Washington Pre-Occupied

occupy washingtonThe biggest question in America these days is how to revive the economy.

The biggest question among activists now occupying Wall Street and dozens of other cities is how to strike back against the nation’s almost unprecedented concentration of income, wealth, and political power in the top 1 percent.

The two questions are related. With so much income and wealth concentrated at the top, the vast middle class no longer has the purchasing power to buy what the economy is capable of producing. (People could pretend otherwise as long as they could treat their homes as ATMs, but those days are now gone.) The result is prolonged stagnation and high unemployment as far as the eye can see.

Until we reverse the trend toward inequality, the economy can’t be revived.

But the biggest question in our nation’s capital right now has nothing to do with any of this. It’s whether Congress’s so-called “Supercommittee” – six Democrats and six Republicans charged with coming up with $1.2 trillion in budget savings — will reach agreement in time for the Congressional Budget Office to score its proposal, which must then be approved by Congress before Christmas recess in order to avoid an automatic $1.5 trillion in budget savings requiring major across-the-board cuts starting in 2013.

Have your eyes already glazed over?

occupy la teach inDiffident Democrats on the Supercommittee have already signaled a willingness to cut Medicare, Social Security, and much else that Americans depend on. The deal is being held up by Regressive Republicans who won’t raise taxes on the rich – not even a tiny bit.

President Obama, meanwhile, is out on the stump trying to sell his “jobs bill” – which would, by the White House’s own estimate, create fewer than 2 million jobs. Yet 14 million people are out of work, and another 10 million are working part-time who’d rather have full-time jobs.

Republicans have already voted down his jobs bill anyway.

The disconnect between Washington and the rest of the nation hasn’t been this wide since the late 1960s.

The two worlds are on a collision course: Americans who are losing their jobs or their pay and can’t pay their bills are growing increasingly desperate. Washington insiders, deficit hawks, regressive Republicans, diffident Democrats, well-coiffed lobbyists, and the lobbyists’ wealthy patrons on Wall Street and in corporate suites haven’t a clue or couldn’t care less.

I can’t tell you when the collision will occur but I’d guess 2012.

Look elsewhere around the world and you see a similar collision unfolding. The details differ but the larger forces are similar. You see it in Spain, Greece, and Italy, whose citizens are being squeezed by bankers insisting on austerity. You see it in Chile and Israel, whose young people are in revolt. In the Middle East, whose “Arab spring” is becoming a complex Arab fall and winter. Even in China, whose young and hourly workers are demanding more – and whose surge toward inequality in recent years has been as breathtaking as is its surge toward modern capitalism.

Will 2012 go down in history like other years that shook the foundations of the world’s political economy – 1968 and 1989?

robert reichI spent part of yesterday in Oakland, California. The Occupier movement is still in its infancy in the United States, but it cannot be stopped. Here, as elsewhere, people are outraged at what feels like a rigged game – an economy that won’t respond, a democracy that won’t listen, and a financial sector that holds all the cards.

Here, as elsewhere, the people are rising.

Robert Reich
Robert Reich’s Blog 


  1. Joe Weinstein says

    Calls, like those of commenter Ryder, against government ‘interference’ with markets sound abstractly cool. Until you realize that orderly markets, in which consumers and vendors can operate and have long-term confidence, would be impossible without something like a government able (and at least partly willing) to enforce basic rules (e.g. against theft, murder, egregious deceptions, etc.).

    As Lord Acton insightfully noted, power tends to corrupt and absolute power corrupts absolutely. This insight is much quoted – and then is ignored even by would-be anti-corruption reformers.

    But attributing corruption to ‘government’ power is misleading, because what actually can hold governmental or corporate power or get corrupted is not an abstract institution like a ‘government’ (or a large ‘corporation’) but a person. The primary enabler for corruption is not that overall a government or a corporation has a lot of power but rather that the power is concentrated for long periods in a few oligarchs – human power-holders – who are then free to collude to abuse or sell-out their power.

    When government or corporate power of decision is massively distributed, among many people, each given power for just a short time, a would-be corrupter faces a far more difficult, often de facto impossible, task. The path to meaningful such distribution is not, however, massive elections: a decision by mass vote-count, mainly from casual voters not educated in the issue, amounts just to concentrating power in media manipulators. The solution is not to involve everyone in every decision, but to give each different decision to a different few (preferably randomly chosen) short-term decision-makers.

  2. Ray Bishop says

    I have attempted to find some scholarly ideas from Ryder; however this is not Robert Reich. He has a part of the story correct; however the fact is that our system is built on a patronage system. Politicians are elected by the people, but the founding fathers did not have a vision for today’s world of television and mass communications. People are basically uneducated except for the education they receive from the paid media. It is the money that elects the politicians that is they way the system works. It is not a problem with the government. The government was designed to protect the rights of citizens and to regulate those who would otherwise take advantage of the underprivileged.
    We must not take the power from the government we must work to insure that it enacts laws that are fair and protect the majority and enforces those laws with a fair justice system.
    Without that we would be totally at the mercy of those who would act as dictators with the power of wealth. President Obama was elected as a result of the internes and free access to more and more people. This might have been a fluke but the solution is to make sure that all money contributed to politicians is fully disclosed and eliminate donations by corporations or groups controlled by few individuals. Clean Money is an effort to deal with this problem.
    Ryder’s assertion that the problem is big government is false. Government should be controlled by citizens not by greedy interests of the wealthy.

    • Ryder says

      Hi Ray, I would beg to differ…

      Government chooses which industries win, and which loose. GM should have gone under. The Government declared them unconditional winners… and kept them alive.

      Obama has specifically said that he would tax coal energy out of business. Declared losers. Why has he not kept this promise? I’d guess that the coal industry ponied up, and made sure he was paid in some manner.

      Government is taking money from private investors, and investing it in the likes of Solyndra which the government has declared a “winner”…

      The Government tells Boeing where it can and can’t operate… apparently they didn’t pay enough to the politicians… to outweigh the money paid by the unions.

      Whoever pays most, wins.

      The Military Industrial Compex is a an old example of Government collecting tax money, and making it available to the powerful.

      Famously, the Interstate Commerce Commission (1887) was supposedly established to regulate the railroad “robber barons”, but was instantly bought by the railroads which used it to prevent competition and fix prices. (in other words, Government assumed the power to end free markets, and this power was bought by the rich).

      When Japan disallowed beef imports untested for mad cow disease, a US beef producer set up facilities to do the necessary testing. The big beef producers bought the USDA, who stepped in and prevented the testing so that the small beef supplier could not prove their superior product in the market. (big beef would have had to invest in expensive testing in order to compete)

      And the list never ends. Ever.

      Where government is controlling markets… expect the wealthy and well-connected to step right up and purchase that control.

      If, instead, the government did not operate outside of the Constitution… there would be no powerful boards or agencies interfering with markets… and therefore no means to be bought by the wealthy.

  3. Ryder says

    Mr. Reich is nonsensical,

    The concentrations of wealth “at the top” are specifically from wealth being able to buy influence.

    What he fails to understand is that this is normal and unavoidable. Ask yourself, how would *you* prevent people with wealth or connections from buying influence? You can’t. No civilization ever has.

    Corruption wasn’t invented last week.

    The most basic problem is that since Government has claimed so much power, they are now one stop shopping for the corrupt.

    Steve Jobs, to make money, had to sell phones and computers, one at a time, by convincing people that he had something good to sell them at a price his customers would agree to.

    On the other hand…. if you are a company like Solyndra, or a bank that made bad decisions on running a business, the corrupt simply turn to Washington for a hand-out… which they simply take and run with.

    I can guarantee you that in nearly every case, the richest 1% got that way because of the power of government to deliver tax payer money directly to them.

    End of story.

    If you have a ready source of money, that you can buy for 10 cents on the dollar, or cheaper… the corrupt will come out of the woodwork to get it…. and there is NOTHING that can be done about that.

    Regulations written by corporate sponsored politicians, including Obama, are never really going to work against those corporations.

    The *only* solution is to reduce the size/role/power of government, so that the corrupt simply have no place to go for handouts. They can’t get special regulations written to the favor of their business.

    Occupy screams for jobs… yet those same people were warned, long ago, that attacking business with regulations, taxes, and litigation (things that the Occupiers still want, BTW), would send jobs *away*. They’ve been told that for many decades, and we’ve watched it happen… exporting jobs all over the world, exactly as was predicted.

    Now they are crying because their state funded student loans are on their back… and the jobs aren’t there for them.

    The Entitlement class needs to choose.

    One way or the other. You can’t have both. You can’t hate people that run businesses, and then expect them to give you work, benefits, and retirement, while at the same time bending over for rectal exams on who they hire, how they hire, what wages they pay, making them unpaid tax collectors and administrators for endless state and federal mandated programs.

    Some female manager says “nice buns” at the company cafeteria, and winks at the food server as she reaches for a roll… and suddenly the company is being sued for six figures… and the next thing you know, the company is fighting for its life with all of the other jobs at stake… paying for lawyers instead of competing in the marketplace.

    JOBS WILL LEAVE THIS ENVIRONMENT…. and go to Asia, South America, anywhere where the b.s. is far more moderated… and stability is assured.

    But Occupy want’s it the other way around… beat the hell out of business… without regard for their innocence or guilt in corruption because Occupy is engaged in *class* warfare.

    Obama called for class warfare, and now the “great uniter” has proven himself to be the great divider, and has helped to launch a movement that has *no* constructive goals. They are like soldiers in a Revolution, and say as much.

    Soldiers destroy.

    When will we ever learn?

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