The Coffee Klatch with Robert Reich

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Zelensky patriotism, Putin patriotism, Trump patriotism Apr 21, 2022

Show notes

We recoil in horror as Putin and his forces wreak havoc and death on Ukraine — before our eyes and in real time. Both Putin and Ukraine President Zelensky repeatedly invoke “nationalism” and “patriotism,” but Putin’s nationalism and patriotism are manufactured to justify this brutal and unprovoked aggression while Zelensky’s words explain astonishing sacrifices now being made by ordinary Ukrainians to protect their freedom, democracy, and homeland.

Donald Trump uses the same words, too — as do his acolytes in the Republican Party. His version of national patriotism is closer to Putin’s than to Zeleneky’s.

Trump-Republican patriotism is about triumphing and dominating. Although America is a nation of immigrants, Trump’s goal is to keep immigrants out. “A nation 'without borders' is not a nation at all,” he has said. It is also about keeping America first. “The American People will come first once again,” he says. Trump-Republican patriotism is zero-sum, just as is Putin’s when it comes to Ukraine (or any other nation that was once part of the Soviet “empire”) — either we win or they win. And who or what is America for Trump Republicans? Essentially, white and Christian.

Trump Republicans demand symbolic gestures of patriotism, such as standing for the national anthem and saluting the flag. But they don’t ask for personal sacrifice because they reject any notion of the common good. They view the nation as a site for self-centered transactions with no deeper and more enduring meaning than immediate self-gratification — a zone of self-promotion and narcissistic extravagance, where individuals can extend their ambition through iPhones and selfies and other technologies of instant gratification.

Zelensky patriotism is the opposite. It isn’t founded on zero-sum superiority or exclusion, or on symbolic gestures, or on exaggerated notions of personal ambition. It’s based on common sacrifice for the common good.

At times in our history America has come close to Zelensky patriotism. We have understood the need for mutual sacrifice — of everyone taking on a fair share of the burden of keeping America going. That includes volunteering for local school boards and city councils, blowing the whistle on abuses of power, and paying taxes in full rather than seeking loopholes or squirreling money abroad. Sometimes it has required the supreme sacrifice. (We are, after all, the descendants of Nathan Hale — soldier and spy for the Continental Army during the Revolutionary War, who famously declared just before being executed by the British in 1776 that his only regret was having “but one life to lose for my country.”)

America’s form of Zelensky patriotism does not pander to divisiveness. It confirms and strengthens the “we” in “we the people of the United States.” It celebrates our diversity, and fights to uplift the voices of America — Black people, women, gay and trans people, younger Americans. It believes that America should welcome refugees and others fleeing from violence or seeking a better life, as memorialized in Emma Lazarus’ famous lines on the Statue of Liberty: “Give me your tired, your poor, your huddled masses yearning to breathe free.”

America’s form of Zelensky patriotism doesn’t hate our government. It recognizes that government is the means by which we come together to solve our common problems. We don’t like everything our government does but we work to improve it rather than attack or undermine it.

We have never fully lived up to these patriotic ideals, of course, but they have fueled our commitment to social justice. The films of Frank Capra, the poems of Walt Whitman and Langston Hughes, and the songs of Woodie Guthrie, express loving devotion to America while turning that love into a demand for justice.

“This land is your land, this land is my land,” sang Guthrie.

Hughes pleaded:

Let America be America again,

The land that never has been yet —

And yet must be — the land where every man is free.

The land that’s mine — the poor man’s, Indian’s, Negro’s, ME —.

Human beings flourish through their attachments to communities and societies, and their dedication to fairness and social justice — not through selfish acquisition or domination of others.

In the years ahead, America will choose which national patriotism we practice — the exclusionary and boastful version peddled by Trump with its shallow displays of national pride and narcissism, or the type we’re now witnessing by Ukrainians, forged in a profound sense of common good. I may be wildly optimistic but I believe we will choose Zelensky patriotism over its odious alternatives.

What do you think?

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Why it must happen soon: The United States vs. Donald J. Trump Apr 18, 2022

Show notes

On Friday, Trump endorsed J.D. Vance in the Ohio Senate Republican primary. This follows his endorsement of Mehmet Oz in Pennsylvania’s Senate Republican primary and Herschel Walker in the Georgia Senate race. The press has framed these endorsements as long-shot bets that “could put [Trump’s] desired image as a kingmaker at risk.” But this misses the point. What’s really at stake for Trump is the selling of Trump and his big lie that the 2020 election was stolen from him.

