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Inequality for All: Robert Reich Warns Record Income Gap Is Undermining Our Democracy

StorySeptember 13, 2013
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Five years ago this weekend, the Wall Street giant Lehman Brothers collapsed, triggering the worst financial crisis since the Great Depression. Today, the divide between the 1 percent and the 99 percent is as great as ever. According to one recent study, the top 1 percent has captured about 95 percent of the income gains since the recession ended. "Since the recovery, almost all of the gains have gone to the very, very top. People who are in the top 1 percent are doing even better than they did before the Great Recession, better than they have done since 1928," says former Labor Secretary Robert Reich. "Most Americans are on a downward escalator. Median wage in the United States, adjusted for inflation, keeps on dropping." Reich is the focus of the new film, "Inequality for All." In this interview, he also talks about Syria, the second anniversary of Occupy Wall Street on September 17, Obama’s healthcare plan and Milton Friedman’s connection to the Pinochet dictatorship in Chile.

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This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: Five years ago this weekend, the Wall Street giant Lehman Brothers collapsed, triggering the worst financial crisis since the Great Depression. At the time, Lehman was the fourth-largest bank on Wall Street. It collapsed under the weight of subprime, mortgage-backed securities tied to the crumbling U.S. housing market.

Five years after the financial crisis began, millions are still suffering, but Wall Street is not. While next week marks the second anniversary of Occupy Wall Street, the divide between the 1 percent and the 99 percent is as great as ever. According to one recent study, the top 1 percent has captured about 95 percent of the income gains since the recession ended. Meanwhile, the top 10 percent of earners last year took more than half the country’s total income, the highest level recorded since the government began collecting relevant data a century ago.

Today we’re joined by former secretary of labor and renowned economist Robert Reich. He is the focus of a new film called Inequality for All.

ROBERT REICH: Now, the thing you ought to know about this Mini Cooper is it is small. We are in proportion, me and my car. My name is Robert Reich. I was secretary of labor under Bill Clinton; before that, the Carter administration. Before that, I was a special aide to Abraham Lincoln. Of all developed nations, the United States has the most unequal distribution of income, and we’re surging toward even greater inequality. 1928 and 2007 become the peak years for income concentration. It looks like a suspension bridge.

UNIDENTIFIED: Last year we made $36,000.

UNIDENTIFIED: I probably make $50,000 a year, working 70 hours a week.

ROBERT REICH: The middle class is struggling. People occasionally say to me, "What nation does it better?" The answer is the United States. In the decades after World War II, the economy boomed. You had very low inequality.

BILL O’REILLY: You know Robert Reich?

FOX NEWS GUEST: I do, indeed.

BILL O’REILLY: He’s a communist.

ROBERT REICH: When I was a kid, bigger boys would pick on me. I think it changed my life. I had to protect people from the people who would beat them up economically. Who is actually looking out for the American worker? The answer is nobody. Workers don’t have power if they don’t have a voice. Their wages and benefits start eroding. We are losing equal opportunity in America. Any one of you who feels cynical, just consider where we have been.

AMY GOODMAN: The trailer for the new film, Inequality for All, featuring Robert Reich. It opens in theaters September 27th. Robert Reich joins us here in New York. He served as labor secretary under President Lincoln, now a professor at the—under President Clinton, and is now a professor at the University of California, Berkeley. Time magazine named him one of the 10 most effective Cabinet secretaries of the last century. He has written 12 books, including Aftershock: The Next Economy & America’s Future and Beyond Outrage, expanded edition, What Has Gone Wrong with Our Economy and Our Democracy, and How to Fix It.

Welcome back to Democracy Now! It’s great to have you.

ROBERT REICH: Hi, Amy. You know, I’m getting so old that my students really do believe that I was a special assistant to Abraham Lincoln. Those were tough years, I tell them, and they stopped getting the joke.

AMY GOODMAN: They have heard of Abraham Lincoln.

ROBERT REICH: They have heard of Abraham Lincoln. That’s right.

