Challenging the Oligarchy (Paul Krugman reviews Robert Reich's new book)

[swag]

http://www.nybooks.com/articles/archives/2015/dec/17/robert-reich-challenging-oligarchy/

. . .

In his proposals for new policies, Reich calls for a sort of broad portfolio, or maybe a market basket, of changes aimed mainly at “predistribution”—changing the allocation of market income—rather than redistribution. (In Reich’s view, this is seen as altering the predistribution that takes place under current rules.) These changes would include fairly standard liberal ideas like raising the minimum wage, reversing the anti-union bias of labor law and its enforcement, and changing contract law to empower workers to take action against employers and debtors to assert their interests against creditors. Reich would also, in a less orthodox move, seek legislative and other changes that might move corporations back toward what they were a half-century ago: organizations that saw themselves as answering not just to stockholders but to a broader set of “stakeholders,” including workers and customers.

Would such measures be enough? Individually, none of them sounds up to the task. But the experience of the New Deal, which was remarkably successful at creating a middle-class nation—and for that matter the success of the de facto anti–New Deal that has prevailed since the 1970s at creating an oligarchy—suggest that there might be synergistic effects from a program containing all these elements. It’s certainly worth trying.

But how is this supposed to happen politically? Reich professes optimism, citing the growing tendency of politicians in both parties to adopt populist rhetoric. For example, Ted Cruz has criticized the “rich and powerful, those who walk the corridors of power.” But Reich concedes that “the sincerity behind these statements might be questioned.” Indeed. Cruz has proposed large tax cuts that would force large cuts in social spending—and those tax cuts would deliver around 60 percent of their gains to the top one percent of the income distribution. He is definitely not putting his money—or, rather, your money—where his mouth is.

Still, Reich argues that the insincerity doesn’t matter, because the very fact that people like Cruz feel the need to say such things indicates a sea change in public opinion. And this change in public opinion, he suggests, will eventually lead to the kind of political change that he, justifiably, seeks. We can only hope he’s right. In the meantime, Saving Capitalism is a very good guide to the state we’re in.