To be endorsed by Trump, candidates apparently must fulfill three prerequisites: 1) They have to be running in swing states whose primaries and general elections will attract lots of media attention. 2) They must be totally committed to Trump and his big lie. And 3) they must have shown themselves capable of promoting Trump and his lie with the kind of celebrity pizzaz that sells well on television.

Vance — celebrity author of “Hillbilly Elegy” — was originally appalled by Trump and his lie, and said so. But now that he’s running for the Senate, Vance has become one of the most forceful promoters of Trump and articulate peddlers of his big lie. As Trump noted about Vance, “he gets it now.”

Oz is a celebrity television doctor who has over the years come under fire for bogus on-air medical advice, which makes him perfect for promoting Trump and his big lie, too. Trump admires Oz’s television bona fides: “They liked him for a long time,” Trump said of Oz at a rally in Pennsylvania last week. “That’s like a poll. You know, when you’re in television for 18 years, that’s like a poll. That means people like you.”

Walker fits the criteria, as well. He was both a college and NFL star.

Trump couldn’t care less whether he’s viewed as a “kingmaker” by the press and politicians inside the Beltway. He cares only about his narcissistic need to delegitimize the outcome of the 2020 presidential election. And he has a knack for recognizing ambitious, unprincipled, television-savvy hucksters who will help him.

Let me pause here to emphasize two things that are too easily forgotten. First, no one to this day has produced even a shred of evidence that fraud affected the results of the 2020 election. Sixty federal judges, along with Trump’s own departments of justice and homeland security, have concluded that Biden won fair and square.

Second, the lynchpin of democracy is the peaceful transition of power from those who lose elections to those who win them. Yet it’s been over a year and half since Trump has refused to concede — continuously spreading his big lie that the election was stolen, pushing public officials at all levels of government to overturn the election, and instigating an insurrection at the U.S. Capitol on the day Congress was to certify the election results. As Federal District Court Judge David Carter stated in a recent opinion, “[T]he Court finds it more likely than not that President Trump corruptly attempted to obstruct the Joint Session of Congress on January 6, 2021.”

Trump is already well on the way to rebuilding the Republican Party around his big lie. He is purging the GOP of his critics and installing loyalists in key state positions. And he is inspiring GOP-state legislatures to enact election sabotage laws that will give Trump and his supporters opportunities to rig congressional election results. The upcoming 2022 congressional elections will serve as proving grounds for his attempt to steal the 2024 presidential election.

Trump is a growing menace to our system of self-government. The longer he goes without being held accountable for what he has done, the more danger he poses.

The critical question, then, is whether Attorney General Merrick Garland will bring criminal charges against him — and when. The window of opportunity is closing fast. The House Select Committee on January 6 will be holding public hearings in a few weeks and report its findings thereafter. (The committee has already collected nearly 10,000 documents and conducted more than 860 depositions and interviews, including with Trump family members and his close associates.) If Republicans take over the House in the midterm elections, they are sure to close down the inquiry.

Moreover, immediately after the midterm elections, America will be in the gravitational pull of the 2024 presidential primaries — in which Trump will almost certainly play a leading role, unless he is indicted and convicted. He has already amassed a campaign chest of more than $120 million, more than double that of the Republican National Committee. During the last six months of 2021, his PAC raised more money online than the GOP every day but two. And once he is a declared candidate, it will be impossible for Twitter, Facebook, and other social media platforms to stop him from engulfing them with his lies.

Some say Garland should not bring criminal charges against Trump because criminal charges have never before been brought against a former president. This is a specious argument because no former president has ever before attempted to overthrow a duly elected President — the first attempted coup in the 233-year history of the United States government.

Others worry that criminal charges against Trump — along with a trial and possible imprisonment — would only deepen the fierce partisan divide that’s already drained trust out of much of American democracy. This is a legitimate concern. But failure to hold Trump accountable for what he has done would pose a far greater risk for American democracy — permanently entrenching distrust in our election system and legitimizing future battles over every contest, possibly provoking repeated rounds of violence.

Trump’s indictment and conviction must occur as quickly as possible. The upcoming midterm elections won’t simply be a battle between Republicans and Democrats. They will be a battle between Trump acolytes and fair election supporters over protecting the integrity of our elections and our democracy. The sooner Trump is held accountable for his criminality, the safer American democracy will be.

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Musk, Twitter, Inflation, Putin, and our gift to you of a game Apr 16, 2022

Show notes

Heather and I had coffee this morning. As before, please pull up a chair.

If you know other people who might enjoy a good conversation over coffee, please share.

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The real reason CBS News hired Mick Mulvaney (and Musk's latest escapade) Apr 14, 2022

Show notes

Friends, I hope you’re as well as can be expected in these difficult times.

