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Reich writes: "It's crucial that America's most powerful and privileged understand what's happening, and why they must support fundamental reform."

Robert Reich, 08/16/09. (photo: Perian Flaherty)
Robert Reich, 08/16/09. (photo: Perian Flaherty)

The Politics and Economics of Inequality

By Robert Reich, Robert Reich's Blog

04 July 14

ere’s the Aspen Lecture I gave recently at this year’s Aspen Ideas Festival. The irony of talking about inequality with an audience composed almost entirely of the richest one-tenth of 1 percent of Americans was not lost on me. When I suggested that we return to the 70 percent income-tax rate on top incomes that prevailed before 1981, many looked as if I had punched them in the gut.

But I stressed it’s not a zero-sum game, and they’d do better with a smaller share of a rapidly-growing economy — growing because the vast middle class and the poor had the purchasing power to get the economy back on track — than they’re doing with a large share of an economy that’s barely growing at all.

It’s crucial that America’s most powerful and privileged understand what’s happening, and why they must support fundamental reform. your social media marketing partner


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+17 # fredboy 2014-07-04 09:26
Robert, we greatly appreciate your perspective and caring. But I must ask: Were you raised in poverty? Have you experienced it yourself?

One of the major disappointments experienced by those of us who began our lives in poverty is to have the condition studied and decided by those who have never tasted hunger, the lack of transportation, public shame, and the sad look on your parents' faces as they realize the social "beat down" poverty prompts.

Every decade brings new theories and solutions from those studying the challenge, but few take the time to really know it or live it or see it through the eyes and souls of its victims.

There are solutions. I call them paths. I am living proof that the paths can be most positive and even bountiful.

I celebrate the great spirits who care. Whatever your economic stage may be. Caring about others is the only way our nation, and society, can go on.

Those who think otherwise are simply painting themselves and their future in a corner.
+4 # munza1 2014-07-04 13:48
Right. Only black film directors can make films about the black experience, only Latinos can write about what the Hispanic experience is and I guess only those who grew up in poverty can truly find solutions to the problem of poverty. Maybe you're right as it's hardly been solved in this country and the majority of the world's countries.
0 # MidwesTom 2014-07-05 08:57
The only places that come close to 'solving' the poverty problem are in close knit homogeneous communities and countries. My poster child would be Salt Lake City, which I have only visited briefly, but I saw absolutely no signs of poverty there eight years ago.

Without a common cause people tend to group and support their own kind. Groups can include churches, clubs, or neighborhoods.
+15 # Buddha 2014-07-04 10:21
"But I stressed it’s not a zero-sum game, and they’d do better with a smaller share of a rapidly-growing economy — growing because the vast middle class and the poor had the purchasing power to get the economy back on track — than they’re doing with a large share of an economy that’s barely growing at all."

That once may have been true, when the fortunes of the Capital class by necessity were tied to the economic health of this nation. But the last 4+ decades has been one of making not just labor fungible, but capital as well. Increasingly our multinationals are looking overseas for their revenue growth, after all, that's where they sent the jobs. It is a mathematical game, they may be stagnating revenues coming from a hundred million working class in "rich" America, but the billions overseas are going from dollar-a-day "can't buy anything" poverty to now being able to buy a Coke once in a while, and that math is something our multinationals and the shareholders who own them are profiting on. That is part of the Wall St./Main St. disconnect. All the Capital Class really care about now is keeping this neo-liberal "Free Trade" regimen going full blast, and keeping the plebs from picking up pitchforks in the developed world...
+14 # Vardoz 2014-07-04 12:05
The rich and corporations prefer slave labor, they have shell corporations and off shore accounts, banks as it was recently reported are borrowing money from the feds at one per cent and then reinvesting it back at 2 to 3%. Nothing is being done to address the health of the economy. Regulations have been broken. Our govt is being run like a casino and we are the losers. It's an agenda of economic destruction. The southern states are drowning in poverty, corruption and incarceration. People need jobs to live and to raise revenues but there does not appear the be any interest in the 1% and special interests to uplift the nation in any way. The social contract is broken and this is a serious threat to the health, safety and welfare of the majority.
+11 # wrknight 2014-07-04 12:34
There's more at stake than just fairness and economic opportunity. Extreme inequality is a threat to our national security. What everyone seems to ignore is that the major threat to our government is internal, not external. History shows that 90% of governments that have fallen fell because of revolutions, military coups, internal rot and corruption and other internal forces. Look at Egypt. Look at the Ukraine. Look around you. Since WWII, practically no government has fallen from invading forces. Yet how many governments have fallen in the same time frame? The threat to the U.S. from any invading army is almost laughable.

So what is the real threat to our government? It is social unrest, that left to fester leads to oppression and revolution. And what causes social unrest? Extreme inequality where a few have it all and everyone else has nothing. Those in power can suppress social unrest for awhile, but sooner or later it always explodes.

The middle class provides a great stabilizing force in any government. The larger the middle class becomes, the more stable the government. That's the reason why the middle class must be preserved at all cost. That's why extreme inequality is a danger to our national security.
+6 # wrknight 2014-07-04 12:37
...and must be eliminated.
-24 # 2014-07-04 13:18
Mr. Reich,

If you are so bent on the return of a 70 percent tax for some, let ask:
"Have YOU been giving away 70% of YOUR income?"

Flat tax is equality. The rest is deceptive and abusive.
+17 # mebemo 2014-07-04 13:40
Actually, what is deceptive and abusive is the illusion that corporations are people, and the myth that political power isn't purchased by big bucks.
+15 # tswhiskers 2014-07-04 15:03
The flat tax is NOT equality. Compare: 10% of $10,000. is $1000, quite a cut to such a small income. 10% of $100,000 is $10,000. Where's the equality? That's precisely why Congress never took it seriously; the smaller the income the bigger the financial hit and vice versa. Maybe this is why the super-wealthy tout it so much. BTW the highest tax rate in the 1950's (during Eisenhower's presidency) was 90% not 70%.
+9 # wrknight 2014-07-04 15:32
70% is a marginal tax rate (i.e., the tax rate in the highest income bracket), which is not the same as paying 70% of your income.

Secondly, if we had true tax equality, then everyone would pay exactly the same amount of tax. That's not the same as the flat tax.

Some people should understand what they are saying before they say it.
0 # Jingze 2014-07-15 10:18
A nation whose corporations refuse to pay their employees enough money so that they need not beg food stamps and other help from the government is worse than a third world nation. Such is the USA.

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