Redistributing the Wealth — Higher and to Fewer

Robert Reich reminds us that all the talk about taxing the wealthy to redistribute downward masks a vital point — the wealthy got that way, in part, by the rigged distribution upward.

Much of the national debate about widening inequality focuses on whether and how much to tax the rich and redistribute their income downward.

But this debate ignores the upward redistributions going on every day, from the rest of us to the rich. These redistributions are hidden inside the market.

… the extra money we’re paying for pharmaceuticals, Internet communications, home mortgages, student loans, airline tickets, food, and health insurance – and you get a hefty portion of the average family’s budget.

Or, in other words, the markets are far from being ‘free,’ as is widely and loudly claimed.  The ideal state for big business is to have captive markets, or shall we call them slave markets, controlled by themselves. Until the conglomerates are broken up, and the purchasing public understands that saving 2% at the big box stores costs 4% in time, transportation and hassle, redistribution up will continue to be the norm.

Public Immorality

Robert Reich is always worth listening to whether about economics or trade or work, usually all three at the same time.  In recent blog posts he’s gone after the disappearance of public morality in great corporations, an absolute necessity, he says:

An economy depends fundamentally on public morality; some shared standards about what sorts of activities are impermissible because they so fundamentally violate trust that they threaten to undermine the social fabric.

He’s written about it twice in recent weeks, following on earlier posts about The Outrageous Ascent of CEO Pay and Corporate Welfare in California

 

 

At a time many Republican presidential candidates and state legislators are furiously focusing on private morality – what people do in their bedrooms, contraception, abortion, gay marriage – America is experiencing a far more significant crisis in public morality.

CEOs of large corporations now earn 300 times the wages of average workers. Insider trading is endemic on Wall Street, where hedge-fund and private-equity moguls are taking home hundreds of millions.

A handful of extraordinarily wealthy people are investing unprecedented sums in the upcoming election, seeking to rig the economy for their benefit even more than it’s already rigged.

Yet the wages of average working people continue to languish as jobs are off-shored or off-loaded onto “independent contractors.”

All this is in sharp contrast to the first three decades after World War II.

Read All

And if you didn’t see him in Inequality for All, here is a trailer.  Available out there in internet land

 

 

The Hidden Hand, Indeed!

Libertarians and free market fans love to talk about the hidden hand of the marketplace as God’s way of ensuring fairness, making sure the most good comes to the most people.  What they never like to talk about are the actual hidden hands — those market makers, market manipulators who shred the idea of free markets, and trample on the idea of markets regulated for the public good.

Why have almost none of the accounts of the Greek crisis over the last several months whispered the name Goldman Sachs?

Here’s a guy who will: Robert Reich.

 

The Greek debt crisis offers another illustration of Wall Street’s powers of persuasion and predation, although the Street is missing from most accounts.

The crisis was exacerbated years ago by a deal with Goldman Sachs, engineered by Goldman’s current CEO, Lloyd Blankfein.

Blankfein and his Goldman team helped Greece hide the true extent of its debt, and in the process almost doubled it

On Reich’s Blog: How Goldman Sachs Profited from the Greek Debt Crisis.

The GOP Crackup

Robert Reich, Secretary of Labor under President Clinton, contributes regular opinion pieces on-line and to various print papers, among them, the San Francisco Chronicle.  Today he has an interesting take:

Two weeks before the Iowa caucuses, the Republican crackup threatens the future of the Grand Old Party more profoundly than at any time since the GOP’s eclipse in 1932. That’s bad for America.

The crackup isn’t just Romney the smooth versus Gingrich the bomb-thrower.

Not just House Republicans who just scotched the deal to continue payroll tax relief and extended unemployment insurance benefits beyond the end of the year, versus Senate Republicans who voted overwhelmingly for it.

Check out the rest

While you’re there read his prediction that there will be a change in the Obama-Who team in 2012.

…the Democratic ticket for 2012 is Obama-Clinton. Why do I say this?

Predictus Reicheus