A few days ago I focused on Elon Musk and his designs on Twitter. (Here’s my post.) This morning, as I predicted, Musk put in a bid to buy the rest of Twitter and take it private. Musk’s bid of $54.20 per share is going to be hard for Twitter to resist, given Twitter’s duty to its shareholders: It’s nearly 40 percent higher than Twitter’s stock price in January, before Musk started buying. Musk says he has lost confidence in Twitter’s management to fulfill the company’s “social imperative” as a platform for “free speech” and he’d “unlock” Twitter’s potential. (He can start with unblocking me from his Twitter feed.) As I said, the problem with social media is lack of mediation. If he owns Twitter, Musk is likely to put Trump back on.

But enough about Musk. Today I want to continue to probe the issue of power over how Americans get their news. I’ve spent enough time in and around politics to see how decisions made by the media — what issues to focus on, how those issues are framed, and who presents them — are central to our democracy. The media isn’t just the “fourth branch” of government, as it’s been called. It’s not a branch at all. It’s the trunk.

Which is why I find it troubling that CBS News has hired Mick Mulvaney as an on-air contributor. You’ll recall that Mulvaney served as acting chief of staff under Trump and led Trump’s Office of Management and Budget. But as I’ll talk about in a moment, Mulvaney wasn’t just a high official in the Trump administration. He was an active enabler of Trump’s deceit and attempted coup.

First, some background: An “on-air contributor” on a major network is quite different from a mere “guest.” I’ve been in both roles. Guests appear from time to time when a particular program’s producer invites them, and are unpaid. “On-air contributors,” on the other hand, appear regularly. They’re paid contractors. And they’re introduced as “contributors” — which gives them the cachet and authority of being part of a network’s news division.

Mulvaney’s first appearance as a paid contributor for CBS News occurred several days ago on a “MoneyWatch” segment in which he was asked to explain Biden’s plan for taxing the super-rich. The anchor, Anne-Marie Green, introduced Mulvaney as “a former OMB director” and “the guy to ask about this.” But she said nothing about whose OMB he directed, suggesting that Mulvaney was simply a budget expert offering an expert analysis rather than a fierce Trump partisan.

Then she asked him whether a “regular working-class American” should care about Biden’s tax proposal. Mulvaney’s answer: “It’s easy to look at it and say, ‘Don’t worry, you’re not going to pay this,’” but regular working Americans would have to “prove that they don’t have to pay it,” and such a burden “could be troublesome: every single year proving that you’re not worth a hundred million dollars.”

This is as misleading as it gets in broadcast media (with the possible exception of Fox News). Nothing in Biden’s proposal to tax the super-rich requires that people prove they’re not super-rich. Mulvaney’s claim was pure demagoguery.

But that’s what we should expect from Mulvaney. Recall that Mulvaney was complicit in Trump’s attempted extortion of Ukraine President Zelensky in 2019 — threatening to withhold U.S. aid to fight Russian aggression unless Zelensky came up with dirt on Hunter Biden. (This was the call in which Zelensky’s request “we need more Javelins” —anti-tank missiles that have proved crucial in Ukraine's defense against Russia's invasion — was met with Trump’s “I would like you to do us a favor though.”) When the quid pro quo came to light, Mulvaney brushed it off: “I have news for everybody: Get over it. There’s going to be political influence in foreign policy.” After Trump withheld the aid, Mulvaney asked White House budget officials for legal justification to withhold it until Zelensky did what Trump wanted him to do —announce an investigation of Hunter Biden.

Oh, and there was the time Mulvaney called COVID a “media hoax” designed to bring down Trump. And the time he predicted that if Trump lost in 2020 he would “concede gracefully.” I should add that Mulvaney is now a high-powered lobbyist for corporate interests — another fact that CBS somehow failed to mention in its announcement of his position and when it introduced him on air.

When I was growing up, CBS News was the home of news legends like Edward R. Murrow and Walter Cronkite — pioneers who set the standards for broadcast news. So why is CBS News now reaching into the cesspool of Trump conspirators and enablers to hire Mulvaney?

Neeraj Khemlani, co-head of CBS News, explained to the CBS News staff at a meeting last month that when it comes to contributor hires, “getting access to both sides of the aisle is a priority because we know the Republicans are going to take over, most likely, in the midterms.”

“Getting access?” Access to what? To the big lie about the 2020 election? To lies about COVID? To bonkers economics? To insights about how to pull off a coup that nearly destroyed American democracy and continues to threaten it?

