The Coffee Klatch with Robert Reich

Thank you so much for joining me in this community. It’s an experiment in group learning and teaching about the American system — and it’s succeeding far beyond my expectations. Your interest and enthusiasm make it all worthwhile. Please let others know!In preparation for my course on Wealth and Poverty, which starts Friday on this page, you may find useful the documentary below. It’s called Inequality for All. I made it a few years ago with the talented director Jacob Kornbluth. It’s won many awards, and is used in college classrooms across America. As you’ll see, the doc begins and ends in an earlier version of the same course you’ll be taking starting Friday (although you’ll be taking it remotely). The doc runs 1 hour and 15 minutes. Think of it as pleasant homework. (Having trouble viewing the video on this page? Try clicking this direct link.) 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

Today’s January jobs report is heightening fears that a so-called “tight” labor market is fueling inflation, and that therefore the Fed must put on the brakes by raising interest rates. This line of reasoning is totally wrong. Among the biggest job gains in January were workers who are normally temporary and paid low wages (eg, leisure and hospitality, retail, transport and warehousing). Employers cut fewer of these low-wage temp jobs than in most January’s because of rising customer demand combined with Omicron’s negative effect on worker availability. But due to the Bureau of Labor Statistics’s “seasonal adjustment,” cutting fewer workers than usual for this time of year appears as “adding lots of jobs.” Fed policymakers are set to raise interest rates at their March meeting and then continue raising them, in order to slow the economy. They fear that a labor shortage is pushing up wages, which in turn are pushing up prices — and that this wage-price spiral could get out of control. It’s a huge mistake. Higher interest rates will harm millions of workers who will be involuntarily drafted into the inflation fight by losing jobs or long-overdue pay raises. There’s no “labor shortage” pushing up wages. There’s a shortage of good jobs paying adequate wages to support working families. Raising interest rates will worsen this shortage. There’s no “wage-price spiral,” either (even though Fed chief Jerome Powell has expressed concern about wage hikes pushing up prices). To the contrary, workers’ real wages have dropped because of inflation. Even though overall wages have climbed, they’ve failed to keep up with price increases – making most workers worse off in terms of the purchasing power of their dollars.Wage-price spirals used to be a problem. Remember when John F. Kennedy “jawboned” steel executives and the United Steel Workers to keep a lid on wages and prices? But such spirals are no longer a problem. That’s because the typical worker today has little or no bargaining power. Only 6 percent of private-sector workers are now unionized. A half-century ago, more than a third were. Today, corporations can increase output by outsourcing just about anything anywhere because capital is global. A half-century ago, corporations needing more output had to bargain with their own workers to get it. These changes have shifted power from labor to capital — increasing the share of the economic pie going to profits and shrinking the share going to wages. This power shift ended wage-price spirals.  Slowing the economy won’t remedy either of the two real causes of today’s inflation – continuing worldwide bottlenecks in the supply of goods, and the ease with which big corporations (with record profits) are passing these costs to customers in higher prices.Supply bottlenecks are all around us. (Just take a look at all the ships with billions of dollars of cargo idling outside the Ports of Los Angeles and Long Beach, through which 40 percent of all U.S. seaborne imports flow.) Big corporations have no incentive to absorb the rising costs of such supplies — even with profit margins at their highest level in 70 years. They have enough market power to pass these costs on to consumers, sometimes using inflation to justify even bigger price hikes. “A little bit of inflation is always good in our business,” the CEO of Kroger said last June. “What we are very good at is pricing,” the CEO of Colgate-Palmolive added in October.In fact, the Fed’s plan to slow the economy is the opposite of what’s needed now or in the foreseeable future. COVID is still with us. Even in its wake, we’ll be dealing with its damaging consequences for years — everything from long-term COVID, to school children months or years behind. Today’s jobs report shows that the U.S. economy is still 2.9 million jobs below what it had in February 2020. Given the growth of the US population, it’s 4.5 million short of what it would have by now had there been no pandemic. Consumers are almost tapped out. Not only are real (inflation-adjusted) incomes down, but pandemic assistance has ended. Extra jobless benefits are gone. Child tax credits have expired. Rent moratoriums are over. Small wonder consumer spending fell 0.6 percent in December, the first decrease since last February.Many people are understandably gloomy about the future. The University of Michigan consumer sentiment survey plummeted in January to its lowest level since late 2011, back when the economy was trying to recover from the global financial crisis. The Conference Board’s index of confidence also dropped in January.Given all this, the last thing average working people need is for the Fed to raise interest rates and slow the economy further. The problem most people face isn’t inflation. It’s a lack of good jobs. 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

