The Democrats have a secret sauce to win the midterm elections

The beginning of May before midterm elections signals the official start of primary season and the kickoff of fall campaigns. Because midterms are usually referendums on a president’s performance, the conventional view now is that Democrats are in deep trouble because Biden’s approval ratings are in the cellar.

But the conventional view doesn’t account for the Trump factor, which gives Democrats a fighting chance of keeping one or both chambers.

According to recent polls, Trump’s popularity continues to sink. He is liked by only 38 percent of Americans and disliked by 46 percent. (12 percent are neutral.) And Trump continues to slide: Among voters 45-64 years old – a group exit polls show Trump won 50% to 49% in 2020 – just 39 percent now view him favorably and 57 percent unfavorably. Among voters older than 65 – 52 percent of whom voted for him in 2000 to Biden’s 47 percent – only 44 percent now see him favorably and more than half (54%) view him unfavorably. Importantly, independents hold him in even lower regard. Just 26 percent view him favorably and 68 percent unfavorably.

Republican lawmakers had hoped and assumed that Trump would fade from the scene by the 2022 midterms, allowing them to engage in full-throttled attacks on Democrats.

But Trump hasn’t faded. In fact, his visibility is growing daily.


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The media is framing the May Republican primaries as all about Trump. The Ohio primary was a giant proxy battle over him, in which Republican candidates outdid each other trying to sound just like Trump – railing against undocumented immigrants, coastal elites, “socialism,” and “wokeness,” and regurgitating the Big Lie.

Trump’s April 15 endorsement of JD Vance made the difference – as could his backing of Mehmet Oz in Pennsylvania’s May 17 primary and Hershel Walker in Georgia’s May 24 primary. But whether Trump’s bets pay off in wins for these candidates is beside the point. Trump is making these races all about himself —and in so doing, casting the midterms as a referendum on his continuing power and influence.

June’s televised hearings of the House January 6 committee will likely show how Trump and his White House orchestrated the attack on the U.S. Capitol, and rekindle memories of Trump’s threat to withhold military aid to Ukraine unless Ukrainian president Zelensky came up with dirt on Biden.

Here again, the real significance of these hearings won’t be seen in Trump’s approval ratings but in Trump’s heightened visibility in the months before the midterms – and its almost certain shift in voters’ preferences toward the Democrats.

Also likely in June (according to leaked documents) is a decision by the Supreme Court to uphold Oklahoma’s near ban on abortion and reverse Roe v. Wade – courtesy of Trump’s three Court nominees whom Trump explicitly nominated in order to reverse Roe.

The high court’s decision will green-light other Republican states to enact similar bans, and spur Republicans in Congress to push for national legislation to virtually bar abortions across the country. Republicans believe this would ignite their base, but it’s more likely to ignite a firestorm among the vast majority of Americans who believe abortion should be legal. Score another one for Trump.

There is also the distinct possibility of criminal trials over Trump’s business and electoral frauds (such as his brazen attempt to change the Georgia vote tally). Again, their significance for the midterms is less about whether Trump is found guilty than about their continuing reminders of his lawlessness.

Meanwhile, America will be treated to more Trump rallies, interviews, and barnstorming to convince voters the 2020 election was stolen from him, along with his incessant demands that Republican candidates reiterate his Big Lie.

Somewhere along the line, also before the midterms, Elon Musk will allow Trump back on Twitter. The move would be bad for America, but it would remind voters of how whacky, racist, and dangerously incendiary Trump continues to be.

Oh, and don’t forget the antics of Trump’s many surrogates – Tucker Carlson, Marjorie Taylor Greene, Matt Gaetz, Steven Bannon, Madison Cawthorn, and others – who mimic Trump’s bravado, bigotry, divisiveness, and disdain for the law. All are walking billboards for Trumpism’s heinous impact on American life.

All will push wavering voters toward Democrats in November.

I’m not suggesting Democrats seeking election or reelection should center their campaigns around Trump. To the contrary, Democrats need to show their continuing commitment to average working people. Between now and November, they should provide help with childcare, cut the costs of prescription drugs, and stop oil companies for price gouging, to take but three examples.

If they do this, they can count on Trump to remind Americans of the hatefulness and chaos he unleashed. The combination – Democrats scoring some additional victories for working people, and Trump being Trump – could well reverse conventional wisdom about midterms and keep Dems in control of Congress.

Here's how Republicans on the Supreme Court could make your life more dangerous

Your life could get a lot more dangerous. Republican appointees on the Supreme Court seem poised to strip away basic safety standards for our workplaces, our food, our air and water.

Congress gives federal agencies the authority to enact regulations that protect us in our daily lives. Congress defines the goals, but leaves it up to the health and safety experts in those agencies to craft and enforce regulations.

I know regulations don’t sound very exciting, but they’re how our government keeps us safe.

Remember when lots of romaine lettuce was recalled because it was causing E.coli outbreaks? That was the Food and Drug Administration protecting us from getting sick.

Working in a warehouse? The Occupational Safety and Health Administration sets standards to ensure you don’t breathe in dangerous chemicals like asbestos.

Enjoying the fresh air on a clear, sunny day? Thank the Environmental Protection Agency for limiting the amount of pollution that can go into our air.

These agencies save lives. Since OSHA was established a half-century ago, its workplace safety regulations have saved more than 618,000 workers’ lives.

Republicans have been trying to gut these agencies for decades. Now, with the Supreme Court’s right-wing majority solidly in place, they have their best chance yet.

In January 2022, the Supreme Court blocked OSHA’s vaccine-or-testing mandate from going into effect, which was estimated to prevent a quarter-million hospitalizations.

The Court claimed that Covid isn’t an “occupational hazard” because people can become infected outside of work, and that allowing OSHA to regulate in this manner “would significantly expand” its authority without clear Congressional authorization.

This is absurd on its face. Section 2 of the Occupational Safety and Health Act of 1970 clearly spells out OSHA’s authority to enact and enforce regulations that protect workers from illness, injury, and death in the workplace. Congress doesn’t need to list every specific workplace hazard before OSHA can protect workers.

What this ruling tells us is that the Republican appointees on the Supreme Court are intent on gutting the power of agencies to issue regulations.

This term, the Court will also hear a case regarding the EPA’s authority to enforce the Clean Water Act. If the Court undermines the EPA’s authority, it will put our environment – and our health – at risk. Remember when the Cuyahoga River caught on fire because it was brimming with oil, acid, and factory chemicals? That’s what we may be returning to.

And what’s next? Will they gut the Federal Trade Commission and put us all at risk of being defrauded? Target the Securities and Exchange Commission and deregulate the financial sector, sparking another financial crisis?

Beware. If Republican appointees on the Supreme Court succeed in gutting regulatory agencies, we all lose. This agenda is anti-worker, anti-consumer, and anti-environment. The only thing it’s good for is corporate profits.

