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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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      The US jobs report was a warning sign – even before the Omicron surge | Robert Reich

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      The US jobs report was a warning sign – even before the Omicron surgeRobert ReichThe Fed wants to raise interest rates and coronavirus support programs are ending. Millions of families stand to suffer Friday’s jobs report from the Department of Labor was a warning sign about the US economy. It should cause widespread concern about the Fed’s plans to raise interest rates to control inflation. And it should cause policymakers to rethink ending government supports such as extended unemployment insurance and the child tax credit. These will soon be needed to keep millions of families afloat.US workforce grows by just 199,000 in disappointing DecemberRead moreEmployers added only 199,000 jobs in December. That’s the fewest new jobs added in any month last year. In November, employers added 249,000. The average for 2021 was 537,000 jobs per month. Note also that the December survey was done in mid-December, before the latest surge in the Omicron variant of Covid caused millions of people to stay home.But the Fed is focused on the fact that average hourly wages climbed 4.7% over the year. Central bankers believe those wage increases have been pushing up prices. They also believe the US is nearing “full employment” – the maximum rate of employment possible without igniting even more inflation.As a result, the Fed is about to prescribe the wrong medicine. It’s going to raise interest rates to slow the economy – even though millions of former workers have yet to return to the job market and even though job growth is slowing sharply. Higher interest rates will cause more job losses. Slowing the economy will make it harder for workers to get real wage increases. And it will put millions of Americans at risk.The Fed has it backwards. Wage increases have not caused prices to rise. Price increases have caused real wages (what wages can actually purchase) to fall. Prices are increasing at the rate of 6.8% annually but wages are growing only between 3-4%.The most important cause of inflation is corporate power to raise prices.Yes, supply bottlenecks have caused the costs of some components and materials to rise. But large corporations have been using these rising costs to justify increasing their own prices when there’s no reason for them to do so.Corporate profits are at a record high. If corporations faced tough competition, they would not pass those wage increases on to customers in the form of higher prices. They’d absorb them and cut their profits.But they don’t have to do this because most industries are now oligopolies composed of a handful of major producers that coordinate price increases.Yes, employers have felt compelled to raise nominal wages to keep and attract workers. But that’s only because employers cannot find and keep workers at the lower nominal wages they’d been offering. They would have no problem finding and retaining workers if they raised wages in real terms – that is, over the rate of inflation they themselves are creating.Astonishingly, some lawmakers and economists continue to worry that the government is contributing to inflation by providing too much help to working people. A few, including some Democrats like Joe Manchin and Kyrsten Sinema, are unwilling to support Biden’s Build Back Better package because they fear additional government spending will fuel inflation.Joe Biden needs to stand up and fight Manchin like our lives depend on it | Daniel SherrellRead moreHere again, the reality is exactly the opposite. The economy is in imminent danger of slowing, as the December job numbers (collected before the Omicron surge) reveal.Many Americans will soon need additional help since they can no longer count on extra unemployment benefits, stimulus payments or additional child tax credits. This is hardly the time to put on the fiscal brakes.Policymakers at the Fed and in Congress continue to disregard the elephant in the room: the power of large corporations to raise prices. As a result, they’re on the way to hurting the people who have been taking it on the chin for decades – average working people.
