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      Why the White House stopped telling the truth about inflation and corporate power | Robert Reich

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      Why the White House stopped telling the truth about inflation and corporate powerRobert ReichStarbucks, McDonald’s, Chipotle, Amazon – all protect profits by making customers pay more. We need the political courage to say they can and should cover rising costs themselves The Biden White House has decided to stop tying inflation to corporate power. That’s a big mistake. I’ll get to the reason for the shift in a moment. First, I want to be clear about the relationship between inflation and corporate power.Share the Profits! Why US business must return to rewarding workers properly | Robert ReichRead moreWhile most of the price increases now affecting the US and global economies have been the result of global supply chain problems, this doesn’t explain why big and hugely profitable corporations are passing these cost increases on to their customers in the form of higher prices.They don’t need to do so. With corporate profits at near record levels, they could easily absorb the cost increases. They’re raising prices because they can – and they can because they don’t face meaningful competition.As the White House National Economic Council put it in a December report: “Businesses that face meaningful competition can’t do that, because they would lose business to a competitor that did not hike its margins.”Starbucks is raising its prices to consumers, blaming the rising costs of supplies. But Starbucks is so profitable it could easily absorb these costs – it just reported a 31% increase in yearly profits. Why didn’t it just swallow the cost increases?Ditto for McDonald’s and Chipotle, whose revenues have soared but who are nonetheless raising prices. And for Procter & Gamble, which continues to rake in record profits but is raising prices. Also for Amazon, Kroger, Costco and Target.All are able to pass cost increases on to consumers in the form of higher prices because they face so little competition. As Chipotle’s chief financial officer said, “Our ultimate goal … is to fully protect our margins.”Worse yet, inflation has given some big corporations cover to increase their prices well above their rising costs.In a recent survey, almost 60% of large retailers say inflation has given them the ability to raise prices beyond what’s required to offset higher costs.Meat prices are soaring because the four giant meat processing corporations that dominate the industry are “using their market power to extract bigger and bigger profit margins for themselves”, according to a recent report from the White House National Economic Council (emphasis added).Not incidentally, that report was dated 10 December. Now, the White House is pulling its punches. Why has the White House stopped explaining this to the public?The Washington Post reports that when the prepared congressional testimony of a senior administration official (Janet Yellen?) was recently circulated inside the White House, it included a passage tying inflation to corporate consolidation and monopoly power. But that language was deleted from the remarks before they were delivered.Apparently, members of the White House Council of Economic Advisers raised objections. I don’t know what their objections were, but some economists argue that since corporations with market power wouldn’t need to wait until the current inflation to raise prices, corporate power can’t be contributing to inflation.This argument ignores the ease by which powerful corporations can pass on their own cost increases to customers in higher prices or use inflation to disguise even higher price increases.It seems likely that the Council of Economic Advisers is being influenced by two Democratic economists from a previous administration. According to the Post, the former Democratic treasury secretary Larry Summers and Jason Furman, a top economist in the Obama administration, have been critical of attempts to link corporate market power to inflation.“Business-bashing is terrible economics and not very good politics in my view,” Summers said in an interview.Wrong. Showing the connections between corporate power and inflation is not “business-bashing”. It’s holding powerful corporations accountable.Whether through antitrust enforcement (or the threat of it), a windfall profits tax or price controls, or all three, it’s important for the administration and Congress to do what they can to prevent hugely profitable monopolistic corporations from raising their prices.Otherwise, responsibility for controlling inflation falls entirely to the Federal Reserve, which has only one weapon at its disposal – higher interest rates. Higher interest rates will slow the economy and likely cause millions of lower-wage workers to lose their jobs and forfeit long-overdue wage increases.