This article was originally published at

DC insider outlines eight sobering realities about Putin's invasion -- and the costs we must face

We must do what we can to contain Vladimir Putin’s aggression in Ukraine. But we also need to be clear-eyed about it, and face the costs. As I’ve said before, economics can’t be separated from politics, and neither can be separated from history. Here are eight sobering realities:

1. Will the economic sanctions now being put into effect stop Putin from seeking to take over all of Ukraine? No. They will complicate Russia’s global financial transactions but they will not cripple the Russian economy. After Russia annexed Ukraine’s Crimean Peninsula in 2014, the U.S. and its allies imposed economic sanctions which slowed the Russian economy temporarily, but Russia soon rebounded. Since then, Russia has taken steps to lessen its reliance on foreign debt and investment, which means that similar sanctions will have less effect. In addition, the rise of cryptocurrencies and other digital assets allow Russia to bypass bank transfers, which are the control points for sanctions. Bottom line: The sanctions already imposed or threatened could reduce Russia’s gross domestic product, but only by a few percentage points.

2. What sort of sanctions would seriously damage Russia? Sanctions on Russia’s enormous oil and gas exports could cause substantial harm. Russia produces 10 million barrels of oil a day, which is about 10 percent of global demand. It ranks third in world oil production (behind the United States and Saudi Arabia). It ranks second in natural gas (behind the United States), according to the U.S. Energy Information Administration.

3. Then why not impose sanctions on them? Because that would seriously harm consumers in Europe and the US — pushing up energy prices and worsening inflation (now running at 7.5 percent annually in the US, a 40-year high). Although the US imports very little Russian oil or natural gas, oil and natural gas markets are global — which means shortages that push up prices in one part of the world will have similar effects elsewhere. The price of oil in the US is already approaching $100 a barrel, up from about $65 a year ago. The price of gas at the pump is averaging $3.53 a gallon, according to AAA. For most Americans, that gas-pump price is the single most important indicator of inflation, not just because they fuel their cars with gas but because the cost is emblazoned in big numbers outside every gas station in America. (The biggest beneficiaries of these price increases, by the way: Energy companies like Halliburton, Occidental Petroleum and Schlumberger, which are now leading the S&P 500. Anyone in favor of putting a windfall profits tax on them?)

RELATED: Why Vladimir Putin won’t back down

4. Will stronger sanctions weaken Putin’s control over Russia? Possibly. But they could also have the opposite effect — enabling Putin to fuel Russia’s suspicions toward the West and stir up even more Russian nationalism. The harshest U.S. measures would cause the average Russian to pay higher prices for food and clothing or devalue pensions and savings accounts because of a crash in the ruble or Russian markets, but these might be seen as necessary sacrifices that rally Russians around Putin.

5. Any other foreign policy consequences we should be watching? In a word: China. Russia’s concern about the West has already led to a rapprochement with China. A strong alliance between the two most powerful world autocracies could be worrisome.

6. What about domestic politics here in the US? Foreign policy crises tend to drive domestic policy off the headlines, and weaken reform movements. Putin’s aggression in Ukraine has already quieted conversations in America about voting rights, filibuster reform, and Build Back Better — at least for now. Large-scale war, if it ever comes to that, deadens reform. World War I brought the progressive era to a halt. World War II ended FDR’s New Deal. The Vietnam War stopped Lyndon Johnson’s Great Society.

Wars and the threat of wars also legitimate huge military expenditures and giant military bureaucracies. America is already spending $776 billion a year on the military, a sum greater than the next ten giant military powers (including Russia and China) together. Wars also create fat profits for big corporations in war industries.

READ: Trucker convoy in disarray: Ousting of 'Nazi' leads to mutual accusations of snitching to the Feds

The possibility of war also distracts the public from failures of domestic politics, as the Spanish-American War did for President William McKinley and the wars in Afghanistan and Iraq did for George W. Bush. (Hopefully, Biden’s advisors aren’t thinking this way.)

7. Could the sanctions lead to real war between Russia and the West? Unlikely. Americans don’t want Americans to die in order to protect Ukraine (most Americans don’t even know where Ukraine is, let alone our national interest in protecting it). And neither Russia nor the US wants to be annihilated in a nuclear holocaust.

But international crises such as this one always run the risk of getting out of hand. Russia and the US have giant stockpiles of nuclear weapons. What if one is set off accidentally? More likely: What if Russia cyberattacks the US, causing massive damage to US utilities, communications, banks, hospitals, and transportation networks here? What if Russian troops threaten NATO members along Ukraine’s borders? Under these conditions, might the US be willing to commit ground troops?

Those who have fought ground and air wars know war is hell. Subsequent generations tend to forget. By the eve of World War I, many in America and Britain spoke of the glories of large-scale warfare because so few remembered actual warfare. Today, most Americans have no direct experience of war. Afghanistan and Iraq were abstractions for most of us. Vietnam has faded from our collective memory.

8. What is Putin really after? Not just keeping Ukraine out of NATO, because NATO itself isn’t Putin’s biggest worry. After all, Hungary and Poland are NATO members but are governed in ways that resemble Russia more than Western democracies. Putin’s real fear is liberal democracy, which poses a direct threat to authoritarian “strongmen” like him (just as it did to Donald Trump). Putin wants to keep liberal democracy far away from Russia. Yet for nearly two centuries, Ukraine has been the leading edge of Western ideology and culture in the face of a reactionary Russia.

READ: CNN reporter explains the likely reason Russia wants to seize control of Chernobyl site

Putin’s means of keeping Western liberal democracy at bay isn’t just to invade Ukraine, of course. It’s also to stoke division inside the West by fueling racist nationalism in Western Europe and the United States. In this, Trump and Trumpism continue to be Putin’s most important ally.

Robert B. Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley, Senior Fellow at the Blum Center for Developing Economies, and writes at Reich served as Secretary of Labor in the Clinton administration, for which Time Magazine named him one of the ten most effective cabinet secretaries of the twentieth century. He has written fifteen books, including the best sellers "Aftershock", "The Work of Nations," and"Beyond Outrage," and, his most recent, "The Common Good," which is available in bookstores now. 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." He's co-creator of the Netflix original documentary "Saving Capitalism," which is streaming now.

DC insider: Political extremism is a one-sided affair

How did we get so politically divided? Well, it’s not because both sides have gotten more extreme.

I got my start in American politics 50 years ago. My political views then — to grossly simplify them — were that I was against the Vietnam War and the military-industrial complex, strongly supportive of civil and voting rights, and against the power of big corporations. That put me here: just left of the center.

Back then, the political spectrum from left to right was short. The biggest political issue was the Vietnam War. The left was demonstrating against it, sometimes violently. Since I was committed to ending the war through peaceful political means, I volunteered for George McGovern, the anti-war presidential candidate. Even Richard Nixon on the right was starting to look for ways out of Vietnam.

Twenty-five years later, I was in Bill Clinton’s cabinet, and the left-to-right political spectrum stretched much longer. The biggest change was how much further right the right had moved. Ronald Reagan had opened the political floodgates to corporate and Wall Street money — bankrolling right-wing candidates and messages that decried “big government.”

Bill Clinton sought to lead from the “center,” but by then the “center” had moved so far right that Clinton gutted public assistance, enacted “tough on crime” policies that unjustly burdened the poor and people of color, and deregulated Wall Street. All of which put me further to the left of the center — although my political views had barely changed.