      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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      Democrats worry inflation could imperil agenda and congressional majorities

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      Democrats worry inflation could imperil agenda and congressional majoritiesRepublicans blame Biden’s spending packages but supporters argue Build Back Better will help Americans pay their bills As recently as this summer, Joe Biden seemed to be taking a “keep calm and carry on” approach when it came to concerns about rising inflation.“As our economy has come roaring back, we’ve seen some price increases,” the US president said in July. “Our experts believe and the data shows that most of the price increases we’ve seen were expected and expected to be temporary.”But now, with inflation hitting a 30-year high last month, Biden’s tone has become noticeably less upbeat.“Everything from a gallon of gas to a loaf of bread costs more,” Biden said in Baltimore earlier this month. “We still face challenges, and we have to tackle them. We have to tackle them head on.”Americans are taking notice of high prices with growing alarm, and their concerns appear to be negatively affecting Biden’s approval rating, which had already been falling in recent months. As the US experiences sticker shock at the gas pump and in grocery stores, Democrats are worried that inflation could imperil their legislative agenda and their majorities in Congress as crucial midterm elections loom next year.While the president and fellow Democrats had previously sought to downplay rising inflation, it has become an unavoidable issue as prices continue to climb. The labor department has reported that prices increased by 6.2% over the past 12 months, marking the most rapid uptick since 1990. Gasoline prices have increased by 49.6% over the past year, while food prices have risen by 5.3%.As prices rise, more working Americans are noticing their bills have become more burdensome. According to a poll conducted by the progressive firm Navigator Research this month, 54% of Americans now say the cost of groceries and gas is a “major crisis”, marking a 17-point increase since September.Republicans have blamed the price increases on Biden’s economic policies, arguing that rising inflation underscores the need to oust Democratic lawmakers in the midterm elections next year.“As Biden and Democrats continue to push for trillions more in reckless spending and higher taxes, skyrocketing prices and a broken supply chain under Biden are crushing American families, workers and small businesses,” said Emma Vaughn, a spokesperson for the Republican National Committee. “Americans will soundly reject Biden’s failed economic agenda at the ballot box in 2022.”There are some early signs that Republicans’ message is striking a chord with voters, as the party looks to take back control of Congress in 2022.An AP VoteCast survey showed that 35% of Virginia voters named the economy and jobs as the most important issue facing the state, making it the most common response. Those voters were more likely to support the Republican gubernatorial candidate Glenn Youngkin, who defeated Democrat Terry McAuliffe by two points in the election held earlier this month.And it’s not just Republicans who are sounding the alarm about price hikes. Senator Joe Manchin, one of the key holdouts in Democrats’ negotiations over their $1.75tn spending package, has said he is hearing more from constituents who are concerned about their gas and grocery bills.“By all accounts, the threat posed by record inflation to the American people is not ‘transitory’ and is instead getting worse,” Manchin said in response to the labor department’s latest report. “From the grocery store to the gas pump, Americans know the inflation tax is real and DC can no longer ignore the economic pain Americans feel every day.”Manchin has previously expressed concern that Democrats’ spending package, known as the Build Back Better Act, could negatively contribute to inflation. In a September op-ed for the Wall Street Journal, Manchin warned against approving more government spending, saying, “An overheating economy has imposed a costly ‘inflation tax’ on every middle- and working-class American.”The Biden administration has sought to mitigate inflation-related concerns about the bill, which passed the House on Friday. The president has repeatedly touted a letter from 17 Nobel laureates in economics, which argued the spending package would “ease longer-term inflationary pressures”.But the bill’s critics say the legislation would not address the inflation happening now and may even cause prices to rise further, urging members of Congress not to approve another large spending package.“We’re not worried about the long-term. We have inflation in the here and now, and this policy will make it worse in the foreseeable future,” said Curtis Dubay, a senior economist at the US Chamber of Commerce, a pro-business lobbying group that opposes the spending package.