      Robert Reich, a former US secretary of labor, is professor of public policy at the University of California at Berkeley and the author of Saving Capitalism: For the Many, Not the Few and The Common Good. His new book, The System: Who Rigged It, How We Fix It, is out now. He is a Guardian US columnist. His newsletter is at robertreich.substack.com
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      The Fed is about to raise interest rates and shaft American workers – again | Robert Reich

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      The Fed is about to raise interest rates and shaft American workers – againRobert ReichPolicymakers fear a labor shortage is pushing up wages and prices. Wrong. Real wages are down and workers are struggling The January jobs report from the US 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.Trump and his enablers unwittingly offer Democrats the best hope in the midterms | Robert ReichRead moreAmong the biggest job gains in January were workers who are normally temporary and paid low wages: leisure and hospitality, retail, transport and warehousing. In January, employers cut fewer of these workers than in most years because of rising customer demand combined with Omicron’s negative effect on the supply of workers. Due to the Bureau of Labor Statistics’ “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% of private-sector workers are 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) pass 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% of all US 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 chief executive of Kroger said last June.“What we are very good at is pricing,” the chief executive of Colgate-Palmolive said 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.Friday’s jobs report shows that the economy is still 2.9m jobs below what it had in February 2020. Given the growth of the US population, it’s 4.5m 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% 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 Reich, a former US secretary of labor, is professor of public policy at the University of California at Berkeley and the author of Saving Capitalism: For the Many, Not the Few and The Common Good. His new book, The System: Who Rigged It, How We Fix It, is out now. He is a Guardian US columnist. His newsletter is at robertreich.substack.com
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      Dignity in a Digital Age review: a congressman takes big tech to task

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      Dignity in a Digital Age review: a congressman takes big tech to taskRo Khanna represents Silicon Valley and the best of Capitol Hill and wants to help. His aims are ambitious, his book necessary Just on the evidence of his new book, Ro Khanna is one of the broadest, brightest and best-educated legislators on Capitol Hill. A graduate of the University of Chicago and Yale Law School who represents Silicon Valley, he is by far the most tech-savvy member of Congress.Silicon Holler: Ro Khanna says big tech can help heal the US heartlandRead moreAt this very dark moment for American democracy, this remarkable son of Indian immigrants writes with the optimism and idealism of a first-generation American who still marvels at the opportunities he has had.Even more remarkable for a congressman whose district includes Apple, Google, Intel and Yahoo, Khanna is one of the few who refuses to take campaign money from political action committees.Once or twice in a “heated basketball game” in high school, he writes, someone may have shouted “go back to India!” But what Khanna mostly remembers about his childhood are neighbors in Pennsylvania’s Bucks county who taught him “to believe that dreams are worth pursuing in America, regardless of one’s name or heritage”.His book is bulging with ideas about how to transform big tech from a huge threat to liberty into a genuine engine of democracy. What he is asking for is almost impossibly ambitious, but he never sounds daunted.“Instead of passively allowing tech royalty and their legions to lead the digital revolution and serve narrow financial ends before all others,” he writes, “we need to put it in service of our broader democratic aspirations. We need to steer the ship [and] call the shots.”The story of tech is emblematic of our time of singular inequality, a handful of big winners on top and a vast population untouched by the riches of the silicon revolution. Khanna begins his book with a barrage of statistics. Ninety percent of “innovation job growth” in recent decades has been in five cities while 50% of digital service jobs are in just 10 major metro centers.Most Americans “are disconnected from the wealth generation of the digital economy”, he writes, “despite having their industries and … lives transformed by it”.A central thesis is that no person should be forced to leave their hometown to find a decent job. There is one big reason for optimism about this huge aspiration: the impact of Covid. Practically overnight, the pandemic “shattered” conventional wisdom “about tech concentration”. Suddenly it was obvious that high-speed broadband allowed “millions of jobs to be done anywhere in the nation”.The willingness of millions of Americans to leave big city life is confirmed by red-hot real estate markets in far flung towns and villages – and a Harris poll that showed nearly 40% of city dwellers were willing to live elsewhere.“The promise is of new jobs without sudden cultural displacement,” Khanna writes.He suggests a range of incentives to spread tech jobs into rural areas, including big federal investment to bring high-speed connections to the millions still without them. This is turn would make it possible to require federal contractors to have at least 10% of their workforces in rural communities.The congressman imagines nothing less than a “recentering” of “human values in a culture that prizes the pursuit of technological progress and market valuations”. A vital step in that direction would be a $5bn investment for laptops for 11 million students who don’t have them.The problems of inequality begin at the tech giants themselves. Almost 20% of computer science graduates are black or Latino but only 10% of employees of big tech companies are. Less than 3% of venture capital lands in the hands of Black or Latino entrepreneurs.If redistributing some of big tech’s gigantic wealth is one way to regain some dignity in the digital age, the other is to rein in some of the industry’s gigantic abuses. Data mining and the promotion of hate for profit are the two biggest problems. Khanna has drafted an Internet Bill of Rights to improve the situation.Throughout his book, he drops bits of evidence to suggest just how urgent it is to find a way to make the biggest companies behave better.