Robert Reich: Americans Don’t Need More Government by Wall Street

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A demonstrator outside Goldman Sachs's lower Manhattan headquarters during a protest against the Wall Street bank's ties to the Trump administration, in New York on January 17. Robert Reich writes that Wall Street and corporate America seem not to have learned a thing from what’s happened over the past year. Do they really believe the anger, rage, hate, racism and nationalism that welled up during the 2016 election were a random, passing phenomenon, like a particularly bad hurricane? Bria Webb/reuters

This article first appeared on RobertReich.org.

With Steve Bannon on the way out, official Washington is jumping for joy that Gary Cohn, the former president of Goldman Sachs who’s now running Donald Trump’s National Economic Council, along with Dina Powell, another influential Goldman Sachs alumnus, seems to be taking over Trump’s brain.

As CNBC puts it, Cohn will push “more moderate, business-friendly economic policies.” The Washington Post says Cohn is advocating “a centrist vision.” The Post goes on to describe “the growing strength of Cohn and like-minded moderates,” as revealed in Trump’s endorsement of government subsidies for exports and of corporate tax cuts. Says the Post: “The president’s new positions move him much closer to the views of... mainstream Republicans and Democrats.”

In reality, Cohn, Powell and other Wall Streeters in the Trump White House are pushing Trump closer to the views of Wall Street and big business—views that are reflected in the views of “mainstream” Republicans and Democrats only to the extent the “mainstream” is dependent on the Street and big corporations for campaign money.

These views aren’t “centrist,” and they’re not sustainable. More tax breaks for the rich and more subsidies for big corporations aren’t much better for America than xenophobia.

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Wall Street and corporate America seem not to have learned a thing from what’s happened over the past year. Do they really believe the anger, rage, hate, racism and nationalism that welled up during the 2016 election were a random, passing phenomenon, like a particularly bad hurricane?

If so, they’re wrong. These sentiments came from a shrinking and ever more anxious working class.

From millions of people so convinced the game is rigged against them they were prepared to overthrow the established order in order to get fundamental change.

From voters whipped up into a fury over tax breaks and subsidies and bailouts for those at the top—socialism for the rich—but who for years have been getting the harsh losing end of the capitalist stick: declining wages, mass firings, less job security, emptying towns and cities and their children with even lower and fewer prospects.  

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They came from people who during the Great Recession lost their jobs, homes and savings as Wall Street got bailed out for its wanton greed and not a single top Wall Street executive went to jail.

The so-called “centrist” policies that Wall Street and big corporations are now happily promoting via Gary Cohn and Dina Powell won’t reverse these sentiments. They’ll add to them, because these were same sort of the policies that got us to this point.   

There’s a better alternative. It’s to make it easy for people who lose their jobs to get new ones that pay at least as well, through wage insurance; expand the Earned Income Tax Credit and raise the minimum wage so every job pays a living wage; invest in great teachers and great schools, along with a system of lifelong learning and high-quality early childhood education; and provide Medicare for all.

And pay for all of this with a 2 percent tax on wealth over $1 million and a carbon tax. While we’re at it, get big money out of politics.

Here’s a  “centrist” agenda that big business, Wall Street and the rest of America should agree on because it (or something very much like it) is the only way to move forward without inviting even more inequalities of income, wealth and political power—and ever more vicious backlashes against such inequities.

If Wall Street and big business used the 2016 election as a teachable moment, they would realize this.

Robert Reich is the chancellor’s professor of public policy at the University of California, Berkeley, and a senior fellow at the Blum Center for Developing Economies. He served as secretary of labor in the Clinton administration, and Time magazine named him one of the 10 most effective Cabinet secretaries of the 20th century. He has written 14 books, including the best-sellers Aftershock, The Work of Nations and Beyond Outrage and, most recently, Saving Capitalism. He is also a founding editor of The American Prospect magazine, chairman of Common Cause, a member of the American Academy of Arts and Sciences and co-creator of the award-winning documentary Inequality for All.