By Robert
Reich
You are the captains of American industry, the titans of Wall
Street, and the billionaires who for decades have been the backbone of the
Republican Party.
You’ve invested your millions in the GOP in order to get lower
taxes, wider tax loopholes, bigger subsidies, more generous bailouts, less
regulation, lengthier patents and copyrights and stronger market power allowing
you to raise prices, weaker unions and bigger trade deals allowing you
outsource abroad to reduce wages, easier bankruptcy for you but harder
bankruptcy for homeowners and student debtors, and judges who will let you to
engage in insider trading and who won’t prosecute you for white-collar crimes.
All of which have made you enormously wealthy. Congratulations.
But I have some disturbing news for you. You’re paying a big
price – and about to pay far more.
First, as you may have noticed, most of your companies aren’t
growing nearly as fast as they did before the Great Recession. Your sales are
sputtering, and your stock prices are fragile.
That’s because you forgot that your workers are also consumers.
As you’ve pushed wages downward, you’ve also squeezed your customers so tight
they can hardly afford to buy what you have to sell.
Consumer spending comprises 70 percent of the American economy. But the typical family is earning less today than it did in 2000, in terms of real purchasing power.
Most of the economic gains have gone to you and others like you
who spend only a small fraction of what they rake in. That spells trouble for
the economy – and for you.
You’ve tried to lift your share prices artificially by borrowing
money at low interest rates and using it to buy back your shares of stock. But
this party trick works only so long. Besides, interest rates are starting to
rise.
Second, you’ve instructed your Republican lackeys to reduce your
and your corporation’s taxes so much over the last three decades – while
expanding subsidies and bailouts going your way – that the government is
running out of money.
That means many of the things you and your businesses rely on
government to do – build and maintain highways, bridges, tunnels, and other
physical infrastructure; produce high-quality basic research; and provide a
continuous supply of well-educated young people – are no longer being done as
well as they should.
If present trends continue, all will worsen in years to
come.
Finally, by squeezing wages and rigging the economic game in
your favor, you have invited an unprecedented political backlash – against
trade, immigration, globalization, and even against the establishment itself.
The pent-up angers and frustrations of millions of Americans who
are working harder than ever yet getting nowhere, and who feel more
economically insecure than ever, have finally erupted. American politics has
become a cesspool of vitriol.
Republican politicians in particular have descended into the
muck of bigotry, hatefulness, and lies.
They’re splitting America by race,
ethnicity, and religion. The moral authority America once had in the world as a
beacon of democracy and common sense is in jeopardy. And that’s not good for
you, or your businesses.
Nor is the uncertainty all this is generating. A politics based
on resentment can lurch in any direction at almost any time. Yet you and your
companies rely on political stability and predictability.
You follow me? You’ve hoisted yourself on your own petard. All
that money you invested in Republican Party in order to reap short-term gains
is now reaping a whirlwind.
You would have done far better with a smaller share of an
economy growing more rapidly because it possessed a strong and growing middle
class.
You’d have done far better with a political system less poisoned
by your money – and therefore less volatile and polarized, more capable of
responding to the needs of average people, less palpably rigged in your favor.
But you were selfish and greedy, and you thought only about your
short-term gains.
You forgot the values of a former generation of Republican
establishment that witnessed the devastations of the Great Depression and World
War II, and who helped build the great post-war American middle class.
That generation did not act mainly out of generosity or social
responsibility. They understood, correctly, that broad-based prosperity would
be good for them and their businesses over the long term.
So what are you going to do now? Will you help clean up this
mess – by taking your money out of politics, restoring our democracy,
de-rigging the system, and helping overcome widening inequality of income,
wealth, and political power?
Or are you still not convinced?
ROBERT B. REICH is Chancellor’s Professor of
Public Policy at the University of California at Berkeley and Senior Fellow at
the Blum Center for Developing Economies. He served as Secretary of Labor in
the Clinton administration, for which Time Magazine named him one of the ten
most effective cabinet secretaries of the twentieth century. He has written
fourteen books, including the best sellers “Aftershock, “The Work of
Nations," and "Beyond Outrage," and, his most recent,
"Saving Capitalism." He is also a founding editor of the American
Prospect magazine, chairman of Common Cause, a member of the American Academy
of Arts and Sciences, and co-creator of the award-winning documentary,
INEQUALITY FOR ALL.