AMY GOODMAN: So you’re a good teacher, then.

ROBERT REICH: But, look, they don’t have—my students, who are very idealistic, and they do want to change the world, they, in their lives, don’t have very much of a memory of government or even of the society that we are a part of expanding equal opportunity, changing the structure of power. I mean, you know, they don’t remember, as I do, the 1960s.

AMY GOODMAN: Let’s talk about this fifth anniversary of the collapse of Lehman Brothers, the beginning of the recession and who has profited in this last five years. It has certainly not been bad for everyone.

ROBERT REICH: Oh, no. In fact, Emmanuel Saez, my colleague at Berkeley who has really done the pioneering work on determining who’s got what and looked at income tax records, he’s just came out with a new study showing that since the recovery almost all the gains have gone to the very, very top. People who are in the top 1 percent are doing better than they did even before the Great Recession, better than they have done since 1928. Remember what happened after 1928: We had a great crash. Remember what happened after 2007, which was the last peak in terms of inequality: We had another crash. We can get back to why there is a relationship there, but most Americans are on a downward escalator. The median wage in the United States, adjusted for inflation, keeps on dropping.

AMY GOODMAN: You use the image of a suspension bridge to talk about inequality in the film.

ROBERT REICH: Because up until—this new study shows that 2012, actually, is the new peak. The old peaks were 1928 and 2007, which is interesting because in 1929 and 2008 we had crashes. And I think it’s not coincidental, because when so much of the nation’s income and wealth go to the top, the rest simply don’t have the purchasing power to keep the economy going at full employment.

AMY GOODMAN: Talk about what’s happened to everyone else.

ROBERT REICH: What’s happening to everybody else is not only wages eroding and a very large number of discouraged workers, who basically are never going to be able to find jobs, but economic insecurity. Most Americans today, even if they have jobs, even if the jobs pay fairly well, are much more insecure than Americans have ever been at work before, at least in living memory, because we have a huge number of contingent workers, huge number of part-time workers, huge number of workers who can’t know what their paychecks are going to be because they’re paid on a contingency fee—bonuses, you know, working hours, billable hours. That means that they cannot plan, and have to live, to some extent, from paycheck to paycheck. That insecurity, Amy, coupled with declining wages, coupled with more and more concentration of income and wealth at the very top, has led to a very—an economy that is very vulnerable and a democracy that is also very vulnerable, because all of that money at the top is being transformed into political power every day.

AMY GOODMAN: Political power. I want to refer to Syria right now. It’s something you also have written about, Syria and the reality at home in America. Aside from the moral and the strategic arguments against the war or a strike on Syria by the United States, can you simply talk about what the costs of war mean?

ROBERT REICH: Well, every time the United States has got into this tinderbox of the Middle East, for reasons that we can debate, whether it’s good or not, there have been ancillary—let’s call them ancillary consequences. I mean, civilians are killed. You can’t prevent civilians from being killed. There is a rise in anti-American sentiment. There is a rise in terrorism. We deflect attention from what’s going on here in the United States in terms of widening inequality, what needs to be done here in America. We use resources that could otherwise be used on our poor, on infrastructure, on education. You know, I am old enough to remember Lyndon Johnson’s war on poverty and the Great Society ending on the shoals of Vietnam, another civil war, in effect, where we were told exactly what, ironically, John Kerry is saying about Syria—American resolve is at stake; our credibility is at stake; you know, if we don’t do this, our enemies are going to be emboldened. He is using the same words, ironically, that were used by McNamara, you know, in the 1960s, when John Kerry was—

AMY GOODMAN: The former secretary of defense under Lyndon Johnson.

ROBERT REICH: The former secretary of defense when John Kerry was protesting the Vietnam War. I mean, I hope this irony is not lost on Kerry or anybody else.

AMY GOODMAN: Chuck Hagel, who opposed the war in Iraq, our current defense secretary, when asked in the Senate what will be the costs of these strikes, because very few people are talking about the actual economic cost, he said something like tens of millions of dollars.

