Robert Reich: Guilded Age-level inequality threatens us all

Robert Reich, economist and former Secretary of Labor in the Clinton Administration, contributes an opinion piece in The Nation which is a particularly eloquent statement of the liberal case for sweeping economic reform.

Reich begins with the familiar outlines of the situation we face: for a variety of reasons, since the 1970s, a tiny share of the U.S. population has become fantastically wealthy, at the expense of stagnant or declining incomes for the vast majority.  Vast sums have become available for financial speculation while most families must borrow to keep up middle-class living standards.  The financial meltdown of 2008 is best understood in this context, rather than as just the result of particular Wall Street machinations.  But Reich goes on to warn us:

It’s too facile to blame Ronald Reagan and his Republican ilk. Democrats have been almost as reluctant to attack inequality or even to recognize it as the central economic and social problem of our age. (As Bill Clinton’s labor secretary, I should know.) The reason is simple. As money has risen to the top, so has political power. Politicians are more dependent than ever on big money for their campaigns. Modern Washington is far removed from the Gilded Age, when, it’s been said, the lackeys of robber barons literally deposited sacks of cash on the desks of friendly legislators. Today’s cash comes in the form of ever increasing campaign donations from corporate executives and Wall Street, their ever bigger platoons of lobbyists and their hordes of PR flacks.

Reich then reaches a fascinating conclusion – that excessive inequality is so dangerous to the fabric of society as a whole, that eventually even elites will support reform:

If nothing more is done, America’s three-decade-long lurch toward widening inequality is an open invitation to a future demagogue who misconnects the dots, blaming immigrants, the poor, government, foreign nations, “socialists” or “intellectual elites” for the growing frustrations of the middle class. The major fault line in American politics will no longer be between Democrats and Republicans, liberals and conservatives. It will be between the “establishment” and an increasingly mad-as-hell populace determined to “take back America” from them. When they understand where this is heading, powerful interests that have so far resisted reform may come to see that the alternative is far worse.

The entire essay is well worth a read.

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