As former secretary of labor, I’m always interested in the annual count of unionized workers issued by the Bureau of Labor Statistics. This year’s count shows that the 70-year decline of unions continues. The share of unionized American workers dropped from 10.8 percent last year to 10.3 percent now. The rate among private-sector workers hit a new rock bottom of 6.1 percent — about one-seventh of its level in the middle of the 20th century.How to square this with the huge surge in labor activism that began last fall? From Alabama to the Midwest to California, workers have headed to the picket lines. 10,000 John Deere workers. Over 1,000 Alabama coal miners. New York City taxi drivers. Health care workers. Food production plant workers at multiple companies. Workers at media outlets, think tanks, museums, and universities. At worksites staffed predominantly by millennials and GenZ’s — among whom support for unions hovers near 80 percent — unionization is soaring (Starbucks baristas, graduate student workers, and so on).Oh, and public support for unions is at a 50-year high. The answer to this seeming paradox is found in the law. The 1935 National Labor Relations Act (NLRA) once ensured workers’ right to form unions and bargain collectively. But the Act has been steadily weakened by the 1947 Taft-Hartley Act, court decisions, Ronald Reagan’s repudiation of unions, and decades of inaction by Democratic politicians. Today, corporations typically intimidate and even fire workers seeking to unionize. These tactics are illegal under the NLRA, but companies don’t care because the penalties are small — at worst, rehiring and giving backpay to workers who have been fired, and allowing new elections. Many companies consider these little more than costs of doing business. (Consider last year’s failed organizing drive at Amazon’s Bessemer, Alabama warehouse, when the company intimidated its workers into rejecting the union.) Both Bill Clinton and Barack Obama promised they’d make it easier for workers to unionize by pushing legislation to increase penalties against employers who violate the Act and speed the process of forming unions. But neither followed through on those promises, even though both had Democratic congresses during their first two years in office. Why didn’t they follow through? I know because I spoke with each of them (and tried to get Clinton to support such legislation). They didn’t want to spend the political capital necessary to get the legislation through Congress. They also took union voters for granted. “Who else are they going to vote for?” I was told over and over again by political advisers to Clinton and Obama. This has proven to be a huge mistake. Unionized workers used to be the ground troops of the Democratic Party. And they made sure Democrats paid attention to the concerns of America’s working class — which is why we have a 40-hour workweek, unemployment insurance, a minimum wage, Medicare and Medicaid, and the Affordable Care Act. Now, much of the non-college working class votes Republican. These voters no longer believe Democratic politicians are on their side, and have succumbed to GOP-Fox News cultural and racial paranoia. At least Joe Biden made his promise to strengthen unions tangible by supporting the Protecting the Right to Organize Act (also known as the PRO Act). It passed in the House earlier this year. But — as with Build Back Bigger and voting rights — getting it through the Senate is impossible so long as the filibuster enables senate Republicans to block it (not surprisingly, all 50 Republicans oppose the PRO Act). In the meantime, I’m encouraged by recent actions of the National Labor Relations Board (which has the responsibility for enforcing the National Labor Relations Act). With its new Biden-appointed majority and its new Biden-appointed general counsel (Jennifer Abruzzo), the Board is flexing its muscles. Last week it accused Amazon of illegally surveilling and threatening workers who are trying to unionize a warehouse in Staten Island. (The Board has already ordered a new election at Amazon’s Bessemer warehouse.)The Board may require companies that violate workers’ rights during unionization campaigns to recognize those unions. It’s also considering whether companies that misclassify their workers as independent contractors violate the NLRA. (The number of misclassified workers who could unionize—potentially including the drivers at companies like Uber and Lyft—could be well into the millions.) Big corporations like Amazon and Starbucks will continue to do whatever possible to squelch worker power. And if any of these issues get to the Supreme Court you can expect its Republican majority to do the same. But America’s working people outnumber the billionaires and CEOs by a wide margin. If we stand in solidarity, it’s possible to reverse 40 years of stagnant wages, declining economic security, and widening inequality -- and build a more prosperous middle class where the gains are shared by everyone. My strong advice to Democratic politicians: Stand up for unions. Fight to strengthen them. Join workers on picket lines. Don’t let Republicans pretend they’re the party of the working class when they’re a trojan horse for the moneyed interests. PS: I thought you might find useful the following video that my colleagues and I at Inequality Media just made about the labor union movement. 