ROBERT REICH: Well, look, these things tend to escalate out of control. We know that. We’ve been there before—I mean, in living memory of most of us. What Assad has apparently done, and I’m assuming Assad was responsible for the chemical—the use of chemical weapons, is abhorrent, absolutely abhorrent. There has to be some world response. But to assume that the United States is the only world’s policeman and that missiles are going to actually be the best response, as opposed to economic sanctions or freezing assets or doing any number of things the most powerful economic force in the world can do—that is, the United States—I think is the height of folly at this particular point in time.

AMY GOODMAN: We’re talking to former Labor Secretary Robert Reich. Now, when you were the secretary of labor under President Clinton, interestingly, especially in light of the NSA scandal today and how the Obama administration is reeling from all the leaks around U.S. government spying on Americans, you proposed cutting the CIA budget in half and giving the money to inner-city schools.

ROBERT REICH: I did, and I was making a kind of play on the notion of U.S. intelligence, because I just sat through a briefing where the CIA and the Intelligence Committee said they needed more money. And I said—and I was slightly tongue-in-cheek, but I was actually quite serious, Amy. I said, "If we’re really concerned about U.S. intelligence, the most important U.S. intelligence we have are the brains and the capacities of our kids as they face their adulthood and their futures, and we need better schools, particularly in poor communities, and we need to spend a lot of money, and we’re spending far more on the wrong kind of intelligence." I didn’t get a very positive response, let’s put it that way.

AMY GOODMAN: Were talking to Robert Reich. He is the subject of a new film. It’s called Inequality for All. He teaches now economics at the University of California, Berkeley, was the labor secretary under President Clinton. We’ll be back with him in a minute.


AMY GOODMAN: Former Labor Secretary Robert Reich is our guest today. I want to turn to another clip from the new film, Inequality for All, which will be released around the country on September 27th. Here Bob Reich explains how he got interested in issues of economic justice.

ROBERT REICH: When I was a kid, the bigger boys would pick on me. That was what you did. That’s what is done. So I got an idea that I would make alliances with older boys, you know, like just one or two who would be my protectors. The summer when I was about 10, one of the older boys who I depended on to kind of be a protector, his name was Michael Schwerner. In the summer of '64, I learned that Mickey had been in Mississippi registering voters, and he and two other people who had been with him registering voters were—were tortured and murdered. And when I heard that my protector had been murdered by the real bullies, I think it changed my life. I had to protect people from the bullies, the people who would beat them up economically or the people who would subject them and their families to real harm, because if you don't have a voice, if you don’t have power, if you are vulnerable economically in society, you don’t have anybody to protect you.

AMY GOODMAN: That’s Robert Reich, featured in Inequality for All, talking about what inspires you. This is the 50th anniversary, of course, of the 1963 March on Washington, as well. Talk more about your experience.

ROBERT REICH: Well, like many people who are my age, you know, the 1960s were the formative era. We were involved in the civil rights movement, even peripherally, the anti-Vietnam War movement. I spent a lot of time organizing young people for Eugene McCarthy, went clean for Gene in 1968. But out of all of that came a sense of efficacy, a sense that we really could change the world. I mean, there had been a Civil Rights Act, a Voting Rights Act. We ended the Vietnam War. And there was also an assumption that I shared with many people that, of course, you would spend much of your life working to improve society. I mean, even if that was not going to be your official vocation or your job, still that was part of your work, part of your life’s work. It wasn’t just me. I mean, it was really millions of us.

And I think that that assumption may be different now, Amy. One of the great victories of the right, particularly the radical right, has been to spread such cynicism about the capacity of our country to change and generate social justice, that many people just have given up. They basically, "I don’t want anything to do with politics. It’s all corrupt. I don’t want anything to do with that kind of focus on social movements at that scale. They’ll go nowhere." But that, you see, that kind of cynicism about our politics and our government, cedes everything, cedes control to the moneyed interests. And that’s exactly what they want.