Since when does CBS News’s decisions about whom to hire depend on predictions about which party will prevail in the midterm elections, anyway? What if the party that’s predicted to win is so contemptuous of democracy that it continues to claim, without basis in fact or law, that the last presidential election was stolen? Would the CBS News of the 1950s hire as an on-air contributor Senator Joseph McCarthy (who conducted a vicious anti-communist witch hunt that wrecked the lives and careers of countless Americans) because the News Division wanted access to “both sides?” (In fact, CBS News’s Edward R. Murrow exposed McCarthy as a liar and demagogue.)

If there were ever any doubts that “both sides” of the political aisle are about the same, the events of the past two years should have laid them to rest. One of America’s two national political parties has embraced (and been embraced by) an anti-democratic extremist fringe.

CBS News, like every news outlet and platform, has a cardinal responsibility to protect American democracy from this growing menace. To fulfill this responsibility, it must report accurately what is occurring. It should not pander to the menace by hiring a person who has had a hand in it and will further obscure the truth. Just as Twitter shouldn’t pander to the menace by allowing Trump back on its platform (which will likely occur if Musk owns all of Twitter).

That’s my view. What do you think?

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Inflation is out of control! Urgent memo to Biden and the Democrats! Apr 12, 2022

Show notes

Memo to President Biden (and the Democrats)

From: Robert Reich

Re: Inflation

Prices were 8.5 percent higher last month than they were a year ago, the Bureau of Labor Statistics reported this morning — the highest rate of inflation since 1981. The buying power of Americans is being squeezed more and more each day. You must explain what’s happening and put responsibility where it belongs. As America slouches toward the midterm elections, you need an economic message that celebrates your accomplishments to date – job creation and higher wages –- yet also takes aim at the major abuses of economic power that are fueling inflation and widening inequality.

You should put these ten indisputable facts centerstage:

1. Corporate profits are at a 70-year high. Yet corporations are raising their prices.

2. They are not raising prices because of the increasing costs of supplies and components and of labor -- which are real but expected when an economy goes suddenly from a pandemically-induced deep freeze to meeting the soaring demands of consumers who are emerging from the pandemic. Corporations enjoying record profits in a healthy competitive economy would absorb these costs.

3. Instead, they’re passing these costs on to consumers in the form of higher prices. In many cases they’re raising prices higher than those cost increases, using the cover of inflation to increase their profit margins even more.

4. They’re doing so because they face little or no competition. If markets were competitive, companies would keep their prices down to prevent competitors from grabbing away customers. As the White House National Economic Council put it in a December report: “Businesses that face meaningful competition can’t [maintain high profit margins and pass on higher costs to consumers], because they would lose business to a competitor that did not hike its margins.”

5. Since the 1980s, two-thirds of all American industries have become more concentrated. This concentration gives corporations the power to raise prices because it makes it easy for them to informally 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.

6. Corporations are using these near-record profits to boost share prices by buying back a record amount of their own shares of stock. (Buybacks reduce a company's shares outstanding, pushing its profit-per-share figure higher.) Stock buybacks hit a new record last year. So far this year they’re on track to exceed that record. In the first two months of 2022, S&P 500 companies have disclosed authorizations to buy back $238 billion in stock -- a record pace, according to Goldman Sachs, which expects $1 trillion of buybacks this year – an all-time high.

Chevron engaged in $1.4 billion in stock buybacks and spent $500 million more on shareholder dividends than it did in 2020. This year, the oil giants are planning to buy back at least $22 billion more.

7. Most American workers have barely had a wage increase in 40 years (adjusted for inflation). Although corporations have recently given out wage increases in response to the post-pandemic surge in demand, these wage increases have been almost completely eroded by price increases. We now know that wages grew 5.6 percent over the past year — but prices rose 8.5 percent. That means that, adjusted for inflation, wages have actually dropped 2.7 percent.

Corporations are handing out wage increases to attract or keep workers with one hand, and then eliminating those wage increases by raising prices with the other. When corporations are enjoying near-record profits, we would expect corporations to pay the higher wages out of their profits rather than to pass them on to consumers in higher prices. But they are not. The labor market is not “unhealthily” tight, as Fed Chair Jerome Powell asserts; corporations are unhealthily fat. Workers do not have too much power; corporations do.

8. As a result of all this, income and wealth are being redistributed upward from average working people (many of whom live from paycheck to paycheck) to CEOs and shareholders, including the wealthiest people in America. Billionaires have become $1.7 trillion richer during the pandemic. CEO pay (based largely on stock values) is now at a record 350 to 1 ratio relative to median pay.