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 a young teenager near the middle of the last century, I asked the high school librarian if I could borrow J.D. Salinger’s The Catcher in the Rye. Why did I want to read it? she asked. I lied and told her my parents told me it was excellent literature.The real reason I wanted to read The Catcher in the Rye was it had been banned from the library. I knew the librarian kept one copy behind her desk, and I was determined to get it. She reluctantly handed it to me. I read it voraciously. There’s no better way to get a teenager to read a book than to ban it.Which is why it was so clever of the McMinn County, Tennessee, school board to vote to remove Maus from its eighth grade curriculum. Maus is a Pulitzer-winning graphic novel by Art Spiegelman that conveys the horrors of the Holocaust in cartoon form. The board cited “objectionable language” and nudity.Before the board made its decision, teenagers in McMinn County probably weren’t particularly eager to read about the Holocaust, even in the form of a graphic novel. But now that Maus has been banned for objectionable language and nudity, I bet they’re wildly trading whatever threadbare copies they can get their hands on. Since it was banned, half the teenagers in America seem to have bought Maus (or insisted their parents do). Two weeks ago, the book wasn’t even in the top 1,000 of Amazon’s bestseller list. Now it’s number 1.Way to go, McMinn County school board! Get teenagers all over America excited to read about the Holocaust!Even the McMinn County school board has been outdone by the Matanuska-Susitna school board in Palmer, Alaska, which clearly had a more serious problem on its hands than getting teenagers excited to read about the Holocaust. It couldn’t even get them to read the great novels of American literature. So the Matanuska-Susitna school board voted 5 to 2 to ban Invisible Man by Ralph Ellison, Catch-22 by Joseph Heller, The Things They Carried by Tim O’Brien, I Know Why the Caged Bird Sings by Maya Angelou, and The Great Gatsby by F. Scott Fitzgerald.Brilliant! I bet nearly every teenager in Palmer, Alaska is now deep into these books. They’re probably having intense discussions about them online late at night, away from their parents and other snooping adults. “Why do you think Ellison called himself ‘invisible?’” “How did Angelou come up with those amazing metaphors?” “Why did Daisy Buchanan reject Jay Gatsby?” “Wait! Shhh! Gotta go! My parents are right outside my room! Call back in 20 minutes!”The Great Gatsby was required reading when I went to high school. I admit I never read it. Had it been banned, I probably would have devoured it. Beginning last fall, at least 16 school districts in a half-dozen states have demanded school libraries ban Out of Darkness. It’s a young adult novel about a love affair between two teenagers, a Mexican American girl and Black boy, set against the backdrop of the 1937 natural gas explosion at a New London, Texas plant that claimed nearly 300 lives. The book received lots of favorable reviews and literary rewards, but only a handful of teenagers read before it was banned. Now, it’s hot.It’s the cleverest marketing strategy I’ve ever seen. Publishers must be clamoring to have school districts ban their books. (Why haven’t my books been banned, dammit?)An influential group called “No Left Turn” is partly responsible. Just take a look at their website of books “used to spread radical and racist ideologies to students.” You can bet teenagers across America are now lining up to read them. 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 midterm elections are just over nine months away. What will Democrats run on? What will Republicans run on? One hint came at a Houston-area Trump rally Saturday night. “If I run and if I win,” the former guy said, referring to 2024, “we will treat those people from January 6th fairly.” He then added, “and if it requires pardons, we will give them pardons, because they are being treated so unfairly.” Trump went on to demand "the biggest protest we have ever had" if federal prosecutors in Washington or in New York and Atlanta, where cases against him are moving forward, "do anything wrong or illegal." He then called the federal prosecutors “vicious, horrible people” who are “not after me, they're after you." Trump’s hint of pardons for those who attacked the Capitol could affect the criminal prosecution of hundreds now facing conspiracy, obstruction and assault charges, which carry sentences that could put them away for years. If they think Trump will pardon them, they might be less willing to negotiate with prosecutors and accept plea deals. His comments could also be interpreted as a call for violence if various legal cases against him lead to indictments.But if Trump keeps at it — and of course he will —he’ll help the Democrats in the upcoming midterm elections by reminding the public of the attempted coup he and his Republican co-conspirators tried to pull off between the 2020 election and January 6. That would make the midterm election less of a referendum on Biden than on the Republican Party. (Don’t get me wrong. I think Biden is doing a good job, given the hand he was dealt. But Republicans are doing an even better job battering him — as his sinking poll numbers show.)Last week, Newt Gingrich, who served as House Speaker from 1995 to 1999, suggested that members of the House select committee investigating the January 6, 2021 attack on the Capitol should face jail time if the GOP returns to power. "The wolves are gonna find out that they're now sheep, and they're the ones who—in fact, I think—face a real risk of jail for the kind of laws they're breaking," Gingrich said on Fox News. Gingrich’s remark prompted Representative Liz Cheney, Wyoming Republican and vice-chair of the select committee, to respond: "A former Speaker of the House is threatening jail time for members of Congress who are investigating the violent January 6 attack on our Capitol and our Constitution. This is what it looks like when the rule of law unravels."Trump and Gingrich are complicating the midterm elections prospects for all Republicans running or seeking reelection nine months from now. Many Republican leaders believe they