewhere. It’s what made him a super-salesman: He was absolutely certain that every single person he met – Newt Gingrich, Yasir Arafat, whoever – wanted to find common ground. It was simply a matter of discovering where it was.If the owners would agree to binding arbitration, it would be over. But they wouldn’t budge. Bill and I went with Selig to another office. Bill sat down next to him on a couch, and commenced the move. Bill’s face was six inches away from Selig’s. Bill’s arm rested on the back of the couch behind Selig’s head so that his hand reached around to Selig’s other shoulder. It was full-intensity Bill Clinton. I was amazed Selig didn’t melt on the spot.“Look, Bud,” Bill purred in soft southern. “You guys can make millions. Millions. We’ll have a b-i-g sendoff for the season. I’ll help you. We’ll all help. I’ll get Dole to go to Kansas, Gingrich to Atlanta. I’ll have every major figure in America out there for the start. Can’t you just see it?” Bill sketched the vision in the air with his other hand. “This will be the biggest season opening ever in the history of the game. Now … all you need to do” – Bill’s voice became even softer, and he moved his face even closer to Selig’s –“is agree to have this thing arbitrated. It’s in your interest, Bud.” Bill paused and looked deeply into Selig’s eyes. “And it’s also in the interest of … America.”I thought I heard the National Anthem in the distance. The performance was spellbinding. Selig’s thin body seemed to be shaking. “Let … Let me just … just check with the other … other owners,” he said weakly. I helped him out of the couch. He could barely stand, poor man. He wandered out of the office, dazed.Bill shot me a grin. “I think we hit a homer.”The reporters down the hall were restive. I couldn’t help think there were more important things for the President and Vice President of the United States to be doing with their time than waiting for Bud Selig to return with his verdict. Surely something must be happening in China.But Bi

More inflation buzz today. The U.S. consumer price index for January rose at an annual rate of 7.5 percent, the largest such increase since 1982.Yes, prices are increasing. But would you prefer a recession? As a practical matter, that’s the choice the Fed gives us. When the Fed puts on the brakes, it often pushes the economy into a ditch. (Anyone remember when Paul Volcker “broke the back of inflation” by putting the economy into a tailspin?) A recession will cause far more hardship for many more Americans than inflation is now causing. Want to control inflation? Don’t do it by drafting millions of workers into the inflation fight by slowing the economy — causing them to lose jobs and wages. Better to ride out the storm — prices will slow down as shortages are overcome (although don’t expect corporations to reverse their price hikes). Or there’s always stronger medicine — price controls, windfall profits taxes, and antitrust. Most importantly, focus on the real problems facing working Americans — the power imbalance that’s been keeping wages and working conditions down (adjusted for inflation) while pushing profits and stock prices up. Specifically, stop employers from using five tactics that are seriously harming working people. Three of them are legal but shouldn’t be. No other advanced nation allows its working people to be treated this way. 1. Forced overtime. Your employer can force you to work for more than 40 hours a week. If you refuse, you can be reprimanded, demoted, or even fired.Forced overtime is at the heart of the explosion of strikes in 2021. Workers at a Frito-Lay plant in Topeka, Kansas went on strike for nearly three weeks, demanding an end to 12-hour “suicide shifts,” forced 84-hour workweeks, and working conditions that have led to heart attacks, electrocution, and even death.How is this legal? Because federal overtime laws are wildly out of date. The Fair Labor Standards Act of 1938 established the 40-hour work week and that workers must be paid “time-and-a-half” for hours worked beyond 40 hours, but imposes no limit on the number of overtime hours -- unlike nearly every other industrialized nation.The term “forced overtime” should not exist. Congress must pass legislation that bars employers from forcing workers to work more than 40 hours a week.2. Forced arbitration. Under this often-hidden provision in employment contracts, you must waive your right to sue your employer or participate in a class action lawsuit against them. Employment disputes must be resolved by a private arbitrator — often chosen by the employer — rather than a judge or a jury in a court of law, and the outcome is not public. Forced arbitration means that workers cannot sue their employers for violating any of their labor rights, whether it be wage theft, discrimination, retaliation, or sexual harassment. You might not have any idea you’re agreeing to this because it’s buried in the fine print of your employment contract. Unsurprisingly, the practice overwhelmingly favors