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Today, the spectrum from left to right is the longest it’s been in my 50 years in and around politics. The left hasn’t moved much at all. We’re still against the war machine, still pushing for civil and voting rights, still fighting the power of big corporations. But the right has moved far, far rightward.

Donald Trump brought America about as close as we’ve ever come to fascism. He incited an attempted coup against the United States. He and most of the Republican Party continue to deny that he lost the 2020 election. And they’re getting ready to suppress votes and disregard election outcomes they disagree with.

So don’t believe the fear-mongering that today’s left is “radical.” What’s really radical is the right’s move toward fascism.

Robert Reich writes at His latest book is "THE SYSTEM: Who Rigged It, How To Fix It." He is Chancellor's Professor of Public Policy at the University of California at Berkeley and Senior Fellow at the Blum Center. He served as Secretary of Labor in the Clinton administration.

DC insider: The Fed is about to shaft American workers -- for no good reason

The January jobs report from the Labor Department is heightening fears that a so-called “tight” labor market is fueling inflation, and 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 (leisure and hospitality, retail, transport and warehousing). This January employers cut fewer of these low-wage temp workers than in most years, because of rising customer demand and the difficulties of hiring during Omicron. 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 poised 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.

The January 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.

Robert B. Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley, Senior Fellow at the Blum Center for Developing Economies, and writes at Reich served as Secretary of Labor in the Clinton administration, for which Time Magazine named him one of the ten most effective cabinet secretaries of the twentieth century. He has written fifteen books, including the best sellers "Aftershock", "The Work of Nations," and"Beyond Outrage," and, his most recent, "The Common Good," which is available in bookstores now. 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." He's co-creator of the Netflix original documentary "Saving Capitalism," which is streaming now.

IN OTHER NEWS: National Archives says Trump representatives are still looking for additional docs he smuggled to Mar-a-Lago

National Archives says Trump representatives are still looking for additional docs he smuggled to FL

Paging Dr. Freud: DC insider explains the driving force behind 'Manchinema'

What can possibly explain Manchin’s and Sinema’s votes against voting rights last Wednesday? Why did they create a false narrative that the legislation had to be “bipartisan” when everyone – themselves included – knew bipartisanship was impossible?

Why did they say they couldn’t support changing the filibuster rules when only last month they voted for an exception to the filibuster that allowed debt ceiling legislation to pass with only Democratic votes?

Why did they co-sponsor voting rights legislation and then vote to kill the very same legislation? Why did Manchin vote for the “talking filibuster” in 2011 yet vote against it now?

Part of the answer to all these questions can be found in the giant wads of corporate cash flowing into their campaign coffers.

But if you want the whole answer, you need to look at the single biggest factor affecting almost all national politicians I’ve dealt with: Big egos. Manchin’s and Sinema’s are now among the biggest.


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Before February of last year, almost no one outside West Virginia had ever heard of Joe Manchin, and almost no one outside of Arizona (and probably few within the state) had ever heard of Kyrsten Sinema. Now, they’re notorious. They’re Washington celebrities. Their photos grace every major news outlet in America.

This sort of attention is addictive. Once it seeps into the bloodstream, it becomes an all-consuming force. I’ve known politicians who have become permanently and irrevocably intoxicated by it.

I’m not talking simply about power, although that’s certainly part of it. I’m talking about narcissism – the primal force driving so much of modern America, but whose essence is concentrated in certain places such as Wall Street, Hollywood, and the United States Senate.

Once addicted, the pathologically narcissistic politician can become petty in the extreme, taking every slight as a deep personal insult. I’m told that Manchin asked Biden’s staff not to blame him for the delay of “Build Back Better,” and was then infuriated when Biden suggested Manchin bore some of the responsibility. I’m also told that if Biden wants to restart negotiations with Manchin on “Build Back Better,” he’s got to rename the package because Manchin is so angry he won’t vote for anything going by that name.

The Senate is not the world’s greatest deliberative body, but it is the world’s greatest stew of egos battling for attention. Every senator believes he or she has what it takes to be president. Most believe they’re far more competent than whoever occupies the Oval Office.

Yet out of one hundred senators, only a handful are chosen for interviews on the Sunday talk shows, only one or two are lampooned on SNL, and very few get a realistic shot at the presidency. The result is intense competition for national attention.

Again and again, I’ve watched worthy legislation sink because particular senators didn’t feel they were getting enough credit, or enough personal attention from a president, or insufficient press attention, or unwanted press attention, or that another senator (sometimes from the same party) was getting too much attention.

Several people on the Hill who have watched Sinema at close range since she became a senator tell me she relished all the attention she got when she gave her very theatrical thumbs down to increasing the minimum wage, and since then has thrilled at her national celebrity as a spoiler.

Biden prides himself on being a member of the senatorial “club” for many years before ascending to the presidency and argued during the 2020 campaign that this familiarity would give him an advantage in dealing with his former colleagues. But it may have worked against him. Senators don’t want clubby familiarity from a president. They want a president to shine the national spotlight on them.

Some senators get so whacky in the national limelight that they can’t function without it. Trump had that effect on Republicans. Before Trump, Lindsay Graham was almost a normal human being. Then Trump directed a huge amp of national attention Graham’s way — transmogrifying Graham into a bizarro creature who’d say anything Trump wanted in order to keep the attention coming.

Not all senators are egomaniacs, of course. Most lie on an ego spectrum ranging from mildly inflated to pathological.

Manchin and Sinema are near the extreme. Once they got a taste of the national spotlight, they couldn’t let go. They must have figured that the only way they could keep the spotlight focused on themselves was by threatening to do what they finally did this week — shafting American democracy.

Robert B. Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley, Senior Fellow at the Blum Center for Developing Economies, and writes at Reich served as Secretary of Labor in the Clinton administration, for which Time Magazine named him one of the ten most effective cabinet secretaries of the twentieth century. He has written fifteen books, including the best sellers "Aftershock", "The Work of Nations," and"Beyond Outrage," and, his most recent, "The Common Good," which is available in bookstores now. 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." He's co-creator of the Netflix original documentary "Saving Capitalism," which is streaming now.

Robert Reich has the perfect answer to Trumpism

As I’ve considered the real lesson of January 6, I’ve been prompted to rewatch a movie that provides a hint of an answer — Frank Capra’s “It’s a Wonderful Life,” which was released 75 years ago this month.

When I first saw the movie in the late 1960s, I thought it pure hokum. America was coming apart over Vietnam and the assassinations of Martin Luther King, Jr. and Robert F. Kennedy, and I remember thinking the movie could have been produced by some propaganda bureau of the government that had been told to create a white-washed (and white) version of the United States.

But in more recent years I’ve come around. As America has moved closer to being an oligarchy — with staggering inequalities of income, wealth, and power not seen in over a century — and closer to Trumpian neofascism (the two moves are connected), “It’s a Wonderful Life” speaks to what’s gone wrong and what must be done to make it right.

As you probably know (and if you don’t, this weekend would be a good time to watch it), the movie’s central conflict is between Mr. Potter (played by Lionel Barrymore) and George Bailey (Jimmy Stewart). Potter is a greedy and cruel banker. George is the generous and honorable head of Bedford Fall’s building-and-loan — the one entity standing in the way of Potter’s total domination of the town. When George accidentally loses some deposits that fall into the hands of Potter, Potter sees an opportunity to ruin George. This brings George to the bridge where he contemplates suicide, thinking his life has been worthless — before a guardian angel’s counsel turns him homeward.