9. Wealthy Americas are now paying a lower tax rate than the working class. Some are paying no taxes at all.

10. Big corporations have accumulated a substantial amount of political power, with which they’ve beaten back lower drug prices, prevented higher corporate taxes, and amassed unprecedented corporate welfare.

In short, although the American economy is rebounding nicely from recession, the growing imbalance of economic power is bad for most Americans and for the economy as a whole.

This must be addressed through (1) tougher antitrust enforcement, (2) a temporary windfall profits tax, (3) higher taxes on the wealthy and on corporations, (4) a ban on corporate buybacks, (5) stronger unions, and (6) campaign finance reform to get big money out of politics.

You have a critical opportunity to reframe the national conversation as it should be framed -- around these worsening abuses of economic power by large corporations and the super-rich. Republicans have left themselves vulnerable because they have no response to this. They’ll just blame you for inflation, and use their “culture wars” to try to distract the public from what’s really going on.

This is not and should not be a partisan issue. Average working Americans – many of whom voted for Trump in 2016 and 2020 – are being shafted.

Sincerely yours,

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Why Elon Musk has blocked me on Twitter (and now owns the joint) Apr 11, 2022

Show notes

We begin another gut-wrenching week watching Putin’s barbarity in Ukraine. The Russian people know little about it because Putin has blocked their access to the truth, substituting propaganda and lies.

Years ago, pundits assumed the Internet would open a new era of democracy, giving everyone access to the truth. But dictators like Putin and demagogues like Trump have demonstrated how naïve that assumption was.

At least America responded to Trump’s lies. Trump had 88 million Twitter followers before Twitter took him off its platform — just two days after the attack on the U.S. Capitol which he provoked, in part, with his tweets. (Trump’s social media accounts were also suspended on Facebook, YouTube, Instagram, Snapchat, Twitch, and TikTok.)

Twitter’s move was necessary to protect American democracy. But Elon Musk – the richest man in the world, with 80 million Twitter followers – wasn’t pleased about it. Musk tweeted that U.S. tech companies shouldn’t be acting "as the de facto arbiter of free speech."

I would have posted that tweet for you right here, if I had access to it. But ever since I posted a tweet two years ago criticizing Musk for how he treated his Tesla workers, he has blocked me — so I can’t view or reply to his tweets to his 80 million Twitter followers. Seems like an odd move for someone who describes himself as a “free speech absolutist.”

Musk advocates free speech but in reality it’s just about power.

It’s power that compelled Musk to buy $2.64 billion of Twitter stock, making him the largest shareholder, with a 9.2 percent stake in the company. Last week, Twitter announced that Musk will be joining the company’s board of directors. After the announcement, Musk promised "to make significant improvements" to the platform. (He even changed his investment designation to clarify that he’s not simply a "passive" investor but one who intends to impact the way the company is run.) Yesterday evening, though, it was announced that — contrary to last week’s announcement — Musk would not be joining Twitter’s board. No reason was given but this is typical for Musk.

It’s likely part of a bargaining Kabuki dance. Musk wouldn’t have plopped down $2.64 billion for nothing. He probably wants more control. If he is not on Twitter’s board, Musk is not bound by the “standstill” agreement in which he pledged to buy no more than 14.9 percent of Twitter’s stock. Musk now has no restrictions on how much of Twitter’s stock he can buy. I predict he buys more and takes an even more active role trying to influence the platform.

By the way, what “improvements” does Musk have in mind for Twitter? Would Musk pressure Twitter to let Trump back on? I fear he would.

Musk has long advocated a libertarian vision of an “uncontrolled” Internet. That vision is dangerous rubbish. There’s no such animal, and won’t be. Someone has to decide on the algorithms in every platform — how they’re designed, how they evolve, what they reveal and what they hide. Musk has enough power and money to quietly give himself this sort of control over Twitter. He talks about freedom of speech but his real power is freedom of reach – reaching 80 million twitter followers without accountability to anyone (including critics like me) — and enough money to buy himself a seat on Twitter’s board.

Musk has never believed that power comes with responsibility. He's been unperturbed when his tweets cause real suffering. During his long and storied history with Twitter he has threatened journalists and stolen memes. In March 2020 he tweeted that children were “essentially immune” to Covid. He’s pushed cryptocurrencies that he’s invested in. When a college student started a Twitter account to track Musk’s private plane, Musk tried and failed to buy him off, before blocking him.