“The first rule of being in a hole is to stop digging,” Dubay added. “This would keep digging. So they need to not pass it.”Jason Furman, who served as the chair of the White House council of economic advisers under Barack Obama, rejected that argument. “Build Back Better will have a negligible impact on inflation over the medium term,” Furman said. “In gross terms, the total spending is one-tenth as much per year as what we just did this year [with the coronavirus relief package]. Moreover, that spending is paid for.”For progressives, conservatives’ warnings about inflation seem a convenient excuse to quash a bill that they already opposed.Natalia Salgado, the director of federal affairs for the progressive Working Families party, said the legislation would actually help average Americans deal with rising inflation by lowering their healthcare and childcare costs.For example, the Build Back Better Act would establish universal prekindergarten for all three- and four-year-old children. It would also reduce Affordable Care Act premiums and lower drug prices by allowing Medicare to negotiate with pharmaceutical companies.“If we really want to have a discussion about inflation, let’s talk about the many things that this bill is going to help minimize the cost of,” Salgado said. “Folks coming out of this pandemic were already hurting economically. It is economically imperative to pass the Build Back Better legislation.”Democrats in Congress have echoed that message, urging those who are worried about inflation to support the bill.“House Democrats’ infrastructure deal and Build Back Better Act tackle inflation head on through their historic investments,” said Congressman Sean Patrick Maloney, the chair of the Democratic Congressional Campaign Committee. “Rather than working to solve economic problems, Republicans have voted overwhelmingly to block these bills that reduce prices for the American people and focused instead on their own extremist agenda.”But many of the provisions of the Build Back Better bill will not go into effect immediately. The Medicare drug price negotiations will not begin until 2025, and the universal prekindergarten program will be built up over the next few years.In the short term, it may be difficult for Biden to address rising prices. Even if the Federal Reserve moves quickly to stifle inflation, it would take months for Americans to feel the effect of the fiscal policy change. And when it comes to gas prices specifically, Biden has little sway over the global oil market, although he has called on the Federal Trade Commission to investigate “mounting evidence of anti-consumer behavior by oil and gas companies”.“Politically, people are very sensitive to inflation in gasoline prices and food because that’s just a visible item they see,” Furman said. “I’ve been in government when gas prices are going up, and it’s terrible. Everyone hates you.”On the plus side for Democrats, the frequent fluctuations in gas and food prices mean those costs could decrease over the next year even if overall inflation continues to rise, Furman said.That possibility may be Democrats’ best hope for maintaining control of Congress after the 2022 elections. However, if prices do not improve over the coming year, the president’s party may need to brace for an ugly election night next November.TopicsUS economyInflationDemocratsUS politicsanalysisReuse this content More

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      Biden’s infrastructure success is historic – and sorely needed | Gary Gerstle

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      OpinionBiden administrationBiden’s infrastructure success is a historic – and sorely needed – win Gary GerstleInfrastructure bill’s passage opens a path to victory in 2022. Democrats should be encouraged by this breakthrough Mon 8 Nov 2021 06.19 ESTLast modified on Mon 8 Nov 2021 11.08 ESTThe infrastructure deal struck late on Friday evening gave Biden a desperately needed win. It represents an opportunity to regain control of the political narrative that the Afghanistan debacle in August had stripped from his grasp. Since that time, his presidency has taken a series of damaging hits, culminating in the party’s dispiriting losses in Tuesday’s elections. The deal reached between the moderate and progressive wings of the Democratic party had to happen for the party to have any chance of keeping its congressional majorities in 2022.The passage of the billion-dollar-plus infrastructure bill is the largest appropriation of its kind since the Eisenhower Congress gave America its interstate highway system in the 1950s. Infrastructural improvements in the country are urgently needed and, if handled well, will be greeted with enthusiasm by Democrats and Republicans alike. The size of this bill, in combination with Biden’s $1.9tn