READ: 'Its roots are deep': Noam Chomsky breaks down just how dangerous Trumpism is after ex-president's 'attempted putsch'

It’s two radically opposed versions of America. In Potter’s social-Darwinist view, people compete with one another for resources. Those who succeed deserve to win because they’ve outrun everyone else in that competitive race. After the death of George’s father, who founded the building-and-loan, Potter moves to dissolve it — claiming George’s father “was not a businessman. He was a man of high ideals, so-called, but ideals without common sense can ruin a town.” For Potter, common sense is not coddling the “discontented rabble.”

In George’s view, Bedford Falls is a community whose members help each other. He tells Potter that the so-called “rabble … do most of the working and paying and living and dying in this community.” His father helped them build homes on credit so they could afford a decent life. “People were human beings to him,” George tells Potter, “but to you, they’re cattle.”

When George contemplates ending it all, his guardian angel shows him how bleak Bedford Falls would be had George never lived — poor, fearful, and dependent on Potter. The movie ends when everyone George has helped (virtually the entire town) pitch in to bail out George and his building-and-loan.

It’s a cartoon, of course — but a cartoon that’s fast becoming a reality in America. Do we join together or let the Potters of America own and run everything?

Soon after “It’s a Wonderful Life” was released, the FBI considered it evidence of Communist Party infiltration of the film industry. The FBI’s Los Angeles field office — using a report by an ad-hoc group that included Fountainhead writer and future Trump pin-up girl Ayn Rand — warned that the movie represented “rather obvious attempts to discredit bankers by casting Lionel Barrymore as a ‘scrooge-type’ so that he would be the most hated man in the picture.” The movie “deliberately maligned the upper class, attempting to show the people who had money were mean and despicable characters. This … is a common trick used by Communists.”

The FBI report compared “It’s a Wonderful Life” to a Soviet film, and alleged that Frank Capra was “associated with left-wing groups” and that screenwriters Frances Goodrich and Albert Hackett were “very close to known Communists.”

This was all rubbish, of course — and a prelude to the Red Scare led by Republican Senator Joe McCarthy of Wisconsin, who launched a series of highly publicized probes into alleged Communist penetration of Hollywood, the State Department, and even the US Army.

The movie was also prelude to modern Republican ideology. Since Ronald Reagan, Republicans have used Potter-like social Darwinism to justify everything tax cuts for the wealthy, union-busting, and cutbacks in social safety nets. Rand herself became a hero to many in the Trump administration.

Above all, Reagan Republicans, CEOs, and Trumpers have used the strategy of “divide-and-conquer” to generate division among Americans (a kind of political social-Darwinism). That way, Americans stay angry and suspicious of one another, and don’t look upward to see where all the money and power have gone. And won’t join together to claim it back.

What would Republicans say about “It’s a Wonderful Life” if it were released today? They’d probably call it socialist rather than communist, but it would make them squirm all the same — especially given the eery similarity between Lionel Barrymore’s Mr. Potter and you know who.

DC insider explains a 'fundamental truth' about Trump's Jan. 6 coup attempt

January 6 will be remembered as one of the most shameful days in American history. On that date in 2021, the United States Capitol was attacked by thousands of armed loyalists to Donald Trump, some intent on killing members of Congress. Roughly 140 officers were injured in the attack. Five people died that day.

But even now, almost a year later, Americans remain confused and divided about the significance of what occurred.

Let me offer four basic truths:

1. Trump incited the attack on the Capitol.

For weeks before the attack, Trump had been urging his supporters to come to Washington for a “Save America March” on January 6, when Congress was to ceremonially count the electoral votes of Joe Biden’s win. Without any basis in fact or law (60 federal courts as well as the Departments of Justice and Homeland Security concluded that there was no evidence of substantial fraud), Trump repeatedly asserted he had won the 2020 election and Biden had lost it.

“Big protest in D.C. on January 6th. Be there, will be wild!” Trump tweeted on December 19. Then on December 26: “See you in Washington, DC, on January 6th. Don’t miss it. Information to follow.” On December 30: “JANUARY SIXTH, SEE YOU IN DC!” On January 1: “The BIG Protest Rally in Washington, D.C. will take place at 11:00 A.M. on January 6th. Locational details to follow. StopTheSteal!”

At a rally just before the violence, Trump repeated his falsehoods about how the election was stolen. “We will never give up,” he said. “We will never concede. It will never happen. You don’t concede when there’s theft involved. Our country has had enough. We will not take it anymore.”

He told the crowd that Republicans are constantly fighting like a boxer with his hands tied behind his back, respectful of everyone — “including bad people.”

But, he said, “we’re going to have to fight much harder…. We’re going to walk down to the Capitol, and we’re going to cheer on our brave senators and congressmen and women, and we’re probably not going to be cheering so much for some of them, because you’ll never take back our country with weakness. You have to show strength, and you have to be strong…. We fight like hell. And if you don’t fight like hell, you’re not going to have a country anymore.“

He then told the crowd that “different rules” applied to them. “When you catch somebody in a fraud, you are allowed to go by very different rules. So I hope Mike [Pence] has the courage to do what he has to do, and I hope he doesn’t listen to the RINOs [Republicans in Name Only] and the stupid people that he’s listening to.”

READ: Bill Maher explains how he thinks America can stop Trump's 'slow-moving coup'

Then he dispatched the crowd to the Capitol as the electoral count was about to start. The attack on the Capitol came immediately after.

2. The events of January 6 capped two months during which Trump sought to reverse the outcome of the election.

Shortly after the election, Trump summoned to the White House Republican lawmakers from Pennsylvania and Michigan, to inquire about how they might alter the election results. He even called two local canvassing board officials in Wayne County, Michigan’s most populous county and one that overwhelmingly favored Biden.

He phoned Georgia’s Republican secretary of state to “find 11,780 votes,” according to a recording of that conversation, adding “the people of Georgia are angry, the people of the country are angry. And there’s nothing wrong with saying that, you know, um, that you’ve recalculated.”

He suggested that Georgia’s secretary of state would be criminally prosecuted if he did not do as Trump told him. “You know what they did and you’re not reporting it. You know, that’s a criminal — that’s a criminal offense. And you know, you can’t let that happen. That’s a big risk to you and to Ryan, your lawyer. That’s a big risk.”

READ: REVEALED: Trump's CIA director warned of 'right-wing coup' as White House tried to corrupt military

He pressed the acting US attorney general and deputy attorney general to declare the election fraudulent. When the deputy said the department had found no evidence of widespread fraud and warned that it had no power to change the outcome of the election, Trump replied “Just say that the election was corrupt + leave the rest to me” and to Trump’s congressional allies.

Trump and his allies continued to harangue the attorney general and top Justice Department officials nearly every day until January 6. Trump plotted with an assistant attorney general to oust the acting attorney general and pressure lawmakers in Georgia to overturn the state’s election results. But Trump ultimately decided against it after top department leaders pledged to resign en masse.