“Algorithmic amplification” turns out to be one of the greatest evils of the modern age. After extracting huge amounts of data about users, Facebook and the other big platforms “push sensational and divisive content to susceptible users based on their profiles”.An internal discussion at Facebook revealed that “64% of all extremist group joins are due to our recommendations”. The explosion of the bizarre QAnon is one of Facebook’s most dubious accomplishments. In the three years before it finally banned it in 2020, “QAnon groups developed millions of followers as Facebook’s algorithm encouraged people to join based on their profiles. Twitter also recommended Qanon tweets”. The conspiracy theory was “actively recommended” on YouTube until 2019.And then there is the single greatest big tech crime against humanity. According to Muslim Advocates, a Washington-based civil rights group, the Buddhist junta in Myanmar used Facebook and WhatsApp to plan the mass murder of Rohingya Muslims. The United Nations found that Facebook played a “determining role” in events that led to the murder of at least 25,000 and the displacement of 700,000.The world would indeed be a much better place if it adopted Khanna’s recommendations. But the question Khanna is too optimistic to ask may also be the most important one.Have these companies already purchased too much control of the American government for any fundamental change to be possible?
      Dignity in a Digital Age: Making Tech Work For All Of Us is published in the US by Simon & Schuster
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      Share the Profits! Why US business must return to rewarding workers properly | Robert Reich

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      Share the profits! Why US businesses must return to rewarding workers properlyRobert ReichThe economy is booming and corporate profits are huge, but American wages still stagnate. History provides the answer According to this week’s release from the commerce department, the US economy has been growing at its fastest pace in almost 40 years. Corporate profits are their highest in 70 years. And the stock market, although gyrating wildly of late, is still scoring record gains.Where egos dare: Manchin and Sinema show how Senate spotlight corrupts | Robert ReichRead moreSo why do most Americans remain gloomy about the economy? Mainly because their real (inflation-adjusted) wages continue to go nowhere.Steeply-rising profits, economic growth and stock market highs – coupled with near-stagnant wages – has been the story of the American economy for decades. Most economic gains have gone to the top.So why not share the profits?Profit-sharing was tried with great success in the early decades of the 20th century but is now all but forgotten. In 1916, Sears, Roebuck & Co, then one of America’s largest corporations with more than 30,000 employees, announced it would begin to share profits with its employees, giving workers shares of stock and thereby making them part-owners.The idea caught on. Other companies that joined the profit-sharing bandwagon included Procter & Gamble, Pillsbury, Kodak and US Steel.The Bureau of Labor Statistics suggested profit-sharing as a means of reducing “frequent and often violent disputes” between employers and workers. Profit-sharing gave workers an incentive to be more productive, since the success of the company meant higher profits would be shared. It also reduced the need for layoffs during recessions because payroll costs dropped as profits did.By the 1950s, Sears workers had accumulated enough stock that they owned a quarter of the company. And by 1968, the typical Sears salesperson could retire with a nest egg worth well over $1m, in today’s dollars.The downside was that when profits went down, workers’ paychecks would shrink. And if a company went bankrupt, workers would lose all their investments in it. The best profit-sharing plans took the form of cash bonuses that employees could invest however they wish, on top of predictable wages.But profit-sharing with regular employees all but disappeared in large US corporations. Ever since the early 1980s when corporate “raiders” (now private-equity managers) began demanding high returns, corporations stopped granting employees shares of stock, presumably because they didn’t want to dilute share prices. Sears phased out its profit-sharing plan in the 1970s.Yet, just as profit-sharing with regular employees disappeared, profit-sharing with top executives took off, as big Wall Street banks, hedge funds, private equity funds and high-tech companies began doling out huge wads of stock and stock options to their MVPs.The result? Share prices and chief executive pay (composed increasingly of shares of stock and options to buy stock) have gone into the stratosphere, while the wages of the typical worker have barely risen.Researchers have found that before the 1980s, almost all the increases in share prices on the US stock market could be accounted for by overall economic growth. But since then, a large portion of the increases have come out of what used to go into wages.Jeff Bezos, who now owns around 10% of Amazon’s shares, is worth $170.4bn. Other top Amazon executives hold hundreds of millions of dollars of shares. But most of Amazon’s employees, such as warehouse workers, haven’t shared in the bounty.Amazon used to give out stock to hundreds of thousands of its employees. But in 2018 it stopped the practice and instead raised its minimum hourly wage to $15. The wage raise got headlines and was good PR – Amazon is still touting it – but the decision to end stock awards was more significant. It hurt employees far more than the increased minimum helped them.Corporate sedition is more damaging to America than the Capitol attack | Robert ReichRead moreIf Amazon’s 1.2 million employees together owned the same proportion of Amazon’s stock as Sears workers did in the 1950s – a quarter of the company – each Amazon worker would now own shares worth an average of more than $350,000.America’s trend toward higher profits, higher share prices, mounting executive pay but near stagnant wages is unsustainable, economically and politically.Profit-sharing is one answer. But how can it be encouraged? Reduce corporate taxes on companies that share profits with all their workers, and increase taxes on those that do not.Sharing profits with all workers is a logical and necessary step to making the system work for the many, not the few.