The Securities and Exchange Commission went after Musk after he tweeted that he had funding to take Tesla private, a clear violation of the law. Musk paid a fine and agreed to let lawyers vet future sensitive tweets, but he has tried to reverse this requirement. He has also been openly contemptuous of the SEC, tweeting at one point that the “E” stands for “Elon’s.” (You can guess what the “S” and “C” stand for.) By the way, how does the SEC go after Musk’s ability to tweet now that he owns Twitter?

Billionaires like Musk have shown time and again they consider themselves above the law. And to a large extent, they are. Musk has enough wealth that legal penalties are no more than slaps on his wrist, and enough power to control one of the most important ways the public now receives news. Think about it: After years of posting tweets that skirt the law, Musk was given a seat on Twitter’s board (and is probably now negotiating for even more clout).

Musk says he wants to “free” the Internet. But what he really aims to do is make it even less accountable than it is now, when it’s often impossible to discover who is making the decisions about how algorithms are designed, who’s filling social media with lies, who’s poisoning our minds with pseudo-science and propaganda, and who’s deciding which versions of events go viral and which stay under wraps.

Make no mistake: This is not about freedom. It’s about power. In Musk’s vision of Twitter and the Internet, he’d be the wizard behind the curtain — projecting on the world’s screen a fake image of a brave new world empowering everyone. In reality, that world would be dominated by the richest and most powerful people in the world, who wouldn’t be accountable to anyone for facts, truth, science, or the common good. That’s Musk’s dream. And Trump’s. And Putin’s. And the dream of every dictator, strongman, demagogue, and modern-day robber baron on earth. For the rest of us, it would be a brave new nightmare.

PS: As I said, Musk has blocked me from his Twitter feed. However, this is just one example in a broader pattern of dodging and silencing his critics. Whether online, in government hearings, or in his Tesla factories, Musk seems unable to stomach disagreements. For instance:

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My Saturday coffee klatsch with Heather Apr 09, 2022

Show notes

This morning I had coffee once again with my colleague Heather Lofthouse (who runs Inequality Media) about the events of the week — Putin, Judge Jackson, and Republicans maneuvers, as well as some personal stuff (including something I’ve never before admitted to publicly). Please feel free to join us.

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

Why Republicans are obsessed with pedophilia, gender identity, gay people, and abortion Apr 07, 2022

Show notes

Yesterday, CEOs from America’s largest oil companies appeared before a House committee probing why they’re raising prices at the pump while raking in record profits and spending huge sums buying back their shares of stock. (Last year, Chevron, Exxon, BP, and Shell spent more than $44 billion on buybacks and dividends, and plan to spend $74 billion this year — money that should be used instead to lower prices at the pump.) It’s price-gouging and profiteering, and we’re all paying for it.

Republicans, meanwhile, are focusing on sex. I’ll explain why in a moment, but first consider the extent of the Republican sex obsession.

In her recent confirmation hearings, Judge Ketanji Brown Jackson was barraged with questions from Republican senators about her alleged lenient treatment of child pornographers. It was a baseless claim, but that didn’t matter to the Republicans who kept hammering her. In four days of hearings, the phrase ‘child porn’ (or ‘pornography’ or ‘pornographer’) was mentioned 165 times, along with 142 mentions of “sex” or related terms like “sexual abuse” or “sex crimes.”

On March 28, Florida’s Republican Governor Ron DeSantis signed a bill banning kindergarten through third-grade public school teachers from talking about sexual orientation or gender identity, calling it an “anti-grooming bill” and accusing opponents of wanting to groom young children for sexual exploitation. (When the Walt Disney Company, Florida’s largest employer, came out against the measure and promised the company would donate $5 million to LBGTQ organizations, DeSantis called Disney’s opposition “radical” and suggested that the Florida legislature cancel Disney’s special status in Florida that essentially makes it a local government.)

In late February, Texas’s Republican Governor Greg Abbott ordered state child welfare officials to launch child abuse investigations into reports of transgender kids receiving gender-affirming care. Last May he signed into law a ban on abortions after about six weeks of pregnancy, and gives private citizens the right to sue anyone who helps someone obtain an abortion.

Just yesterday, Oklahoma’s Republican House voted overwhelmingly to make performing an abortion a felony, punishable by up to 10 years in prison. The measure now heads to Oklahoma’s Republican governor, Kevin Stitt, who has signaled he’ll sign it into law.

The Republican Party, once a proud proponent of limited government, has turned itself into a font of sexual innuendo and legal intrusion into the most intimate aspects of personal life. Protecting children from predators is a worthy aim, to be sure, but the GOP is obsessing about all aspects of sex. Why?

