The Coffee Klatch with Robert Reich

Nothing good comes from war except, on occasion, the prevention of something even worse. As pressure increases on the Biden Administration to take more aggressive action against Putin, the question is how to minimize the collateral damage to Americans and use the crisis to move toward a more humane future. Here are five possible ways. 1. Help Americans endure higher fuel prices. The best way to stop Putin’s war machine would be to put economic sanctions on anyone buying Russian oil or gas, because oil and gas revenue makes up about half of the Kremlin’s budget. But such sanctions would also drive the prices of oil and natural gas through the roof. (Biden’s decision today to stop imports of Russian oil to the U.S. will have far less consequence because only a tiny fraction of the oil we use comes from Russia.)Gas prices in America are already topping four dollars a gallon (here in California, five dollars). That’s less of a problem for higher-wage workers who can work from home, but it’s a huge burden on lower-wage workers who have to make longer and longer commutes.What to do? Help Americans caught in the energy squeeze. Revive the refundable expanded Child Tax Credit, which enabled millions of poor and working-class families to survive the COVID recession.2. Move the nation toward green energy. Oil companies are pocketing windfall profits while their lobbyists are using the crisis to demand that the U.S. build new Liquid Natural Gas terminals, allow more oil pipelines, and approve new leasing of federal lands for oil drilling. That’s the exact opposite of what we need to do. However we invest in new energy infrastructure, none of it will have an immediate impact on energy prices. The practical longer-term choice is between an energy infrastructure that supports the production of more fossil fuels (such as the additional LNG terminals, pipelines, and oil leases that energy lobbyists are now pushing) or one that moves the nation more quickly to renewable energy sources (such as subsidies for electric cars, batteries, and charging stations). Now is the time to redouble our efforts toward the latter. We need to use this opportunity to build more of the green infrastructure America needs for the long term. Meanwhile, there’s no reason American oil producers should enjoy windfall profits from rising energy prices. Congress should enact a windfall profits tax on them, and use the proceeds for additional green infrastructure. (The European Union is urging member countries to do exactly this. Why can’t we?)3. Trim the military-industrial complex. Though the U.S. and other Western allies have stopped short of sending troops to Ukraine, they are sending weapons. Even Sweden, a non-NATO member, has announced it will send anti-tank weapons, helmets and body armor to Ukraine. Finland has pledged assault rifles and anti-tank weapons. In America, budget analysts expect defense spending in the 2023 federal budget to rise to between 3.5 percent and 4 percent of GDP.All this military spending comes at the expense of domestic priorities in the United States and abroad. It also increases the likelihood of armed conflict. The big winners: U.S. aerospace and defense contractors that are making many of these weapons systems and whose share prices are surging. America’s defense budget is already bloated — bigger than the next ten defense budgets put together. There’s no reason for more defense spending. If anything, we should use the current crisis to reexamine defense spending and make our armed forces more efficient — using the savings to finance more humanitarian aid around the world. 4. Put democracy and human rights at the center of American foreign policy. In one way, Putin’s war is elevating democracy and human rights in U.S. foreign policy. That’s why Biden has unified and mobilized much of the rest of the free world. But in pursuit of oil sources to replace Russian oil, America seems to be recalibrating its emphasis on human rights. That would be a tragic mistake. This past weekend Biden officials met in Venezuela with the government of President Nicolás Maduro. Why? Because Venezuela’s petroleum exports are seen as a potential substitute for Russian oil. But Maduro’s government has been responsible for extrajudicial executions and short-term forced disappearances. It has jailed opponents, prosecuted civilians in military courts, tortured detainees, and cracked down on protesters. Judicial authorities have participated or been complicit in the abuses. Maduro used a state of emergency implemented in response to Covid-19 as a pretext to intensify his control over the population.Last year, a United Nations fact-finding mission concluded that the Maduro regime has committed crimes against humanity. The exodus of Venezuelans fleeing repression and the humanitarian emergency represents the largest migration crisis in recent Latin American history.Biden’s advisers are also discussing a possible visit to Saudi Arabia to help repair relations and convince the Kingdom to pump more oil. Saudi Arabia is also among the world’s worst abusers of human rights. According to the CIA, Saudi Arabia’s de facto leader, Crown Prince Mohammed bin Salman, was directly involved in the murder and dismemberment of Washington Post columnist Jamal Khashoggi.Abandoning democracy and human rights around the rest of the world is no way to protect democracy and human rights in Ukraine. 