Robert Reich is one of those sane voices in the wilderness. As an economist and former Secretary of Labor, he has some well-educated opinions about how the economy can work best for the average American.
Saving Capitalism, a Netflix original, is a documentary inspired by his book of the same title. The documentary shows Reich going from book signing to book signing, meeting to meeting. In between, he explains his background and his perspective on the economy through the decades. Reich is pretty good about trying to explain economic concepts in laymen’s terms. (He shares excellent tidbits through videos and tweets on Twitter.)
Reich is an unabashed Democrat and firm believer in capitalism. But he gets it. He gets that people are angry and frustrated. He gets that people are screaming to be heard but no one is listening. He gets the feeling that the system is rigged.
It is, he says. It only works for a few. And then he explains why. Along the way, he debunks myths that we have been told about the capitalist system.
Free markets. There is no such thing, though for several decades some people have liked to pretend there is. Any capitalist system plays by rules, rules surrounding property, monopoly, contracts, bankruptcy, and enforcement. The role of government is to set these rules. So the question is not do rules exist but rather how should the rules be set and who should they benefit.
The rules are not set in stone. They are not inherently set a certain way. The rules are man-made and can be changed to reflect our values as a society. (Clearly, our values are at a really low point right now.) The rules do not have to rig the system against us. We can change them so that capitalism works for all of us.
Reich actually predicted the anger and frustration that we see today back in the early 1990s when he was Secretary of Labor. The feeling that things weren’t working for average Americans started with the Powell memo of 1971. The Powell memo advocated for the flood of lobbying we see today from corporations.
With money comes power. With power comes influence over the rules of the game. As corporations started to pour money into politics, their power over the rules grew and then they were able to change the rules to benefit themselves more. The vicious cycle continued, ramping up further with Citizens United.
Reich also reviews corporate welfare, what it is, how much it is, and how insidious it is. Corporate welfare includes subsidies to industries and tax breaks. Rather than be an easy beast to tame, it has invaded the tax code, appropriations, and trade deals. Good luck rooting it out!
Reich argues too that the 2008 financial disaster was not an aberration, but rather the logical consequence of deregulation that started under Reagan. The late 1990s saw the rise of derivatives and the successful defeat of their regulation. Then the 1933 Glass-Segall law that was enacted following the 1929 stock market crash was repealed because, well, that was no longer necessary, regulation hampers profits, etc., etc.
To those who scream for no government involvement, Reich points out that government is always involved in capitalism. Government either prevents disaster with regulation and oversight or steps in to clean up a mess made through a lack of regulation and oversight. Which do we prefer?
With Citizen United, we see even more money from corporations and the super wealthy flowing into government. With it comes more power and influence for the corporations and the super wealthy—and less for us average Americans. With this trend comes more general anger, frustration, and delusion in the system.
…which explains the rise of populism. We are suffering through the ascendency of authoritarian populism, when the populace has decided to put its faith in a strong man to save the system and to save us. (Never mind that our current strong man—Trump—is one of the wealthy who is amassing more power, more influence, and more money at the expense of most Americans.)
The other kind of populism is reform populism, where the people channel their anger and frustration to reform the system. (Although he never mentions him by name, Sanders is the clear unnamed elephant in the room.)
The pendulum swings, Reich reminds us, and history repeats itself. We are back in the corruption of the Gilded Age of the 1880s and 1890s. The message is that things will get better if we organize, rise up, and become active citizens again. Society as a whole will progress. As I watched photographs of individuals suffering through the effects of the Gilded Age, I couldn’t help but think of the horrible suffering that individuals must go through before we average Americans get to the other side of a better world.
Which do we prefer? Government that prevents disaster with regulation and oversight or government that steps in to clean up a mess made through a lack of regulation and oversight. I vote for the former.