      Robert Reich, a former US secretary of labor, is professor of public policy at the University of California at Berkeley and the author of Saving Capitalism: For the Many, Not the Few and The Common Good. His new book, The System: Who Rigged It, How We Fix It, is out now. He is a Guardian US columnist. His newsletter is at robertreich.substack.com
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      ‘We have to fight back’: can Joe Biden recover before the midterms?

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      ‘We have to fight back’: can Joe Biden recover before the midterms? As the president seeks to reset course, a booming economy and receding pandemic reveal encouraging signsSnow fell lightly as Joe Biden stared into the wooded hollow where, just hours before he arrived in Pittsburgh, a half-century old bridge had collapsed. It was a dramatic illustration of what had brought the president to the City of Bridges: his urgent drive to rebuild crumbling US infrastructure.Silicon Holler: Ro Khanna says big tech can help heal the US heartlandRead moreLast year, Biden signed a $1tn infrastructure bill, an achievement that eluded his most recent predecessors and one he was eager to champion after legislative setbacks.“There are another 3,300 bridges here in Pennsylvania, some of which are just as old and just as in decrepit a condition as that one was,” Biden said later, in a speech at a manufacturing research and development center. Funding in the infrastructure law would help repair the Pittsburgh bridge and “thousands of other bridges across the country”.“We’ve got to move,” he said. “The next time, we don’t need headlines saying that someone was killed.”The visit to Pittsburgh was the beginning of an effort by the White House to change the narrative of Biden’s presidency, as he shifts from an inaugural year mired in legislative battles to elections that will determine control of Congress. The new approach was a recognition of a stalled agenda, an unyielding pandemic, rising inflation and flagging popularity.Yet the week brought a much-needed burst of good news, a reminder that the electoral landscape may look very different come November.The supreme court justice Stephen Breyer announced his retirement, giving Biden the opportunity to name his replacement. The commerce department reported that the US economy grew last year at its fastest pace since 1984. US households began receiving free coronavirus tests from the government. And suddenly, after months of gridlock, the administration is optimistic Congress will pass a plan aimed at making the US more competitive against China.Democratic strategists, progressive activists and former party officials welcomed Biden’s use of the bully pulpit, urging him to seize such momentum by touting economic success and drawing sharp contrasts with Republicans.“In the districts, people can’t tell you a thing that’s in Build Back Better but they can tell you to the penny how much a tank of gas is,” said Chuck Rocha, a progressive Democratic strategist. “They can also tell you what their relief check meant to them.”“We just have to not be afraid to beat our chest as Democrats,” he said.‘Toast in the midterms?’Historical patterns suggest Republicans are well-positioned to win the House and possibly the Senate in November. The party that holds the White House typically loses seats during its first midterm elections, the extent of such losses often correlating with a president’s popularity.Biden will use time away from Washington to build support for his legislative priorities while highlighting what his administration has accomplished: a poverty reducing coronavirus stimulus package, the infrastructure law, full vaccination of more than 210 million Americans.Strategists say his travels may remind Americans why they voted for him.Biden began his presidency with high approval ratings and broad public confidence in his ability to confront the pandemic. But the national mood darkened, sending Biden’s popularity spiraling, including among Black, Latino, female and young voters – core segments of his coalition. A survey by Pew Research this week found the president’s approval rating down to 41%, from a high of 59% in April.“We need to get Biden’s approval numbers up or else we’re toast in the midterms,” warned Lanae Erickson, senior vice-president at the moderate think tank Third Way.Disappointment with Biden’s handling of the pandemic is a key factor weighing down such ratings. Now that vaccines have proven effective, including against fast-spreading variants like Omicron, Erickson said voters want to hear the White House strategy for living with the virus.