AMY GOODMAN: Can you talk about what’s just happened in California? Governor Brown says he will sign this legislation around increasing the minimum wage. It will be the highest in the country. And yet, the backlash that we have seen?

ROBERT REICH: Well, it’s a—look, 85 percent of Americans support a minimum wage increase. If you just kept the minimum wage we had in 1968 steady, adjusted for inflation, it would be $10.40 right now. If you adjusted the minimum wage for the productivity improvements we’ve had since the late 1960s, the minimum wage would be over $15 an hour. I mean, Martin Luther King, in 1963, that was a march for jobs and justice, and one of the planks was moving the minimum wage to $2 an hour, which in today’s dollars would be well over $14—in fact, by some measures, about $15 an hour. So, this is not out of our tradition. This is not a radical notion. This is what it would be, all other things being equal. And if you put more money people’s pockets, they can turn around and buy stuff, which means more jobs, not fewer jobs.

AMY GOODMAN: Let’s go back to another clip of Inequality for All. The focus here is problems of American workers today.

ROBERT REICH: Contrary to popular mythology, mobilization and technology haven’t really reduced the number of jobs available to Americans. These transformations have reduced their pay. I mean, it’s not just that wages are stagnating, but when you take into consideration rising costs, the rising costs of rents or homes, dramatically increasing costs of healthcare, the rising costs of child care, and also the rising costs of higher education, rising much faster than inflation—take all of these into consideration, and you find that it’s much worse than just stagnating wages, it’s basically middle-class families, often with two wage earners, working harder and harder and harder, and getting nowhere.

AMY GOODMAN: An excerpt of Inequality for All, which is being released in two weeks. Bob Reich, what about healthcare? What about the costs of healthcare? What about the costs of Obamacare, the costs of what Medicare for all would be, the costs of the system we have today?

ROBERT REICH: Well, look at it. It’s the most inefficient and costly system that any advanced country has, yet we have the highest infant mortality, the lowest level of—you know, even in terms of lifespans, we don’t do as well as many other advanced countries. We ought to have a single-payer plan. We will eventually have a single-payer plan. It’s the only rational direction to go in. Everybody admits this. Even doctors and medical professionals and heads of medical institutes I sit with and talk with, privately, they say, "Yes, we’re going to have to go to single payer." They just don’t say it publicly. The fact we didn’t even have a public option in the Affordable Care Act is absurd.

On the other hand, though, Amy, the Affordable Care Act is a beginning. Let’s be clear. I mean, this is something that Bill Clinton couldn’t get, Franklin D. Roosevelt couldn’t get, Harry Truman couldn’t get, John F. Kennedy couldn’t get. I mean, it is at least a major step in the right direction. And the Republicans are apoplectic about it. They all want—you know, they want to—they’re threatening to not even to raise the debt ceiling unless we roll back or unless they get rid of and repeal the Affordable Care Act. I think most Americans, once they see the act working and once they enjoy the benefits, will be incredibly supportive, which is exactly what the opponents are worried about.

AMY GOODMAN: Why do you think the media has not been—I mean, the media is supposed to be separate from the government, from the insurance industry—has not been able to convey what these costs are and to actually show where the U.S. stands in the world, so people could make a rational decision?

ROBERT REICH: Well, you say the media is supposed to be separate from the private sector and separate from the insurance industries and everything else. I wish I could say with a straight face that America’s news media and news outlets were not influenced at all by advertisers or by insurance companies and drug companies. Drug companies are advertising like mad. I’m not sure that’s the case. I think that Americans have not really had and been given a clear idea of the absurdities and unnecessary costs of our healthcare system. I mean, prevention is and should be the rule of game. But it’s all a matter of fee-for-service, and everybody who is inside living off of that fee-for-service likes it that way. But we’ve got to move to a system that awards healthy outcomes.