the employer. One study estimates that forced arbitration enabled employers to steal $12.6 billion from low-wage workers in 2019. As of 2019, forced arbitration affected 60 million workers. It’s particularly prevalent in low-wage jobs held by women and people of color.Congress must pass legislation banning forced arbitration in employment contracts.3. Unpredictable and unstable scheduling. Millions of American workers are subject to “just-in-time” scheduling, in which your employer changes your schedule with little or no advance notice. Over 40 percent of younger retail workers with hourly wages report receiving their schedules with one week or less notice.Unpredictable scheduling puts workers at the whim of their employer and prevents them from planning for childcare, attending school, or holding down a second job. It also causes high levels of stress. And it prevents millions of working families from gaining financial stability and building wealth.It’s time for Congress to enact a fair workweek law, requiring employers to send out schedules two weeks in advance or pay extra for last-minute changes.Add to these, two other tactics that are illegal but have become standard practice nonetheless. 4. Wage theft. Employers steal from you by working you off the clock, paying you below minimum wage, or not paying for overtime. A study of just three cities found that employers stole $3 billion in wages from low-wage workers in just a single year. On that basis, researchers estimate $50 billion is stolen from the country’s low-wage workforce every year. Many of them, as a result, have to rely on public assistance, meaning we all subsidize corporate theft.What can be done? Tougher labor laws, better enforcement, harsher penalties for employers, and stronger unions. The Protecting the Right to Organize Act (PRO Act), passed in the House in March 2021, contains all these. But like many important bills that have been passed during the last year in the House,

Many people tell me America is going to hell. But when I ask them how their own lives are going, they say pretty well. This discrepancy between how people feel about America’s public life and their own private lives is wider today than it’s been since the late 1960s. Then, our public life was marked by assassinations, riots, an escalating war in Vietnam, and the deeply flawed Lyndon Johnson and Richard Nixon. But our private lives featured love-ins, Woodstock, and the Beatles. (I know; I was there.)The latest Gallup poll show that just 17 percent of Americans are satisfied with the way things are going in the country. That’s the lowest percent since Joe Biden became president – and it coincides with his lowest job approval rating, as well as a rock-bottom 18 percent congressional job approval, sagging economic confidence, and the expectation that inflation will rise in the coming months.But wait. At the same time we’re so down on America, our satisfaction with our own lives has ticked up to 85%. That’s just five points shy of the January 2020 record-high point. Take a look:Why such a huge gap between public and private now? It’s easy to understand why we’re so dissatisfied with the way things are going in America. The news from the mainstream media is unrelentingly bad — and those negatives are amplified by an angry, nasty (and often paranoid) social media. We’ve endured more than two years of a deathly pandemic, with all its accompanying confusions and fears. Inflation is high. Politics is meaner and more partisan. An astonishingly large portion of the country seems to have turned Trumpish. And last year’s high expectations for helpful measures from Biden and the Democrats have been dashed by Manchin, Sinema, and senate Republicans.But given this, how can we be so satisfied with the way things are going in our personal lives? Plenty of us remain hugely stressed – essential workers, parents of young kids who aren’t able to get childcare, poor people who can’t afford the rent, those of us who have gotten horribly sick or lost loved ones during the pandemic. Yet the pandemic has also allowed almost half of us to work from home, which has proven to be a huge boon -- giving us, on average, a full extra hour each day, far more flexibility in how we use our time, and escape the daily agonies of commuter traffic. While I’d rather teach in person, I far prefer to attend all tiresome meetings on Zoom rather than in bland conference rooms.We’re also spending less money on stuff, partly because we can’t afford it but also because we can’t get it Supply bottlenecks are forcing us to do without — and to simplify our lives as a result. My TV set is tiny by today’s standards, my car is a dozen years old, and my dryer doesn’t work half the time. But guess what? I can live without them. I’m exercising more, listening to more music, started to learn another language. We can’t socialize as much — but this has forced us to be choosier about whom to spend our time with, allowing us to deepen those relationships. My wife and I