American Rescue Plan passed last spring, and the likelihood that some version of the social infrastructural bill will pass Congress before the end of the calendar year, puts Biden’s ambition in New Deal-second world war territory. It will quiet critics of the FDR-Biden comparisons, at least for a time.The bill’s passage coincides with encouraging news on the economic and Covid-19 fronts: Friday’s jobs report was better than expected, the virulence of the Delta variant may have peaked, and Pfizer’s report of an effective treatment for those ill with the disease may turn out to have as much significance as the announcement a year ago that vaccines were on their way. Imagine if the Pfizer medicines, by election season 2022, turn Covid infections into nothing worse than a bad cold or the flu. Credit will fall to the Democrats.Friday’s victory is also notable for delivering on Biden’s promise of bipartisanship. Thirteen Republican votes in the House of Representatives hardly constitute a wave but they represent 13 more than the total cast by Republicans for Obama’s Affordable Care Act in 2010. Those 13 yea votes, moreover, breached the rules governing Trump-style politics, which dictate giving opponents no quarter. Trump will not take kindly to hearing reports that “sleepy Joe” has succeeded on infrastructure where the Great Leader himself had failed. It may be that a movement out of the Trump era, if it is to happen, will occur through a series of modest steps rather than through one big bang.It will take days and weeks for full reports of Friday’s tense negotiations to emerge. But already there are two details worth highlighting. First, Black politicians, this time in the form of the Congressional Black Caucus, came to Biden’s rescue much as Jim Clyburn had in the crucial South Carolina primary in February 2020. Nancy Pelosi helped this maneuver along by sending out Joyce Beatty, head of the Congressional Black Caucus, to deliver a message to the progressives that, at this critical moment, they needed to check their legislative utopianism at the door and vote for the infrastructure bill. Biden must take appropriate notice of this Black Caucus intervention, and find ways to reward it.Second, Biden must also understand that the progressives compromised more than the moderates did. For months, the former had pledged to hold up the infrastructure bill until its fraternal twin, the social infrastructural bill known as the Build Back Better Act (BBBA), passed as well. The skillful Pramila Jayapal, head of the House’s Progressive Caucus, extracted the equivalent of sworn oaths from key party moderates to vote for BBBA when it comes up for a vote (as it will) sometime in November. But these moderates will have an escape hatch: If the Congressional Budget Office’s costing of BBBA turns out to be much higher than expected, they will claim that such a “worrisome” estimate relieves them of their solemn obligation to vote yea.Biden and Pelosi cannot allow the moderates to wriggle free in this way. Progressives will regard this as a betrayal, and their willingness to contribute their essential energy and support to the Democrats in 2022 will ebb. Collaboration between progressives and moderates in the Democratic party has rarely been easy. But, historically, the party has made its greatest advances when the alliance has held. To sustain that alliance in this moment, both groups must come out of the current legislative season with a win.Biden must now convert his Capitol Hill accomplishment into economic and technological achievements. He must use his bully pulpit to talk up the virtues of his infrastructure bill. He must demonstrate in concrete terms that work on multiple projects is under way via hiring commencing, diggers breaking ground, cranes sprouting across city skylines, and landscapes transforming. Biden should emulate the success of the New Dealers in using infrastructural initiatives to demonstrate to Americans of all kinds that the federal government was working on their behalf. He doesn’t have a lot of time. He’d help his cause by finding and unleashing his own Harry Hopkins, the irrepressible New Deal administrator who was brilliant at cutting through red tape and moving major infrastructural projects from blueprint to reality.There will be challenges galore: completing environmental impact studies in a timely manner, pushing projects through the country’s balky federal system, honoring principles of diversity in issuing contracts while also overcoming labor shortages stemming from the “great resignation”, to name only a few. But this is also Biden’s opportunity to show that he, not Trump, is the man who knows how to make American great again. The passage of the infrastructure bill opens a path to victory in 2022.
      Gary Gerstle is Mellon Professor of American history at Cambridge and is writing The Rise and Fall of the Neoliberal Order (2022). He is a Guardian US columnist.
