When Robert Reich was planning the national book tour for his latest release “Saving Capitalism: For the Many, Not the Few,” he told his publisher that he wanted to promote it outside of his normal route of liberal cities. Instead of hitting only the coasts, he visited areas in the Midwest and in the Deep South.
He was surprised, first and foremost, that people in these predominantly conservative towns came to his talks at all. But what surprised Reich even more was that when he asked attendees what bothered them most about politics today, many of them said “crony capitalism” — the same hotly detested issue plaguing liberal circles.
Reich, an economist, political commentator and author of 14 books, nearly filled all 700 seats in the Rio Theatre on Tuesday when he came to discuss his newest book, released last year. The event was hosted by the UC Santa Cruz Blum Center and, keeping in line with the theme of “for the many, not the few,” admission was free.
In conversation with UCSC psychology professor Heather Bullock, a Blum advisory board member, the discussion involved getting people from diverse backgrounds to work together in remedying the U.S.’ worsening political and economic climate.
“We have a fundamental corruption of our democratic process, where an awful lot of people feel justifiably disenfranchised,” Reich said. “The task in front of us is not just overcoming economic inequality, it’s also reconstituting our democracy, and this is a challenge that’s not going to be met easily or quickly.”
Reich served as secretary of labor from 1993-97 during the Clinton Administration and is currently chancellor’s professor of public policy at UC Berkeley.
“As an economist, Robert Reich understands the roots and the impacts of structural inequality,” said Executive Vice Chancellor Alison Galloway in an introduction, “and he has remedies that are actually feasible. He’s the guy you want on your side, our side, and he’ll guide us through this mess of income inequality that we’ve gotten ourselves into.”
THE POLITICAL ECONOMY
Income inequality in the U.S. has been worsening since the 1970s, and has reached levels not seen since the Great Depression.
Before the economy took a turn for the worse, the U.S.’ top 1 percent of income earners in 1944 received 11.3 percent of the country’s pre-tax income, while the bottom 90 percent received 50.7 percent, according to the Pew Research Center. But in the 1970s, the income share of the top 1 percent began increasing dramatically while the share of the bottom 90 percent shrank. Fewer people were holding more money.
In 2012, the same study reports, the top 1 percent of income earners receive 22.5 percent of all pre-tax income, while the share of the bottom 90 percent is 49.6 percent, reaching below 50 percent for the first time on record.
Reich said this degree of inequality is bad for low-income and middle-class families but also for the rich who manipulate the wealth distribution.
“With a shrinking middle class and increasing levels of poverty, the question naturally is, who’s going to buy all the stuff that is being produced by big companies?” Reich said. “There’s no way that consumers can spend if we don’t have a large and growing middle class and poor people who are capable of ascending into the middle class.”
At one point, Heather Bullock paused to quote a line from Reich’s book, “The invisible hand of the marketplace is connected to a wealthy and muscular arm.”
STUDENT LOANS
Reich has taught at UC Berkeley for over 10 years. He referred to the UC system as “the crown jewel” of public higher education in America, saying he viewed it as the “exemplar” for other university systems to follow, even while teaching at Brandeis University in Massachusetts.
And yet, tuition costs have been increasing across UC campuses since 1975, restricting access to a UC education for many.
Reich blames rising tuition on the California legislature, which has been defunding the UC system, placing the cost burden on students. He added that funding higher education may seem like a personal investment but emphasized it is necessary for the state’s continued growth.
“It is simply wrong to think of public investments in education, infrastructure, basic R and D as the same as public spending on today,” Reich said. “Investments have to do with building productive capacity for the future. If we’re cutting back on investments for the future, then we’re actually shooting ourselves in the feet.”
UC officials have used the funds they do have in ways not directly beneficial to students, like increasing salaries of the system’s most highly paid executives.
Reich acknowledged the efforts of many UC students to protest tuition hikes, but said others need to get involved to increase the capacity of Californians on the individual and state level. He singled out one group in particular — the techies over the hill.
“Why is it that you have a high tech sector and a venture capital community here in Northern California that are the leading edge of the world,” Reich said, “but there’s no political outcry from these sectors demanding better investment in education?”
California is not the only state where students are paying tens of thousands for an education that was once free. Between 2008 and 2015, tuition at public universities in Arizona rose by 83.6 percent, the highest number over that period. Arizona is followed by Hawaii, Georgia, Louisiana, Florida and California.
THE PRESIDENTIAL ELECTION
One of the biggest talking points of the night was the presidential election and the state of the parties. The 2008 Great Recession and subsequent big bank bailout saw the emergence of the Occupy and Tea Party movements, both of which Reich said are the progenitors to two presidential campaigns today, namely those of Bernie Sanders and Donald Trump.
“[These groups] are expressing their outrage and frustration and cynicism with the political economic system we have in two completely different ways,” Reich said, “but it’s coming from the same source.”
Reich repeatedly expressed his support for Sanders. He mentioned that he’s known Hillary Clinton since she was 19 and even dated her once, but he doesn’t think she would be a good fit if the U.S. wants to move forward.
“She would be, in my view, the best president for the system we now have,” Reich said, “but Bernie Sanders would be the best vehicle for getting the system we need.”
On the other side of the aisle, Reich said the Republican party has become so disjointed he hardly recognizes it anymore.
“I think the Republican party is over.” His statement was met with scattered applause from the crowd. Reich looked around the room and dryly said, “That’s a problem. That’s a serious problem.”
Despite political disagreement, Reich said both parties are necessary for a functioning democracy. The goal is to make sure the democracy is governed by people, not dollar bills.
“There is huge agreement along the political spectrum about the importance of getting rid of crony capitalism and the moneyed interests’ influence in our democratic system,” Reich said, “and yet we don’t even know how much agreement there is because we don’t talk to each other about it.”
Reich said one of the biggest problems in the U.S. is people’s reluctance to speak to people who have different beliefs than them. As he learned on his book tour, if people with different political ideologies actually communicated with each other, he said, they would realize that they’re not that different after all.