5. Protect and expand voting rights in America. The same goes for the United States itself. Let’s use this crisis to reaffirm our commitment to voting rights. Last weekend, Vice President Kamala Harris visited Selma, Alabama. Standing by the iconic Edmund Pettus Bridge that was the site of a violent clash between civil rights leaders and segregationist police in 1965, she drew a parallel between the Americans who marched for their rights and the Ukrainians fighting for their nation’s survival against an invading Russian military. “Today, the eyes of the world are on Ukraine and the brave people who are fighting to protect their country and their democracy. And their bravery is a reminder that freedom and democracy can never be taken for granted by any of us.” The fight in Ukraine should galvanize America to protect voting rights. Whether it’s a Black activist being beaten by a police officer or a mother marching across a muddy field fleeing violence, the brutality is the same. Months after the original Selma march, Congress passed the Voting Rights Act. In 2013, the Supreme Court gutted the Act — arguing that protections for Black voters were no longer needed in states with deep histories of discrimination. In the years since, states have moved methodically to make access to ballots more difficult. That effort has accelerated since the 2020 election, in light of Trump’s big lie. The Senate is now sitting on two measures that would reverse these state efforts and make it easier for all Americans to vote — the John Lewis Voting Rights Advancement Act and the Freedom to Vote Act. But fifty Republican senators and two Democratic senators (Krysten Sinema of Arizona and Joe Manchin of West Virginia) stand in the way. Putin’s war against Ukraine’s democracy should remind all of us of how fundamental the struggle for democracy is to America’s own purpose and ideals, and enact these two measures necessary to protect voting rights in America. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

We’re sanctioning Russian oligarchs up the wazoo, hoping it’s a way to get Putin to stop his deadly attack on Ukraine. But for this tactic to work (1) the U.S. and our allies must be able to locate and tie up Russian oligarchic wealth, and (2) Russian oligarchs must have enough power to stop Putin. Let’s take them one at a time: Can we locate and tie up the wealth of Russian oligarchs? Anecdotally, sanctions on the oligarchs appear to be working. Last Sunday, billionaire industrialist Oleg Deripaska (on the U.S. sanctions list) and banker Mikhail Fridman (on the EU’s) both publicly urged an end to Putin’s war. Billionaire businessman Roman Abramovich has put his British soccer club up for sale and vowed to donate the proceeds to “all victims of the war in Ukraine.” Banker and entrepreneur Oleg Tinkov told his 634,000 Instagram followers last week that “innocent people are dying in Ukraine now, every day, this is unthinkable and unacceptable.”But are these sanctions really biting? This is where a comparison of Russian oligarchs with American oligarchs comes in. While Russian oligarchs (Russia’s richest 0.01 percent) have hidden an estimated $200 billion offshore (over half of their financial wealth), American oligarchs — America’s 765 billionaires — have hidden $1.2 trillion (about 4 percent of their wealth), mostly to avoid paying taxes on it. While American oligarchs park their income and wealth in tax havens such as the Cayman Islands, Russian oligarchs have hidden their most valuable assets in the United States and Europe. The reason they do so is telling: Western democracies follow the rule of law. Under such laws, before a government can seize property it must follow lengthy and elaborate legal processes. As a result, American and European governments are finding their hands tied in actually taking control of the assets of Russian oligarchs. American law makes it difficult even to discover what Russian oligarchs own in the United States because they’ve hidden their assets behind complex trusts and shell corporations. American laws governing taxes, corporations, transportation, and banking are wonderfully convenient for the world’s oligarchs. One out of every six aircraft in the United States, for example, is registered through trusts, Delaware corporations, and even post office box addresses, making it almost impossible to discover their true owners. This isn’t an argument against sanctioning Russian oligarchs. It’s just that we need to be clear-eyed about how difficult it is to do so.[Russian oligarch Roman Abramovich’s yacht:[American billionaire Rick Caruso’s yacht:Do Russia’s oligarchs have enough political clout in Russia to stop Putin’s aggression, or perhaps even depose him?American oligarchs have enormous political clout. In the 2012 presidential election (the most recent for which we have detailed data on individual contributions), the richest 0.01 percent of Americans (that is, the richest 1 percent of the richest 1 percent) accounted for 40 percent of all campaign contributions. (See the graph below.)What have American oligarchs got out of these campaign contributions? The lowest tax rates on the highest incomes in over a generation — and the lowest among all wealthy nations. They’ve also gotten an IRS so starved of resources it’s barely able to enforce the law. Russian oligarchs who have pledged loyalty to Putin arguably have less political power in Russia than do American oligarchs in the U.S. In Putin’s Russia, power is exercised by a narrow circle of officials and generals appointed by Putin, whom he has drawn largely from the former KGB. According to several Russian specialists I’ve spoken with over the last few days, this circle has become very small in recent months, now numbering perhaps a half dozen. We should use whatever means at