don’t need to offer the public any agenda for the midterms because of widespread frustration with Biden and the Democrats. Senate Minority Leader Mitch McConnell, recently asked what the Republican party’s agenda would be if it recaptured Congress, quipped “I’ll let you know when we take it back.”But if Republicans fail to offer an agenda, the Republican party’s midterm message is even more likely to be defined by Trump and Trumpers like Gingrich: the big lie that the 2020 election was stolen along with promises to pardon the January 6 defendants, jail members of the select committee investigating the attack on the Capitol, and other bonkers claims and promises. This would spell trouble for the GOP because most Americans don’t believe the big lie and remain appalled by the attack on the Capitol.House minority leader Kevin McCarthy (who phoned Trump during the attack on the Capitol but refuses to cooperate with the House’s January 6 committee investigation) will have a major role in defining the Republican message for the midterms. And whom has McCarthy been consulting with? None other than Newt Gingrich. The two have been friends for years and McCarthy's current chief of staff in his leadership office, Dan Meyer, served in the same role for Gingrich when he was the speaker. McCarthy knows Gingrich is a master huckster. After all, in 1994 Gingrich delivered a House majority for the Republicans for the first time in 40 years by promising a “contract with America” that amounted to little more than trickle-down economics and state’s rights.But like most hucksters, Gingrich suffered a spectacular fall. In 1997 House members overwhelmingly voted to reprimand him for flouting federal tax laws and misleading congressional investigators about it — making him the first speaker panned for unethical behavior. The disgraced leader, who admitted to the ethical lapse as part of a deal to quash inquiries into other suspect activities, also had to pay a historic $300,000 penalty. Then, following a surprise loss of Republican House seats in the 1998 midterm election, Gingrich stepped down as speaker. He resigned from Congress in January 1999 and hasn't held elected office since. I’ve talked with Gingrich several times since then. I always come away with the impression of a military general in an age where bombast and explosive ideas are more potent than bombs. Since he lost the House, Gingrich has spent most of his time and energy trying to persuade other Republicans that he alone possesses the strategy and the ideas entitling him to be the new general of the Republican right.Gingrich has no scruples, which is why he has allied himself with Trump and Trump’s big lie — appearing regularly on Fox News to say the 2020 election was rigged and mouth off other Trumpish absurdities (such as last week’s claim that members of the House select committee should be jailed).  Gingrich likes to think of himself as a revolutionary force, but he behaves more like a naughty boy. When he was Speaker, his House office was adorned with figurines of dinosaurs, as you might find in the bedrooms of little boys who dream of becoming huge and powerful. Gingrich can be mean, but his meanness is that of a nasty kid rather than a tyrant. And like all nasty kids, inside is an insecure little fellow who desperately wants attention.Still, as of now, the best hope for Democrats in the midterms lies with Trump, Gingrich, and others who loudly and repeatedly remind the public how utterly contemptible the Republican Party has become. 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 light of the news this week that the economy has been growing at a record rate (and corporate profits are also hitting record highs, the stock market notwithstanding), several of you have asked me specifically what can be done to spread the benefits of economic growth. I have a few ideas, which I’ll share with you in coming weeks. One idea is an old one that was tried with great success but is now all but forgotten. It’s called profit-sharing. It emerged from the tumultuous period when America shifted from farm to factory. In 1916, Sears, Roebuck and Co., then one of America’s largest corporations with over 30,000 employees, announced that it was embarking on a major experiment — profit-sharing. The firm gave workers shares of stock, making them part owners. Shortly thereafter, the Bureau of Labor Statistics issued a report on profit-sharing, suggesting it as a way to reduce the “frequent and often violent disputes” between employers and workers. Profit-sharing gave workers an incentive to be more productive since the success of the company meant higher profits would be shared. It also reduced the need for layoffs during recessions because payroll costs dropped as profits did. Profit-sharing proved a huge success. Other companies that joined the profit-sharing movement included Procter & Gamble, Pillsbury, Kodak, and U.S. Steel.By the 1950s, Sears workers had accumulated enough stock that they owned a quarter of the company. And by 1968, the typical Sears salesperson could retire with a nest egg worth well over $1 million (in today’s dollars). There was a downside. When profits went down, workers’ paychecks would shrink. And if a company went bankrupt, workers would lose all their investments in it.  