“Right now people are hearing a lot of ‘Stay home, stay safe’ from Democrats. But people are tired of staying home,” she said. “We have to be the party that’s talking about getting people back to work.”Biden’s relatively infrequent travel during his first year in office was partly due to the pandemic. But he was also grounded by negotiations on Capitol Hill. In September, the White House canceled a trip to Chicago so Biden could hammer out a deal on his domestic spending package, only to see such efforts collapse soon after.This month, Biden’s visit to Capitol Hill to pressure Democrats to pass voting rights protections was forestalled by Senator Kyrsten Sinema, who declared her opposition to changing the filibuster, thereby dooming the legislation, in a speech just before the president’s arrival.Pittsburgh bridge collapses hours before Biden’s infrastructure speech in cityRead moreBiden appeared to acknowledge that his involvement with negotiations on Capitol Hill hurt his standing with voters, who wanted to see him govern more like a commander-in-chief. Defending his reputation as a bipartisan dealmaker, built over 36 years in the Senate, Biden conceded that the role of president required a different type of engagement.“The public doesn’t want me to be the ‘president-senator,’” he told reporters this month. “They want me to be the president and let senators be senators.”The retirement of Justice Breyer immediately put a spotlight on one of the most consequential responsibilities of any presidency: filling a vacancy on the supreme court. At a press conference this week, Biden said he would draw up a list of candidates based on his promise to nominate a Black woman.Stefanie Brown James, co-founder and executive director of the Collective Pac, which aims to build Black electoral power, said the assurance “felt monumental”, particularly after the disappointments on domestic spending and voting rights.Though the replacement would do little to shift the ideological composition of the court, after three Trump-era appointments created a conservative supermajority, James said appointing a Black woman would “right a historic wrong”.Antjuan Seawright, a South Carolina Democratic strategist, said the chance for Biden to add a woman of color could be a “galvanizing” moment for Democrats, a reminder to supporters Biden can still deliver on his promises.“The president won because of our votes, Black voters, the most consequential and loyal voting bloc in the country,” Seawright said. “And so this is going to remind them of the net worth of their vote and why it’s important to keep showing up.”‘Look people in the eye’A natural retail politician with a zeal for campaigning, Biden lamented that he had so few opportunities to “look people in the eye” in his first year as president.On Tuesday, he stepped out of the White House to visit a boutique that opened during the pandemic, purchasing a necklace for his wife and a coffee mug featuring the face of Kamala Harris, his vice-president. The excursion also included a stop for ice-cream, where he posed with employees after greeting US Marines.On Wednesday, Biden bantered with the General Motors chief executive, Mary Barra, about the speed of a new electric vehicle, during a White House roundtable with the heads of major US companies.“I’m looking for a job, Mary,” quipped the president, a car enthusiast, after Barra told him the vehicle went from “zero to 60 in three seconds”.Next week, Biden will travel to New York to discuss plans for combatting gun crime with Mayor Eric Adams, after the fatal shooting of two police officers. The White House has sought to elevate efforts to combat rising violent crime as Republicans attempt to portray the country as lawless. Centrist Democrats believe Adams, a retired NYPD captain who campaigned on a promise to reduce crime, offers a model for how the party can beat back such attacks.The White House insists the president hasn’t given up on passing Biden’s Build Back Better agenda or voting protections, but is scaling back his involvement – and his ambitions. Activists and progressives are pressing him to ramp up use of his executive authority.Cristina Tzintzún Ramirez, president of NextGen America, a youth voting organization, said canceling student debt was one of the “most basic and critical” steps Biden could take to deliver for young people. She said the issue was a top priority for voters under 35, and would help fulfil a promise to reduce the racial wealth gap.Biden has expressed doubt whether he has the legal authority to enact widespread student loan forgiveness. In December, he extended a moratorium on student loan payments put in place by the Trump administration in the early days of the pandemic.“Young folks overwhelmingly supported the Biden administration and now it’s up to the Biden administration to support young people,” Tzintzún Ramirez said. “We understand they can’t pass every single policy but on student debt they hold the power to make it happen.”