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      It’s not all about the culture war – Democrats helped shaft the working class | Robert Reich

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      OpinionUS politicsIt’s not all about the culture war – Democrats helped shaft the working classRobert ReichResults in Virginia and New Jersey do not make Republican dog-whistle politics the future. The left must do more to help Sun 7 Nov 2021 01.00 EDTLast modified on Sun 7 Nov 2021 01.03 EDTAfter Tuesday’s Democratic loss in the Virginia gubernatorial election and near-loss in New Jersey, I’m hearing a narrative about Democrats’ failure with white working-class voters that is fundamentally wrong.Is this a presidency-defining week for Biden? Politics Weekly Extra – podcastRead moreIn Thursday’s New York Times, David Leonhardt pointed out that the non-college voters who are abandoning the Democratic party “tend to be more religious, more outwardly patriotic and more culturally conservative than college graduates”. He then quotes a fellow Times columnist, the pollster Nate Cohn, who says “college graduates have instilled increasingly liberal cultural norms while gaining the power to nudge the Democratic party to the left. Partly as a result, large portions of the party’s traditional working-class base have defected to the Republicans”.Leonhardt adds that these defections have increased over the past decade and suggests Democratic candidates start listening to working-class voters’ concerns about “crime and political correctness”, their “mixed feelings about immigration and abortion laws”, and their beliefs “in God and in a strong America”.This narrative worries me in two ways. First, if “cultural” messages top economic ones, what’s to stop Democrats from playing the same cultural card Republicans have used for years to inflame the white working class: racism? Make no mistake: Glenn Youngkin focused his campaign in Virginia on critical race theory, which isn’t even taught in Virginia’s schools but comes out of the same disgraceful Republican dog-whistle tradition.The other problem with this “culture over economics” narrative is it overlooks the fact that after Ronald Reagan, the Democratic party turned its back on the working class.During the first terms of Bill Clinton and Barack Obama, Democrats controlled both houses of Congress. They scored some important victories, such as the Affordable Care Act and an expanded earned income tax credit.But both Clinton and Obama allowed the power of the working class to erode. Both ardently pushed for free trade agreements without providing the millions of blue-collar workers who thereby lost their jobs any means of getting new ones that paid at least as well.They stood by as corporations hammered trade unions, the backbone of the working class. Both refused to reform labor laws to impose meaningful penalties on companies that violated them or enable workers to form unions with simple up-or-down votes. Union membership sank from 22% of all workers when Clinton was elected to fewer than 11% today, denying the working class the bargaining leverage it needs to get a better deal.The Obama administration protected Wall Street from the consequences of its gambling addiction through a giant taxpayer-funded bailout but let millions of underwater homeowners drown.Both Clinton and Obama allowed antitrust to ossify – allowing major industries to become more concentrated and hence more economically and politically powerful.Finally, they turned their backs on campaign finance reform. In 2008, Obama was the first presidential nominee since Richard Nixon to reject public financing in his primary and general-election campaigns. He never followed up on his re-election campaign promise to pursue a constitutional amendment overturning Citizens United v FEC, the 2010 supreme court opinion that opened the floodgates to big money in politics.What happens when you combine freer trade, shrinking unions, Wall Street bailouts, growing corporate power and the abandonment of campaign finance reform? You shift political and economic power to the wealthy and you shaft the working class.Adjusted for inflation, American workers today are earning almost as little as they did 30 years ago, when the American economy was a third its present size.Biden’s agenda for working people – including lower prescription drug prices, paid family leave, stronger unions and free community college – has followed the same sad trajectory, due to the power of big money. Big Pharma has blocked prescription drug reform. A handful of Democratic senators backed by big money have refused to support paid family leave. Big money has killed labor law reform.Resilience: the one word progressives need in the face of Trump, Covid and more | Robert ReichRead moreDemocrats could win back the white working class by putting together a large coalition of the working class and poor, of whites, Blacks and Latinos, of everyone who has been shafted by the huge shift in wealth and power to the top. This would give Democrats the political clout to reallocate power in the economy – rather than merely enact palliatives that paper over the increasing concentration of power at the top.But to do this Democrats would have to end their financial dependence on big corporations, Wall Street and the wealthy. And they would have to reject the convenient story that American workers care more about cultural issues than about getting a better deal in an economy that’s been delivering them a worsening deal for decades.
      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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