The best profit-sharing plans have been in the form of cash bonuses that employees can invest however they wish, on top of predictable wages. At Lincoln Electric, for instance, which has had profit-sharing since 1934, employees receive a profit-sharing cash bonus worth, on average, 40 percent of their annual base earnings.But profit-sharing with employees has all but disappeared in large corporations, which since the start of the 1980s — and the advent of corporate “raiders” (now private-equity managers) — have focused on maximizing shareholder returns. Sears phased out its profit-sharing plan in the 1970s (and filed for bankruptcy protection in 2018). Yet profit-sharing with top executives has soared — as big Wall Street banks, hedge funds, private-equity funds, and high-tech companies have doled out huge amounts of stock and stock options to their MVPs.The result? Share prices have gone into the stratosphere while wages have barely risen. Researchers have found that increases in share prices before the late 1980s could be accounted for by overall economic growth. Since then, a large portion of the dramatic increases in share prices have come out of what used to go into wages. Jeff Bezos, who now owns around 10 percent of Amazon’s shares of stock, is worth $210 billion overall. Other top Amazon executives hold hundreds of millions of dollars of Amazon shares. But most of Amazon’s employees, such as warehouse workers, haven’t shared in the bounty.Amazon used to give out stock to hundreds of thousands of its employees. But in 2018 it stopped doing so, and instead raised its minimum hourly wage to $15. The wage raise got headlines and was good PR, but Amazon’s decision to end stock awards was more significant. If Amazon’s 1.2 million employees together owned the same proportion of Amazon’s stock as Sears workers did in the 1950s — a quarter of the company — each Amazon employee would now own shares worth an average of over $350,000.America’s trend toward higher profits, higher share prices, mounting executive pay, but near stagnant wages is unsustainable, economically and politically. How to encourage profit sharing? Corporate taxes should be lower on corporations that share profits with all their workers, and higher on those that don't. Sharing profits with all workers is a logical and necessary step to making the system work for the many, not the few.What do you think? 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

How can it be that the U.S. economy grew at its fastest pace since 1984 last year (according to yesterday’s report from the Commerce Department) but most Americans remain gloomy about the economy, and blame Biden and the Democrats? The New York Times declares that the cause of this paradox is inflation: “Biden is suffering in the polls as high inflation saps confidence in the economy, even as growth comes in strong.”Rubbish. Americans are gloomy about the economy despite its record growth because most Americans haven’t shared in that growth. If you really want to understand this, a good place to begin is with the corporation often considered the most socially responsible in the nation — Starbucks. (A Pew survey on where Americans would like to live included the following question: “Just for fun: Would you prefer to live in a place with more McDonald’s or more Starbucks?” Among self-described liberals, Starbucks carried the day, 46 percent to 33 percent. And while McDonald’s won among adults 65 and above, Starbucks had a 13-percentage-point edge among 18-to-29-year-olds.)But in fact, Starbucks isn’t socially responsible. Its brand is built on an edifice of faux social responsibility. Starbucks is the nation’s first major retailer to backtrack on vaccine-or-test plans for its workers, since the Supreme Court’s absurd January 13 ruling that struck down the Biden administration’s vaccine-or-test requirement. Starbucks is now telling its 200,000 U.S. employees they no longer have to be fully vaccinated or submit to weekly coronavirus testing. Starbucks calls its workers “partners” — but they’re not real partners. They don’t share in the profits. Between January and September of last year, Starbuck’s revenue soared to $20.9 billion (compared to $17.3 billion in the same period in 2020). Its president and chief executive officer, Kevin Johnson, raked in $14,665,575 in total compensation. But the current average hourly pay at Starbucks is $14 and hour, or $28,000 a year. And Starbucks wants to keep wages in the basement. For years it’s fought ferociously against employee efforts to unionize. Social responsibility my macchiato. Now zoom out to the economy as a whole. Could it be that Americans are gloomy despite the economy’s record growth because the super-rich are taking home an ever-larger share of those gains while most people are getting the crumbs? Is it possible they blame Biden and the Democrats for promising to change this but, after a good start, not delivering?Starbuck’s progressive branding has helped it sell lots of coffee. Yet Starbucks faces a growing dilemma — not unlike the dilemma facing Biden and the Democrats. Starbucks’s young, progressive baristas are no longer willing to tolerate Starbucks’s hypocrisy. Since two Starbucks stores voted to unionize in late August, workers in dozens of other Starbucks stores across the country have filed petitions for elections. Starbucks can’t have it both ways — promoting itself as the face of socially-responsible capitalism while treating its workers like s**t. Biden and the Democrats may be facing a similar paradox — promising a fundamental change in the power structure of America while allowing big corporations and the super-rich to continue enlarging their wealth and power. Biden and the Democrats can’t have it both ways, either. Perhaps it was too much to expect Biden and the Dems to alter a trend that’s been growing for four decades as large corporations have steadily gained bargaining power (a handful of big firms now dominate most industries), while hourly wage earners have steadily lost it (the share of private-sector workers in unions has plummeted from over 30 percent to 6.1 percent). This power shift is directly reflected in the increasing share of economic gains going to the top, and decreasing share to everyone else. But it’s important for Biden and the Democrats to avoid the trap of Starbucks-like hypocrisy. Biden and the Dems need to tell the truth about what’s happening: American workers are not losing ground due to inflation. They are losing ground because they continue to lose bargaining power. The economy grew mightily over the past year but the share going to most American workers continues to shrink. Starbucks’s workers have had enough corporate hypocrisy. They’re beginning to take power back by organizing at the grass roots. Will most Americans become so fed up with their declining share of the economy’s gains that they too decide to take power back? 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