‘Best messenger’If Biden’s standing slips further, his visits could become a political headache for Democrats in battleground states.American muckrakers: Peter Schweizer, James O’Keefe and a rightwing full court pressRead moreOn Friday, a leading Democratic contender in the Pennsylvania governor’s race was noticeably absent from Biden’s Pittsburgh event, citing a scheduling conflict. Earlier in the month, Stacey Abrams, the leading Democratic candidate for governor in Georgia, also cited a scheduling conflict for her absence at Biden’s Atlanta speech on voting rights, which was boycotted by some civil rights groups. Beto O’Rourke said he was “not interested” in help from the president or any national politician in his bid to become governor of Texas.Ed Rendell, a former governor of Pennsylvania, said Biden was still the “best messenger to motivate our rank-and-file Democrats” in battleground states.But Rendell said the time for bipartisan backslapping had passed. Biden’s message to voters, he said, must be clear: Republicans, not Democrats, are squarely to blame for his stalled agenda.“We have to fight back with the weapons at our disposal,” Rendell said. “We’d rather negotiate peace … but we’re not going to fight with a hand tied behind our back.”TopicsJoe BidenBiden administrationUS politicsUS midterm elections 2022DemocratsUS CongressUS SenatefeaturesReuse this content More

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      Silicon Holler: Ro Khanna says big tech can help heal the US heartland

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      InterviewSilicon Holler: Ro Khanna says big tech can help heal the US heartlandLauren Gambino in Washington As part of his drive to use tech to close social divides, the California Democrat has written a book, Dignity in the Digital AgeShortly after Silicon Valley sent him to Washington, Ro Khanna visited “Silicon Holler”, a name coined by a colleague, Hal Rogers, for the fledgling tech sector in eastern Kentucky.Gentrification destroyed the San Francisco I knew. Austin is next | Patrick BresnanRead moreThe two congressmen’s districts had little in common. Khanna’s was among the wealthiest, most diverse and most Democratic. Rogers’ was among the poorest, whitest and most Republican.But when he visited Rogers’ district, in once-prosperous coal country, the California Democrat did not meet with resentment. Desire to participate in the digital revolution was there. Only opportunity was lacking.“In my district, young people wake up optimistic about the future – there’s $11tn in market value in the district and surrounding areas,” Khanna said.“But for many working-class Americans, across the country, globalization has not worked. It’s meant jobs going offshore. It’s meant the shuttering of communities and it’s meant that their kids have to leave their hometowns.“We need to figure out how to bring economic opportunity for the modern economy to these communities that have been left out.”In his new book, Dignity in a Digital Age, Khanna lays out his vision for democratizing the digital economy. He wants the tech industry to expand to places like Paintsville, Kentucky, and Jefferson, Iowa, where the Guardian watched him make his case.Khanna is an intellectual property lawyer who taught economics at Stanford before serving as the congressman for California’s 17th district, home to companies like Apple and Intel. The top contributors to his most recent campaign were employees of Alphabet, Google’s parent company.And yet Khanna is a member of the Congressional Antitrust Caucus and was a co-chair of Bernie Sanders’ 2020 presidential campaign. He says tech companies must be held accountable for harm, and has backed regulatory and privacy reforms.Two senators, Amy Klobuchar, a Minnesota Democrat, and Chuck Grassley, an Iowa Republican, have introduced legislation to stop tech platforms disadvantaging smaller rivals. Khanna calls it a “promising” start. Despite fierce opposition from large tech companies, the American Innovation and Choice Online Act was voted out of committee this month on a bipartisan vote, 16–6.A House committee passed a version of the bill last year. Khanna, however, was critical of that effort, warning that the language was imprecise and could have unintended consequences. His nuanced views on tech and its impact on the economy and democracy have helped make him a rare figure in Washington and Silicon Valley, taken seriously by politicos and entrepreneurs alike.