are doing more together, just the two of us. I’ve seen more of my close friends and less of people I merely feel obliged to see. We also worry less about clothing, haircuts, makeup, and other ways we present ourselves to the world — because we’re presenting less of ourselves and less often. Most days I look like a schlump. (To be honest, that’s always been the case.)We eat out less and eat in more, enabling some of us to discover the joys of home cooking – both eating and preparing. (I’d forgotten how delicious homemade chicken soup with fresh vegetables can be.) We’re spending less time visiting parents, children, and siblings who live far away, but we can keep up with them over Zoom (which in some ways has made life less complicated).This terrible period in public life, in other words, has also allowed more space for our personal lives. It’s enabled us to slow down, simplify, do without lots of stuff, deepen relationships, and create more room for ourselves. Which in turn has allowed many of us to ask ourselves — perhaps for the first time in many years, if ever — what we want from the rest of our lives, and maybe even decide to get off the track we’re on (just look at record quit rates).I’m aware that life is indubitably hard for many people. And I’m sick about what’s happening to America — about its widening inequalities, racism, and attacks on our democracy. I’m determined to keep fighting for social justice. But at the same time, I’m discovering an enjoyment in my own life that feels somehow deeper and more authentic than it’s ever been. I hope you are, too. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

The biggest stories this week are likely to be the continuing standoff between NATO (led by the United States) and Putin in the Ukraine, the new Russo-Chinese detente, and the Republican Party’s continuing drift toward Trumpism. One way of tying these together to reveal a larger pattern is to talk about the expanded Child Tax Credit. You heard me right. The fate of the expanded Child Tax Credit illustrates a basic problem that runs through all this. Let me explain. Even before the pandemic, more than one out of every six America children was impoverished, often without enough food or inadequate shelter. Meanwhile, the typical American family was living precariously from paycheck to paycheck. At the same time, a record high share of national wealth was already surging to the top.Starting last July, the nation did an experiment that might have limited these extremes. That’s when 36 million American families began receiving monthly payments of up to $3000 per child ($3,600 for each child under 6).Presto. Child poverty dropped by at least a third, and the typical family gained some breathing space. It’s rare for a government policy to work so unambiguously well, so quickly, on such a huge scale, and on so basic a problem.The experiment ended abruptly in December, notwithstanding. On Dec. 19, as you may recall, Senator Joe Manchin announced he would not vote for President Biden’s Build Back Better Act, which would have continued the monthly payments. He cited concerns over the ballooning federal budget, and offered to support a smaller version without the child subsidy. Not a single Republican senator would vote for it either, citing similar concerns. That, it seems, was the end. But obviously, the federal budget would not balloon if taxes were raised on the rich and on big corporations to pay for the child subsidy -- at a cost of an estimated $100 billion per year, or $1.6 trillion over ten years.That’s less than big corporations and the rich will have saved on taxes from the Trump Republican tax cut. Repeal it, and there’d be adequate money. It’s also less than the increase in the wealth of America’s 745 billionaires since the pandemic began. Why not a wealth tax?It’s also less than one-seventh of America’s bloated defense budget. Arguably, America would be stronger in future years if fewer American children are impoverished and the typical family more financially secure. The experiment died because, put simply, big corporations and the super-rich didn’t want to pay for it. Capitalism and democracy can co-exist as long as democracy is in the driver’s seat -- reducing the inequalities, insecurities, joblessness, and poverty that accompany unbridled profit-seeking.For the first three decades after World War II, democracy was in the driver’s seat. Both the US and war-ravaged Western Europe built the largest middle classes the world had ever seen, and the largest and most buoyant democracies. The arrangement was far from perfect, but with addition of civil rights and voting rights, subsidized health care (in the US, Medicare and Medicaid), and a huge expansion of public education, democracy was on the way to making capitalism work for the vast majority.Then came a giant U-turn, courtesy of Ronald Reagan in America and Margaret Thatcher in Europe. Deregulation, privatization, globalization, and the dominance of finance led to the Full Monty: abandoned factories and communities, stagnant wages, widening inequality, a shrinking middle class, political corruption, and threadbare social safety nets.The result? Widespread anger, frustration, and cynicism. Even before the pandemic, most people were working harder than ever but couldn’t get ahead, and their children’s prospects weren’t any better. The lion’s share of economic gains went to the top.As Americans went to the polls after eight years of President Obama, 75 percent said they were looking for a leader who would “take the country back from the rich and powerful.” Donald Trump campaigned as the voice of the working class but he delivered the country more fully into the hands of the rich and powerful by stoking racist nationalism. Racist nationalism marks the ultimate failure of progressive politics. When the people are no longer defended against the powerful, they look elsewhere. This was the direct legacy of forty years of deregulation, privatization, globalization, and the dominance of finance. It explains what happened in 2016 — and may happen again in the mid-term elections of 2022 and the presidential contest of 2024, unless Democrats and progressives overcome these regressive forces. As the United States seeks to confront China and Russia by presenting the choice as between democracy and autocracy, the rest of the world is skeptical. That’s because American democracy itself has succumbed to oligarchic money and racist-nationalist populism – a kinder and gentler form than China’s and Russia’s, to be sure, but differing only in degree.Trump openly envied Xi’s

Thank you so much for joining me in this community. It’s an experiment in group learning and teaching about the American system — and it’s succeeding far beyond my expectations. Your interest and enthusiasm make it all worthwhile. Please let others know!In preparation for my course on Wealth and Poverty, which starts Friday on this page, you may find useful the documentary below. It’s called Inequality for All. I made it a few years ago with the talented director Jacob Kornbluth. It’s won many awards, and is used in college classrooms across America. As you’ll see, the doc begins and ends in an earlier version of the same course you’ll be taking starting Friday (although you’ll be taking it remotely). The doc runs 1 hour and 15 minutes. Think of it as pleasant homework. (Having trouble viewing the video on this page? Try clicking this direct link.) This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

Today’s January jobs report is heightening fears that a so-called “tight” labor market is fueling inflation, and that therefore the Fed must put on the brakes by raising interest rates. This line of reasoning is totally wrong. Among the biggest job gains in January were workers who are normally temporary and paid low wages (eg, leisure and hospitality, retail, transport and warehousing). Employers cut fewer of these low-wage temp jobs than in most January’s because of rising customer demand combined with Omicron’s negative effect on worker availability. But due to the Bureau of Labor Statistics’s “seasonal adjustment,” cutting fewer workers than usual for this time of year appears as “adding lots of jobs.” Fed policymakers are set to raise interest rates at their March meeting and then continue raising them, in order to slow the economy. They fear that a labor shortage is pushing up wages, which in turn are pushing up prices — and that this wage-price spiral could get out of control. It’s a huge mistake. Higher interest rates will harm millions of workers who will be involuntarily drafted into the inflation fight by losing jobs or long-overdue pay raises. There’s no “labor shortage” pushing up wages. There’s a shortage of good jobs paying adequate wages to support working families. Raising interest rates will worsen this shortage. There’s no “wage-price spiral,” either (even though Fed chief Jerome Powell has expressed concern about wage hikes pushing up prices). To the contrary, workers’ real wages have dropped because of inflation. Even though overall wages have climbed, they’ve failed to keep up with price increases – making most workers worse off in terms of the purchasing power of their dollars.Wage-price spirals used to be a problem. Remember when John F. Kennedy “jawboned” steel executives and the United Steel Workers to keep a lid on wages and prices? But such spirals are no longer a problem. That’s because the typical worker today has little or no bargaining power. Only 6 percent of private-sector workers are now unionized. A half-century ago, more than a third were. Today, corporations can increase output by outsourcing just about anything anywhere because capital is global. A half-century ago, corporations needing more output had to bargain with their own workers to get it. These changes have shifted power from labor to capital — increasing the share of the economic pie going to profits and shrinking the share going to wages. This power shift ended wage-price