I just heard Joe Manchin say Biden should move to the “center.” Political consultant Mark Penn wrote in the New York Times that “Biden should follow the lead of Bill Clinton, and move to the center.” Duh. Who wants to be on the fringe? Political careers are imperiled by labels like “left-winger” (or “right-winger”). The public feels safer with a president who proclaims total commitment to the middle. FDR always sought to position himself as a centrist. So did Nixon (remember the “silent majority?”). Barry Goldwater’s “extremism in defense of liberty” helped cost him the White House. But this is just positioning. Visionary leaders of America have always understood that the “center” is a fictitious place lying somewhere south of thoughtless adherence to the status quo. Virtually any attempt to lead — to summon forth the energies and commitments of public — will not “centrist” be at the time. That’s the essence of leadership. Teddy Roosevelt didn’t discover the evils of industrial concentration at the political center. FDR didn’t knit a safety net for the poor and dispossessed, or take the nation into the Second World War, from the center. Kennedy and Johnson didn’t locate the cause of civil rights at the center. Nixon didn’t find support for recognizing China in the center. Nor even did Reagan find his mandate for a smaller government at the center. Leadership, by definition, does not cater to the center. If it did, there would be no need to lead. The nation is already there.A president will exert some influence on where the “center” is at any given time simply by virtue of the office and the pulpit that comes with it. If a president moves rightward in an attempt to be at the “center,” the center shifts even further to the right. When Bill Clinton succumbed to pressure from the right to seek a balanced budget, the debate over whether to balance the budget was silenced. The debate shifted to whether to balance it quickly or gradually. The new “center” moved to the right — seeking a reasonably quick balance. There’s much talk in Democratic circles these days about so-called “swing” voters in the upcoming midterms. Where is this elusive voter to be found? Where else? At the center. Not in the traditional “Democratic base,” which is assumed to be left of center, nor in the “Republican base,” to the right, but in between. And where does this “swing” voter presumably live? In the American suburbs, we’re told. Not the close-in suburbs of blue-collar, semi-detached aluminum sidings, nor the farther-out suburbs of manicured lawns and underground wires, but somewhere in between.The center? The base? The swing? The suburbs? Pollsters and political consultants like Mark Penn reap fortunes out of such amorphous b******t. The words substitute for thought. Tactics emerge from thin air. There’s a simpler way: Look at who’s losing ground in the economy. They’re the ones who are up for grabs. Lead them by giving them the means to do better — and a reason to vote for you. 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

Inflation! It’s dominating all economic news. It’s the main reason the stock market is going nuts. It’s what Fed officials are discussing in today’s meeting (they’re expected to raise interest rates several times over the next twelve months). But in all of the inflated verbiage over inflation, there’s been little or no discussion about the role that large, hugely-profitable corporations are playing. Yet inflation is intimately connected to corporate power (as I discussed on this page last month).Today I turn to the evidence, and then to what I believe should be done about corporate power and inflation. First, to recap: While most of the price increases now affecting the US and global economy have been the result of global supply chain problems limiting the availability of parts needed to make consumer goods, this doesn’t explain why big and hugely- profitable corporations are passing these cost increases on to their customers in the form of higher prices. If corporations were competing vigorously against each other, they’d swallow these cost increases in order to keep their prices as low as possible — especially when they’re making huge profits. Yet corporations have been raising prices even as they rake in record profits. That’s because they face so little competition that they can easily coordinate price increases with the handful of other big companies in their industry. That way, all of them come out ahead — while consumers and workers lose. As to the evidence, it’s all around us: 1.  EnergyOnly a few entities have access to the land and pipelines that control the oil and gas still powering most of the world. They took a hit during the pandemic as most people stayed home. But they are more than making up for it now, limiting supply and ratcheting up prices. As Chevron Corp.’s top executive Mike Wirth said in September, “we could afford to invest more” in production but “the equity market is not sending a signal that says they think we ought to be doing that.” Translated: Wall Street says the way to maximize profits is to limit supply and push up prices instead, and we do whatever the Street wants. 