our disposal to make Vladimir Putin end the brutal war he started. But it is proving difficult to use sanctions on specific oligarchs to get Putin to stop. Perhaps we should be more ambitious. My Berkeley colleague Gabriel Zucman recommends that the United States and the European Union freeze all offshore holdings of Russian nationals in excess of $10 million. This would affect about 10,000 to 20,000 Russians who have benefitted the most from Putin’s rule.Meanwhile, blanket sanctions against the Russian economy are having an effect. Over the past week they have caused the ruble to collapse and decimated Russian markets. But the major burden has fallen on ordinary Russians, many of whom have already suffered from Putin’s brutal regime. As we’ve seen in North Korea and Iran, dictatorships don’t depend on popular approval. In fact, widespread hardship can lead to even more repression and violence. We should remind ourselves that Putin is not synonymous with the Russian people. Xenophobia of whatever form has no place in the fight against vicious authoritarianism.PS: Here’s a video that I and my terrific colleagues at Inequality Media did on the meaning and functioning of oligarchy in both the U.S. and Russia. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

The waitperson where I had breakfast this morning broke down in tears over Ukraine. “I just don’t know what to do,” she said.She’s not alone. I feel the same way. You probably do, too. That one tyrant can cause this much human suffering defies whatever progress we assumed civilization had made since Hitler’s rise almost a century ago. That Putin can wreak such havoc on innocent people, seemingly unconstrained by others in Russia’s government, makes a mockery of modern ideas about governance in even totalitarian regimes. That he has control over a nuclear stockpile capable of annihilating much of humanity lays bare — even more starkly than does climate change — how far humanity has fallen behind in the primal race between technology and survival.But bear in mind several encouraging things. The rich nations of the world that still practice democracy are exercising a unity of resolve not seen in decades. Thankfully as well, we in the United States have as president a person who is sane, thoughtful, experienced, and even-tempered. Can you imagine where we’d be with the former guy? Beyond this, there is no reason to suppose that the grim calculus behind “mutually-assured destruction,” which has so far prevented a nuclear holocaust, has changed. Finally, by all accounts Putin is not having an easy time of it. The people of Ukraine are mounting a fierce resistance. He cannot “win” this war. Even if he establishes a puppet government there, the resistance will continue.So what can you do to help Ukraine? Four things. 1. First, you can contribute to Ukrainian relief efforts. Here are organizations I trust: — Ukraine Crisis Fund. The international humanitarian group is providing food, water and other items to families fleeing violence in Ukraine. Contribute here.— Doctors without Borders. Staffers with the medical relief organization remain in Ukraine and are "seeking ways to respond to the medical and humanitarian needs as the conflict evolves." Offer support here.— ICRC. The Swiss-based organization is supporting the work of the Ukrainian Red Cross in helping those impacted by the war. Donate to the ICRC.— Keep Ukraine’s Media Going is a GoFundMe campaign for journalists around Ukraine that also aims to help reporters relocate and continue their work from neighboring countries. Donations can be made here. 2. Second, you can write your members of Congress expressing your view that the United States should sanction Russian oil and gas, and that you are willing to make the financial sacrifice of higher prices at gas pumps and for home heating oil that will almost certainly result. 3. Third, you can urge your members of Congress to open wide America’s borders to Ukrainians fleeing Putin’s war, and help them transport themselves and their families here. 4. Fourth and finally, whatever your political persuasion, you can put aside your anger and frustration with Americans who disagree with you on other issues and recognize our shared commitment to democracy and human rights and our mutual loathing for the murderous rampage we are witnessing in Ukraine. Even former VP Mike Pence declared last night that “there is no room in this party for apologists for Putin” (drawing another contrast with the Trump wing of the GOP). Bearing witness to this calamity and unambiguously condemning it should, at the very least, be something we can all agree on. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

If Europe and the United States do what must be done next to contain Putin’s despicable invasion – blocking Russian exports of gas and oil – energy prices will soar. That means consumers will have less money to spend on everything else. This could well push the U.S. economy back into recession.Which makes all the more bizarre Federal Reserve Chairman Jerome Powell’s statement yesterday to the House Financial Services Committee that he will propose increasing interest rates at the central bank’s meeting in two weeks. Really? The Fed plans to whip inflation by throttling the US economy at a time when a war in Europe threatens to engulf it? Yes, inflation is very high. That’s because demand for goods exceeds supply. But inflation will slow as the pandemic winds down and Americans continue to shift their purchases back to services (retail stores, restaurants, hotels, and airlines are already rebounding), and as the supply of goods