spirals. Slowing the economy won’t remedy either of the two real causes of today’s inflation – continuing worldwide bottlenecks in the supply of goods, and the ease with which big corporations (with record profits) are passing these costs to customers in higher prices.Supply bottlenecks are all around us. (Just take a look at all the ships with billions of dollars of cargo idling outside the Ports of Los Angeles and Long Beach, through which 40 percent of all U.S. seaborne imports flow.) Big corporations have no incentive to absorb the rising costs of such supplies — even with profit margins at their highest level in 70 years. They have enough market power to pass these costs on to consumers, sometimes using inflation to justify even bigger price hikes. “A little bit of inflation is always good in our business,” the CEO of Kroger said last June. “What we are very good at is pricing,” the CEO of Colgate-Palmolive added in October.In fact, the Fed’s plan to slow the economy is the opposite of what’s needed now or in the foreseeable future. COVID is still with us. Even in its wake, we’ll be dealing with its damaging consequences for years — everything from long-term COVID, to school children months or years behind. Today’s jobs report shows that the U.S. economy is still 2.9 million jobs below what it had in February 2020. Given the growth of the US population, it’s 4.5 million short of what it would have by now had there been no pandemic. Consumers are almost tapped out. Not only are real (inflation-adjusted) incomes down, but pandemic assistance has ended. Extra jobless benefits are gone. Child tax credits have expired. Rent moratoriums are over. Small wonder consumer spending fell 0.6 percent in December, the first decrease since last February.Many people are understandably gloomy about the future. The University of Michigan consumer sentiment survey plummeted in January to its lowest level since late 2011, back when the economy was trying to recover from the global financial crisis. The Conference Board’s index of confidence also dropped in January.Given all this, the last thing average working people need is for the Fed to raise interest rates and slow the economy further. The problem most people face isn’t inflation. It’s a lack of good jobs. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

As former secretary of labor, I’m always interested in the annual count of unionized workers issued by the Bureau of Labor Statistics. This year’s count shows that the 70-year decline of unions continues. The share of unionized American workers dropped from 10.8 percent last year to 10.3 percent now. The rate among private-sector workers hit a new rock bottom of 6.1 percent — about one-seventh of its level in the middle of the 20th century.How to square this with the huge surge in labor activism that began last fall? From Alabama to the Midwest to California, workers have headed to the picket lines. 10,000 John Deere workers. Over 1,000 Alabama coal miners. New York City taxi drivers. Health care workers. Food production plant workers at multiple companies. Workers at media outlets, think tanks, museums, and universities. At worksites staffed predominantly by millennials and GenZ’s — among whom support for unions hovers near 80 percent — unionization is soaring (Starbucks baristas, graduate student workers, and so on).Oh, and public support for unions is at a 50-year high. The answer to this seeming paradox is found in the law. The 1935 National Labor Relations Act (NLRA) once ensured workers’ right to form unions and bargain collectively. But the Act has been steadily weakened by the 1947 Taft-Hartley Act, court decisions, Ronald Reagan’s repudiation of unions, and decades of inaction by Democratic politicians. Today, corporations typically intimidate and even fire workers seeking to unionize. These tactics are illegal under the NLRA, but companies don’t care because the penalties are small — at worst, rehiring and giving backpay to workers who have been fired, and allowing new elections. Many companies consider these little more than costs of doing business. (Consider last year’s failed organizing drive at Amazon’s Bessemer, Alabama warehouse, when the company intimidated its workers into rejecting the union.) Both Bill Clinton and Barack Obama promised they’d make it easier for workers to unionize by pushing legislation to increase penalties against employers who violate the Act and speed the process of forming unions. But neither followed through on those promises, even though both had Democratic congresses during their first two years in office. Why didn’t they follow through? I know because I spoke with each of them (and tried to get Clinton to support such legislation). They didn’t want to spend the political capital necessary to get the legislation through Congress. They also took union voters for granted. “Who else are they going to vote for?” I was told over and over again by political advisers to Clinton and Obama. This has proven to be a