First, it’s part of their culture war, and culture wars sell with voters (and the media) eager for conflict and titillation. A culture war over sex sells even better. It lets Republicans imply that Democrats are somehow on the side of sexual “deviants” who endanger the “natural order.”

Also, by focusing on sex, Republicans can court both the evangelical right and the rightwing extreme QAnon vote (with its the loony “Pizzagate” conspiracy claim that Hillary Clinton was a pedophile).

Most importantly, a culture war over sex allows Republicans to sound faux populist without having to talk about the real sources of populist anger — corporate-induced inflation at a time of record corporate profits, profiteering and price gouging, monopolization, stagnant wages, union busting, soaring CEO pay, billionaires who have amassed $1.7 trillion during the pandemic but who pay a lower tax rate than the working class, and the flow of big money into the political campaigns of lawmakers who oblige by lowering taxes on the wealthy and big corporations and doling out corporate welfare.

Oh, and by focusing on pedophilia, gender identity, gay people, and abortion, Republicans don’t have to talk about Trump and January 6.

Democratic politicians, wake up! You have a critical opportunity between now and the midterm elections to reframe the national conversation as it should be framed -- around abuses of economic power by corporations and the super rich. Those abuses are worsening. They affect the everyday lives of all Americans.

If you fail to do this, Americans will continue to be inundated with Republican “culture war” messages intended to deflect the public’s attention from how badly big corporations and the super wealthy are shafting them. Americans won’t understand how these economic abuses all relate to record amounts of income and wealth at the top, and what must be done to reverse this imbalance (break up monopolies, enact a windfall profits tax, raise taxes on large corporations and the super wealthy, strengthen labor unions, reform campaign finance, stop corporate welfare, and so on). And some of you will lose your jobs in the midterm elections — allowing Republicans to take over the House and Senate.

Please share!

PS: Here’s what I said yesterday about Big Oil’s profiteering.

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Office Hours: My appearance yesterday before the Senate Budget Committee Apr 06, 2022

Show notes

Today’s Office Hours discussion question: Is a windfall profits tax a good idea? How could it get the political support it needs? Would this be helpful for the Democrats in the midterms?

Background: Yesterday I testified before the Senate Budget Committee about the power of American corporations — now enjoying the highest profits in 70 years — to raise their prices. And I endorsed a windfall profits tax. (You can see my testimony below.) Lindsey Graham told me he “couldn’t disagree with me more.” He and other Republicans on the Committee blamed inflation on Biden and the Democrats whom, they charged, spent too much on measures such as the American Rescue Plan.

Senator Sheldon Whitehouse (also on the Committee) has introduced a windfall profits tax on big oil companies that would tax half the difference between their current profits and their average profits between 2015 and 2019, and then remit the proceeds to Americans in quarterly payments. Senator Bernie Sanders (the Committee chair) has introduced a windfall profits tax on all big corporations that would tax 95 percent of their profits in excess of their average profit level from 2015-2019, adjusted for inflation. It would apply only to large companies with $500 million or more in revenue annually, and be a temporary emergency measure, applying only in 2022, 2023, and 2024.

Both bills would tax profits, not revenues, so companies that raise their prices for legitimate reasons related to rising expenses would not be penalized. But companies that have chosen to raise their prices (presumably to further enrich their CEOs and wealthy shareholders) would pay the windfall profits tax.

Here’s my testimony yesterday:

***

Some added thoughts, in response to your very thoughtful comments: Yes, Lindsey Graham wanted to cut me off so he could talk about “securing the southern border” rather than about corporate power. That’s the problem in a nutshell. Democrats have an important opportunity between now and the midterm elections to frame the national conversation as it should be framed -- around corporate power to raise prices, price gouging and profiteering, CEO pay that's now reached almost 350-to-1 relative to median worker pay, billionaire gains of $1.7 trillion during the pandemic while most Americans struggled, illegal union-busting by giant corporations such as Amazon, and hugely profitable corporations and billionaires paying little or no taxes. If Democrats don't focus the public’s anger on these economic abuses, Americans will be inundated with Republican “culture war” messaging intended to deflect attention from them.

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Why Biden's plan to tax the super rich is moving from unlikely to likely Apr 05, 2022

Show notes

America is on the cusp of the largest inter-generational transfer of wealth in history. As wealthy boomers expire over the next three decades, an estimated $30 trillion will go to their children. Those children will be able to live off of the income these assets generate, and then leave the bulk of them – which in the intervening years will have grown far more valuable – to their own heirs, tax-free. After a few generations of this, almost all of the nation’s wealth will be in the hands of a few thousand family dynasties.

Unless Joe Biden’s new tax plan is enacted — the odds of which is moving from unlikely to likely. I’ll explain in a moment.