and components continues to rise to meet demand.Yes, demand is strong. That’s because after two years of pandemic, American consumers have pent-up needs and wants. They’ve also managed to save a bit. But these conditions are also temporary. The household savings rate continues to drop. Government pandemic relief programs are over. Most Americans are back to living paycheck to paycheck.Powell worries about a tight labor market. But a tight labor market improves the bargaining leverage of the bottom half of American workers, who haven’t had much of a raise in 40 years. If the Fed slows the economy, those workers will lose any prospect of a pay increase. If the slowdown tips the economy into recession, they’ll also be the first to lose their jobs. Don’t believe anyone who warns of an “overheated” labor market. The only people whose paychecks have been overheated are in C-suites and on Wall Street. With Putin’s war raging, this is the worst time for the Fed to slow the economy. The war is doing enough damage as is. It threatens to worsen inflation by further disrupting supply chains and pushing energy and commodity prices even higher — thereby forcing consumers to cut back on other purchases. If Europe and the United States block Russian exports of gas and oil — as they should, in order to contain Putin’s barbarity — energy prices will soar, and the US and global economy could fall into recession. (Over the longer term, higher gas and oil prices aren’t a bad thing; they’ll help propel the U.S. economy toward renewable sources of energy.) Raising interest rates at a time like this is like trying to cure a flu with an enema. The underlying problem has nothing to do with permanently excessive demand or permanently limited supply, or with a tight labor market, or with Putin’s war. The real problem is big corporations in America have too much pricing power. As the New York Times pointed out last week, “corporate executives have spent recent earnings calls [with Wall Street] bragging about their newfound power to raise prices, often predicting that it will last.”A better alternative to raising interest rates and slowing the economy would be a windfall profits tax on profitable corporations that have been taking advantage of the turmoil by raising prices -- including energy companies. But such an initiative would have to come from Congress, where the political clout of corporate America -- especially over Republicans and corporate Democrats -- makes it nearly impossible.If Putin’s aggression continues, though, a windfall profits tax isn’t out of the question.(For more on the real source of inflation, see the video below that I just did with terrific my colleagues at Inequality Media about the real source of inflation.) This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

When I was in elementary school in the 1950s, I was periodically required to “duck and cover” by huddling under my desk in case the Soviet Union dropped an atomic bomb on my town. If I didn’t survive, I was also issued a dog tag with my name and address to help my parents identify my body. (I remember thinking that if the bomb dropped my parents wouldn’t be around to identify me anyway.) The whole thing was terrifying. Years later, when I had my own children, I learned that the only means by which America prevents a far worse nuclear attack — featuring much more powerful bombs capable of reaching anywhere in the United States — is through “mutually assured destruction,” the morbid reality that if Russia launches an attack on us it would be annihilated, as would we. No more duck and cover. Which gets me to today’s Office Hours discussion. Putin’s invasion of Ukraine is escalating. The United States and our allies have already imposed severe economic sanctions, but a dictator can withstand the consequences of sanctions for quite some time (Exhibit A: Kim Jong-un). The most severe sanctions would be on Russia’s oil and gas exports, but imposing them would cause oil and gas prices to soar in the United States at a time when Americans are already facing near record inflation. Should we be willing to make this sacrifice? And what happens if Putin takes over Ukraine, establishes a puppet government there, and then amasses Russian troops along the borders of NATO members Poland, Hungary, Estonia, Latvia, or Lithuania? By treaty, we are obligated to defend these nations. But are we willing to risk full-scale war? And what does war possibly mean between two nations armed with the most nuclear warheads in the world? None of this is pleasant to think about, but we have no choice. Hence this week’s Office Hours question: As a practical matter, what should we be prepared to sacrifice to stop Putin’s aggression? (Please comment below. I’ll weigh in mid-day with some thoughts of my own.)**My two cents. Putin is escalating his attack on Ukraine, now reportedly using vacuum bombs on civilians, which are barred by the Geneva Convention. A humanitarian catastrophe is unfolding in real time before our eyes.Russian gas and oil now come soaked in blood. I do not believe it any longer morally justifiable for the West to purchase them. I agree with Ken and Keith on this. To be sure, cutting off Russian gas and oil will result in substantially higher energy prices in the US and Europe, at a time when inflation is already soaring. Although we are not prepared to sacrifice the lives of Americans, we should be willing to sacrifice our pocketbooks. This is the minimum we should be willing to endure. (We should protect lower-income Americans from the worst economic consequences by enlarging subsidies for heating oil and gas at the pump, for example). One ancillary benefit could be speeding up our conversion to renewable energy. Germany – which is highly dependent on Russian natural gas – has committed itself to 100 percent renewables by 2030, just 8 years from now. We must do the same. It is no longer “green energy” versus Big Oil and Big Coal. American security has now converged with the necessity of slowing and reversing climate change. But what if Putin amasses tanks and troops along the borders of a NATO country? I think our best hope at the moment is that fierce financial pressure — including a ban on Russian oil and gas exports — convinces Russian oligarchs and generals that Putin must be deposed. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