“You can’t just have the tools of antitrust and think, ‘OK, now we’re going to have jobs in Youngstown or jobs in New Albany,’” Khanna said. “You want to have antitrust so new competitors can emerge but then you also need a strategy for getting jobs into these communities.”Antitrust: Hawley and Klobuchar on the big tech battles to comeRead moreKhanna says Silicon Valley has a responsibility to address inequality it helped create. Tech companies would benefit, he argues, from a diversity of talent and lower costs of living. Such a shift, he says, would help revitalize communities devastated by the decline of manufacturing and construction, and by automation and outsourcing, thereby allowing young people to find good jobs without leaving their home towns.For years, Khanna said, the notion met resistance. But millions have transitioned to remote work during the coronavirus pandemic, pushing tech companies to embrace changing practices. He says he has gone from “swimming against the tide” to “skiing down the mountain”, so much so that an industry friend said he had put into practice many of the ideas Khanna outlines in his book.“It’s amazing how people go from, ‘It’s impossible’ to ‘It’s already been done’ as if there are no steps in between,” Khanna said. “The truth is, it’s not impossible, but it hasn’t already been done. My book is sort of an accelerant for what is now taking place.”Early in the pandemic, tech workers fled San Francisco for smaller cities in neighboring states. While the transplants brought new business and wealth, in some places they widened wage gaps and drove up real-estate prices. Growth has to be planned, Khanna says.“It’s important to learn some of the lessons and the mistakes of the Valley. There has to be more housing supply, there has to be proper conditions for workers and fair wages so you don’t have the stark inequality that you see in Silicon Valley, where you have, in certain communities, 50% of people’s income going to rent because rents are so high.”Khanna thinks bridging the digital divide might also begin to alleviate polarization that Donald Trump exploited.“Just having good economic empowerment and prosperity for rural Americans, for Black Americans, for Latino Americans is not a silver bullet for becoming a multiracial, multi-ethnic democracy,” he said. “But it could be a starting point.”He has called for billions in federal investments in research, manufacturing and workforce development; building tech hubs that emphasize regional expertise, such as a hub in eastern Washington state to focus on lumber technology; providing tax incentives for federal contractors who employ workers in rural areas; underwriting training programs at historically black colleges; and expanding Stem (science, technology, engineering and mathematics) in public schools.Such ideas have captured the attention of Joe Biden’s White House, as it looks to expand opportunity at home and counter China abroad.This week, House Democrats turned to a bill that aims to make the US more competitive with China by strengthening technology, manufacturing and research, including incentives for producing computer chips, which are in short supply.The plan incorporates key planks of Khanna’s Endless Frontier Act, including the establishment of a Directorate for Science and Engineering Solutions. A similar measure passed the Senate with unusual bipartisan support last year but House Republicans seem less amenable.“We need to produce things in this country, including technology, and have the supply chains here,” Khanna said. “Everyone now recognizes that it’s a huge challenge for America to have semiconductors produced in Taiwan and South Korea. With the shipping costs and the disruption with Covid, it has created huge challenges in America from manufacturing cars to making electronics.”‘Can we get more Republicans?’With much of the Democrats’ agenda stalled, Khanna believes the new bill can provide a second major bipartisan accomplishment for the party to tout in a difficult midterms campaign.Billionaire Republican backer donates to Manchin after he killed key Biden billRead more“Can we get more Republicans than voted for the infrastructure bill?” Khanna said, recalling 13 who crossed the aisle. “That’s the barometer.”Khanna, who is also a deputy whip for the Congressional Progressive Caucus, said Democrats must be ready to accept a less ambitious version of Biden’s Build Back Better domestic spending plan. That is in limbo after Joe Manchin – a senator from West Virginia, the kind of state to which Khanna wants to bring tech jobs – announced his opposition.“A big pillar of [the spending plan] should be climate,” Khanna said, “and then let’s get a couple more things that can get support from Senator Manchin, like establishing universal pre-K and expanding Medicaid.”When it comes to combatting climate change and easing child and healthcare costs, he said, “something is certainly better than nothing”.