Dynastic wealth runs counter to the ideal of America as a meritocracy. It makes a mockery of the notions that people earn what they’re worth in the market, and that economic gains should go to those who deserve them. It puts economic power into the hands of a small number of people who have never worked but whose investment decisions have a significant effect on the nation’s future. And it is antithetical to democracy.

We are well on the way. Already six out of the ten wealthiest Americans alive are heirs to prominent fortunes. The Walmart heirs alone have more wealth than the bottom 42 percent of Americans combined. The richest 1 tenth of 1 percent of Americans already owns almost as much wealth as the bottom 90 percent.

The last time America faced anything comparable occurred at the turn of the last century, in the first Gilded Age. Then, 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. The estate tax was enacted in 1916 and the capital gains tax in 1922.

Since then, both of Roosevelt’s taxes have been eroded by the moneyed interests. As the rich have accumulated more wealth, they have amassed more political power — which they’ve used to reduce their taxes. By now, the estate tax affects only a handful of super-wealthy families that are busily setting up “dynastic trusts” to circumvent what’s left of it. And the capital gains tax has been defanged by what’s known as the “stepped-up-basis-at-death” loophole. More on this in a moment.

Last week Joe Biden unveiled two tax proposals that would revive Teddy Roosevelt’s original vision, and could possibly slow or even reverse America’s march toward oligarchy: (1) a minimum income tax that Biden calls a billionaire tax but would in reality apply to households with a net worth of $100 million or more, and (2) a separate tax at death on gains from appreciated assets, even if the assets are not sold.

The odds are growing that at least one of these proposals will get through the Senate in April or May via “reconciliation” requiring only a bare majority (i.e., all fifty Democratic senators plus the vice president). I’m told Joe Manchin is mostly on board (which means the other Democratic holdout, Kyrsten Sinema, will sign on as well).

Let me go into a bit of detail on each:

(1) The minimum tax is a 20 percent levy on households with a net worth of more than $100 million, affecting the top 0.01 percent of earners. It would apply both to taxable earnings and to unrealized capital gains (the increased value of your assets), and would function as a kind of prepayment (analogous to withholding) of taxes that eventually would be owed upon the sale of appreciated assets or death.

For example, suppose someone named Mark Zuckerberg owns $100 billion of Facebook stock, for which he paid nothing when he founded the company, and has no other taxable income. For the first year under the Biden plan, he’d owe $20 billion in taxes even if he didn’t sell any Facebook shares. The next year, if his stock increased in value, he’d owe another prepayment equal to 20 percent of any increase in value beyond $100 billion. (There are other provisions to prevent the very wealthy from being taxed twice on the same income.)

The Treasury anticipates Biden’s new minimum tax would raise $360 billion in the first 10 years from America’s 20,000 richest households.

(2) Biden’s second proposal would close the “stepped-up-basis-at death” loophole. Under today’s tax code, you pay capital gains taxes on the increased value of assets when you sell them. But if you pass your assets on to your heirs, they can sell them and not pay a penny of capital gains. In other words, you escape capital gains taxes by dying. They escape it by inheriting your wealth. (I remember years ago arguing that this loophole should be closed with then Treasury Secretary Lloyd Benson, who at one point pounded his fist on the table and exclaimed “death is an involuntary conversion!”)

That’s not all. Under current law, if heirs never sell these assets and they continue to gain value (as they almost certainly will), heirs can borrow against them to pay living expenses and then pass them on to their heirs, who won’t pay capital gains taxes either. Put this together with the unprecedented transfer of generational wealth about to occur, from rich boomer to their millennial children, and America’s oligarchy will become thoroughly entrenched in a small group of people who exercise all the power that comes with great wealth but have never worked a day in their lives.

Biden proposes simply to repeal the “stepped-up-basis-at-death” loophole. The value of assets would not be “stepped up” to their market value at the time of death. Their increased value would be subject to capital gains taxes as if they’d been sold before death.

Either of these tax reforms would be significant, and they fit nicely together. But if I were betting, I’d bet on the latter because Second President Manchin has sounded less enthusiastic about the first.

One thing we’ve all learned over the past fourteen months is not to rely on Manchin or on anything he says or commits to, so I’m not holding my breath. But if Manchin gives the green light, and Biden and the Democrats pull this off, it will be an historic rebirth of Teddy Roosevelt’s movement against dynastic wealth — perhaps Biden’s biggest single accomplishment. Taxing big wealth is necessary if we’re ever to get our democracy back and make our economy work for everyone rather than a privileged few.

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

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