AMY GOODMAN: I want to turn to another anniversary. Next Tuesday marks the second anniversary of Occupy Wall Street. I’m playing a clip now of Robert Reich addressing an Occupy demonstration in California at the University of Berkeley in 2011.

ROBERT REICH: Because of Occupy L.A. and the Occupy movement around America, this country is beginning to discuss an issue and a set of issues it has avoided discussing for years. And that is the increasing concentration of income and wealth and political power at the very top of this country, and what that has done to the economy and what that has done to our democracy.

AMY GOODMAN: That was Bob Reich speaking in California two years ago. What about the significance of the Occupy movement, the coining of the term "99 percent," and where are we today?

ROBERT REICH: Well, on the positive side, the Occupy movement has had a huge effect, of putting this issue front and center, page one, a lot of discussion reframing the debate so that people understand that it’s not the middle class against the poor, it’s basically a small group of Americans at the very top. I mean, the 400 richest Americans, 400 of them, have more wealth than the bottom 150 million of us put together. The heirs of Wal-Mart, just the Wal-Mart heirs, who own a huge chunk of Wal-Mart stock, they have more wealth than the bottom 40 percent of Americans put together. I mean, this is mind-boggling, and the Occupy movement showed America what was happening.

Unfortunately, on the negative side, Occupy did not organize itself and discipline itself and develop politically strategic ways of effectuating many of the objections it had, and so that once the mayors and the universities began clearing out these encampments, there wasn’t the kind of organization that’s needed for a sustained, long-term social movement. And one thing we’ve learned over the years, Amy, whether it’s the labor movement or the women’s movement or it’s the civil rights movement or any other movement, it takes a long time, it takes a great deal of discipline, it takes strategy, it takes politics, and it takes patience.

AMY GOODMAN: I wanted to read a critique of your theories put forward by Paul Roderick Gregory of the Hoover Institution, who recently wrote an article for Forbes called "Robert Reich’s F Minus in Economics: False Facts, False Theories." In it, Gregory writes, quote, "Reich, a former labor secretary, displays a glaring ignorance of how markets work, even labor markets. In his world, big corporations convene behind closed doors to decide how much they deign to give to their workers after they have taken their often obscene profits. He does not understand that wages are generally set in markets, not in smoke-filled corporate board rooms. He displays an even greater lack of appreciation of profits as signals to guide resource allocation and as sources of investment finance. To Reich, profits seem always to be too high, wages too low. I would like to ask him how many workers would be employed if businesses earned no profit, and labor got everything." Well, respond, Robert Reich.

ROBERT REICH: Well, that’s the typical right-wing argument. You know, the Hoover Institute, where this fellow is, and Forbes magazine, that calls itself a capitalist tool, I mean, they’re putting out this stuff, and they’ve put it out for years. This is not new. The fact of the matter is that one of the major ways in which American corporations have shown huge profits over the last few years is by keeping payrolls down, by squeezing wages. This is well documented. I don’t have—you know, this is not my own personal view, Amy. This is—we know it. There is abundant evidence and abundant proof of this. And this is why, in part, the top 1 percent has done so well, because they are the ones who get a lot of their income out of the stock market, whereas everybody else, the only assets that most other people have, if they have any assets at all, is the value of their homes. And home values are the things that really took a huge hit after 2008. They’re slowly beginning to come back, but many people are still underwater. So, if you don’t look at this reality, if you don’t look at the asset base of the wealthy versus the asset base of most other people, you know, you can begin to be convinced by these propaganda—this propaganda.

AMY GOODMAN: I was just watching, actually, Steve Ratner this morning, right, who was the American financier who led the presidential task force on the auto industry for the Obama administration, when talking about the California increase in the minimum wage bill, talked about how, for example, at fast-food restaurants, yeah, he said maybe minimum wage, yes, should be increased, but when you’re talking living wage, when these people want $15 an hour, that’s not what these fast-food restaurants are about. What’s your response to that?

