By John Lawrence
This is Robert Reich’s latest venture in an attempt to inform the American public about what’s really going on with the economy in this society. He’s tried everything else: Chancellor’s Professor of Public Policy at the University of California at Berkeley in which he teaches a course on Wealth and Poverty, a blog, where he had as many as 300 comments after each post until he shut down the comments due to a persistent vile and threatening commenter who stooped to anti-semitic comments, 13 books, the latest being “Beyond Outrage,” Secretary of Labor in the Clinton Administration, radio and TV appearances, lectures.
He also worked in the Ford and Carter administrations. Reich has always been concerned about those who are struggling to keep their heads above water, and in today’s world that includes almost all of the former members of the middle class.
The major metaphor in the film is a suspension bridge which fits perfectly over a graph of the concentration of wealth that occurred at two points in American history, the first being in 1928 and the second being in 2008. These are the two high points of the suspension bridge and correspond to the two points of peak inequality in American society after which there was a crash: the Great Depression and the Great Recession.
At those two high points in the suspension bridge the upper 1% took home over 23% of the national income. The situation is so extreme that today 400 Americans have more wealth than the lower half of the American people, 150 million, combined.
The movie starts and ends in Reich’s Berkeley class on Wealth and Poverty. Many scenes are shot while Reich is driving his Mini-Cooper, a car he says is “proportionate” with his diminutive height. He uses self-deprecating humor by showing “the box” which he carries to speaking engagements so he can see over the lectern. A rare genetic disease caused his lack of growth. An interesting fact that I hadn’t known is that Michael Schwerner, one of three civil rights workers murdered in 1964 by the Ku Klux Klan in Mississippi, was a personal friend and “protector”. Since bigger boys picked on him he became friends with Schwerner who looked out for him. Reich decided to spend his life serving the underserved after he heard of Schwerner”s murder.
The major study on inequality was done by Emmanuel Saez (also at Berkeley) and French economist Thomas Piketty. Their innovation was to measure American income inequality historically. Existing data went back only to the 1970s. Tedious archival research at the Internal Revenue Service allowed them to stretch the data all the way back to 1913. After World War II, there was a period in which the middle class did quite well. This lasted till approximately 1980. After that median wages remained flat up till the present day while the income of the upper 1% skyrocketed thus producing epic inequality.
The US has one of the most unequal distribution of incomes and wealth of any country in the world. Rated by the gini coefficient, a measure of inequality, the US has more inequality than Turkey, Iran and the Ivory Coast to name just three.
Robert Reich does not advocate any radical solutions to this problem despite the fact that Bill O’Reilly has called him a communist on Fox News, the archival footage of which is included in the film. He points out that the two high points of the suspension bridge correspond to the points at which taxes were extremely low for the upper class. Reich is basically a Keynesian who would like taxes raised on the rich with the money spent to rebuild infrastructure thus providing middle class jobs. He points out that the decline of the middle class exactly corresponds with the deunionization of the US, but labor unions will probably not be coming back any time soon due to the facts of globalization and robotization. American workers do not have any leverage for jobs that can either be shipped overseas or roboticized. Unions were able to bargain for better wages when the corporations really needed them in the period 1945-1980. They don’t really need them now.
Reich doesn’t talk about economic democracy or the cooperative movement in the world today. He doesn’t take on Wall Street or suggest public banking as an alternative. He seems to long for the good old days when taxes on the rich were high and good union jobs were plentiful. But that doesn’t address the present day situation. He seems to think like most conventional thinkers that more education is the panacea so that we can “compete in the global market.” Along those lines Anthony Carnivale has done a study on the economic value of various college degrees. The study was just for four year bachelor’s degrees with no advanced degrees included. He found that the highest paid degree was Petroleum Engineering with students being recruited on campus with offers over $100,000 per year to start.
That contrasts with a degree in psychology for which there was an average starting salary of around $25,000. So if you have no conscience about contributing to global warming, you can major in petroleum engineering, go to work for Exxon and make over $100K to start. There is seemingly an inverse relationship between highly paying jobs and highly ethical jobs. For instance, about half the Princeton graduating class last year went to work for Wall Street along with 25% of the classes of Harvard and Yale. So yes education pays as long as it is in what I would consider an unethical field. It’s no secret that there are plenty of jobs in the oil and gas industry, on Wall Street and in the military-industrial complex. The question is do you want money or do you want to be able to sleep at night?
The trouble with the seeming obsession with education as a way to hold onto middle class status is that the whole educational system is oriented toward preparing one to go to work as an employee. Getting a job means going to work for someone else. The educational system does not prepare you to go to work for yourself. A college degree is just a ticket of admission for a billet in the corporate world. If we became educated with a view towards becoming self employed, education would take on a much different complexion. However, the best jobs are self created jobs especially now since corporate jobs are becoming few and far between and the cost of a college diploma is $20K-$50K in student loan debt. With that debt there is no guarantee that you will even get a job. The social contract that a college degree guarantees a good middle class job has totally broken down. As Thomas Friedman says, “Need a Job? Invent It.”