In a few minutes, Joe Biden will give his first State of the Union address. It’s his best opportunity between now and November’s midterm elections to shape the narrative — describing the key choices ahead and explaining where he’s leading America. But there’s far more at stake than mere politics. Biden needs to frame not only what he’s accomplished and wants to accomplish but also what America stands for at this precarious point in our nation’s history. That should be the choice between democracy and authoritarianism. Biden should emphasize that America’s role in the world is to lead democracies against aggressors like Putin. And then he should connect this to voting rights here in America and the dangers posed by the ongoing assault on democracy spawned by Donald Trump. Biden should hold senate Republicans accountable for thwarting every attempt to protect the right to vote — rejecting the comprehensive For the People Act, the John Lewis Voting Rights Advancement Act (which would have restored those parts of the Voting Rights Act of 1965 that the Supreme Court gutted in 2013), and most recently, the Freedom to Vote Act — which was expressly designed to attract at least ten Republicans in order to overcome a filibuster, but did not. Biden should unequivocally state that this intransigence is undermining what generations of Americans have fought and died for — the defining legacy lying at the heart of the nation: our democracy. Biden should also make clear that record levels of concentrated wealth inside America also poses a danger to democracy, as big money engulfs politics. (It wouldn’t hurt to use the quote attributed to the great Justice Louis Brandeis — “America has a choice: We can have great wealth concentrated in the hands of a few, or we can have a democracy, but we cannot have both.”) He could also use this opportunity to show the connection between inflation and increasing levels of corporate concentration and market power — requiring stepped-up antitrust enforcement. At this point in the nation’s history when several existential challenges are converging — Putin’s war and the fearful prospect of nuclear armageddon, COVID, climate change, the attacks Trump has provoked on democracy at home, along with racism and xenophobia — what Biden says tonight could be profoundly important. His address begins in about fifteen minutes. Please watch or listen, and let us know whether in your view he has risen to the occasion. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

The world is currently and frighteningly locked in a battle to the death between democracy and authoritarianism. Yesterday, Vladimir Putin issued a new threat to the West — telling his defense minister and his top military commander to place Russia’s nuclear forces on alert. It is a new cold war. The biggest difference between the old cold war and the new one is that authoritarian neo-fascism is not just an external threat. A version of it has also taken over one of the major political parties in the United States.The Trump-led Republican Party does not openly support Putin, but the GOP’s animus toward democracy is expressed in ways familiar to Putin and other autocrats. Trump Republicans continue to refuse to acknowledge the outcome of the 2020 election, claiming without evidence that it was “stolen” from Trump. In many states, on the basis of this big lie, they are making it more difficult for people who don’t share their beliefs to vote. In several states they are laying the groundwork for ignoring the popular vote altogether and throwing a future presidential election to Trump or another strongman. They have stopped even pretending to be the party of free speech: They are banning books from schools and prohibiting teachers from talking about America’s struggles against racism and homophobia. Putin’s attack on Ukraine, starting February 24, 2022, and the attack by followers of Donald Trump on the United States Capitol on January 6, 2021 are different, of course, but they resemble one another in their contempt for democratic institutions and their attempts to justify violence by asserting a threat to a dominant racial or ethnic group. Each also represents the logical culmination of leadership by a dangerous narcissist who flagrantly lies about his intentions and his opponents and who sees the world only in terms of his personal power.Donald Trump has long admired Vladimir Putin who, evidence shows, personally authorized a secret spy agency operation to support a “mentally unstable” Donald Trump in the 2016 U.S. presidential election. Believing that a Trump White House would help secure Moscow’s strategic objectives, Russia’s spy agencies were ordered to use “all possible force” to ensure Trump’s victory. Again in the 2020 election, according to a recently unclassified report by the U.S. Office of the Director of National Intelligence, Putin authorized "influence operations” aimed at “supporting Trump” and “denigrating President Biden's candidacy.”Presumably Putin supported Trump in 2016 and in 2020 in part because of Trump’s disdain for NATO. As president, Trump did all he could to undermine the organization, even suggesting the U.S. should withdraw from it. Is it pure coincidence that once Trump was out of office and NATO remained intact, Putin attacked Ukraine?Defending democracy and standing up against authoritarian neo-fascism requires courage. In 2019, Ukrainian President Volodymyr Zelensky refused Trump’s demand for help in rigging the 2020 election in the United States, even after Trump threatened to withhold money Congress had appropriated to help Ukraine resist Russian expansion. Today, Zelensky won’t be bullied by Putin. He turned down America’s offer to evacuate him, saying “I need ammunition, not a ride.” Zelensky’s courage in the face of overwhelming brute force has fortified Ukrainians now defending their country against invaders.Contrast this with the toadies at the Republican National Committee who in February censured Republican Representatives Liz Cheney of Wyoming and Adam Kinzinger of Illinois for participating in Congress’s select committee investigating the events of January 6, and who called the January 6 attack on the Capitol "legitimate political discourse​." Also contrast Zelensky’s courage with most elected Republicans who still refuse to stand up to Trump. Just yesterday on national television, Senator Tom Cotton refused four times to condemn Trump for calling Putin “smart” and “savvy” and NATO and the US “dumb.” Make no mistake. Putin’s authoritarian neo-fascism has rooted itself in America. We may be able to prevent Putin’s aggression from spreading to the rest of Europe. But we cannot win a cold civil war inside America without destroying this nation — another of Putin’s objectives when he ordered his spy agencies to help Trump. In the months and years ahead, those of us who believe in democracy, the rule of law, human rights, and truth, must do everything we can to win back our fellow countrymen to these same overriding values. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

In the midst of Putin’s attack on Ukraine, it’s hard to keep our minds on domestic priorities — such as protecting voting rights, delivering economic security, and fixing our woefully expensive and unfair healthcare system. Yet maybe this is exactly the time to focus on these domestic goals. Doing what’s right for our people strengthens our moral authority to defend democracy and human rights abroad. Protecting voting rights lends credibility to our claims of the superiority of democracy to autocracy. Providing more economic security shows the world that our system is fair and just. Fixing our healthcare system enables more Americans to live fuller and more productive lives. Surely we can afford to do far more than we are now doing. Containing Putin while also attending to our domestic priorities fortifies opponents of tyranny in Russia and elsewhere who know they don’t have the luxury of supporting a vast military while also attending to domestic needs. Last week (which seems like an eternity ago) I testified before Congress on why we need Medicare for All. I’ve posted below a video of my testimony and my responses to followup questions from members of Congress. I can guess what you’re thinking: But what about Manchin, Sinema, and senate Republicans? Maybe you don’t believe there’s a chance in hell of protecting voting rights or strengthening social safety nets or enacting Medicare for All. The window of opportunity never opened wide enough to do any of this, and if Democrats lose the House and Senate it will close. But before you throw in the towel, you should know how strong the green shoots of reform are right now. For example, the powerful Congressional Budget Office, led by a Bush administration economist, just issued a report suggesting how a Medicare for All–style system could fix the mess of our current healthcare system — and save money at the same time. As I told Congress last week, Medicare for All — or some variant of a single-payer system — is inevitable because current healthcare trends are unsustainable. The only real question is how much unnecessary pain, suffering, and cost Americans will have to endure before we get there. Stopping Vladimir Putin from taking over Ukraine will be difficult if not impossible in the short term. Containing his aggressiveness beyond Ukraine will demand great energy and resolve, both from us and our allies. Compared to this, reforming America — so the richest nation in the history of the world improves the lives of most Americans instead of only a super-wealthy elite — is straightforward. It should be part of our strategy for strengthening democracy everywhere. In 1941, on the eve of America’s entrance into World War II, when the darkening shadow of fascism was spreading across Europe, Franklin D. Roosevelt delivered his “Four Freedoms” address to a joint session of Congress. He proposed that people “everywhere in the world” should enjoy the freedom of speech and freedom of worship, and also the freedom from want and freedom from fear. The benefits of democracy, FDR asserted, included economic opportunity, employment, social security, and adequate health care. Roosevelt was speaking both to Americans and to the rest of the free world. He was saying, in essence, that the sacrifices we were about to make should be understood as investments in our collective future. It is much the same today. I hope you have a good and safe weekend, despite all the troubling news in the world. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