ROBERT REICH: Well, first of all, it’s not—you know, we’re not talking about individual mom-and-pop operations so much as we are talking about the Wal-Marts, the very large chains, retail, restaurant, hotel, hospital. Wal-Mart is the largest employer in the United States right now. You know, McDonald’s and others, if they raise their minimum wage to $15 an hour, that would have several positive effects. It would, as I noted a moment ago, give people more money with which they could then turn around and buy stuff, which is going to keep other people employed. It would, secondly, enable these people to live without the dependence on food stamps and other safety nets that we’re all paying for. We’re all subsidizing Wal-Mart and McDonald’s and others. These are not any longer—their employees are not any longer teenagers. I mean, these are mostly adults. The typical Wal-Mart worker, the typical even fast-food worker at one of these big chains, is earning at least half of family income. And if they are not going to pay their workers enough, the rest of us are going to have to subsidize their workers. Even the earned income tax credit is a subsidy to these companies so their workers are not impoverished. And that’s just—that’s not fair. That is not economical. That gives them, these companies, a competitive advantage that is simply unwarranted.

AMY GOODMAN: Janet Sparks, a Wal-Mart employee, was recently speaking at a protest and comparing the wages of Wal-Mart workers to the CEO of Wal-Mart, which was something like $20.7 million.

ROBERT REICH: Well, the gap between CEO pay and the pay of the typical workers—you don’t even have to go to the low-wage workers—is now at a record 350 times. So anybody who says that somehow these companies can’t afford it is not looking at their profit-and-loss statements, is not looking at their extraordinary corporate profits overall, the share values which has been risen—have risen dramatically since the Great Recession, relative to what’s happened to wages. I mean, if you look at the economy as a whole, the share of the economy going to wages is at the lowest level we have seen in about five decades. The share going to profits is at the highest level we’ve seen in decades. I mean, you know, this is not rocket science. This is not abstruse economics. This is just—these are data available to everybody. They’ve been well reported.

AMY GOODMAN: So what can the Obama administration do? What can President Obama do to address this greatest gap in wealth in this country that we have ever seen?

ROBERT REICH: Well, number one, introduce a bill to raise the minimum wage. He says that he is going to do that—still hasn’t done it. His minimum wage bill was very modest. I think it ought to be a minimum wage that’s higher than $9 and whatever—I can’t remember what it is, $9.20 or $9.50. But, secondly, I think that the president and other members of the administration ought to be out there campaigning for better wages, because even as people start to get new jobs back, those new jobs are paying less than the jobs that were lost during the Great Recession, which means that the median wage, the wage of the—I’m not talking about average wages. You know, Shaquille O’Neal, the basketball player, and I have an average height of six-foot-one. Do you get my point? I’m pretty short. I mean, every time you say "average," watch your wallet, because the people at the top are bringing up the average. But if you look at the median, which is really halfway there, that gives you a pretty good snapshot of where the middle class and certainly the poor are. That median wage keeps on dropping, adjusted for inflation, which means that more and more families are being squeezed to a greater and greater and greater extent. This economy is not working for everyone.

And one of the points we make in the film, which I have been writing about, but the wonderful thing about it in film is that you can dramatize something, is that the economy is not something out there. It’s not kind of a state of nature. The economy is a set of rules. It’s based upon, basically, rules that are decided upon by our democracy. And if our rules are generating outcomes that are unfair, that don’t work very well, that don’t spread enough of the gains of economic growth to enough people, we change the rules.

AMY GOODMAN: Can you talk, finally, about the significance of who will head the Federal Reserve, what that means in this country? Now we’ve got the battle between Janet Yellen and Larry Summers. You have a long history with Larry Summers. President Obama is rumored to be supporting Larry Summers. Talk about the significance of what that means, considering this five years, the Lehman Brothers anniversary, is all tied up with Larry Summers and his ideology.

