Robert Reich: US Leads the Developed Nations and Many Third World Nations in Income Inequality

Protest.(Photo: The All-Nite Images / Flickr)Get the just-released Robert Reich Inequality for All DVD . Make a minimum contribution to support Truthout and receive the documentary. Just click here.

When, during the credits of the new Robert Reich documentary, Inequality for All, a Jon Stewart clip appears in which he reveals that the United States ranks 64th in the world in income inequality – the highest in the developed world and beating many third world nations in income disparity – it signals that Reich is going to attack the redistribution of wealth in the United States head on.

Inequality for All is an engaging overview of how the United States came to be a nation that is distinguished by its concentration of wealth in the top 10%, with much of our national cash and assets in the hands of the top 1%. (Indeed, Reich repeats the now-well-known fact that America’s 400 richest families have more money than the bottom 50% of the population.)

The documentary is absorbing about a topic that incites so much frustration among those who seek a more just society, making it both a primer in inequality and a revealing portrait of the self-deprecating and succinct Reich (who is often featured in Truthout). As a former secretary of labor in the Clinton administration – and a savvy media guest – Reich (now a professor of economics at UC Berkeley after stints at Brandeis and Harvard) is one of the few former or present DC officials to relentlessly advocate for a redistribution of income to the working class.

It’s important to qualify that Reich is no radical. He believes in capitalism, but he advocates that capitalism needs to be controlled by the government to prevent an excess accumulation of wealth by a small percentage of the population. Obviously, Washington DC has gone in the other direction and abandoned regulations that prevented a disproportionate flow of the nation’s income and assets to a small percentage of the nation’s citizenry. As a result, toward the end of the film, which makes its way through a complex topic with clarity – and visuals that keep one invested in the documentary – Reich concedes: “I do ask myself whether I’ve been a total failure.” Speaking of his years working with President Bill Clinton, he laments, “We didn’t alter the underlying trend.”

Some might argue that the failure is because Reich advocates only incremental change in the current economic system. He is not someone advocating for the end of capitalism as we know it, but rather readjustments to bring us back to what he believes is the golden age of the middle class: the three decades after World War II. Yet, despite his advocacy for tinkering with the current economic/political system, that doesn’t appear to be happening. In fact, wealth consolidation in the top 1% continues unabated.

Using creative graphs (such as a suspension bridge) to illustrate economic trends that have benefited the wealthy while the working class has experienced stagnating wages and increased debt, Reich, nonetheless, remains a self-described optimist, confident that a new generation (symbolized by a class of hundreds that he teaches at Berkeley, to which the documentary periodically returns) will create economic change.

The obstacles to wresting control of the nation’s economy from the wealthy, however, remain daunting, particularly since the Citizen’s United decision allowed the richest individuals to openly buy candidates. (Before Citizen’s United, elections were still very much influenced by big money, but the infamous Supreme Court ruling broke the dam open in a number of ways.)

Reich worries about whether democracy can survive an electoral system if individuals or secret donors can buy candidates without any meaningful restrictions. He makes the case, dismayed, that the majority of the people will, in the end, not decide who represents them if a minority can essentially flood campaign funding to influence election outcomes.

With an astonishing graph to illustrate where the price one pays for an iPhone goes, Reich repeatedly emphasizes the importance of the United States offering affordable higher education. As for the iPhone, here are some of the percentages of dollars received for each iPhone sold, according to Reich: 34%, Japan; 17%, Germany; 13%, South Korea; 6%, United States; and only 3.6% to China because, he says, that nation is only assembling the product not producing the components. The iPhone breakdown of revenue received by each nation is an indication to Reich that those nations that invest in a skilled, highly educated workforce are best situated for the economy of the future.

Unfortunately, as Reich emphasizes, the United States has been proceeding in the opposite direction, increasing the costs of higher education and seeing the number of college graduates level off.

Regular readers of Truthout will recognize many of the distressing economic facts and trends that Reich discusses in Inequality for All.

As Reich notes at one point in response to a FOX News clip calling him a communist, he’s really just a guy in the economic center, advocating for a strong middle class (something that evokes the Eisenhower era). It’s the financial politics of the United States that have moved so dramatically to the right.

Reich is not arguing for major economic structural change, just some economic fairness. Still, even he, a man who would have felt satisfied with tax policy and union growth in the ’50s, has been left in the dust of America’s right wing redistribution of our nation’s wealth to the richest in society, occurring at an accelerating pace.

Get the just-released Robert Reich Inequality for All DVD . Make a minimum contribution to support Truthout and receive the documentary. Just click here.