Presumably, more details of Trump’s attempted coup will emerge after the House Select Committee on January 6 gathers more evidence and deposes more witnesses.

3. Trump’s attempted coup continues to this day.

Trump still refuses to concede the election and continues to assert it was stolen. He presides over a network of loyalists and allies who have sought to overturn the election (and erode public confidence in it) by mounting partisan state “audits” and escalating attacks on state election officials. When asked recently about the fraudulent claims and increasingly incendiary rhetoric, a Trump spokeswoman said that the former president “supports any patriotic American who dedicates their time and effort to exposing the rigged 2020 Presidential Election.”

Trump recently announced he would be hosting a news conference at his Mar-a-Lago resort in Florida on January 6.

“Remember,” he said in the announcement “the insurrection took place on November 3rd. It was the completely unarmed protest of the rigged election that took place on January 6th.” (Reminder: they were armed.) Trump then referred to the House investigation: “Why isn’t the Unselect Committee of highly partisan political hacks investigating the CAUSE of the January 6th protest, which was the rigged Presidential Election of 2020?”

READ: There was a method to the madness of the Trump coup memos

He went on to castigate “Rinos,” presumably referring to his opponents within the party, such as Republican Reps. Liz Cheney and Adam Kinzinger, who sit on the January 6 committee. “In many ways a Rino is worse than a Radical Left Democrat,” Trump said, “because you don’t know where they are coming from and you have no idea how bad they really are for our Country.” He added, “the good news is there are fewer and fewer RINOs left as we elect strong Patriots who love America.”

Trump has endorsed a primary challenger to Cheney, while Kinzinger will leave Congress at the next election. Trump and other Republicans have also moved to punish 13 House Republicans who bucked party leadership and voted for a bipartisan infrastructure bill in November.

4. All of this reveals a deep problem in America that must be addressed

Trump and his co-conspirators must be held accountable, of course. Hopefully, the Select Committee’s report will be used by the Justice Department in criminal prosecutions of Trump and his accomplices.

But this in itself will not solve the underlying problem. A belligerent and narcissistic authoritarian has gained a powerful hold over a large portion of America. As many as 60 percent of Republican voters continue to believe his lies. Many remain intensely loyal. The Republican party is close to becoming a cult whose central animating idea is that the 2020 election was stolen from Trump.

Trump has had help, of course. Fox News hosts and Facebook groups have promoted and amplified his ravings for their own purposes. Republicans in Congress and in the states have played along.

But even with this help, Trump’s attempted coup could not have gotten this far without something more basic: A substantial portion of the American population feels an anger and despair that has made them susceptible to Trump’s swagger and lies.

It is too simplistic to attribute this solely to racism or xenophobia. America has harbored white supremacist and anti-immigrant sentiments since its founding. The despair Trump has channeled is more closely connected to a profound loss of identity, dignity and purpose, especially among Americans who have been left behind – without college degrees, without good jobs, in places that have been economically abandoned and disdained by much of the rest of the country.

The wages of these Americans have not risen in forty years, adjusted for inflation, even though the economy is now three times larger than it was four decades ago. The norm of upward mobility has been shattered for these Americans. Through their eyes, the entire American system is now rigged against them.

This part of America yearns for a strongman to deliver it from despair. Trump has filled that void. To be sure, he’s filled it with bombast, lies, paranoia, and neofascism. But he has filled it nonetheless.

The challenge ahead is to fill it with a democracy and economy that work for everyone. Unless we understand and respond to this fundamental truth, we will miss the true meaning of January 6.

The oligarchy's ultimate political weapon

If you’re discouraged by what’s happening in the country, that is by design.

The forces undermining our democracy, polluting our planet, and stoking hatred are counting on you to give up. But we must not let them.

They use their allies in political office to grind the gears of government to a halt, so people see government as the problem, not the solution. But if there’s one thing we learned from this wretched pandemic, it’s that government intervention can reduce poverty and suffering, and we can afford to pay for it.

They want us to become so discouraged that we stop showing up to vote. Another victory for them. Those who want you to believe that change is not possible are counting on you to forget that history and give up. Don’t.

The Oligarchy's Ultimate Political Weapon | Robert Reich

PS: If you’d like to join me on a (nearly) daily basis, please subscribe at

Psst: You want to know the truth about inflation? (It's not what the Fed thinks it is.)

Yesterday, the Fed’s policy committee announced it would both end its bond-buying program and likely raise interest rates sooner than had been expected. “Inflation is more persistent and higher, and that the risk of it remaining higher for longer has grown,” Fed chair Jerome Powell explained. Translated: Powell and the Fed are about to slow the economy — even though we’re still at least 4 million jobs short of where we were before the pandemic. And even though, as a result, millions of American workers won’t get the raises they deserve.

I think that’s a big mistake. Powell’s medicine has nothing to do with the real reason for inflation: the increasing concentration of the American economy into the hands of a relative few corporate giants with the power to raise prices.

If markets were competitive, companies would keep their prices down in order to prevent competitors from grabbing away customers. But they’re raising prices even as they rake in record profits. How can this be? The answer is they have so much market power they can raise prices with impunity.

The underlying problem is not inflation. It’s lack of competition. Corporations are using the excuse of inflation to raise prices and make fatter profits.

In April, Procter & Gamble announced it would start charging more for consumer staples ranging from diapers to toilet paper, citing “rising costs for raw materials, such as resin and pulp, and higher expenses to transport goods.”

That was rubbish. P&G continues to rake in huge profits. In the quarter ending September 30 (after its price increases went into effect) it reported a whopping 24.7 percent profit margin. It even spent $3 billion during the quarter buying back its own stock.

The reason it could raise prices and rake in more money is P&G faces almost no competition. The lion’s share of the market for diapers (to take one example) is controlled by just two companies – P&G and Kimberly-Clark – which coordinate their prices and production. It was hardly a coincidence that Kimberly-Clark announced price increases similar to P&G’s at the same time P&G announced its own price increases.

Or consider another consumer product duopoly – PepsiCo (the parent company of Frito-Lay, Gatorade, Quaker, Tropicana, and other brands), and Coca-Cola. In April, PepsiCo announced it was increasing prices, blaming “higher costs for some ingredients, freight and labor.” That was pure baloney. The company didn’t have to raise prices. It recorded $3 billion in operating profits through September.

If PepsiCo faced tough competition it could never have gotten away with it. Consumers would have deserted it for lower-priced competitors. But PepsiCo clearly colluded with its only major competitor, Coca-Cola – which announced similar price increases at about the same time as PepsiCo, and has increased its profit margins to 28.9 percent.

Half of the recent rise in grocery prices is from meat products — beef, pork, and poultry. Just four large conglomerates control most meat processing. They’re raising their prices — and coordinating their price increases — even as they’re scoring record profits. Here again, they’re using “inflation” as an excuse.

You see the same pattern all over the American economy.

