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Bring Back the Basic Bargain with Robert Reich

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Throughout much of the 20th century, the American political and economic system thrived based on a fundamental bargain - that US employers would pay their workers enough to purchase the goods and services US companies produced. Meanwhile government's role was to maintain this bargain, allowing wages and living standards to rise across the board. Today, however, that bargain has been all but destroyed, and as Robert Reich (Professor of Public Policy at UC Berkeley, and former Labor Secretary) explains, the petty squabbling soon to return to Washington when Congress reconvenes will prove useless at improving the economy until this compact between workers, employers and government is restored. Support The Point for FREE by doing your Amazon shopping through this link (bookmark it!) http://www.amazon.com/?tag=townsquaretyt-20
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Text Comments (69)
handyhippie65 (1 month ago)
5 years later, nothing has changed. the only way to change things so firmly under the control of corporations, and the wealthy is a revolution, peaceful or otherwise. until we all stand together against the control of corporations, and elect leaders who will work for us, rather than them, it will only get worse until it all falls apart again.
In4cer in4cer (1 year ago)
American middle class is suffering because of corporations. Tell me why a CEO would make $94M per year, when average employ make $10 an hour????
Vash Lash (2 years ago)
But Henry Ford voluntarily raised his workers wages, no ones against that. He didn't double his profits be chase his employees could buy the vehicles. Why not just lower the price of the vehicles? After all this would skip a step. I'm sure Henry ford was an intelligent business man as we all know. Why would he need people to force him to raise wages or lower costs? Who should responsible for price controlling the market? If capitalists are so greedy then why would you need to force these people to make more money? Mister Ford raised wages which gave him a competitive edge in Detroit, thus less tune over rates and better employees. This isn't s principle otherwise all I'd have to do to become a billionaire is pay my employed $50 an hour. Assuming 10's of millions of business owners can afford to do this is absurd. Make minimum wage a state issue not federal.
Nate J (3 years ago)
Thank you Ana for posting this video! I was able to write my paper with this 6 minute video rather than reading his 150 page book!
ThisIsTurok1 (4 years ago)
Rich people are awesome. Poor people are the scum of the Earth. Keep voting Democrat. Fuck the poor!
Gene Starwind (4 years ago)
The people in charge of the corporations, and even their major stockholders have no interest in the long term whatsoever.  It's all about getting a return on your investment now, and to hell with the system!
stevenbe4201 (4 years ago)
I love these videos!
Phil Yo (4 years ago)
This is dope!
Jim Mullinaux (4 years ago)
Reasonable and correct.
Celine Grenier (4 years ago)
Yeah, but "only" because he is fair-minded and compassionate! I'm buyin' it.
Krndancedance (4 years ago)
While I largely agree, there is the added factor of globalization. Consummers do not necessarily need to be in the US, especially when dealing with the financial sector. Along with the global distribution of manufacturing, class becomes increasingly a globally stratified phenomenon. In essence, where there was a labor class, there are labor countries. However, some jobs cannot be outsourced, which is why the US has converted largely from a labor economy to a service economy.
A Fernando (5 years ago)
So true
IMortage (5 years ago)
Sounds okay. ;)
SilortheBlade (5 years ago)
You are thinking too small and to short. Fords example made such a drastic difference at the time because there was no competition (or so little not worth worrying about). Anyone who wanted a car had to buy from him. Today it's not about your specific company, but the overall economy. More money in means companies can hire more, pay more, which means more business for all, including "your company".
klondike444 (5 years ago)
(2 of 2) Ecological economist Kent Klitgaard is on YouTube at ?v=RgkZgaYBnCA (in last third, poor sound). He co-authored "Energy and the Wealth of Nations" with biophysical economist Charles Hall - google generalideas/charles-hall-energy-returns for a very good video. Anyone interested in what conventional economics isn't telling us can go to: theoildrum(.)com/node/8402 - "Twenty (Important) Concepts I Wasn't Taught in Business School - Part I" That's the best I can do in this kind of forum.
klondike444 (5 years ago)
(1 of 2) It's not about how much is left in the ground. There's the cost of extraction, in both financial and energy terms, and there is often information on reserves, albeit not always reliable. Economists that address current reality don't often make it into the MSM - too scary perhaps. Canadian Jeff Rubin is worth taking a look at, though his reasoning can be faulty.
quixgofar (5 years ago)
Well said, Robert! Well said.
PasadenaMMZ (5 years ago)
You're missing the point entirely. If there was no disposable income (or credit) among the middle class, it wouldn't have mattered how much buzz that Apple products had generated because no one would have been able to buy them.
PasadenaMMZ (5 years ago)
I have not yet seen or heard any economists that have established reasonable theories that account for resource depletion. Truth be told, it would be difficult to include resource depletion because the only estimates of how much of a resource is left in the ground is that of the industry responsible for gathering it.
ryan8878 (5 years ago)
Well to be fair, it was a product that came in to replace the disc-man. So actually the market was in place. The demand was created by a strong marketing strategy and the innovation of a ``new cool product``. Stop being short sighted, the demand was there in a different form.
klondike444 (5 years ago)
No question about the IQ of liberals/progressives. But most are still conventional in their thinking about the economy, and defer to the likes of Reich and Krugman because they like their views on inequality, corruption etc. Unfortunately they don't realize that the economic models of said economists don't relate to today's reality of resource depletion and the end of growth. Good intentions aren't enough.
klondike444 (5 years ago)
If it had to be an economist I couldn't name one offhand, but it should probably be an ecological economist; one not detached from reality and who is not afraid of addressing energy and other resource issues in a rational way.
Kjellarmann (5 years ago)
This man knows what's up.
gilbet (5 years ago)
(cont).....Steven Jobs created the demand by taking a risk and creating the products first.
gilbet (5 years ago)
Basically everything he said is wrong. Keynesians have no idea where jobs come from. There was no demand for the iPod or iPhone until
klondike444 (5 years ago)
An economist who takes no account of how his policies would affect our survival is tunnel-visioned. We are past peak for the conventional (cheap) oil on which we depend. There are no serious, scalable alternatives (don't ask me to prove that here). Major economies all over the world are slowing. There are always exceptions, including in Africa. If you googled *generalideas/charles-hall-energy-returns* I believe Hall nails conventional economics. In imitation, I understood - still...
klondike444 (5 years ago)
It might take a Keynesian to finish us off.
Zzzz Whatever (5 years ago)
Key words "MAY not have". He is right about what he's saying. I'm sure if you asked for the research, he would be glad to cite it. Better thought: look it up to confirm for yourself.
Whoo711 (5 years ago)
"possibility for them to buy more of MY co's particular goods on their free time" dimishes significantly. Now, granted, as LOTS of companies pay well, that means there's far more opportunity to "pay companies a lot of money, which increases profits substantially." But what GUARANTEE did that individual company have that, "all the other companies would do the same"? They could only GUESS that they might do that, at best.
Whoo711 (5 years ago)
I kinda think with that one quoted point, Reich is taking Henry Ford's point from the 10s or 20s a bit TOO seriously. I'm not sure THAT kind of thinking was all that fresh in most employers' minds. After all, if a corporation had, say, JUST 1,000 employees, what 'real effects' on economic growth would "paying each of them 50 grand" have? At most, it could only affect, I think, $50 Million or Billion in additional growth. Of course, AFTER bills and expenses are taken into account, this
Whoo711 (5 years ago)
I think part of it is an even MORE BASIC reason: because they COULD Lack of competition, esp. from FOREIGN companies in many fields, allowed the American corporations to DOMINATE globally, so they had PLENTY of money to go around and low costs Plus, even though they obviously still paid their execs generously (tho not nearly as much as today...), they still believed in, "not separating the gap between employer and employee pay too widely", with only 70 or 100x, rather than 400x
Whoo711 (5 years ago)
"that US employers would pay their workers enough to purchase the goods and services US companies produced. " I think he's giving corporations far too much credit here and treating them as "altruistic", almost. Sure, back in the day, they DID pay workers very well and gave them generous income increases every now and then. But I'm not sure it was necessarily, "So they'll buy our products and make us richer." Sure, in the minds of A FEW execs, this view may have reigned supreme, but
Whoo711 (5 years ago)
Mind you, I am liberal myself, but the PROBLEM I have here is with the whole, "Getting this guy on who's supposedly an expert economist to give our views more credibility", when, in fact, the guy HIMSELF may not have ACTUALLY done any academic work to PROVE (or disprove) certain talking points, tbh. He may well just be spouting rhetoric LIKE THE REST OF THE LEFT but hiding behind an "economist" title. It's kind of cheap, really. Just be honest about who you are and what you're doing.
Whoo711 (5 years ago)
Trotting out Reich just seems like you want to ARTIFICIALLY give your economic talking points additional credibility that "might not be had" with, say, a guy like Jhon Fugelsang saying them. Or John Iadarola But unless he can point to ACTUAL STUDIES he's conducted that come to the conclusions he refers to, he's really not much diff. than the 'typical ideologues.' After all, he IS saying the SAME stuff! So why trot him out as "a much-bigger expert" if all he's doing is being political, too?
Whoo711 (5 years ago)
who really just spouts POLITICAL talking points from one side of the aisle, even IF they're "mostly economic issue stuff." Economists are ALSO supposed to STUDY the economy and/or effects of various policies! That's WHY we kind of consider them "Economists", rather than, "random ideological people who just talk political issues in an 'economic' context."
Whoo711 (5 years ago)
I know that many on the left LOVE to trot out Robert Reich as this "big expert that vindicates our views", but, to be fair, HOW MANY comprehensive, rigorous studies on these matters has he ACTUALLY done? It kind of seems to me like he's MORE JUST A LIBERAL IDEOLOGUE (not that there's necessarily anything wrong with that) than an OBJECTIVE ECONOMIST who's really just 'reporting the facts.' Yes, a lot of what he says is true, but I'd rather you guys NOT trot out a so-called "economist"
hawkesworth1712 (5 years ago)
That's because they do. There's a reason why study after study shows that the average IQ of liberals/progressives is much higher than conservatives - you only have to listen to the Bachmann/Gohmert crowd to know the answer. It's why Fox News always said that Obama was professorial and bookish. The dummies on the right thought being called intelligent and thoughtful was an insult.
IMortage (5 years ago)
Who would you suggest? I kinda fear the answer, expecting some kind of gold bug.
Jack Johnson (5 years ago)
But you don't have to put the economy right Armageddon is just around the corner....
pvtpain66k (5 years ago)
Good talk, but sooooooooooooo boring.
Ahmad Alfaiz (5 years ago)
This guy looks a lot like "The Most Interesting Man in the World".
theogore (5 years ago)
Hear, hear!
VitalVampyr (5 years ago)
I don't know, doesn't come up often as he isl an economist, not a climatologist. We have yet to reach peak production of fossil fuels, and there are alternatives. Economies all over the world are recovering (slow growth is still growth). Austerity and income inequality are often claimed to be the reason for slow growth, and we can see that countries who do not have these as much are growing faster (e.g. Iceland). Economics is a social science, and the insult was simply in imitation of your post.
klondike444 (5 years ago)
True. But too many liberals/progressives think people like Reich and Krugman know what they are talking about.
klondike444 (5 years ago)
When was the last time he mentioned climate change? You cannot tackle climate change at the same time as pushing up economic growth, even if the latter were possible. Learn the difference between resources and reserves. Once past peak production of resources, especially energy, real growth ends. Where is the "recovery"? What is happening in Europe, China, Brazil, Australia... All slowing. "economics is a science". Please yourself. Insults reflect badly on their source.
NY OneLove (5 years ago)
No. Since we haven't had an economist in the white house (in who knows how long). Last 16 years: we had a son of a billionaire and a constitutional law professor.
NY OneLove (5 years ago)
Employee pay is what drives our economy.
NY OneLove (5 years ago)
Robert Reich for president!
Shrop (5 years ago)
This was great!
IMortage (5 years ago)
Depends very much on which economist.
goemon9378 (5 years ago)
the republican agenda is the same as obama's agenda, including starting more wars in the middle east
kokofan50 (5 years ago)
We've got tolerant o walk before we run.
Toosin Beymen (5 years ago)
It's good but it's economy 101. Can't we get beyond baby steps? How about how real estate developers are trying to buy up our public spaces such as schools and libraries as they are here in NY City.
danapointg (5 years ago)
Thank you most interesting man in the world
VitalVampyr (5 years ago)
Reich approves of carbon taxes to combat climate change. Our stores of resources of nearly every variety grows daily, food production continues to rise. How exactly is growth over? Money is an abstraction which is representative of available resources. Of course economics is a science. You're dumb.
inademv (5 years ago)
Just want to remind everyone; this current congress is LITERALLY the worst in US history.
VitalVampyr (5 years ago)
This video wasn't about fixing "depravity", it was about fixing the economy. It's a simple fact that the middle class spends the most on goods and services and therefore drives the economy the most. Though obviously one component of good policies to strengthen the economy would be allowing the poor greater upward mobility.
MistressArte (5 years ago)
If Ford saw what his company was doing in his name he'd be one angry ghost. If I was the owner of Ford I would be thankful there's no such thing as ghost.
Stikibits (5 years ago)
Middle class mumbo-jumbo? Seriously!? It's the poor where the greatest depravity exists. Take care of the poor and working class, then the middle class, and wealthy will do well, too. Make the poor redundant with this middle-class mumbo-jumbo, then poverty will still exist.
Alexandre Pinho (5 years ago)
I think the US needs strong unions like in Europe to raise the minimum wage, reduce hours of work and get paid vacation.
klondike444 (5 years ago)
Want money out of politics? wolf-pac.com
klondike444 (5 years ago)
An economist in the White House? Aren't things bad enough?
klondike444 (5 years ago)
Reich understands only money. Everyone understands inequality. Reich and similar economists don't get 1) climate change, 2) that growth is over (= capitalism is over). Look around the world, it's the same story. It's not money that counts, but resources. Economics is not a science. Reich is dumb.
Charlie Wallace (5 years ago)
Once again, Dr. Reich is absolutely right!
Ashley Ember (5 years ago)
I know this is overused, but I actually think it's a valid political move based on his history and ideas. He is a real presidential figure that unfortunately hasn't had the honor yet. Reich 2016! or at least Warren/Reich 2016!
RainBoKatchr (5 years ago)
We need a national ballot initiative! Each and every state in this country should have a fully accessible initiative and referendum available to the population of that state! The only collective voice we have as a nation is when we vote for the POTUS. That is not giving the people a voice! We need the I&R in every state so that we will have a voice on a federal level on issues and not just the POTUS!
Madam Vonkook (5 years ago)
exactly !
ArcticSlicer (5 years ago)
The democratic agenda isn't much different.

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