We must do what we can to contain Vladimir Putin’s aggression in Ukraine. But we also need to be clear-eyed about it, and face the costs. As I’ve said before, economics can’t be separated from politics, and neither can be separated from history. Here are eight sobering realities: 1. Will the economic sanctions now being put into effect stop Putin from seeking to take over all of Ukraine? No. They will complicate Russia’s global financial transactions but they will not cripple the Russian economy. After Russia annexed Ukraine’s Crimean Peninsula in 2014, the U.S. and its allies imposed economic sanctions which slowed the Russian economy temporarily, but Russia soon rebounded. Since then, Russia has taken steps to lessen its reliance on foreign debt and investment, which means that similar sanctions will have less effect. In addition, the rise of cryptocurrencies and other digital assets allow Russia to bypass bank transfers, which are the control points for sanctions. Bottom line: The sanctions already imposed or threatened could reduce Russia’s gross domestic product, but only by a few percentage points. 2. What sort of sanctions would seriously damage Russia? Sanctions on Russia’s enormous oil and gas exports could cause substantial harm. Russia produces 10 million barrels of oil a day, which is about 10 percent of global demand. It ranks third in world oil production (behind the United States and Saudi Arabia). It ranks second in natural gas (behind the United States), according to the U.S. Energy Information Administration. 3. Then why not impose sanctions on them? Because that would seriously harm consumers in Europe and the US — pushing up energy prices and worsening inflation (now running at 7.5 percent annually in the US, a 40-year high). Although the US imports very little Russian oil or natural gas, oil and natural gas markets are global — which means shortages that push up prices in one part of the world will have similar effects elsewhere. The price of oil in the US is already approaching $100 a barrel, up from about $65 a year ago. The price of gas at the pump is averaging $3.53 a gallon, according to AAA. For most Americans, that gas-pump price is the single most important indicator of inflation, not just because they fuel their cars with gas but because the cost is emblazoned in big numbers outside every gas station in America. (The biggest beneficiaries of these price increases, by the way: Energy companies like Halliburton, Occidental Petroleum and Schlumberger, which are now leading the S&P 500. Anyone in favor of putting a windfall profits tax on them?)4. Will stronger sanctions weaken Putin’s control over Russia? Possibly. But they could also have the opposite effect — enabling Putin to fuel Russia’s suspicions toward the West and stir up even more Russian nationalism. The harshest U.S. measures would cause the average Russian to pay higher prices for food and clothing or devalue pensions and savings accounts because of a crash in the ruble or Russian markets, but these might be seen as necessary sacrifices that rally Russians around Putin.5. Any other foreign policy consequences we should be watching? In a word: China. Russia’s concern about the West has already led to a rapprochement with China. A strong alliance between the two most powerful world autocracies could be worrisome.6. What about domestic politics here in the US? Foreign policy crises tend to drive domestic policy off the headlines, and weaken reform movements. Putin’s aggression in Ukraine has already quieted conversations in America about voting rights, filibuster reform, and Build Back Better — at least for now. Large-scale war, if it ever comes to that, deadens reform. World War I brought the progressive era to a halt. World War II ended FDR’s New Deal. The Vietnam War stopped Lyndon Johnson’s Great Society. Wars and the threat of wars also legitimate huge military expenditures and giant military bureaucracies. America is already spending $776 billion a year on the military, a sum greater than the next ten giant military powers (including Russia and China) together. Wars also create fat profits for big corporations in war industries.The possibility of war also distracts the public from failures of domestic politics, as the Spanish-American War did for President William McKinley and the wars in Afghanistan and Iraq did for George W. Bush. (Hopefully, Biden’s advisors aren’t thinking this way.)7. Could the sanctions lead to real war between Russia and the West? Unlikely. Americans don’t want Americans to die in order to protect Ukraine (most Americans don’t even know where Ukraine is, let alone our national interest in protecting it). And neither Russia nor the US wants to be annihilated in a nuclear holocaust. But international crises such as this one always run the risk of getting out of hand. Russia and the US have giant stockpiles of nuclear weapons. What if one is set off accidentally? More likely: What if Russia cyberattacks the US, causing massive damage to US utilities, communications, banks, hospitals, and transportation networks here? What if Russian troops threaten NATO members along Ukraine’s borders? Under these conditions, might the US be willing to commit ground troops? Those who have fought ground and air wars know war is hell. Subsequent generations tend to forget. By the eve of World War I, many in America and Britain spoke of the glories of large-scale warfare because so few remembered actual warfare. Today, most Americans have no direct experience of war. Afghanistan and