Since the 1980s, two-thirds of all American industries have become more concentrated. Monsanto now sets the prices for most of the nation’s seed corn. Wall Street has consolidated into five giant banks. Airlines have merged from 12 carriers in 1980 to four today, which now control 80 percent of domestic seating capacity. The merger of Boeing and McDonnell Douglas has left the US with just one large producer of civilian aircraft — Boeing. Three giant cable companies dominate broadband: Comcast, AT&T and Verizon. A handful of drug companies control the pharmaceutical industry: Pfizer, Eli Lilly, Johnson & Johnson, Bristol-Myers Squibb and Merck.

All this concentration gives corporations the power to raise prices, because it makes it easy for them to coordinate price increases with the handful of other companies in their same industry — without risking the possibility of losing customers, who have no other choice.

In sum, inflation isn’t driving these price increases. Corporate power is driving them.

So what’s the appropriate government response? Not slowing down the economy. This will only hurt millions of workers, who are just beginning to get the raises they deserve. The problem at the heart of the economy is amenable to only one thing: the aggressive use of antitrust laws to bust up monopolies.

This will take time — perhaps years. In the meantime, Biden and the Democrats could do something with a more immediate effect: Enact a windfall profits tax applicable to any large corporation that raises its prices during the same quarter its profits have risen.

IN OTHER NEWS: 'Whitewashing moron' Lara Trump busted for 'lying' about Jan. 6 on Fox News: 'She's an entitled grifter'

Lara Trump busted for 'lying' about Jan. 6 on Fox News

DC insider explains the shocking truth about who really benefits from America coming apart

Official Washington will be quiet this week, but the fallout from the Kyle Rittenhouse verdict will continue to divide America along the Trumpian fault lines of fear, violence, and racism.

Closing arguments are scheduled today in the trial of three men charged with the killing of Ahmaud Arbery in Georgia. Though they chased him, they are claiming self-defense because, they say, Arbery tried to get control of a shotgun one of them was carrying. As with the Rittenhouse case, the trial raises questions of how self-defense laws will hold up as guns proliferate. Regardless of how it come out, the case also illustrates America's deepening split.

Congress's continuing investigation into the January 6 insurrection reveals the same rift, as will the Supreme Court's expected decision on executive privilege in that investigation, and its likely move to strike down New York State's law requiring people seeking licenses to carry handguns in public to show a "proper cause," as violating the Second Amendment.

The fault line has now extended into almost every facet of American lawmaking. When the "Build Back Better" bill passed the House late Friday night, 220 out of 221 Democrats voted for it. But all of the House's 213 Republicans voted against it. Why? The measures in the bill are hugely popular, according to polls. The bill includes the largest expansion of federal child-care assistance in history; free, universal prekindergarten for all American children ages 3 and 4; Medicare benefits covering hearing services; government for the first time being allowed to negotiate some prescription drug prices, aiming to lower the costs that seniors pay for lifesaving medicines such as insulin; and more than $550 billion to combat climate change — promoting greener energy and providing new perks for Americans who buy electric vehicles.

But policy popularity may be no match for fear, violence, and racism — which Republicans and the moneyed interests are now diligently exploiting to kill the bill in the Senate. So-called "moderate" Democrats (Senators Joe Manchin and Kyrsten Sinema) have expressed skepticism about its cost and scope. It would be one thing if Manchin's and Sinema's reservations were in good faith, but how can they be? Manchin frets about the bill's effects on inflation even though the bill lowers prices for most Americans of major expenses like childcare, drugs, and healthcare. Sinema says she prefers "legislation that is crafted in a bipartisan way," but who is she kidding? Mitch McConnell has made clear he won't allow a single Republican senator to vote for the bill.

The votes of every Senate Democrat are needed if the bill is to pass, but Manchin and Sinema are allowing rightwing tropes — and the big money behind them — to divide Democrats. As the New York Times reported yesterday, cash has poured into Manchin's and Sinema's political coffers from political action committees and donors linked to Wall Street, Big Pharma, and Big Energy, which have opposed proposals in the bill that Manchin and Sinema helped scale back.

The question that keeps haunting me is this: Is an America so deeply divided, and awash in political money that exploits that divide, any longer capable of doing bold things that are broadly popular? The only big thing we continue to do is feed the ravenous military-industrial complex — itself founded on fear, violence, and racism. (Efforts to whip up a new cold war with China conjure up old fears of a "yellow peril.") Congress is on the verge of giving the Pentagon even more money than the Pentagon and the Biden administration are seeking. The nation's military tab over the next ten years will be upwards of $8 trillion and is not paid for with expected revenue, in sharp contrast with the $2 trillion cost of the House's "Build Back America" plan, which would be paid for with tax increases on the wealthy and big corporations.

That America is becoming two separate nations is threatening everything we value. The most obvious beneficiaries (besides top executives of big corporations and Wall Street) are Donald Trump, Vladimir Putin, and Rupert Murdoch, who appear to be doing whatever they can to divide us even further.

IN OTHER NEWS: Former FBI terrorism experts saw something unusual in video
of Waukesha Christmas parade attack

Former FBI experts saw something unusual in video of Waukesha Christmas parade

Noted economist explains what's 'really driving' inflation

The biggest culprit for rising prices that's not being talked about is the increasing economic concentration of the American economy in the hands of a relative few giant big corporations with the power to raise prices.

If markets were competitive, companies would seek to keep their prices down in order to maintain customer loyalty and demand. When the prices of their supplies rose, they'd cut their profits before they raised prices to their customers, for fear that otherwise a competitor would grab those customers away.

But strange enough, this isn't happening. In fact, even in the face of supply constraints, corporations are raking in record profits. More than 80 percent of big (S&P 500) companies that have reported results this season have topped analysts' earnings forecasts, according to Refinitiv.

Obviously, supply constraints have not eroded these profits. Corporations are simply passing the added costs on to their customers. Many are raising their prices even further, and pocketing even more.

How can this be? For a simple and obvious reason: Most don't have to worry about competitors grabbing their customers away. They have so much market power they can relax and continue to rake in big money.

The underlying structural problem isn't that government is over-stimulating the economy. It's that big corporations are under competitive.

Corporations are using the excuse of inflation to raise prices and make fatter profits. The result is a transfer of wealth from consumers to corporate executives and major investors.

This has nothing to do with inflation, folks. It has everything to do with the concentration of market power in a relatively few hands.

It's called "oligopoly," where two or three companies roughly coordinate their prices and output.

Judd Legum provides some good examples in his newsletter. He points to two firms that are giants in household staples: Procter & Gamble and Kimberly Clark. In April, Procter & Gamble announced it would start charging more for everything from diapers to toilet paper, citing "rising costs for raw materials, such as resin and pulp, and higher expenses to transport goods."

Baloney. P&G is raking in huge profits. In the quarter ending September 30, after some of its price increases went into effect, it reported a whopping 24.7% profit margin. Oh, and it spent $3 billion in the quarter buying its own stock.

How can this be? Because P&G faces very little competition. According to a report released this month from the Roosevelt Institute, "The lion's share of the market for diapers," for example, "is controlled by just two companies (P&G and Kimberly-Clark), limiting competition for cheaper options."

So it wasn't exactly a coincidence that Kimberly-Clark announced similar price increases at the same time as P&G. Both corporations are doing wonderfully well. But American consumers are paying more.

