Traverse City Record-Eagle

August 4, 2013

Ex-labor secretary talks about fixing economy

Traverse City Record-Eagle

---- — TRAVERSE CITY — Talk, organize, mobilize, energize.

They’re words former U.S. Labor Secretary Robert Reich used over and over again in answers to the question of how to solve the country’s economic and other woes.

Reich, who served in three national administrations, including as secretary of labor under President Bill Clinton, was the guest Saturday at a Traverse City Film Festival Panel discussion. The public policy expert is a best-selling author, prize-winning professor at the University of California, Berkeley, media commentator and playwright. He stars in the Film Fest documentary, “Inequality for All.”

The film, which explores the causes and consequences of the widening income gap in America, earned a standing ovation at Friday’s screening. It was set to be shown again Saturday.

Known for his humor, equanimity and ability to break down complex issues, Reich started by pointing out that explaining difficult issues like the economy is easier with humor.

“If you can get people to laugh, then they can hear,” he said, in the panel discussion moderated by filmmaker Michael Moore and punctuated by Reich’s jokes about his short stature. “We tend to like our politics in a very angry form.”

He said many Americans don’t understand how the division of wealth contributes to the country’s current economic ills. When 400 Americans have more wealth than the bottom 150 million, the vast middle class doesn’t have the purchasing power to keep the economy going, he said.

“The real reason the economy is not growing is because the median wage is now almost 5 percent below what it was at the start of recovery,” said Reich, a Rhodes Scholar and Yale Law School grad.

He argued that more jobs at lower wages is not the answer but instead raising wages so that the middle class can buy what they produce and stimulate the economy is.

“Employers who treat their employees as assets to be developed rather than costs to be cut do better,” he said, adding that the job creators are not the rich but the middle class. “Investing in people is the essence of American competitiveness because there are very few American companies that are American companies.”

Raising wages is just one of about 12 to 15 “important reforms” Reich said would make the system work better. Others include exempting the first 15 percent of income from taxes for everybody and raising the marginal tax rate for the rich.

He pointed out that the marginal tax rate under President Eisenhower was the highest in history, yet the economy flourished under his administration.

But Reich said reform will only come about if people demand it, and that leadership has to come from the ground up.

“They’ve got to get organized and mobilized and energized and make change,” he said, noting that even Franklin D. Roosevelt, who led the U.S. through the Great Depression, understood that he couldn’t accomplish social change without people demanding it.

“Nothing good ever comes in Washington unless it comes from outside Washington. Otherwise the money interests run everything,” Reich said.

He called the labels “Democrat” and “Republican” divisive and polarizing and urged Americans to get out of their “bubble” and find common cause in fixing the poor economy.

And he said perhaps the biggest deterrent to change is a cynical society that gives up.

When asked if he would be willing to come back to Washington to execute those reforms should former Secretary of State Hillary Clinton be elected president, he responded simply, “Yes.”