      Dignity in a Digital Age: Making Tech Work For All Of Us is published in the US by Simon & Schuster
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      Sanders: ‘anti-democratic’ Republicans to blame for Biden woes, not just Manchin and Sinema

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      Sanders: ‘anti-democratic’ Republicans to blame for Biden woes, not just Manchin and SinemaSenator confirms he will campaign against moderate Democrats if they face primary challenges

      Robert Reich: Manchin and Sinema are all about their egos
      Bernie Sanders on Sunday sought to turn fire aimed by Democrats at two of their own, Kyrsten Sinema and Joe Manchin, onto Republican senators he said were “pushing an anti-democratic agenda”.Kyrsten Sinema: Arizona Democrats censure senator for voting rights failureRead more“Republicans are laughing all the way to election day,” the Vermont senator told CNN’s State of the Union. “They have not had to cast one bloody vote which shows us where they’re at.”But the Vermont progressive also confirmed that he will campaign against Manchin and Sinema, both Democrats, should they face viable primary challengers.Manchin, from West Virginia, and Sinema, from Arizona, have blocked Democratic priorities including the Build Back Better spending plan and, this week, voting rights reform.Their refusal to contemplate reform to the filibuster, the rule which requires 60-vote majorities for most legislation, meant two voting rights bills in answer to Republican attacks on voting in states were always doomed to fail.On Saturday, Sinema was formally censured by her state party. Sanders said he supported that move. He also confirmed his threat to campaign against Sinema and Manchin in 2024.“If there was strong candidates prepared to stand up for working families who understand that the Democratic party has got to be the party of working people, taking on big money interests, if both candidates were there in Arizona and West Virginia, yes, I would be happy to support them.”But, Sanders insisted, “it’s not only those two. It is 50 Republicans who have been adamant about not only pushing an anti-democratic agenda but also opposing our efforts to try to lower the cost of prescription drugs, trying to expand Medicare … to improve the disaster situation in home healthcare, in childcare, to address the existential threat of climate change. “You’ve got 50 Republicans who don’t want to do anything except criticise the president and then you have, sadly enough, two Democrats who choose to work with Republicans rather than the president, and it will sabotage the president’s effort to address the needs of working families in this country.”Speaking to NBC’s Meet the Press, Sanders insisted the Biden administration made “a great start”, in part with a Covid relief bill passed with just 50 votes and the casting vote of Vice-President Kamala Harris, but was now bogged down thanks in large part to Manchin and Sinema.“The president and the Democratic Congress,” Sanders said, “… looked at the economic crisis that was caused by Covid. We passed the American Rescue Plan … and we also passed along the way the strongest infrastructure bill that has been passed since Dwight D Eisenhower … We were off to a great start. “And then I will tell you exactly what happened. Fifty members of the Republican party decided that they were going to be obstructionist … and then you had two United States senators joining them, Mr Manchin and Senator Sinema. “For five months now there have been negotiations behind closed doors trying to get these two Democratic senators on board. That strategy, in my view, has failed. It has failed dismally. We saw it last week in terms of the Voting Rights Act. We now need a new direction.”Asked if he was frustrated, Sanders told CNN he was.But, he insisted, “we need to start voting. We need to bring important pieces of legislation that impact the lives of working families right onto the floor of the Senate. And Republicans want to vote against lowering the cost of climate change, home healthcare, whatever it may be. And if the Democrats want to join them, let the American people see what’s happening. “Then we can pick up the pieces and pass legislation.”Abolishing the filibuster won’t lead to a ‘tyranny of the majority’. It’s quite the opposite Read moreSome Democrats advocate splitting Joe Biden’s Build Back Better plan into separate bills, in order to pass what they can.Sanders conceded that most such legislation will not pass, given Republican obstruction and the machinations of Manchin and Sinema. Bringing bills to the floor, he conceded, would really be about electoral politics ahead of midterms this year in which Republicans expect to take back the House and possibly the Senate, and the presidential contest in two years’ time.“Once we know where people are at,” he said, “then we can say, ‘All right, look, we have 50 votes here, we have just one vote here, 49 votes here. “But what has bothered me very much is Republicans are laughing all the way to election day. They have not had to cast one bloody vote, or two, which shows us where they’re at. And we’ve got to change.”TopicsBernie SandersUS SenateUS CongressDemocratsBiden administrationUS politicsUS domestic policynewsReuse this content More