Or consider another major consumer product oligopoly: PepsiCo (the parent company of Frito-Lay, Gatorade, Quaker, Tropicana, and other brands), and Coca Cola. In April, PepsiCo announced it was increasing prices, blaming "higher costs for some ingredients, freight and labor."

Rubbish. The company recorded $3 billion in operating profits and increased its projections for the rest of the year, and expects to send $5.8 billion in dividends to shareholders in 2021.

If PepsiCo faced tough competition it could never have gotten away with this. But it doesn't. In fact, it appears to have colluded with its chief competitor, Coca-Cola – which, oddly, announced price increases at about the same time as PepsiCo, and has increased its profit margins to 28.9%.

And on it goes around the entire consumer sector of the American economy.

You can see a similar pattern in energy prices. Once it became clear that demand was growing, energy producers could have quickly ramped up production to create more supply. But they didn't.

Why not? Industry experts say oil and gas companies (and their CEOs and major investors) saw bigger money in letting prices run higher before producing more supply.

They can get away with this because big oil and gas producers don't face much competition. They're powerful oligopolies.

Again, inflation isn't driving most of these price increases. Corporate power is driving them.

Since the 1980s, when the federal government all but abandoned antitrust enforcement, two-thirds of all American industries have become more concentrated.

Monsanto now sets the prices for most of the nation's seed corn.

The government green-lighted Wall Street's consolidation into five giant banks, of which JPMorgan is the largest.

It okayed airline mergers, bringing the total number of American carriers down from twelve in 1980 to four today, which now control 80 percent of domestic seating capacity.

It let Boeing and McDonnell Douglas merge, leaving America with just one major producer of civilian aircraft, Boeing.

Three giant cable companies dominate broadband [Comcast, AT&T, Verizon].

A handful of drug companies control the pharmaceutical industry [Pfizer, Eli Lilly, Johnson & Johnson, Bristol-Myers Squibb, Merck].

So what's the appropriate response to the latest round of inflation? The Federal Reserve has signaled it won't raise interest rates for the time being, believing that the inflation is being driven by temporary supply bottlenecks.

Meanwhile, Biden Administration officials have been consulting with the oil industry in an effort to stem rising gas prices, trying to make it simpler to issue commercial driver's licenses (to help reduce the shortage of truck drivers), and seeking to unclog over-crowded container ports.

But none of this responds to the deeper structural issue – of which price inflation is symptom: the increasing consolidation of the economy in a relative handful of big corporations with enough power to raise prices and increase profits.

This structural problem is amenable to only one thing: the aggressive use of antitrust law.

The disturbing story behind how America's wealth inequality spiraled out of control

Elon Musk's wealth has surpassed $200 billion. It would take the median U.S. worker over 4 million years to make that much.

Wealth inequality is eating this country alive. We're now in America's second Gilded Age, just like the late 19th century when a handful of robber barons monopolized the economy, kept wages down, and bribed lawmakers.

While today's robber barons take joy rides into space, the distance between their gargantuan wealth and the financial struggles of working Americans has never been clearer. During the first 19 months of the pandemic, U.S. billionaires added $2.1 trillion dollars to their collective wealth and that number continues to rise.

And the rich have enough political power to cut their taxes to almost nothing — sometimes literally nothing. In fact, Jeff Bezos paid no federal income taxes in 2007 or in 2011. By 2018, the 400 richest Americans paid a lower overall tax rate than almost anyone else.

But we can not solve this problem unless we know how it was created in the first place.

Let's start with the basics.

I. The Basics

Wealth inequality in America is far larger than income inequality.

Income is what you earn each week or month or year. Wealth refers to the sum total of your assets — your car, your stocks and bonds, your home, art — anything else you own that's valuable.Valuable not only because there's a market for it — a price other people are willing to pay to buy it — but because wealth itself grows.

As the population expands and the nation becomes more productive, the overall economy continues to expand. This expansion pushes up the values of stocks, bonds, rental property, homes, and most other assets. Of course recessions and occasional depressions can reduce the value of such assets. But over the long haul, the value of almost all wealth increases.

Lesson: Wealth compounds over time.

Next: personal wealth comes from two sources.The first source is the income you earn but don't spend. That's your savings. When you invest those savings in stocks, bonds, or real property or other assets, you create your personal wealth — which, as we've seen, grows over time.

The second source of personal wealth is whatever is handed down to you from your parents, grandparents, and maybe even generations before them — in other words, what you inherit.

Lesson: Personal wealth comes from your savings and/or your inheritance.

II. Why the wealth gap is exploding

The wealth gap between the richest Americans and everyone else is staggering.
In the 1970s, the wealthiest 1 percent owned about 20 percent of the nation's total household wealth. Now, they own over 35 percent.

Much of their gains over the last 40 years have come from a dramatic increase in the value of shares of stock.

For example, if someone invested $1,000 in 1978 in a broad index of stocks — say, the S&P 500 they would have $31,823 today, adjusted for inflation.

Who has benefited from this surge? The richest 1 percent, who now own half of the entire stock market. But the typical worker's wages have barely grown.

Most Americans haven't earned enough to save anything. Before the pandemic, when the economy appeared to be doing well, almost 80 percent were living paycheck to paycheck.

Lesson: Most Americans don't make enough to save money and build wealth.

So as income inequality has widened, the amount that the few high-earning households save — their wealth — has continued to grow. Their growing wealth has allowed them to pass on more and more wealth to their heirs.

Take, for example, the Waltons — the family behind the Walmart empire — which has seven heirs on the Forbes billionaires list. Their children, and other rich millennials, will soon consolidate even more of the nation's wealth. America is now on the cusp of the largest intergenerational transfer of wealth in history. As wealthy boomers pass on, somewhere between $30 to $70 trillion will go to their children over the next three decades.

These children will be able to live off of this wealth, and then leave the bulk of it — which will continue growing — to their own children … tax-free. After a few generations of this, almost all of America's wealth could be in the hands of a few thousand families.

Lesson: Dynastic wealth continues to grow.

III. Why wealth concentration is a problem

Concentrated wealth is already endangering our democracy. Wealth doesn't just beget more wealth — it begets more power.

Dynastic wealth concentrates power into the hands of fewer and fewer people, who can choose what nonprofits and charities to support and which politicians to bankroll. This gives an unelected elite enormous sway over both our economy and our democracy.

If this keeps up, we'll come to resemble the kind of dynasties common to European aristocracies in the seventeenth, eighteenth, and nineteenth centuries.

Dynastic wealth makes a mockery of the idea that America is a meritocracy, where anyone can make it on the basis of their own efforts. It also runs counter to the basic economic ideas that people earn what they're worth in the market, and that economic gains should go to those who deserve them.

Finally, wealth concentration magnifies gender and race disparities because women and people of color tend to make less, save less, and inherit less.
The typical single woman owns only 32 cents of wealth for every dollar of wealth owned by a man. The pandemic likely increased this gap.

The racial wealth gap is even starker. The typical Black household owns just 13 cents of wealth for every dollar of wealth owned by the typical white household. The pandemic likely increased this gap, too.

In all these ways, dynastic wealth creates a self-perpetuating aristocracy that runs counter to the ideals we claim to live by.