ROBERT REICH: Well, the Fed does two things. The most of our attention is on the bond buying program. That is, is it keeping interest rates down, and who benefits from those low interest rates? The other thing, though, that the Fed is now charged with is a great deal of regulatory oversight of Wall Street, more now than before, although Dodd-Frank is still not fully effectuated. I mean, the big banks have pushed back very hard. The so-called Volcker Rule, remember that? That was supposed to—


ROBERT REICH: —be a watered-down version of Glass-Steagall, separating commercial from investment banking—still not there. I mean, the banks have been so powerful in their lobbying and political contributions that they have not even allowed the Volcker Rule to be applied. But the next Fed chair is going to have a very important responsibility with regard to oversight of Wall Street.

AMY GOODMAN: And what does it mean that Larry Summers is reportedly President Obama’s top candidate?

ROBERT REICH: Well, I’m in an awkward position here, because I know Janet Yellen very well. She’s a very close friend, and Larry Summers and I are friends. I’ve been working with him for 30 years. And so, if you’re asking me who do—

AMY GOODMAN: Well, aside from the friend part, you know Larry Summers, Robert Rubin, what they represent in what we’re talking about, this huge income gap in this country that continues to grow.

ROBERT REICH: Well, let me—let me just be clear. In the late 1990s, 1999, Bob Rubin, Larry Summers, others in the administration did agree to support Republican bills to get rid of the Glass-Steagall Act, which, as I said, had separated investment from commercial banking. And they also opposed a move by the Commodity Futures Trading Corporation to regulate derivatives. Now, that’s what got us into trouble, the lack of oversight of derivative trading. These are bets on bets. And this is what—Wall Street was making a fortune on them, by—you know, certainly by 2007, and those bets were out of control.

So, let’s just put it this way. And I—Bob Rubin is also a friend, but I spent a lot of time in the administration battling Bob Rubin, because Bob, although, again, I like him, and, you know, his view of the economy is through the eyes of Wall Street. And those eyes, the Wall Street’s view of America, is not where most people live. It is just not—it doesn’t take account of the problems, the challenges, the realities faced by most people. It views the economy as sort of a bunch of assets to be moved around wherever they can get the highest use and best use. And people are not simply assets.

AMY GOODMAN: We’re going to break, and then when we come back I want to play for you a clip of another colleague, though he was at University of California, Berkeley, years ago, the Chilean economist Manfred Max-Neef. And I’d like to get your response. He’s calling for a global economic war crimes tribunal. This is Democracy Now! We’ll be back with Robert Reich in a minute.


AMY GOODMAN: This is Democracy Now!,, The War and Peace Report. I’m Amy Goodman. Our guest for the hour is Robert Reich, the former labor secretary, now professor of economics at University of California, Berkeley, and the subject of a new film called Inequality for All. We’re going to talk more about that in a minute, but first I want to turn to another economist, Chilean economist Manfred Max-Neef, who has advocated for the idea of an economics crimes tribunal. I interviewed him over Independence Day weekend when he was attending a meeting of Right Livelihood Award laureates in Bogotá, Colombia. He had won the Right Livelihood Award after his publication of his book Outside Looking In: Experiences in Barefoot Economics. I asked him what he was talking about with this economic crimes tribunal, why he felt one was needed.

MANFRED MAX-NEEF: Well, we know everything that has happened, you know, in these last years, and we know that many or practically all the big problems—environment, assassinations of leaders, you know, in the Amazon and other places, and unemployment and desperation, and all the thing—suicides that are increasing dramatically in Spain and other places of the world—we know that all these, in the end, you know, are the origin of what I call an evil, an absolutely evil, economic model that is dominating the world. This economy cannot go on no longer, I mean, because it has become absolutely criminal.

I was last year in the Zermatt meeting in Switzerland, with about 400 people participating, all high-level people from different countries of the world, and I gave the opening speech. And in the speech, I said, "Well, I’m going to start with a very brutal statement. And the statement is that this economic model is killing more people in the world than all the armies put together. And this is people who die of hunger or of other diseases that would not happen, you know, if this were a more just and, I would even say, decent economic model."