2.  Consumer staplesLast April, Procter & Gamble raised prices on consumer staples like diapers and toilet paper, citing increased costs in raw materials and transportation. But P&G has been making huge profits. After some of its price increases went into effect, it reported an almost 25 percent profit margin. Looking to buy your diapers elsewhere? Well, good luck. The market is dominated by P&G and Kimberly-Clark, which—not coincidentally—raised its prices at the same time. Another example: Last spring, PepsiCo raised its prices, blaming higher costs for ingredients, freight, and labor. It then recorded $3 billion in operating profits through September. How did it get away with this without losing customers? Simple. Pepsi has only one major competitor, Coca Cola, which promptly raised its own prices. Coca-Cola recorded $10 billion in revenues in the third quarter of 2021, up 16 percent from the previous year.3.  FoodFood prices are soaring. Half of those price increases are from meat. According to the latest data from the Bureau of Labor Statistics, meat prices were up 16 percent in November compared with the same month last year. Why? Because the four giant meat processing corporations that dominate the industry are raising their prices and enjoying fat profits. A recent report from the White House’s National Economic Council finds that the largest meat processing companies are “using their market power to extract bigger and bigger profit margins for themselves. Businesses that face meaningful competition can’t do that, because they would lose business to a competitor that did not hike its margins.”4. Fast food Fast food giants like McDonald’s and Chipotle — incessantly complaining about higher food and labor costs — have increased their prices to consumers to cover these added costs. But they’re so profitable they could easily have absorbed these cost increases. (Wall Street analysts expect McDonald’s revenues hit a five-year high in 2021 and Chipotle’s revenues increased by over a third from two years before.) So why are they passing the cost increases on to their consumers? Because they have so much market power. (A few months ago, Chipotle’s chief financial officer admitted “our ultimate goal … is to fully protect our margins.”)5.  Large retailersA handful of giant corporations — Walmart, Amazon, Kroger, Costco, and Target —dominate retail sales in America. On a recent survey, over 60 percent of large retailers say inflation has given them the ability to raise prices beyond what’s required to offset higher costs.6.  Corporate concentration overallSince the mid-1980s (when the US government all but abandoned antitrust enforcement) two thirds of all American industries have become more concentrated. This includes banks, broadband, pharmaceutical companies, airlines, meatpackers, big tech, and consumer staples.Corporations in these industries could easily absorb higher costs – including wage increases – without passing them on to consumers in the form of higher prices. But they’d rather maintain or enlarge their record profits by coordinating with other big players in the same industry and raise prices together. As a result, their record profits are lining the pockets of major investors and corporate executives, while shafting consumers and workers (whose wage increases are being eroded by price increases). What to do? Don’t slow the economy. Instead, reduce corporate concentration. As I mentioned at the outset, the Fed meets today. It’s poised to try to control inflation by raising borrowing costs. This means the Fed will battle inflation the old way — drafting millions of workers into the inflation fight by slowing the economy and causing them to lose their jobs or wages, or both. This is the wrong medicine for the wrong disease. It will hurt millions of people who are among the most vulnerable in the economy. The correct medicine is to reduce corporate market power. Biden has started to try. He has prodded the Agriculture Department to investigate large meatpackers that are raising prices and underpaying farmers — while tripling their profit margins during the pandemic. He has encouraged the Federal Trade Commission to investigate accusations that large oil companies are artificially inflating prices, even after global oil prices began to fall in recent weeks.In late October, the FTC ordered nine large retailers, including Walmart, Amazon and Kroger, to turn over detailed information to help root out the sources of supply chain disruptions that were “harming competition in the U.S. economy.”Biden has urged the Federal Maritime Commission to root out price gouging by large shipping companies at the heart of supply chains. The Commission has investigated the handful of corporate shipping alliances that effectively control the flow of goods across the world’s oceans and which have raised prices as much as ninefold during the pandemic, according to data from the freight-tracking firm Freightos. In addition, Biden has tapped antitrust crusaders for key roles, including Lina Khan to be chairwoman of the Federal Trade Commission, and Jonathan Kanter (a long-time adversary of Facebook and Google) to lead the antitrust division of the Justice Department. And he has brought Tim Wu (a proponent of breaking up Facebook and other large companies) into the White House as a special adviser on competition issues.All these initiatives are fine. But far more resources need to be aimed at the problem of corporate concentration. The Biden administration must declare economic war on monopolies and oligopolies. Make no mistake. Taking on concentrated industries and corporate market power will be difficult. Corporate America will do whatever it can to keep its record profits and reduce its costs. In addition, antitrust enforcement is extraordinarily complex and time consuming. I directed the policy planning staff at the Federal Trade Commission in the Carter Administration and saw this firsthand.But it’s worth the effort. Corporate concentration harms workers and consumers while rewarding CEOs and investors. Unless capitalism is made to work for everyone – unless the concentration of the American economy in the hands of a few giant corporations is reduced – inequalities of income, wealth, and power will continue to widen. And at some point, the system will break. 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 light of last week’s devastating senate vote on voting rights, I keep hearing “voting rights are dead.” Wrong. If voting rights are dead, American democracy is dead. And if American democracy is dead, the entire project that began (imperfectly, to be sure) in 1776 and has been a beacon for the world, is dead. I will not accept that. Nor, I assume, will you. But what can and should be done now? I’ll get to that in a moment. First, though, it’s important to acknowledge that our two major parties are now irredeemably opposed on this core issue. Democrats are the party of democracy. Republicans — who should have been willing to at least engage in last week’s debate — are not, and should not be allowed to pretend otherwise.There are two glaring exceptions. Kyrsten Sinema is now the most prominent anti-democracy Democrat; Liz Cheney, the most prominent pro-democracy Republican. On Saturday, the Arizona Democratic Party executive committee appropriately censured Sinema for her vote last week in opposition to changing filibuster rules to pass voting rights bills. The censure has no practical effect but delivers a strong message of condemnation and reflects the will of the party's most active and loyal members. That same day, the Wyoming Republican State Central committee held a straw poll of party activists in which Harriet Hageman, the Trump-endorsed challenger to Liz Cheney, won by a substantial margin. (The secret ballot awarded Hageman 59 votes and Cheney six.) Here again, no practical effect but a strong message. The vote comes eight months before Wyoming’s GOP primary.The two positions — for and against democracy — are not morally equivalent, of course. Democracy is this nation’s core moral principle. Every American who cares about this core moral principle must recommit to the task of protecting it from the growing forces seeking to destroy it. This means fighting voter suppression and election subversion with whatever tools are at hand. How? 1. Keep pressure on the 50 Republicans and two Democrats who blocked Senate action. Sinema and Manchin should face pro-democracy primary challengers when both are up for reelection in 2024 (which means organizing should start soon). Every Republican senator should be held accountable as well. If you live in one of their states, make sure you attend town meetings to voice your outrage, and organize voters against their reelection. 2. The Justice Department should announce that it will use every tool in its legal arsenal – including the Civil Rights Act of 1964 and the Fourteenth Amendment to the Constitution -- to enforce equal voting rights. The Voting Rights Act is not the only weapon to protect the right to vote. Congress should increase funding for the Justice Department’s civil rights division and its related work in this. 3. Democrats in Congress must seek to pass whatever pieces of the Freedom to Vote and John Lewis Voting Rights Advancement Act they can. (Importantly, the Senate can avoid the filibuster through the use of the reconciliation process on any issue that touches on funding for easier voting access.)4. Reforming the 1887 Electoral Count Act is no substitute for voting rights, but it’s still necessary to block states from politicizing election boards and to strengthen federal penalties against intimidating voters and election officials.5. Biden should fully implement his March executive order calling on all agencies of the federal government to help citizens register and vote.6. By executive order, Biden should also make Election Day a federal holiday for government employees, and also encourage states to declare Election Day a holiday.7. If you live in a state with a Republican legislature, you need to do everything possible to block further voter suppression and subversion. Organize and mobilize others. Where applicable, use your state’s referendum process to undo some of the damage.8. Fighting voter suppression in this fall’s midterm election calls for a voting registration drive this coming summer analogous to the 1964 Freedom Summer in Mississippi (which I’ve recently written about). It should focus on Georgia, Florida, Arizona, Texas, Wisconsin, and North Carolina. All have important races coming up. Now as in 1964, young people could play a key role.9. We must keep the pressure on the Justice Department to indict Donald Trump and his co-conspirators for their roles in the January 6 attack on the Capitol and in attempting to sabotage the 2020 election. (This would include recent revelations about false slates of electors in seven swing states and an executive order prepared for Trump that would have directed the secretary of Defense to seize voting machines.)10. Finally, we should support the work of the House’s January 6 committee. Which brings me back to Liz Cheney. Her role as vice-chair of the House January 6 committee is critical to demonstrating the non-partisan legitimacy of that inquiry. I have never agreed with her policy choices on specific issues; her overall voting record has been far to the right. But on the crucial overriding issue of protecting our democracy, she is a hero – and deserves our abiding thanks and support.Other ideas? 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