Lesson: Dynastic wealth creates a self-perpetuating aristocracy.

IV. How America dealt with wealth inequality during the First Gilded Age

The last time America faced anything comparable to the concentration of wealth we face today was at the turn of the 20th century. That was when President Teddy Roosevelt warned that "a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power" could destroy American democracy.

Roosevelt's answer was to tax wealth. Congress enacted two kinds of wealth taxes. The first, in 1916, was the estate tax — a tax on the wealth someone has accumulated during their lifetime, paid by the heirs who inherit that wealth.

The second tax on wealth, enacted in 1922, was a capital gains tax — a tax on the increased value of assets, paid when those assets are sold.

Lesson: The estate tax and the capital gains tax were created to curb wealth concentration.

But both of these wealth taxes have shrunk since then, or become so riddled with loopholes that they haven't been able to prevent a new American aristocracy from emerging.

The Trump Republican tax cut enabled individuals to exclude $11.18 million from their estate taxes. That means one couple can pass on more than $22 million to their kids tax-free. Not to mention the very rich often find ways around this tax entirely. As Trump's former White House National Economic Council director Gary Cohn put it, "only morons pay the estate tax."

What about capital gains on the soaring values of wealthy people's stocks, bonds, mansions, and works of art? Here, the biggest loophole is something called the "stepped-up basis." If the wealthy hold on to these assets until they die, their heirs inherit them without paying any capital gains taxes whatsoever. All the increased value of those assets is simply erased, for tax purposes. This loophole saves heirs an estimated $40 billion a year.

This means that huge accumulations of wealth in the hands of a relatively few households can be passed from generation to generation untaxed — growing along the way — generating comfortable incomes for rich descendants who will never have to work a day of their lives. That's the dynastic class we're creating right now.

Lesson: The estate tax and the capital gains tax have been gutted.

Why have these two wealth taxes eroded? Because, as America's wealth has concentrated in fewer and fewer hands, the wealthy have more capacity to donate to political campaigns and public relations — and they've used that political power to reduce their taxes. It's exactly what Teddy Roosevelt feared so many years ago.

V. How to reduce the wealth gap

So what do we do? Follow the wisdom of Teddy Roosevelt and tax great accumulations of wealth.

The ultra-rich have benefited from the American system — from laws that protect their wealth, and our economy that enabled them to build their fortunes in the first place. They should pay their fair share.

The majority of Americans, both Democrats and Republicans, believe the ultra rich should pay higher taxes. There are many ways to make them do so: closing the stepped up basis loophole, raising the capital gains tax, and fully funding the Internal Revenue Service so it can properly audit the wealthiest taxpayers, for starters.

Beyond those fixes, we need a new wealth tax: a tax of just 2 percent a year on wealth in excess of $1 million. That's hardly a drop in the bucket for centi-billionaires like Jeff Bezos and Elon Musk, but would generate plenty of revenue to invest in healthcare and education so that millions of Americans have a fair shot at making it.

One of the most important things you as an individual can do is take the time to understand the realities of wealth inequality in America and how the system has become rigged in favor of those at the top — and demand your political representatives take action to unrig it.

Wealth inequality is worse than it has been in a century – and it has contributed to a vicious political-economic cycle in which taxes are cut on the top, resulting in even more concentration of wealth there – while everyone else lives under the cruelest form of capitalism in the world.

We must stop this vicious cycle — and demand an economy that works for the many, not one that concentrates more and more wealth in the hands of a privileged few.

The GOP now poses a clear and present threat even to the values it once espoused

I'm old enough to remember when the Republican Party stood for limited government – when Ronald Reagan thundered "Government is not the solution to our problem, government is the problem."

Today's Republican Party, while still claiming to stand for limited government, stands for government intrusion everywhere:

Republican governors ban masks in schools.

Republican states outlaw abortions.

Republican lawmakers prohibit teachers from teaching about America's racist past.

Republican legislators force transgender students to play sports and use bathrooms according to their assigned gender at birth.

And across the country, Republican lawmakers are making it harder for people to vote.

This is not limited government, folks. This is social control. Republicans have a particular ideology and are determined to impose that ideology on citizens holding different views and values.

This is not about freedom, either. Just the opposite: It's Republicans denying people their freedoms: The freedom to be safe from COVID. Freedom over their own bodies. The freedom to learn the truth about our history. The freedom to vote and participate in our democracy.

Once, Republicans had a coherent view about individual liberties and limiting the role of government. That's not to say this ideology was beneficial to the country – far from it. But it was coherent, and they were committed to it.
Now, they only want to get reelected.

They are misusing government to advance a narrow and restrictive set of values — intruding on the most intimate acts, and banning what's necessary for people to exercise their most basic freedoms.

This is not mere hypocrisy. The Republican Party now poses a clear and present threat even to the values it once espoused.

This article was originally published at

DC insider: Don’t believe corporate America’s 'labor shortage' BS

For the first time in years, American workers have enough bargaining leverage to demand better working conditions and higher wages – and are refusing to work until they get them.

Here's where that leverage comes from. After a year and a half of the pandemic, consumers have pent-up demand for all sorts of goods and services. But employers are finding it hard to fill positions to meet that demand.

The most recent jobs report showed the number of job openings at a record high. The share of people working or looking for work has dropped to a near-record low 61.6 percent. In August, 4.3 million Americans quit their jobs, the highest quit rate since 2000.

Republicans have been claiming for months that people aren't getting back to work because of federal unemployment benefits.


America is on Strike | Robert Reich

The number of people working or looking for work dropped in September – after the extra benefits ran out on Labor Day.

The reluctance of people to work doesn't have anything to do with unemployment benefits. It has everything to do with workers being fed up.

Some have retired early. Others have found ways to make ends meet other than a job they hate. Many just don't want to return to backbreaking or mind-numbing low-wage jobs.

In the wake of so much hardship, illness and death, peoples' priorities have shifted.

The media and most economists measure the economy's success by the number of jobs it creates, while ignoring the quality of those jobs. Just look at the media coverage of the September jobs report: The New York Times emphasized "weak" job growth. For CNN, it was "another disappointment."

But when I was Secretary of Labor, I met with working people all over the country who complained that their jobs paid too little and had few benefits, or were unsafe, or required unwieldy hours. Many said their employers treated them badly.

With the pandemic, it's even worse. That's why, in addition to all the people who aren't returning to work, we're also seeing dozens of organized strikes around the country – 10,000 John Deere workers, 1,400 Kellogg workers, over 1,000 Alabama coal miners, and thousands of others.

Not to mention the unauthorized strikes and walkouts since the pandemic began, like the mostly Black sanitation workers in Pittsburgh or the Amazon warehouse workers in Staten Island.

In order to lure workers back, employers are now raising wages and offering other incentives. Average earnings rose 19 cents an hour in September and are up more than $1 an hour over the last year. But clearly, that's not enough to get workers back.

Corporate America is trying to frame this as a "labor shortage."

But what's really happening is more accurately described as a living-wage shortage, a hazard pay shortage, a childcare shortage, a paid sick leave shortage, and a health care shortage.

Unless these shortages are rectified, this unofficial general strike will continue.
I say it's about time.