huge mistake. Unionized workers used to be the ground troops of the Democratic Party. And they made sure Democrats paid attention to the concerns of America’s working class — which is why we have a 40-hour workweek, unemployment insurance, a minimum wage, Medicare and Medicaid, and the Affordable Care Act. Now, much of the non-college working class votes Republican. These voters no longer believe Democratic politicians are on their side, and have succumbed to GOP-Fox News cultural and racial paranoia. At least Joe Biden made his promise to strengthen unions tangible by supporting the Protecting the Right to Organize Act (also known as the PRO Act). It passed in the House earlier this year. But — as with Build Back Bigger and voting rights — getting it through the Senate is impossible so long as the filibuster enables senate Republicans to block it (not surprisingly, all 50 Republicans oppose the PRO Act). In the meantime, I’m encouraged by recent actions of the National Labor Relations Board (which has the responsibility for enforcing the National Labor Relations Act). With its new Biden-appointed majority and its new Biden-appointed general counsel (Jennifer Abruzzo), the Board is flexing its muscles. Last week it accused Amazon of illegally surveilling and threatening workers who are trying to unionize a warehouse in Staten Island. (The Board has already ordered a new election at Amazon’s Bessemer warehouse.)The Board may require companies that violate workers’ rights during unionization campaigns to recognize those unions. It’s also considering whether companies that misclassify their workers as independent contractors violate the NLRA. (The number of misclassified workers who could unionize—potentially including the drivers at companies like Uber and Lyft—could be well into the millions.) Big corporations like Amazon and Starbucks will continue to do whatever possible to squelch worker power. And if any of these issues get to the Supreme Court you can expect its Republican majority to do the same. But America’s working people outnumber the billionaires and CEOs by a wide margin. If we stand in solidarity, it’s possible to reverse 40 years of stagnant wages, declining economic security, and widening inequality -- and build a more prosperous middle class where

When I was a young teenager near the middle of the last century, I asked the high school librarian if I could borrow J.D. Salinger’s The Catcher in the Rye. Why did I want to read it? she asked. I lied and told her my parents told me it was excellent literature.The real reason I wanted to read The Catcher in the Rye was it had been banned from the library. I knew the librarian kept one copy behind her desk, and I was determined to get it. She reluctantly handed it to me. I read it voraciously. There’s no better way to get a teenager to read a book than to ban it.Which is why it was so clever of the McMinn County, Tennessee, school board to vote to remove Maus from its eighth grade curriculum. Maus is a Pulitzer-winning graphic novel by Art Spiegelman that conveys the horrors of the Holocaust in cartoon form. The board cited “objectionable language” and nudity.Before the board made its decision, teenagers in McMinn County probably weren’t particularly eager to read about the Holocaust, even in the form of a graphic novel. But now that Maus has been banned for objectionable language and nudity, I bet they’re wildly trading whatever threadbare copies they can get their hands on. Since it was banned, half the teenagers in America seem to have bought Maus (or insisted their parents do). Two weeks ago, the book wasn’t even in the top 1,000 of Amazon’s bestseller list. Now it’s number 1.Way to go, McMinn County school board! Get teenagers all over America excited to read about the Holocaust!Even the McMinn County school board has been outdone by the Matanuska-Susitna school board in Palmer, Alaska, which clearly had a more serious problem on its hands than getting teenagers excited to read about the Holocaust. It couldn’t even get them to read the great novels of American literature. So the Matanuska-Susitna school board voted 5 to 2 to ban Invisible Man by Ralph Ellison, Catch-22 by Joseph Heller, The Things They Carried by Tim O’Brien, I Know Why the Caged Bird Sings by Maya Angelou, and The Great Gatsby by F. Scott Fitzgerald.Brilliant! I bet nearly every teenager in Palmer, Alaska is now deep into these books. They’re probably having intense discussions about them online late at night, away from their parents and other snooping adults. “Why do you think Ellison called himself ‘invisible?’” “How did Angelou come up with those amazing metaphors?” “Why did Daisy Buchanan reject Jay Gatsby?” “Wait! Shhh! Gotta go! My parents are right outside my room! Call back in 20 minutes!”The Great Gatsby was required reading when I went to high school. I admit I never read it. Had it been banned, I probably would have devoured it. Beginning last fall, at least 16 school districts in a half-dozen states have demanded school libraries ban Out of Darkness. It’s a young adult novel about a love affair between two teenagers, a Mexican American girl and Black boy, set against the backdrop of the 1937 natural gas explosion at a New London, Texas plant that claimed nearly 300 lives. The book received lots of favorable reviews and literary rewards, but only a handful of teenagers read before it was banned. Now, it’s hot.It’s the cleverest marketing strategy I’ve ever seen. Publishers must be clamoring to have school districts ban their books. (Why haven’t my books been banned, dammit?)An influential group called “No Left Turn” is partly responsible. Just take a look at their website of books “used to spread radical and racist ideologies to students.” You can bet teenagers across America are now lining up to read them. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

The midterm elections are just over nine months away. What will Democrats run on? What will Republicans run on? One hint came at a Houston-area Trump rally Saturday night. “If I run and if I win,” the former guy said, referring to 2024, “we will treat those people from January 6th fairly.” He then added, “and if it requires pardons, we will give them pardons, because they are being treated so unfairly.” Trump went on to demand "the biggest protest we have ever had" if federal prosecutors in Washington or in New York and Atlanta, where cases against him are moving forward, "do anything wrong or illegal." He then called the federal prosecutors “vicious, horrible people” who are “not after me, they're after you." Trump’s hint of pardons for those who attacked the Capitol could affect the criminal prosecution of hundreds now facing conspiracy, obstruction and assault charges, which carry sentences that could put them away for years. If they think Trump will pardon them, they might be less willing to negotiate with prosecutors and accept plea deals. His comments could also be interpreted as a call for violence if various legal cases against him lead to indictments.But if Trump keeps at it — and of course he will —he’ll help the Democrats in the upcoming midterm elections by reminding the public of the attempted coup he and his Republican co-conspirators tried to pull off between the 2020 election and January 6. That would make the midterm election less of a referendum on Biden than on the Republican Party. (Don’t get me wrong. I think Biden is doing a good job, given the hand he was dealt. But Republicans are doing an even better job battering him — as his sinking poll numbers show.)Last week, Newt Gingrich, who served as House Speaker from 1995 to 1999, suggested that members of the House select committee investigating the January 6, 2021 attack on the Capitol should face jail time if the GOP returns to power. "The wolves are gonna find out that they're now sheep, and they're the ones who—in fact, I think—face a real risk of jail for the kind of laws they're breaking," Gingrich said on Fox News. Gingrich’s remark prompted Representative Liz Cheney, Wyoming Republican and vice-chair of the select committee, to respond: "A former Speaker of the House is threatening jail time for members of Congress who are investigating the violent January 6 attack on our Capitol and our Constitution. This is what it looks like when the rule of law unravels."Trump and Gingrich are complicating the midterm elections prospects for all Republicans running or seeking reelection nine months from now. Many Republican leaders believe they don’t need to offer the public any agenda for the midterms because of widespread frustration with Biden and the Democrats. Senate Minority Leader Mitch McConnell, recently asked what the Republican party’s agenda would be if it recaptured Congress, quipped “I’ll let you know when we take it back.”But if Republicans fail to offer an agenda, the Republican party’s midterm message is even more likely to be defined by Trump and Trumpers like Gingrich: the big lie that the 2020 election was stolen along with promises to pardon the January 6 defendants, jail members of the select committee investigating the attack on the Capitol, and other bonkers claims and promises. This would spell trouble for the GOP because most Americans don’t believe the big lie and remain appalled by the attack on the Capitol.House minority leader Kevin McCarthy (who phoned Trump during the attack on the Capitol but refuses to cooperate with the House’s January 6 committee investigation) will have a major role in defining the Republican message for the midterms. And whom has McCarthy been consulting with? None other than Newt Gingrich. The two have been friends for years and McCarthy's current chief of staff in his leadership office, Dan Meyer, served in the same role for Gingrich when he was the speaker. McCarthy knows Gingrich is a master huckster. After all, in 1994 Gingrich delivered a House majority for the Republicans for the first time in 40 years by promising a “contract with America” that amounted to little