What we are working on, you know, is really a humane process. I am now one of the members, appointed by the king of Bhutan and the General Assembly, one of the 60 international experts, who are designing a new economic paradigm and developing a paradigm for the world, which is based on well-being and happiness and ecological sustainability and adequate distribution of wealth and intelligent use of natural resources. But the main component is well-being and human happiness, along the lines of what would have said or that was said by your wonderful, magnificent and forgotten father of your country, Thomas Jefferson, the only one who wrote a political document in which happiness, the pursuit of happiness, is an inalienable right.

AMY GOODMAN: That was Manfred Max-Neef. He also was a professor at University of California, Berkeley, an economics professor, now in South Chile. And particularly poignant to hear his words today, on this week that’s the 40th anniversary of the coup in Chile on September 11, the other September 11, 1973. Salvador Allende died in the palace as the Pinochet forces rose to power, Pinochet ruling for 17 years, killing thousands of Chileans. But that idea that Manfred Max-Neef puts forward, Robert Reich, of an economics crimes tribunal, what do you think?

ROBERT REICH: Well, you know, it would be very interesting to examine who the great economic criminals are. It’s interesting you mentioned the Pinochet coup, because two years after that, Milton Friedman came down to Chile to meet with Pinochet to urge economic reforms that were basically quite brutal and brutalized a great number of people. Milton Friedman was not necessarily a supporter of Pinochet, but certainly hated Allende, was very supportive of what Kissinger and Nixon had both done, and that is, help Pinochet take over in Chile.

AMY GOODMAN: And interestingly, this week Kerry met with Kissinger to get advice on Syria—

ROBERT REICH: Yeah, I mean, there are these—

AMY GOODMAN: —on September 11th, actually.

ROBERT REICH: On September 11th. There are these unfortunate parallels. So, in defining an economic criminal, I think it would be interesting to see the interaction between economics and politics. I mean, what—the criminal actions, to me, around the world, particularly in the United States, are the underminings of democracy. That is, if we cannot have a democracy that controls, that limits the excesses of capitalism, the brutality of capitalism, then we don’t have any hope of a just economy. And the people who are making it difficult for our democracy or any democracy to function—again, very poignantly reflected in this 40th anniversary of the coup in Chile—are those people who could very well be defined as economic criminals.

AMY GOODMAN: Robert Reich, finally, the film is coming out, the film about you, Inequality for All, in two weeks, and it will air around the country, or it will be—it will play in theaters around the country. You famously say in this film, as you even said on the show, "We make the rules of the economy, and we have the power to change these rules." What do you hope to accomplish with this film?

ROBERT REICH: Well, first of all, it’s not about me. It’s about the economy. It’s about inequality. It’s about our democracy. I’m a vehicle. I helped prepare the film, and it’s based on some of my work and writings. But we hope that the film is going to open a lot of people’s eyes who don’t understand what’s going on, Amy. I mean, you know, there are a lot of confusion about inequality. You know, people know that inequality is surging. Many people have a feeling that the game is rigged. But they don’t really understand why, how it’s happened and why it’s dangerous, or what they can do about it. I mean, this film also provides a kind of guide to people. There’s a social action movement that is connected to the film. So we hope that the film really spurs a—not just a different discussion in this country, but also a movement to take back our economy and democracy.

AMY GOODMAN: Where do you think you start?

ROBERT REICH: We start—it has to start with people, citizens, organizing and mobilizing and energizing. It can’t start—nothing starts in Washington. It starts at the grassroots. We know this. Those of us who have been involved in social movements before know this. But in order to start it, you have to have the right understanding. You have to have the right framework. And that’s what this movie is all about.

AMY GOODMAN: Well, I want to thank you very much, Bob Reich, for joining us. Robert Reich, former labor secretary under President Clinton, he’s featured in the new film, Inequality for All. It’s being released on September 27th. He has written 12 books, including Aftershock and Beyond Outrage.

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