On Monday, September 6, 2021, Yahoo Finance interviewed Robert Reich “celebrated US economist” and former US Secretary of Labour.
The interview is available in Yahoo. Yahoo summarised the interview. My comments address what, according to the summary, Mr. Reid said.
Perhaps in the interview, Mr. Reich said things that made sense; several statements Yahoo attributes to Mr Reich in the summary make little sense and I address them. I also take issue what some of Yahoo’s Financial staff statements.
According to Yahoo, even before the virus, many people saw Capitalism as a system that failed them. Not that the statement is false, it is literally true; but you can also say that many people feel democracy failed them, or that many people feel Socialism failed them, or Catholicism, or Buddhism and many other ideas.
If Yahoo had said; thanks to Capitalism millions of people in China, India, Africa, etc., have left poverty behind, but many still feel Capitalism has failed them, it would have been a much more reasonable and truthful statement.
The interview is framed as an effort to see what business can do to make Capitalism more equitable; in principle it is a good goal, unfortunately, they interview the wrong guy. Anyhow, to expect that business will do much to make Capitalism more equitable is like asking the fox to look after the chickens; the job of business is to do whatever the system allows to maximize profits. We have to change the system, not ask anything of business.
The interview, can be considered as an effort to distract, just like the foil warplanes drop to “distract” the enemy’s radar.
“Capitalism is broken to the extent that big companies or very wealthy individuals, are able to become so powerful that they essentially override democracy”.
Reich describes capitalism in the US, and to some extent in the UK, as probably the most brutal form of trade and economic relationships we see around the World”. This is an idiotic statement because there are many other places like China, most of Africa, most of Latin America, Russia, practically all Middle Eastern countries (with the possible exception of Israel), etc., as places that practice far more brutal forms of trade and economic relationships than the US and the UK, and even much worse things than trade and economics.
If Mr. Reich had said that “Anglo-Saxon Capitalism is far less socially oriented than the Capitalism they practice in Germany, Switzerland, Northern Europe, France and perhaps Japan, Canada, New Zealand, Australia and few other places”, Mr Reich would have been partly right, but he is wrong.
I do not know if Mr. Reich can not see US and UK Capitalism objectively because he is ignorant, or if he is a self-hating American, or he just says what he says as anti-American and Anti-UK propaganda for some ulterior motive.
He is right about the bankers, GM and others getting bail outs by the Obama Government and Congress while people lost their homes was extremely unfair. He could also add that some executives might have been tried and gone to jail. But remember, Mr. Reich was a member of President Obama’s economic transition advisory board…
According to Yahoo, Mr. Reich also states: “What we need, if we are going to have Capitalism and Democracy, is for democracy to be in charge”. “We need regulations, antitrust rules, we need to restrict the kinds of subsidies that go to business that are unrelated to any social goods”.
Yahoo also seems to attribute to the outsize donations to political campaigns by large business and wealthy individuals, as the cause of the outsize influence they have on American democracy. Yahoo could also add outsize donations by unions, professional associations and the political lobbies.
By the way, I would like to know how much Yahoo, or the wealthy people who own or run Yahoo, contribute to political campaigns.
Because of the large donations, “a handful of CEOs control substantial portions of the economy”, Yahoo-Reich states, “this prevents government from doing very much about the power they amassed.”
The summary of the interview continues along similar lines. Mr Reich manages to say incredibly foolish and demago-illogical things, but you can read the summary yourself in Yahoo.
Well, Mr. Reich and “Mr. Yahoo”; let me tell you, you have in front of your faces the answer to prevent too much influence of big corporation and the rich in politics, it is called direct democracy.
Direct democracy transfers most political power from the elected politicians to ordinary voters. Direct democracy means that voters vote to elect politicians but, and this is much more important, they also vote to stop laws, they also can propose and decide laws and even changes to the constitution. They can, and do that, regardless of what the politicians, the large corporations and the wealthy may want.
But direct democracy never comes up in the summary of the interview. Perhaps Yahoo and Mr. Reich never took the trouble to study direct democracy, perhaps they know about direct democracy but do not believe in it because “ordinary voters are not smart enough”, or perhaps because “the issues are too complex for ordinary voters”, or some other nonsensical stuff. Most ordinary voters run their lives competently, constantly making decisions of great consequence in the personal and business lives.
No issue is too complex for a competent specialist to explain in terms lay people can understand. By the way, most politicians learn about complex issues because specialists explain the issues to them; what does Joe Biden, or Trump, or Sanders, or most anybody else, know about high tech, low tech, nuclear energy, climate change, etc., not much. Most ordinary voters are as capable as most politicians to understand complex issues.
But even more important is that direct democracy places the issues right in front of the people for the people to decide. In direct democracy there are no meetings between the lobbyists and the politicians to decide a new or a new policy, because the politicians and the lobbies know the people have the final say, not them; why waste a lot of money and effort on the politicians is they can not deliver?
Once the people have real power, once they are really empowered, instead of the fake stuff that passes for empowerment, but it is more like charity from politicians to those without power. Once the people have real power, the big corporations, the very wealthy, lose all that disproportionate influence over public policies and laws.
How do we know that? Because we have an example of direct democracy in Switzerland.
For almost 200 years, the Swiss people themselves decide when a to reject a law, when to propose a new one or when to change the constitution. There is nothing the politicians, or Nesté, or UBS, or Swatch, or Roche, or any rich Swiss can do about that. Not even the Swiss Supreme Court has the power to overturn the results of a popular referendum. This is why California is not a real direct democracy; the California Supreme Court and the US Supreme Court can overturn, and have, popular referendums.
But there is another reason California, or any of the other states who practice direct democracy at the state level, are not direct democracies; in the US the government with most power to influence, and even control, the lives of Americans, is the Federal Government; there is no people’s power at all at the Federal level. At the Federal level all Americans can do is vote, forget and hope for the best.
I suspect that Mr. Reich does not believe in direct democracy, or is ignorant of it, otherwise he would be promoting direct democracy as the remedy to America’s huge political problems and growing polarization and instability. I suspect Mr Reich is an elitist, people who believe that ordinary people need special people to lead them, special people that somewhat have been chosen by nature because of their special vision and ability to lead the masses. It is total baloney; Switzerland is far better governed than the US, and most, if not all, other countries.
It is because of direct democracy, direct democracy forces voters to look at the facts themselves, instead of listening to demagogues like Trump, Biden and practically all politicians in the US Congress, and to people like Mr. Reich himself.
Do not listen to Mr. Reich. Mr. Reich proposes that another elite pass laws and regulations to control capitalists, it will never work. In fact, that is what the US has been doing for decades; change the people at the top but, after lots of smoke, mirrors and slogans from the Right and the Left, nothing really changes because the large corporations, the rich and the political lobbies of the Right and the Left know their contributions create obligations for politicians to help the donors and “vote deliverers”.
If you want real change, the people will have to do it ourselves, that is called direct democracy.