Iraq were abstractions for most of us. Vietnam has faded from our collective memory.8. What is Putin really after? Not just keeping Ukraine out of NATO, because NATO itself isn’t Putin’s biggest worry. After all, Hungary and Poland are NATO members but are governed in ways that resemble Russia more than Western democracies. Putin’s real fear is liberal democracy, which poses a direct threat to authoritarian “strongmen” like him (just as it did to Donald Trump). Putin wants to keep liberal democracy far away from Russia. Yet for nearly two centuries, Ukraine has been the leading edge of Western ideology and culture in the face of a reactionary Russia. Putin’s means of keeping Western liberal democracy at bay isn’t just to invade Ukraine, of course. It’s also to stoke division inside the West by fueling racist nationalism in Western Europe and the United States. In this, Trump and Trumpism continue to be Putin’s most important ally. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

The stock market is gyrating wildly in light of Putin’s aggression in Ukraine, but Wall Street traders are doing just fine. Bad news is good news for traders who make money off volatility. After all, in the year of Delta and Omicron, climate chaos, Trump Republican attacks on democracy, bitter divisiveness, a calamitous exit from Afghanistan, and accelerating inflation, the Street’s biggest banks have reaped record profits. Bonuses are through the front Porsche. Hundreds of traders have racked up seven and eight-figure bonanzas. Morgan Stanley paid out $35 million to its CEO, James Gorman. Goldman Sachs, $35 million to David Solomon. Bank of America, $32 million to Brian Moynihan. Citigroup, $22.5 million to Jane Fraser. Not the least, JPMorgan, which paid out $34.5 million to Jamie Dimon — plus a retention bonus of $50 million. Dimon has become a spokesman for the Street and one of the most influential CEOs on Capitol Hill. His public statements are a barometer for what America’s financial oligarchs are thinking. They are not fretting about what the Fed’s incipient fight against inflation is likely to do to jobs and wages. They’re not worried about the shrinkage of America’s middle class or the precariousness of the working class and poor. They aren’t even particularly worried about Putin’s invasion of Ukraine. But they have been unsettled by what they consider to be creeping socialism. In an annual letter to JPMorgan shareholders, Dimon warned that socialism would be a “disaster for our country” because it produces “stagnation, corruption and often worse.” It should be remembered that Dimon was at the helm in 2008 when JPMorgan received a $25 billion socialist-like bailout after it and other Wall Street banks almost tanked because of their reckless loans. Instead of letting the market punish the banks (which is what capitalism is supposed to do), the Obama administration bailed them out and eventually levied paltry fines which the banks treated as the cost of doing business. According to the Justice Department, JPMorgan acknowledged it had regularly and knowingly sold mortgages that should have never been sold. (Presumably this is where the “stagnation, corruption and often worse” come in.) Millions of Americans lost their homes, savings, and jobs in the financial crisis. But neither Dimon nor any other top Wall Street executive was held accountable. If this isn’t socialism for rich bankers, what is it?America’s five largest banks, including Dimon’s JPMorgan, now control almost half of all deposits, up from 12 percent in the early 1990s. Because of their size, these banks are now considered “too big to fail.” This translates into a hidden subsidy of some $83 billion a year — the total estimated discount that creditors and depositors give banks whose solvency is effectively guaranteed by the government. More socialism for rich bankers.Dimon was instrumental in getting the big Trump tax cuts through Congress. They have saved JPMorgan and the other big banks over $50 billion so far. But Dimon and JPMorgan are doing their bit to make sure average Americans experience the full consequences of harsh capitalism. Although federal regulators waived overdraft fees for big banks when the economy took a dive in 2020, Dimon and JPMorgan refused to waive overdraft fees for borrowers struggling to make ends meet amid pandemic lockdowns. Dimon and JPMorgan reaped $1.46 billion in overdraft fees — the most of any big bank. Dimon is a registered Democrat and a major fundraiser for the Democratic Party. He warns that income inequality is dividing America, and laments that a “big chunk” of Americans have been left behind. Announcing a $350m program to train workers for the jobs of the future, he expressed concern that 40 percent of Americans made less than $15 an hour.If Dimon were serious about the problem of widening inequality, presumably he’d use his lobbying prowess to help raise the federal minimum wage and to make the refundable Child Tax Credit permanent. He’d also try to make it easier for workers to unionize, and to raise taxes on the super-wealthy like himself. Do not hold your breath. Dimon isn’t really concerned about widening inequality. He’s not really concerned about socialism, either. Nor about any of the other crises hitting America, which expose Americans to more economic uncertainty and insecurity than the citizens of any other advanced economy. His real worry is that one day America might end the type of socialism he and other denizens of Wall Street depend on – bailouts, regulatory loopholes, subsidies, and tax breaks. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe