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‘Inequality is bad for everyone’: Robert Reich fights economic imbalance

October 11, 2013 at 12:00 AM EDT
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JUDY WOODRUFF: Next: a professor and former government official who’s been on a decades-long quest to combat inequality. Now he’s become the focus of a new film. NewsHour economics correspondent Paul Solman has our look. It’s part of his ongoing reporting Making Sense of financial news.

ROBERT REICH, former U.S. Labor Secretary: My name is Robert Reich. I was secretary of labor under Bill Clinton, before that, the Carter administration. Before that, I was a special aide to Abraham Lincoln.

(LAUGHTER)

PAUL SOLMAN: The improbable star of an unlikely feature film, the chart-and-graph-filled, often funny, sometimes sad documentary “Inequality for All.”

ROBERT REICH: Of all developed nations, the United States has the most unequal distribution of income, resurgent or even great inequality.

PAUL SOLMAN: Robert Reich, welcome.

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ROBERT REICH: Thank you.

PAUL SOLMAN: What’s the basic argument here?

ROBERT REICH: The argument is that inequality is bad for everyone, not just the middle class and the poor; 95 percent of the gains, the economic gains, since the recovery began in 2009 are going to the top 1 percent.

Meanwhile, median household income keeps dropping, adjusted for inflation. Well, where are people going to get the money they need to keep the economy going?

PAUL SOLMAN: I first met you in the early 1980s, and you were already beginning to talk about this phenomenon of inequality, right?

ROBERT REICH: I am so boring, Paul.

(LAUGHTER)

ROBERT REICH: I mean, I really, I bore myself. I — in this movie, I see myself talking about this same issue, and I’m in my early 30s, and I’m in my 40s, I’m in my 50s.

PAUL SOLMAN: Right.

ROBERT REICH: And it’s — you know, if you ever want to get a sense of your own personal failure, you know, look at yourself trying to — trying to get across a point that nobody is listening to and the situation gets worse and worse.

PAUL SOLMAN: In the film, Reich reveals a very personal reason for his persistence.

ROBERT REICH: When I was a kid, the bigger boys would pick on me. Yes, that was what you did. That’s what is done. So I got an idea that I would make alliances with older boys, you know, like just one or two, who would be my protectors.

The summer when I was about 10, one of the older boys who I depended on to kind of be a protector, his name was Michael Schwerner. In the summer of ’64, I learned that Mickey had been in Mississippi registering voters. And he and two other people who had been with him registering voters were tortured and murdered.

I think something just kind of shifted in my brain. I thought, I have to make sure that, in whatever way I can, that people have some degree of protection in life, that the vulnerable people protect people, from which there are many, that people who — don’t suffer the economic bullies.

We’re the richest economy in the history of the world. For the majority of Americans not to get the benefits of this extraordinarily prosperous economy, you know, there’s something fundamentally wrong.

PAUL SOLMAN: The early 1980s was when the growing divide first emerged, the early signs of the rich getting richer, while almost everyone else was falling behind.

Is it not plausible that what’s happening is that we’re living in a more and more skills-intensive world economy, and that some people, perhaps because of who their parents married and their natural endowments and certainly their cultural environment, just have more of those skills than everybody else, and they’re getting rewarded for it?

ROBERT REICH: Well, undoubtedly, that’s part of the story.

But we also know that we have less upward mobility than any other advanced country.

PAUL SOLMAN: So you mean natural endowments can’t explain it all.

ROBERT REICH: Natural endowments don’t explain it all, can’t explain it all.

We have a school system that is not very good, particularly for poorer and working-class and middle-class kids. We also know that it’s getting harder and harder to finance higher education. I think it’s wrong to be an economic determinist. I think it’s wrong to simply say, well, inevitably, if you’re poor, you’re going to get a lousy education, if you’re lower-middle-class, the cards are going to be stacked against you, you will probably never get anywhere.

PAUL SOLMAN: But a lot of people think, particularly the people who have benefited, that they’re entitled to the fruits of their abilities, their labor.

ROBERT REICH: What do you expect them to say? Some of them, like Warren Buffett and Nick Hanauer, who’s in the film, say, I should be taxed more; this is crazy. But many of them say, if I’m wealthy, I must be really smart.

JACOB KORNBLUTH, ”Inequality for All”: I want a shot for people like me to grow up and do something with themselves.

PAUL SOLMAN: Like Reich, director Jacob Kornbluth has personal reasons for his focus on inequality.

JACOB KORNBLUTH: I grew up poor. My mother raised a family of four on between $9,000 and $15,000 a year.

I’m 40 years old. What I have seen my whole life is widening income inequality. But so what? So the economy’s grown so unequal. What — why should we care? Why should we care? That’s the subject of the movie. That’s why we made it.

ROBERT REICH: Who is actually looking out for the American worker? The answer is nobody. We are losing equal opportunity in America. Any one of you who feels cynical, just consider where we have been.

PAUL SOLMAN: Why do you care so much?

ROBERT REICH: Because equal opportunity is what this country is built on. So many people feel like the game is rigged, Paul, that they’re — they’re sort of giving up on politics. You know they…

PAUL SOLMAN: Oh, for sure.

ROBERT REICH: They’re totally cynical.

Well, if you give up on politics, you’re giving up on democracy. And if you give up on democracy, you’re basically saying to the moneyed interests, the powerful people and institutions of society, take it all. That’s a self-fulfilling prophecy. Then we give up. Then we are 100 percent plutocracy.

PAUL SOLMAN: Robert Reich, thank you very much.

ROBERT REICH: Thanks, Paul.