The System (Robert Reich) 2020

The "Mega-Rich" Vs. Everyone Else

A polemic against Jamie Dimon as a representation of everything wrong suggested by Winners Take All, calling out his hypocrisy as someone who purports to be a patriot and want welfare for all, but who actually puts their duties as a for-profit big-bank CEO first.  Highlights the silence of these “leaders” in the face of Donald Trump attacking democracy, as they reaped the benefits of large corporate tax cuts and decreased environmental and banking regulation; they do not want to pay what is necessary for social reform.  Suggests it is the duty of these powerful people to relinquish their power and implement reforms to the end of democratizing power (limiting wealth, the power of finance, etc).  Reviews similar themes as Goliath, the evisceration of Union power as a counter-balance (also thanks Galbraith in the Acknowledgements, one of the villains of Goliath).  Corporations shifted from stakeholder value to shareholder value to defend against corporate raiders; companies had to produce top profits to ward them off.  No one has thought about the consequences of this power consolidation, least of all the DNC or the voting public.  Says the real battle should be the oligarchy of the mega-rich vs. the people, not left vs. Right, not culture wars which distract us from what has really happened.  Argues that we have a socialism of the rich, where the rich benefit from risky investing, but the nation must socialize their losses in the form of bailouts.  Rightly points out that our system is not “Free market” and that the market is organize by the government mostly to serve the interests of the rich, and that corporate success today is driven by monopoly power concentration.  Old labels of left vs. Right prevent people from seeing they’re the real losers.  Quickly glosses over the need to end voter suppression, stop corporate welfare, monopoly-bust, strength the power of labor, have employee owned companies, coops, and localized banks – issues which are not “liberal” or “conservative” says Reich.  “The powerful are more inclined to be generous than to grant social justice.” -Reinhold Niebuhr.  Companies have outsourced, replaced jobs with machines, lobbied against unions, abandoned communities, cut back taxes, fought for lax regulation, and opposed social justice legislation.  In 2005, student loan was made so that it cannot be eliminated in bankruptcy, another distortion in our “free market.”  Homeowners didn’t get bailouts, but big banks did in 2008; “socialism for the rich.”   They wanted to keep Dodd-Frank from requiring banks to not riskily trade in derivatives since they were backed by the FDIC (which they succeeded in).  The returns on lobbying money are very high for lobbyists, in the form of decreased regulation, lower taxes, and the rights to use public land for private ends (I.e. oil).  A more than 10x increase from 1970s to now, to 42% of retiring reps, go into lobbying after congress.  Polls and an SEC feedback form show that both sides are overwhelmingly fed up with “money in politics” and are “mad as hell.”  “I give money to everybody, even the Clintons, because that’s how the system works” -Donald Trump, 2016.  Other European countries have different political-economic system design, and have not been met with the evisceration of the working class power and the enormous rise in executive pay; 3rd parties are discouraged here, as discussed in Two Party Doom Loop and associated suggested reforms.  Chinese economic growth has been fueled, says author, by their doubling down on China with capital investments in technology and infrastructure.  Our “free market” is impacted by a lack of rights to unionize, corporate monopolies, fraud in the banking sector (I.e. fraudulent mortgages), government-backed activities by banks, inconsistent bankruptcy standards for corporations vs citizens, what is “public” vs “private” (I.e. the environment), and employee rights restrictions (anti-poaching, anti-compete, and mandatory arbitration agreements).  Payrolls are typically 70% of corporate costs.  Right to work laws say you do not need to pay union dues in a state to work.  The democrats have done nothing to protect unions.  Great corporate profits go into share buybacks and higher executive pay now.  Women starting to work begun the later decline of the American middle class, which was followed by longer hours, increased borrowing and debt; Americans could no longer to afford as they had been, but as they thought they should be (have-it-all culture).  The 1999 repeal of Glass Steagall turned the banking sector back into a gambling machine.  The idea of American meritocracy has clung throughout time, people deserve what they get, and it is not possible the deck is stacked; dynastic wealth makes a mockery of this notion, an aristocracy antithetical to democratic ruling.  TR taxed wealth; estate taxes and capital gains taxes, which have both been eroded since.  Ways people get really rich: insider information, buying off politicians, avoiding taxes, engaging in monopoly.  Correctly points to the liberal culture which mocks faith and patriotism as a cause of the rise of Trump, when people were faced with stagnating wages and nowhere to go. Obama never followed up on a reelection promise to amend the constitution against Citizens United.  Clinton pushed for NAFTA and China in the WTO; Obama did not overhaul the banking system.  Oligarchies retain power via dogma (“free markets” and meritocracy), bribes, and manufactured threat (fear of the other).  Books points out the entrenched interests of the liberal left in the percentage of prep school grads at Ivy League institutions.  Points to disparity in judicial punishments for black people trying to get their kids into other public schools, vs. Felicity Hoffman and the college admissions scandal.  Points to the class of people, -- the 10% -- complicit in the defense of the system, the lawyers, the accountants, etc; these people who avoid questions of class and power, and just want to see more black and brown faces participating in that 10% class.  Points to hope for the future with the change in racial demographics which is forthcoming due to the racial makeup of those under 30.  People are bullies, and our society is a reflection of super-bullies (is this inevitable?)