Inequality for All

What is the biggest issue facing the United States today? I'm of the belief that it is income inequality--the ever-widening gap between the haves and the have-nots. Robert Reich, the former U.S. Secretary of Labor, thinks so, too, and spells it out in the documentary Inequality for All. I'd been wanting to see this film and I had the chance yesterday when it screened at my local Unitarian church.

Reich, who now teaches at UC-Berkeley, points out that though salaries for the top percent of income-earners in this country has climbed dramatically, wages have remained stagnant since the late '70s. This had led to a shrinking middle class. Problem: 70 percent of the U.S. economy is consumer spending, and if there is no middle-class the economy will continue to take a huge hit.

The richest 44 Americans make us much money as more than half of the rest of the population, which is pretty mind-boggling. Reich doesn't begrudge their wealth; he is a capitalist, and recognizes that talent and gumption should be rewarded. But he is concerned with what they do with their money--they don't really spend it. They may have huge mansions and yachts, but they don't fuel the economy like the middle-class; most of their money is in offshore accounts. They also don't pay taxes like the rest of us. Warren Buffet points out his tax rate is about fifteen percent, less than the receptionist at his firm.

After the halfway point out the film, Reich pulls out what is perhaps most dangerous about income inequality--it's erosion of democracy. Due to horrible, far-reaching decisions by the Supreme Court, spending on financial campaigns is now largely unlimited, allowing the super rich to have undue influence (on both left and right). It could be argued, in fact, that we no longer have a democracy, but instead a plutocracy.

This has not always been this way. Reich, in his classroom, puts up a chart of income equality, and it's like a suspension bridge. It was highest in 1928 and 2007, both years before a market crash. It dips during the post-war era, when unions were strong and the tax rate was higher--it was 91 percent during Eisenhower's administration, but only about 35 percent now. This chart also correlates with the prevalence of unions, which at one time was about one in three workers, but is now challenged at every turn. But in this post-war era, prosperity was high--helping the middle-class, like the tide, lifts all boats. It is not a zero-sum game.

The film includes a lot of media clips and interviews. We see a lot of the objections to this thinking by the right, represented by Fox News, which usually screams "class warfare" and "socialism." One idiot host calls Warren Buffet a socialist, which prompts Jon Stewart to wonder if he knows what socialism is. We also see a lot of the argument that taxing the rich is bad because these are the "job creators." Reich points out that the real job creators are the consumers, who buy goods and services. Many of the top rich people are financiers, who create practically no jobs.

In addition, there is Reich's story. He has a genetic condition that makes him very short, and he has dealt with it humorously all his life. He was Secretary of Labor under Bill Clinton (whom he met on the boat over to England, as both were Rhodes scholars). Therefore there may be a little too much congratulation of the Clinton administration. But I find Reich to be one of the more articulate spokesman of progressives. I follow him on Facebook and his posts are fascinating to read. After he left Washington, he thought about running for governor of Massachusetts, but found he didn't have the stomach for the dirty business of electoral politics. All I can do is daydream about him being president.