More about Robert Reich’s appearance at UC Berkeley last night; and summary notes about his book Economics in Wonderland.
I’m not deep into economics; I follow it only about as well as I need to to understand the different positions of the right and the left. Yet I’ve followed two economists for a number of years. First, Paul Krugman, because he’s written a column for the New York Times for a couple decades. I cite his columns here frequently. More recently, Robert Reich, because for the past several years he’s been doing videos on various platforms to illustrate and pace his little talks about basic economic principles and current issues of the day. Also, Reich has long been an establishment at UC Berkeley, up the road from us in Oakland.
It’s one thing reading a writer’s books, or seeing him or her in online videos, and it’s another seeing them in person. And so seeing Reich I observed 1) he’s quite short, maybe 5’4″, and 2) he pronounces his name rye-sh, with the ch pronounced like an sh, not the like guttural ch as it would be pronounced in German.
The event Monday evening was a casual interview between Reich and a colleague, Arlie Hochschild, also at Cal (the official nickname of UC Berkeley, does everyone know this?), both seated in easy chairs, she asking prepared questions plus some previously-submitted audience questions. The theme was in part Reich’s impending retirement. What will he do next? Hochschild cheekily had asked ChatGPT for some suggestions, and the results were perfectly reasonable and perfectly obvious. The evening, barely an hour long, concluded with some senior Cal staff (of the Goldman School, specifically, I think), presenting Reich with some special honor.
Zellerbach Hall (see when you say Zellerbach the ch is pronounced like a k) was about 3/4 full, and you could tell they were virtually all Reich fans. Lots of applause, some whoops. At the end the award presenter asked members of the School to stand, then members of the Cal staff, then students, then alumni, and 80% of the audience must have stood. (I’m a UCLA alumnus, so I didn’t stand.)
The event was interesting, but again intended mostly for fans; if you knew nothing about Reich, you wouldn’t come away with much of a broad overview of his ideas. He did touch on some familiar themes — inequality, raising taxes on the wealthy, and oh by the way how Trump is a traitor who shouldn’t be *allowed* to run for office again and how that’s a decision for the attorneys general in the 50 states to make, about whether he should be put on the ballot. The last was almost an aside; he didn’t dwell on Trump, nor did he mention current political news about Fox or Tucker Carlson (just that day).
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Here’s an example of a Robert Reich video, with cartoons, though not on a topic in the book summarized below.
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So meanwhile I read the one Reich book I have, called Economics in Wonderland: A Cartoon Guide to a Political World Gone Mad and Mean, published in November 2017, about a year after the 2016 election that Trump won. So Trump had been in office 10 months or so. The book is a compilation of the cartoon videos Reich had been doing, I gather, with the cartoons displayed along brief page or less passages of text. The book is only about 115 pages long, and each ‘chapter’ is 2 or 4 pages. I took brief notes, and I will polish them up here so as to provide a decent take on what Reich sees (or saw in 2017) as economic issues and his takes on them. [[ with some comments of my own ]]
Section 1: Big Money
Page 4, What’s the Fed? How it affects you.
It’s the Federal Reserve. They decide how high interest rates are going to be. Lower rates increases demand, thus labor, and more jobs. Higher rates make borrowing most costly. But the Fed is also supposed to prevent inflation. It’s a balancing act. Currently (as of 2017) unemployment is high, wages are stuck, no sign of inflation. [[ Now it’s quite different ]]
P6, Saving Capitalism for the many, not the few.
The idea that the free market is natural and neutral is dangerously deceptive. There’s no such thing in nature. A free market is a set of rules enforced by the government. They can change. Examples about bankruptcy, trade agreements, bail-outs. Monopolies vs. unions. As inequality grows, the rules tend to favor the wealthy.
P10, The reality of free trade deals
Economists think trade benefits most Americans, but most Americans don’t agree. Inequality; safety nets; median pay drops. The winners aren’t compensating the losers. Income insurance would be nice.
P12, Putting a lid on tax expenditures
These are benefits to the wealthy that allows them to deduce from their incomes what they spend on healthcare, retirement savings, and mortgage interest. The rich don’t need these as incentives, any more. They cost hundreds of billions a year. Limit these to say $25,000. [[ Limits were put in place, in fact, at least in California; thus now TurboTax tells me all I need is the ‘standard’ deduction, because my mortgage deduction doesn’t count for much anymore. ]]
P14, Corporate tax desertion
Corporations leave America for lower tax rates in other countries. The answer isn’t to lower rates in the US; that’s would lead to an endless downward cycle. The answer is to remove their advantages to being American: no more contributions to political campaigns; they can’t apply for government contracts; their assets shouldn’t be protected by the US government.
P16, Power: who has it, who doesn’t
Most people don’t; companies and corporations and banks do. Fewer workers are unionized; CEOs make far more compared to average workers. Now a handful of giant banks run the economy, ‘too big to fail.’ Big money has driven down tax rates, once 90%, now below 30%.
P18, The investments of the 158
Half the money contributed to presidential candidates by 2015 came from 158 families, who are older, white, and rich, who live in exclusive neighborhoods that don’t depend on government services, and who invest in politicians to further advantage themselves. We must get big money out of politics, repeal Citizens United.
P20, Why the Koch Machine is a threat to democracy
They are the 5th and 6th richest people in the world. They work through political front groups; giant advertising campaigns; a network of think tanks; campaigns to suppress the votes of minorities; efforts to bust unions; working to unravel campaign finance laws.
Section 2: Shams, Scams, and Flim-Flams
P24, Paul Ryan’s Seven Terrible Ideas
Cutting income and corporate taxes; slash spending on domestic programs; turn medical programs into block grants to states; raise retirement age for social security; let the minimum wage decline as inflation eats it away.
P26, “Right-to-Work” is wrong for workers
They s/b called “right to work for less”; such laws don’t benefit workers. They undermine unions, by reducing their funds. Such laws lead to lower pay, and only attracts businesses that don’t invest in their workers.
P30, Voter suppression (and how it works)
In 2013 the Supreme Court gutted the Voting Rights Act of 1965. States have begun passing more laws to depress voting—various requirements; gerrymandering. Example maps.
P32, The Republican Tax Sham
Re the “border adjustment tax.” It would penalize companies that import goods, as if to encourage ‘made in the US.’ This plan would mostly hurt the poor and middle class. Thus it’s another redistribution scheme to benefit the wealthy.
P34, Austerity 101: the three reasons republican deficit hawks are wrong
1, Deficit and debt numbers are meaningless on their own; they matter as a percent of the national economy. 2, America needs to run larger deficits when lots of people are unemployed; government spending helps create jobs. Cutting spending can lead to disaster. 3, Deficit spending on investments like education and infrastructure is different, because the benefit will likely exceed the investment.
P36, The real reason republicans want to pull the plug on Obamacare
They never did find a replacement; repealing it would leave millions without insurance. That would benefit the wealthy.
P38, Hands off my medicare!
Re Paul Ryan’s plan to replace medicare with vouchers. His claims about it are false.
P40, The cost of war
Compare the Iraq war with the diplomacy with Iran. Diplomacy should always come first. Wars are expensive. The Iraq war cost some 3 trillion dollars. Over half of the US discretionary spending is for the military.
P42, Climate and inequality
Climate change widens inequality. The poor are more exposed to flooding, droughts, failures in infrastructure. Reversing climate change will lead to more jobs, as we transition to renewables. Trump and Republicans fear clean energy will put power back into the hands of people, away from corporations.
P44, The facts about immigration
Myths: immigrants take away jobs; we don’t need any more; they’re a drain on public budgets (in fact they pay taxes!); it’s increasing.
P46, Word of the year: xenophobia
It was for 2016. It’s a reaction to globalization. Not just in the US, but around the world. In the US it’s been about native Americans; African slaves; Chinese workers; immigrants from Italy and Ireland the Poland. Fear always remains. It’s a sentiment to be fought.
Section 3: Solutions
P50, The five principles of patriotism
1, It’s not just about waving the American flag. 2, It isn’t cheap (willingness to pay taxes, voting, being politically active). 3, It’s about preserving and protecting our democracy. 4, It’s not about hating the government of the US. 5, It’s not about pandering to divisiveness.
P52, Raise the minimum wage to $15 an hour
[[ It is now in CA ]]
1, The current $10.10 needs to be adjusted for inflation. 2, It’s not enough to raise people out of poverty. 3, Some employers don’t pay better wages. 4, Yes some jobs may be lost but many more people will be lifted out of poverty. 5, A wage increase will likely come out of profits (not costs passed on to consumers). 6, Republicans can be counted on to argue for a minimal increase or none at all. 7, It’s the right things to do in a country where 95% of economic gains are going to the top 1%.
P54, Why liberal states won American’s tax experiment
Republicans insist the economy depends on low taxes, few regulations, and low wages. Compare Kansas and Texas, at one end, and California, at the other. In 2015, the Kansas economy actually shrank, and Texas isn’t doing well. While California leads the nation in economic growth—more than twice the national average. Why? Taxes enable investments. CA has a diverse population, it protects public health and its own natural beauty. Texas suffered the oil bust and didn’t diversify. Yes CA still has problems…
P58, Why the sharing economy is harming workers—and what must be done.
This involves independent contractors, free agents, the self-employed. 1099s instead of W2s. It’s growing. [[ This has become much more an issue with the ‘gig’ economy of Uber and its like. ]] It’s more risky. Gone are minimum wage, worker safety, medical leave, overtime, social security etc etc. We should aim for simplicity–… we should move away from unemployment insurance to income insurance.
P60, Four steps to solving student debt.
1, Allow graduates to refinance. 2, Allow graduates to reorganize those loans via bankruptcy. 3, Tie loan payments to how much a graduate earns. 4, Move toward free tuition at public colleges and universities. Remember the GI Bill; it worked.
P62, What is the racial wealth gap?
Why is this widening? Many Americans have almost no savings, so little wealth. Especially true of low-incomes families of color. What to do? 1, Reform the tax system to tax capital gains like ordinary income. 2, Limit mortgage deductions; use gains to establish savings accounts for newborn children. 3, Allow families receiving public benefits to save.
P64, The women’s wealth gap.
Conversation with Elena Chavez Quezada [[ who just received some high-level appointment from CA governor Gavin Newsom ]]. Women earn 79 cents for every dollar earned by men. Their wealth is even less. Assets vs debts. Various reasons. What can we do? 1, Expand women’s access to retirement accounts. 2, Ask ‘who benefits?’ as we debate tax reforms.
P68, End mass incarceration now
It’s wrong, and racist, and it’s bad for the economy. Lots of reasons why this rate ballooned over recent decades. 1, Enact smarter sentencing laws. 2, Stop militarizing the police [[ this is what ‘defund the police’ has meant, not disbanding them]]. 3, Stop building new jails. 4, Ban the ‘box’ i.e. questions on job applications about being convicted of a felony.
P70, Why a tax on wall street trades is an even better idea that you know
A good idea from Bernie Sanders. It would reduce incentives toward risky trading, generate revenue, and be fair. The arguments against it – it would drive stock trades overseas; it would unduly burden small investors – are wrong for various reasons.
P72, Why we’ll need a universal basic income
Imagine an iEverything that does everything, so no one has jobs, and therefore no one can buy it. Good take. [[ Reich used this example in his talk last night ]] We’re headed toward that; examples. People will have more free time, not having to earn a living. Thus the need for UBIs. The idea has been around. Interest is surging; conservative worries haven’t panned out. [[ Again, Harari and others have discussed this in some detail. If it seems counter-intuitive, well, the poor, even those who don’t pay taxes, still use public roads, use public libraries, and can count on the fire department responding to their emergencies. As productivity increases through technology, the same principle about the general welfare of society might just as well apply to cash payouts. ]]
P76, Bernie Sanders’s seven legacies
1, He helped open eyes to how big money is corrupting our democracy. 2, It’s possible to win elections without big money. 3, He educated Americans about the need for a single-payer healthcare system. 4, He brought younger people into politics. 5, He pushed the Democratic party to be more progressive. 6, He taught Americans how undemocratic the system for picking candidates is. 7, He spotlighted that possibility that if the Democratic party doesn’t do these various things, it will be irrelevant.
Section 4, Trumponomics
P82, Seven signs of Tyranny
They 1, Exaggerate their mandate to govern; 2, Turn the public against journalists and media outlets that criticize them; 3, Repeatedly lie to the public, even when confronted with the facts; 4, Blame economic stresses on immigrants or racial or religious minorities; 5, Attack the motives of anyone who opposes them, including judges; 6, Appoint family members to high positions of authority; 7, Keep their personal finances secret, and draw no distinction between personal property and public property.
P84, An orgy of unnecessary cruelty
This is the theme of Trump’s initiatives so far [as of 2017]: 1, His budget comes down especially hard on the poor (in order to hike military spending); 2, He plans to repeal and ‘replace’ the Affordable Care Act (to provide tax breaks to the wealthy); 3, He’s banned Syrian refugees (for nothing to do with terrorist attacks); 4, He’s done a helter-skelter roundup of undocumented immigrants (for no particular reason). This is all morally repugnant.
P86, Trump’s bonkers budget
Despite what he promised, Trump’s budget is great for big corporations, not ordinary people. It increases military spending by 10%; he plans to cut the corporate tax rate; he’ll pay for this by cutting the budget for environment protection agency; he’ll have to cut programs like food stamps and Medicaid.
P88, Tearing down the wall between church and state
How Trump is doing so. 1, His travel ban targets Muslims and exempts Christians; 2, His secretary of education, Betsy DeVos, considers her work to ‘advance God’s kingdom’; 3, His attorney general, Jeff Sessions, dismisses the ‘separation’ of church and state; and so on, re family planning, Ben Carson, Mike Pence, Tom Price.
P90, Trump’s attack on the freedom of the press
Four traditional techniques: 1, Berate the media and turn the public against it; 2, Limit media access; 3, Threaten the media; 4, Bypass the media and communicate directly with the public (his tweets).
P92, Trump’s ten steps for turning lies into half-truths
1, he lies;
2, experts contradict him;
3, he blasts the experts;
4, he repeats the lie;
5, the mainstream media describe the lie as a ‘disputed fact’;
6, he repeats the lie; his surrogates repeat it;
7, the mainstream media call it a ‘controversy’;
8, polls show a growing number believe his lie to be true;
9, the media now say ‘a claim that reflects a partisan divide’ or is ‘found true by many’;
10, the public is confused about what the facts are; he wins.
P94, Trumpcare
Eight promises Trump made about healthcare that never came true.
P96, Trump’s infrastructure scam
What he promises is 1, a public subsidy to developers and investors; 2, he’s turning public roads over to private corporations that would then charge us tolls; 3, he’d emphasize big infrastructure that would make lots of money and ignore the many smaller issues in rural communities.
P98, Trumps big bet on coal
He promised to put people back to work, especially in coal, but there just aren’t that many jobs in coal anymore. There are now more jobs in wind and solar energy.
P100, The wall
It’s a dumb and racist idea, because 1, It would cost $25 billion; 2, He says Mexico will pay for it; 3, There’s no need because undocumented immigration has sharply declined; 4, Anyway they’re not taking jobs away from Americans (they take different jobs).
P102, Trump’s corporate tax cuts
His proposal is nonsensical for 7 reasons: 1, companies already pay that little, through loopholes etc; 2, it would bust the federal budget; 3, it’s supply-side, trickle-down nonsense (that didn’t work for Reagan or Bush either); 4, it creates a new loophole…; 5, would create an international race to the bottom on corporate taxes that the US can’t win; 6, they don’t need a tax cut; 7, their claim they’ll use extra profits to invest is rubbish.
P106, Trump and big banks want to repeal Dodd-Frank
That’s the bank regulations passed after the 2008 crisis. Getting rid of it would triple the odds of another financial crisis.
P108, Four reasons why Trump’s plan to strip the IRS is incredibly dumb
1, It won’t save money; 2, It worsens the deficit; 3, It would widen inequality; 4, The IRS is already understaffed.
P110, The four dangerous syndromes of coping with Trump
1, Normalizer syndrome: he’s just another president;
2, Outrage numbness syndrome: you’ve gone numb, even stopped reading the news;
3, Cynical syndrome: the whole system is rigged, give up;
4, Helpless syndrome: there’s nothing to be done.
Don’t fall prey to any of these. There are always things to be done.
P112, Impeachment: A how-to explainer
Ten steps for how it would work. [[ Of course this did eventually happen. ]]
P114, Four (and maybe five) grounds to impeach Trump
1, He took an oath and is failing to execute it; 2, He’s making money off deals with other nations; 3, His travel ban violates the first amendment; 4, His war on the media also violates it; 5, Evidence might show treason in colluding with the Russians in 2016. [[ And this was before his incitement of the January 6, 2021, attack on the Capitol. ]]
P116, Glossary