more than trickle-down economics and state’s rights.But like most hucksters, Gingrich suffered a spectacular fall. In 1997 House members overwhelmingly voted to reprimand him for flouting federal tax laws and misleading congressional investigators about it — making him the first speaker panned for unethical behavior. The disgraced leader, who admitted to the ethical lapse as part of a deal to quash inquiries into other suspect activities, also had to pay a historic $300,000 penalty. Then, following a surprise loss of Republican House seats in the 1998 midterm election, Gingrich stepped down as speaker. He resigned from Congress in January 1999 and hasn't held elected office since. I’ve talked with Gingrich several times since then. I always come away with the impression of a military general in an age where bombast and ex

In light of the news this week that the economy has been growing at a record rate (and corporate profits are also hitting record highs, the stock market notwithstanding), several of you have asked me specifically what can be done to spread the benefits of economic growth. I have a few ideas, which I’ll share with you in coming weeks. One idea is an old one that was tried with great success but is now all but forgotten. It’s called profit-sharing. It emerged from the tumultuous period when America shifted from farm to factory. In 1916, Sears, Roebuck and Co., then one of America’s largest corporations with over 30,000 employees, announced that it was embarking on a major experiment — profit-sharing. The firm gave workers shares of stock, making them part owners. Shortly thereafter, the Bureau of Labor Statistics issued a report on profit-sharing, suggesting it as a way to reduce the “frequent and often violent disputes” between employers and workers. Profit-sharing gave workers an incentive to be more productive since the success of the company meant higher profits would be shared. It also reduced the need for layoffs during recessions because payroll costs dropped as profits did. Profit-sharing proved a huge success. Other companies that joined the profit-sharing movement included Procter & Gamble, Pillsbury, Kodak, and U.S. Steel.By the 1950s, Sears workers had accumulated enough stock that they owned a quarter of the company. And by 1968, the typical Sears salesperson could retire with a nest egg worth well over $1 million (in today’s dollars). There was a downside. When profits went down, workers’ paychecks would shrink. And if a company went bankrupt, workers would lose all their investments in it. The best profit-sharing plans have been in the form of cash bonuses that employees can invest however they wish, on top of predictable wages. At Lincoln Electric, for instance, which has had profit-sharing since 1934, employees receive a profit-sharing cash bonus worth, on average, 40 percent of their annual base earnings.But profit-sharing with employees has all but disappeared in large corporations, which since the start of the 1980s — and the advent of corporate “raiders” (now private-equity managers) — have focused on maximizing shareholder returns. Sears phased out its profit-sharing plan in the 1970s (and filed for bankruptcy protection in 2018). Yet profit-sharing with top executives has soared — as big Wall Street banks, hedge funds, private-equity funds, and high-tech companies have doled out huge amounts of stock and stock options to their MVPs.The result? Share prices have gone into the stratosphere while wages have barely risen. Researchers have found that increases in share prices before the late 1980s could be accounted for by overall economic growth. Since then, a large portion of the dramatic increases in share prices have come out of what used to go into wages. Jeff Bezos, who now owns around 10 percent of Amazon’s shares of stock, is worth $210 billion overall. Other top Amazon executives hold hundreds of millions of dollars of Amazon shares. But most of Amazon’s employees, such as warehouse workers, haven’t shared in the bounty.Amazon used to give out stock to hundreds of thousands of its employees. But in 2018 it stopped doing so, and instead raised its minimum hourly wage to $15. The wage raise got headlines and was good PR, but Amazon’s decision to end stock awards was more significant. If Amazon’s 1.2 million employees together owned the same proportion of Amazon’s stock as Sears workers did in the 1950s — a quarter of the company — each Amazon employee would now own shares worth an average of over $350,000.America’s trend toward higher profits, higher share prices, mounting executive pay, but near stagnant wages is unsustainable, economically and politically. How to encourage profit sharing? Corporate taxes should be lower on corporations that share profits with all their workers, and higher on those that don't. Sharing profits with all workers is a logical and necessary step to making the system work for the many, not the few.What do you think? This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe