The Coffee Klatch with Robert Reich

Last Wednesday, Vladimir Putin announced that Russian civilians would be drafted to bolster forces in his unpopular war in Ukraine. Almost immediately, the Kremlin faced widespread opposition, including demonstrations. On Friday, the Russian Ministry of Defense announced that “citizens with higher education” would be exempt from the draft, especially those in telecommunications, information technology, banking and “systematically important” media companies.When I heard this news I flashed back to 1968. Tens of thousands of us then graduating from college were subject to being drafted and very possibly going to Vietnam. College students were deferred but local draft boards decided whether to continue deferments for graduate school. Many of us were not only afraid of being killed, but also thought the war insane and unjust. We demonstrated against it. Some burnt our draft cards. We did not want to be complicit in the immoral war. But what to do? Draft resistance meant going to prison or to Canada. The handful of us who had been awarded Rhodes Scholarships for study at Oxford negotiated with our draft boards. Bill Clinton got his extended deferment by signing a letter of intent to join the Reserve Officers Training Corps after Oxford. On December 3 of our second year there — after Bill drew a sufficiently high draft-lottery number to ensure he wouldn’t be drafted — he wrote a letter to Colonel Eugene Holmes, the head of ROTC at the University of Arkansas, essentially withdrawing from the program. Because Bill’s decision and letter would become controversial twenty-three years later when he ran for President, I’m reproducing the relevant portion here. (I can’t help but wonder whether it expresses the sentiments of young Russians now facing Putin’s draft.)Dear Colonel Holmes, First, I want to thank you, not just for saving me from the draft, but for being so kind and decent to me …. For years I have worked to prepare myself for a political life characterized by both practical political ability and concern for rapid social progress. It is a life I still feel compelled to try to lead. I do not think our system of government is by definition corrupt, however dangerous and inadequate it has been in recent years (the society may be corrupt, but that is not the same thing, and if that is true we are all finished anyway).When the draft came, despite political convictions, I was having a hard time facing the prospect of fighting a war I had been fighting against, and that is why I contacted you. ROTC was the one way left in which I could possibly, but not positively, avoid both Vietnam and resistance. … After I signed the ROTC letter of intent I began to wonder whether the compromise I had made with myself was not more objectionable than the draft would have been, because I had no interest in the ROTC program in itself and all I seemed to have done was to protect myself from physical harm. Also, I began to think I had deceived you, not by lies - there were none - but by failing to tell you all the things I'm writing now. I doubt that I had the mental coherence to articulate them then. At that time, after we had made our agreement and you had sent my 1-D deferment to my draft board, the anguish and loss of self-regard and self-confidence really set in. I hardly slept for weeks and kept going by eating compulsively and reading until exhaustion brought sleep. Finally on September 12th, I stayed up all night writing a letter to the chairman of my draft board … stating that I couldn't do the ROTC after all and would he please draft me as soon as possible.I never mailed the letter, but I did carry it on me every day until I got on the plane to return to England. I didn't mail the letter because I didn't see, in the end, how my going in the Army and maybe going to Vietnam would achieve anything except a feeling that I had punished myself and gotten what I deserved. So I came back to England to try to make something of this second year of my Rhodes scholarship.And that is where I am now, writing to you because you have been good to me and have a right to know what I think and feel. I am writing too in the hope that my telling this one story will help you to understand more clearly how so many fine people have come to find themselves still loving their country but loathing the military, to which you and other good men have devoted years, lifetimes, of the best service you could give. To many of us, it is no longer clear what is service and what is disservice, or if it is clear, the conclusion is likely to be illegal. Forgive the length of this letter. There was much to say. There is still a lot to be said, but it can wait. Please say hello to Colonel Jones for me. Merry Christmas.Sincerely, Bill Clinton ***As for me, I had read the Selective Service’s physical requirements for being drafted, which clearly set the minimum height at five feet. So, at 4 foot 11 inches, I assumed I wouldn’t make the grade. Just before setting sail for England, I decided to get the matter officially out of the way. I was working in Berkeley, California at the time, and went over to the Oakland Induction Center (which had been the scene of some violent anti-war protests) to receive my 4-F classification — “unfit for military service.” The Center was almost empty when I arrived. An examining sergeant sitting at a desk at the end of the corridor caught sight of me. “Hey!” he shouted, beckoning me. “Just what we’ve been waiting for!”“Sorry, sir?” I asked as I reached his desk, hoping I’d misheard. My heart raced. Was he joking?“You’re perfect!” he said, smiling and standing up as if to give me a bear hug. “A tunnel rat!”“A … what?” “We need shorties like you to go into tunnels under the rice paddies! Smoke out the ‘Cong with grenades!” I saw my life pass in front of me. “Let’s just measure you.” He asked me to strip down to my underwear and socks, and then ushered me to the measuring stand about ten feet away. He turned me so I was looking outward, away from the vertical measure. “Just stand up v-e-r-y straight,” he said in a somber tone as he slid the horizontal metal strip down to the top of my head. I couldn’t see the measurement but I could hear my heart pounding. In his enthusiasm for tunnel rats, would he declare I was five feet regardless of my one inch deficiency? A long pause that seemed to last for eternity. His large hand came down on my shoulder as he ushered me off the platform. “I’m sorry, son,” he said solemnly. Sorry? Was he sorry I was heading under the rice paddies with hand grenades, or sorry I wasn’t? OMG. Could it be that I was just over 4 feet 11 inches by enough of a fraction that he could claim I was 5 feet? I suddenly remembered that the Army height regulation allowed examining sergeants to round up or down:(1) If the height fraction is less than half an inch, round down to the nearest whole number in inches. (2) If the height fraction is half an inch or greater, round up to the next highest whole number in inches.If this sergeant rounded up, I’d be down under the rice paddies with grenades. Forget Oxford. Hell, forget life. “So,” I said, trying to hide the tremor in my voice, “Wha … what’s the measure show?”He frowned. “You’re just too short.”I was tempted to let out a yell but stopped myself for fear he’d take offense and draft me out of spite. So I simply nodded and said “okay,” trying my best to act disappointed. “But, son…” S**t. Was I too disappointed? Was he going to round up out of sympathy? “… Don’t give up hope,” he smiled. “Maybe you’ll grow!” I grinned. A second later he let out a loud guffaw, probably relieved I wasn’t upset by his lame attempt at humor. Then I felt my own relief overwhelm me — the unmitigated joy of having my life back — and I laughed too. We both laughed and laughed and laughed, out of a sense of relief that both of us felt, for different reasons. That’s the image I’m left with now, fifty-four years later: the two of us, the examining sergeant and me, doubled up there in the Oakland Induction Center, while tens of thousands of young Americans — most of them without college degrees — and hundreds of thousands of Vietnamese, were being slaughtered for no good reason. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

Hello friends,Welcome back to my Saturday coffee klatch with my colleague Heather Lofthouse (Executive Director of Inequality Media Civic Action — and my former student), where we talk about the highs and lows of the week over morning coffee. Pull up a chair. Today we cover:— profit-price inflation rather than wage-price inflation— Tump rallies and his embrace of QAnon— Republican candidates who refuse to commit to be bound by election results— Nse Ufot and the power of hope through on-the-ground organizingPlus two theme songs! And, of course, our weekly poll: This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

Friends,Today’s New York Times has a story about Russia’s powerful internet regulator, Roskmnadzor, whose collection of personal data about average Russians has, in the Times’s words, “catapulted Russia, along with authoritarian countries like China and Iran, to the forefront of nations that aggressively use technology as a tool of repression.”A few weeks ago, the Times ran a story about China’s collection of personal data on its citizens through phone-tracking devices, voice prints, one of the largest DNA databases in the world, facial recognition technology, and more than half of the world’s nearly one billion surveillance cameras.This is important and useful reporting. But pardon me if I ask an impertinent question: Why aren’t we hearing more about corporate surveillance of employees in the United States? Or about corporate surveillance of Americans in general? Or how this corporate surveillance is being used by the US and state governments? Even if Russia’s and China’s surveillance states are far more dangerously intrusive than America’s surveillance capitalism, shouldn’t we know more about how the same or very similar technologies are being utilized here? Since I was secretary of labor, I’ve seen American companies load up on monitoring software — to watch what workers are doing every minute of the day. Workers are now subject to trackers, scores, and continuous surveillance of their hands, eyes, faces, and bodies. And increasingly, they’re paid only for the minutes (or seconds) when the systems detect they’re actively working.Kroger cashiers, UPS drivers, and millions of others are monitored by the minute. Amazon measures seconds. J.P. Morgan — the largest bank in the United States — tracks how its workers spend time, from making phone calls to composing emails. At UnitedHealth Group, low keyboard activity can affect compensation and sap bonuses. In Amazon warehouses, some workers don’t get enough time to go to the bathrooms. ESW Capital, a Texas-based business software company, tracks workers in 10-minute intervals during which — at some moment that workers can’t anticipate — cameras take snapshots of their faces and screens. “Digital productivity monitoring” — isn’t that an innocent-sounding phrase? — is spreading even to white-collar jobs requiring graduate degrees. Radiologists get scoreboards showing “inactivity” time and comparing productivity to their colleagues’. Doctors and nurses describe increasing electronic surveillance over workdays. Even lawyers are being closely monitored.Firms selling all this monitoring technology gush with testimonials from supervisors describing newfound powers of “near X-ray vision” into what workers are doing other than working: watching porn, playing video games, using bots to mimic typing, two-timing. Dystopia now!Russia’s and China’s growing surveillance systems seem more dangerous and intrusive than America’s increasing surveillance of our workers because the information Russia and China collect can stifle dissent. But are the surveillance systems really that far apart? Big corporations that gather loads of data on exactly what their workers do all day (and sometimes into the night) — including in their purview the growing ranks of remote or gig workers — can stifle workers’ efforts to form labor unions or show any disgruntlement at all. Russia’s and China’s surveillance of their inhabitants and America’s surveillance of our workers are starting to overlap because the technologies are starting to overlap. A technology company in eastern China even designs “smart” cushions for office chairs that record when workers are absent from their desks. How long before we see smart cushions in American offices?And more and more, we’re being surveilled without knowing it. Delta Air Lines boasts that its Atlanta airport’s Terminal F is the “first biometric terminal” in the United States where passengers can use facial recognition technology “from curb to gate.” The Financial Times reports that a Microsoft facial recognition training database of 10 million images drawn from the internet without anyone’s knowledge is utilized by agencies that include the United States and Chinese military.A new joint report from the Associated Press and Electronic Frontier Foundation highlights a major surveillance tool, known as “Fog Reveal,” now being used by dozens of local law enforcement agencies across the United States to collect personal data without a warrant. The tool makes use of advertising data — including location, timestamp, and a unique advertising ID tied to individual devices — to construct a searchable database that enables law enforcement to either track an individual device or see which devices passed through a certain area. Where does this end? A few years back, Mark Zuckerberg predicted that “Facebook will know every book, film, and song you ever consumed, and its predictive models will tell you what bar to go to when you arrive at a strange city, where the bartender will have your favorite drink waiting.” Well, that day has just about arrived. Google’s Eric Schmidt has said, “We know where you are. We know where you’ve been. We more or less know what you’re thinking about.”With Google using my search data and its high-tech trucks surveilling my neighborhood, I’m sure Schmidt is right. As Shoshana Zuboff noted in her brilliant The Age of Surveillance Capitalism, we once celebrated these new digital services as free but we are learning that the platforms are hyper-velocity global bloodstreams into which almost anyone may introduce a dangerous virus without a vaccine, or from which big corporations and government can draw anything they’d like to know about us. I’m not so sure we should be so disdainful of Russia’s and China’s surveillance systems, given what’s happening in the United States. Isn’t it time we got serious about protecting our freedom from being watched, monitored, examined, and exposed? Otherwise, the surveillance state and surveillance capitalism merge — and we’ll have no place to hide. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

It makes my blood boil. Since March I’ve been screaming about the Fed’s total misreading of inflation — believing it’s being caused by workers getting wage hikes, when the real cause is powerful corporations raising prices higher than their costs. I’m not so grandiose as to think my screams would have any direct influence on the Fed. My hope was that my argument and data might be picked up by a few voices in the media, which would lead some Democrats in Congress to pick up on it, and that maybe they’d put some pressure on the Fed — such as asking Fed chief Jerome Powell to respond to those arguments when he next testifies. It’s not happened yet. Yesterday Powell and the Fed raised interest rates again — another three-quarters of a percent — bringing the official rate from near zero in March to over 3 percent now. Insane. Well, now I get a chance to tell Congress why this is insane. The House Oversight Committee’s subcommittee on economic and consumer policy holds a hearing this morning and has asked me to testify. (Thankfully, they’re allowing me to do it remotely from my home here in California, although the timing isn’t ideal — the hearing starts 9 am Eastern Time, which is 6 am here — and because I’m the lead-off witness they want me to check in remotely at 5:45 am. I’ll have to drink plenty of coffee.)When you testify before Congress, you get 5 minutes to summarize your views. You submit your detailed testimony, which is read by the committee’s staff, who then give members of Congress questions to ask you based on the submitted testimony (the Democratic staff’s questions are usually quite different from Republican staff’s). Those questions, hopefully, allow you to get into the details. My aim is to state as clearly as possible that the underlying problem is not wage-price inflation. It’s profit-price inflation. And the Fed’s continuing rate hikes will hurt average workers by slowing the economy — making it harder for workers to get wage increases and causing many to lose their jobs. I’m going to suggest that Congress consider ways to control inflation that limit corporate profits rather than jobs and wages — such as a windfall profits tax, tougher antitrust enforcement, and even temporary price controls. Will Congress do any of this? Here again, I’m not so full of myself as to think I can sway a single member of Congress, let alone Congress as a whole. But in my experience, policy ideas that are useful and timely often find their way into politics — eventually displacing old ones that are no longer useful and may be damaging. At least that’s my hope with “profit-price” inflation replacing the anachronistic “wage-price” inflation.I’m going to add my testimony to this post right after I testify this morning — and fill you in on what happened. ***The hearing was just adjourned. The good news is that the Democrats on the committee got it. They understood that big corporations raising their prices in excess of their costs — to score record profits — is a major reason for the inflation we’re now experiencing. And workers are paying for those record profits in two ways — real wage losses (wage gains have been more than offset by price increases, making most workers worse off) and by the higher prices themselves (the result of corporations increasing their profit margins). I was particularly impressed by the chairman of the subcommittee, Representative Raja Krishnamoorthi (from the 8th district of Illinois), who understood the issues and expressed them cogently, and by Cori Bush (from the 1st district of Missouri), who asked terrific questions. Katie Porter did a fabulous job breaking the issue down. There was less discussion of remedies than I’d hoped — only passing reference to tougher antitrust enforcement and no real discussion of a windfall profits tax — and no criticism of the Fed (other than in my remarks and testimony). Not surprisingly, the Republicans on the committee were obstreperous and wildly partisan. All they did was try to blame inflation on the American Rescue Plan, Biden, and the Democrats. They repeatedly quoted Larry Summers’s misleading claim that pandemic spending fueled inflation (even at one point asking me if I served with him in the Clinton administration, without giving me the chance to rebut him). They asked the Republican witness, Tyler Goodspeed (briefly chair of Trump’s Council of Economic Advisors), to confirm their rhetorical questions but didn’t ask me a thing. Like much of the rest of our governing processes, congressional hearings have degenerated into partisan posturing and name-calling. I experienced this starting in 1995 when Newt Gingrich became Speaker. For those of you who might be interested, here’s the testimony I submitted this morning:***Mr. Chairman and members of the Committee,My name is Robert Reich. I’m the Carmel P. Friesen Professor of Public Policy at the Goldman School of Public Policy, University of California, Berkeley.Last week’s consumer price index report shows annual inflation in the United States still roaring at 8.3 percent annually [1] -- the worst breakout of inflation since the 1980s.In response, the Fed has raised interest rates from near zero in March to over 3 percent yesterday, and has signaled it will keep raising rates until inflation is under control.I believe this strategy is a mistake. It assumes the current inflation is being driven by wage hikes and a tight labor market. But the underlying problem is not wage-price inflation. It is profit-price inflation.The Fed’s rate hikes are hurting average working Americans whose real wages are already falling. Congress should consider alternative ways to control inflation that focus on corporate profits rather than jobs and wages.1. What’s causing the current inflation?Inflation is not being driven by the usual suspects:Don’t blame raw materials. The prices of commodities – wheat, natural gas, oil, and metals -- are falling.[2] That’s partly because of a global slowdown, particularly in China, that is reducing worldwide demand.Don’t blame intermediate goods. Last Wednesday’s Bureau of Labor Statistics report on producer prices was fairly encouraging.[3] Even the prices of semiconductors and electronic components are slowing.[4]Don’t blame inflationary expectations. Last week’s New York Fed survey of inflationary expectations [5] was very positive. Expectations of continuing inflation have declined across the board.And – importantly -- it’s not wages.Jerome Powell worries that “the labor market is extremely tight,”[6] and to “an unhealthy level.”[7] Some economists claim that inflation is “grounded in a red hot labor market.”[8]With due respect, this analysis is wrong. Although pay is still climbing, wage hikes have not kept up with inflation. This means most workers’ paychecks are shrinking, in terms of purchasing power. So rather than contributing to inflation, wages are reducing inflationary pressures.As the accompanying graph shows, inflation-adjusted earnings have plunged.[9]2. The underlying problem is profit-price inflationWhat’s a major reason prices are rising? Corporations are increasing their profit margins.In the second quarter of this year, U.S. companies raked in profits that were the highest on record or close to levels not seen in over half a century. As a share of GDP, U.S. corporate profits in the second quarter rose to 12.25%, their highest levels since 1950. (See graph below)Notably, corporate profit margins – over and above costs – continue to grow. (See chart below.)The labor market is not “unhealthily” tight, as Jerome Powell asserts. Corporations are unhealthily powerful.In a normally competitive market, corporations would keep their prices down to prevent competitors from grabbing away customers. As the White House National Economic Council put it in a December report: “Businesses that face meaningful competition can’t [raise profit margins], because they would lose business to a competitor that did not hike its margins.”[10]The underlying problem is that large American corporations have so much market power they can raise profit margins – and prices -- with impunity.Since the 1980s, two-thirds of all American industries have become more concentrated.[11] This concentration gives corporations the power to raise prices because it makes it easy for them to coordinate price increases with the handful of other companies in their same industry, without risking the possibility of losing customers, who have no other choice.For example, Monsanto now sets the prices for most of the nation’s seed corn. Wall Street has consolidated into five giant banks. Airlines have merged from 12 carriers in 1980 to four today, which now control 80 percent of domestic seating capacity. The merger of Boeing and McDonnell Douglas has left the US with just one large producer of civilian aircraft — Boeing. Three giant cable companies dominate broadband: Comcast, AT&T and Verizon. A handful of drug companies control the pharmaceutical industry. Two giant firms dominate consumer staples. A handful of national retailers and food outlets dominate local markets. And so on.Such concentration makes it easy for corporations to raise their prices beyond what is required to offset rising input costs. More than half of the companies surveyed by the business services reviews website Digital.com reported raising prices beyond what was required to offset rising costs.[12]As The New York Times pointed out, “corporate executives have spent recent earnings calls [with Wall Street analysts] bragging about their newfound power to raise prices, often predicting that it will last.”[13]3.    Examples from specific sectorsTake a closer look at specific sectors and you’ll see profit-price inflation in action:Grocery prices are through the roof largely because just 4 companies – Archer-Daniels-Midland, Bunge, Cargill, and Louis Dreyfus, known collectively as ABCD – control an estimated 70 to 90 percent of the global grain trade,[14] making grain markets are even more concentrated than energy markets. All have raised their prices and gained record profits. Last year was Cargill’s most profitable year in its history, with almost $5 billion in net income.[15]At the same time, just 4 companies control up to 85 percent of meat and poultry processing.[16] They too have raised prices above costs. Tyson’s net income soared 47 percent, while it spent $700 million in shareholder buybacks.[17]Consumer packaged goods conglomerates -- such as Coca-Cola, Hershey’s, PepsiCo, and Mondelez – are also highly concentrated. And they too are raising prices and reporting record earnings.[18] Coca-Cola has credited its increased net operating revenues to price hikes. Procter and Gamble has boasted of the “biggest annual sales increase in 16 years” with its net earnings soaring to $14.7 billion following price hikes on all of its products. It has paid out over $19 billion to shareholders.[19] Shipping conglomerates are expected to top last year’s profits by over 73 percent or $256 billion.[20] Here again, it’s because they have the power to raise prices. 80 percent of global merchandise is moved through the Big 3 shipping alliances. You can see a similar pattern in freight railroads. Over the last six years, the five largest railroad freight lines have increased their operating margins by over a third.[21]The ten largest U.S. retailers – all enjoying significant market power – have raised consumer prices while collectively reporting $24.6 billion in increased profits during the last two fiscal years. These same companies also ramped up stock buybacks by nearly $45 billion year-over-year for a total of $79.1 billion.[22]Gas prices are finally declining.[23] But they’re still high, and major oil companies continued to have enough pricing power to gain a whopping $46 billion in earnings in the second quarter of this year.[24] It would be one thing if these corporations were investing their profits in additional capacity. At least this would reduce future inflationary pressures. But they have been using their profits to buy back their own shares of stock. This may be good for shareholders -- buybacks reduce a company's shares outstanding, raising its profits-per-share -- but it does nothing for the economy.There is a direct historic analogy. At the end of World War II, when the United States attempted to shift back from war production to civilian production, it experienced bottlenecks similar to those caused by the pandemic. Then, as now, consumers had high pent-up demand for all sorts of products and services. Then, as now, large corporations with market power took advantage of limited supplies and soaring demand to increase their prices and enjoy windfall profits. Then, as now, inflation soared.4.   The Fed’s rate hikes are aimed at the wrong culprit  The Fed is using the only tool it possesses to fight inflation – interest rate hikes -- to do the one thing it has done in the past to fight inflation – slow the economy so real wages drop and unemployment rises. But when inflation is being driven by corporate pricing power, the major consequence of Fed interest rate hikes is to further depress wages and limit jobs.Rate hikes eventually diminish corporate profits because consumers have less money to spend on goods and services. But by then, average working people will have taken it on the chin.  As the economy cools due to interest rate hikes, they are less likely to get wage increases that keep up with inflation. In consequence, they will fall further behind. As the economy slows and unemployment rises, average working people and the working poor will be the first to be fired and the last to be hired.On August 26, Powell said the Fed must continue to raise interest rates, even though it will “bring some pain” to households.[25]  How much pain? Researchers at the International Monetary fund estimate that unemployment may need to reach 7.5 percent -- double its current level -- to end the country's outbreak of high inflation. This would entail job losses of about 6 million people.[26]Who will bear this pain? Not corporate executives, not Wall Street, not the wealthy and not the upper-middle class. It will be borne by average working people.5.  Better ways to stop profit-price inflationIn fairness to the Fed, it doesn’t have the tools it needs to prevent profit-price inflation. The responsibility falls on Congress and the administration to take on corporate pricing power directly through a windfall profits tax, bolder antitrust enforcement, and, if necessary, price controls.Congress and the Biden administration enacted a 1 percent tax on stock buybacks in the recently enacted Inflation Reduction Act, along with a minimum corporate tax. These measures are important, but they don’t go far enough. They still leave most of the burden of fighting inflation on average working people and the poor.A windfall profits tax would help. One way to structure it would be to place a temporarily tax on any price increases that exceed the producer price index – that is, the costs of producing consumer goods. Congress could also direct the Federal Trade Commission to investigate whether prices reasonably reflect additional costs or amount to opportunistic price-gouging. The FTC already has the power to carry out such investigations and impose penalties under existing law.[27]Bold antitrust enforcement is essential. Antitrust litigation is complex and time consuming (I directed the policy planning staff at the Federal Trade Commission in the Carter Administration and saw this firsthand). But the credible threat of aggressive antitrust enforcement can deter corporations from raising prices higher than their costs.Congress must appropriate sufficient funds for the Antitrust Division of the Justice Department and the Bureau of Competition of the Federal Trade Commission to enable both agencies to attack excessive corporate concentration, which continues to harm workers and consumers. Price controls should be a backstop. Price controls have many disadvantages, in terms of distorting markets and deterring investment. They worked well in World War II, less well in the 1970s when they were half-baked and badly executed.  But as I’ve argued, the current inflation is most directly analogous to what occurred immediately after World War II when supplies were still limited, pent-up demand had soared, and corporations were making windfall profits. At that time and under those circumstances, many of America’s most distinguished economists argued that price controls on important goods should continue temporarily, in order to buy the time necessary to overcome supply bottlenecks and prevent corporate profiteering.[28] They should be considered now, for the same reasons.ConclusionCongress and the administration have the power to stop corporations from using their market power to raise prices. It is far better that Congress and the administration take direct against this sort of inflation than relying solely on the Federal Reserve to raise interest rates to slow the economy and risk another recession – putting the entire burden on fighting inflation on average working people, who are not responsible for it.[1] https://www.bls.gov/news.release/cpi.nr0.htm[2] https://www.intellinews.com/commodity-prices-fall-across-the-board-as-the-market-adjusts-to-the-sanctions-realities-256384/[3] https://www.bls.gov/news.release/ppi.nr0.htm[4] https://www.theregister.com/2022/07/14/intel_plans_price_hikes_for/[5] https://www.newyorkfed.org/newsevents/news/research/2022/20220912[6] https://www.federalreserve.gov/newsevents/speech/powell20220321a.htm[7] https://www.federalreserve.gov/newsevents/speech/powell2023221.htm[8] https://www.nytimes.com/2022/09/15/business/economy/inflation-markets-economy.html[9] Refinitiv Datastream/ BLS/ BEA. Reuters Graphic E. Burroughs.[10] https://www.whitehouse.gov/briefing-room/blog/2021/12/10/recent-data-show-dominant-meat-processing-companies-are-taking-advantage-of-market-power-to-raise-prices-and-grow-profit-margins/[11] https://hbr.org/2018/03/is-lack-of-competition-strangling-the-u-s-economy[12] https://digital.com/half-of-retail-businesses-using-inflation-to-price-gouge/[13] https://www.nytimes.com/2022/02/27/business/economy/price-increases-inflation.html[14] https://www.theguardian.com/environment/2022/aug/23/record-profits-grain-firms-food-crisis-calls-windfall-tax?CMP=Share_iOSApp_Other[15] https://accountable.us/meatpacking-profiteers-testifying-today-saw-nearly-13b-in-profits-after-racking-up-384m-in-price-fixing-fines-and-settlements/[16] https://accountable.us/meatpacking-profiteers-testifying-today-saw-nearly-13b-in-profits-after-racking-up-384m-in-price-fixing-fines-and-settlements/[17] https://accountable.us/meatpacking-profiteers-testifying-today-saw-nearly-13b-in-profits-after-racking-up-384m-in-price-fixing-fines-and-settlements/[18] https://www.modernretail.co/retailers/citing-inflation-cpg-conglomerates-are-raising-prices-and-earning-record-profits/[19] https://accountable.us/profiteering-watch-procter-gamble-boasts-biggest-annual-sales-increase-in-16-years-after-excessive-price-hikes/[20] https://www.bloomberg.com/news/articles/2022-08-09/container-lines-to-smash-year-old-profit-record-with-73-surge[21] https://www-wired-com.cdn.ampproject.org/c/s/www.wired.com/story/a-us-freight-rail-crisis-threatens-more-supply-chain-chaos/amp[22] https://accountable.us/wp-content/uploads/2022/06/CPI-Retail-Report-Release.pdf[23] https://www.forbes.com/sites/sergeiklebnikov/2022/09/07/oil-prices-hit-seven-month-low-as-recession-fears-weigh-on-demand[24] https://www.nbcnews.com/business/business-news/oil-companies-record-earnings-sky-high-gas-prices-linge-rcna40622[25] https://www.nytimes.com/2022/08/26/business/economy/jerome-powell-inflation.html?smid=nytcore-ios-share&referringSource=articleShare[26] https://www.brookings.edu/bpea-articles/understanding-u-s-inflation-during-the-covid-era/[27] https://www.congress.gov/bill/117th-congress/house-bill/675/text[28] https://timesmachine.nytimes.com/timesmachine/1946/04/09/93087670.html?pageNumber=23 This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

Friends,One of the most horrific legacies of Trump is the unwillingness of Republican candidates to commit to being bound by election results. Senate candidates who have refused to commit to accepting the results are Republicans Ted Budd in North Carolina, Blake Masters in Arizona, Kelly Tshibaka in Alaska, and J.D. Vance in Ohio, according to news reports. Two candidates for governor have also refused to be bound: Tudor Dixon, the Republican nominee for the governor of Michigan, and Geoff Diehl, the Republican nominee for governor of Massachusetts.It’s one thing to reserve the right to call for recounts if elections are close and irregularities are evident and to appeal the results through the courts. But that was not Trump’s circumstance in the 2020 presidential election. Recounts were taken but showed the same results; Trump’s appeals through the courts were rejected. And that’s not what these Republican candidates are asserting now, in Trump’s shameful wake. But tell me: If these Republican candidates are not bound by the election results, what are they bound to? These candidates are in effect issuing open invitations to their supporters to contest electoral losses in the streets.American democracy is based on our commitments to be bound by the outcomes of elections. These are commitments we make to democracy over any specific outcomes we may want. The peaceful transition of power depends on these commitments.Before Trump, these commitments were assumed. And at least since the Civil War they have been honored. When losing candidates congratulate winners and deliver gracious concession speeches, they demonstrate their commitment to democracy over the electoral victory they sought.And that demonstration is itself a means of reasserting and reestablishing civility. It sends an unambiguous message to all the candidate’s supporters that the process can be trusted.Think of Al Gore’s concession speech to George W. Bush in 2000, after five weeks of a bitterly contested election and just one day after the Supreme Court ruled 5-4 in favor of Bush: “I say to President-elect Bush that what remains of partisan rancor must now be put aside, and may God bless his stewardship of the country …. Neither he nor I anticipated this long and difficult road. Certainly neither of us wanted it to happen. Yet it came, and now it has ended resolved, through the honored institutions of our democracy. Now the Supreme Court has spoken. Let there be no doubt, while I strongly disagree with the court’s decision, I accept it. … And tonight, for the sake of our unity as a people and the strength of our democracy, I offer my concession.”Gore made the same moral choice made by his predecessors who lost elections, and for the same reason: The democratic process (even one that included the judgements of Supreme Court justices) was more important than winning a specific election. This all changed in September 2020 when Trump refused to commit to be bound to the results of the upcoming 2020 presidential election.“Well, we’re going to have to see what happens,” he said when asked whether he’d commit to a peaceful transition of power. “You know that I’ve been complaining very strongly about the ballots and the ballots are a disaster,” Trump added, presumably referring to mail-in ballots -- which he baselessly claimed would lead to voter fraud.This is when his poison began seeping directly into the bedrock of American democracy.That poison spread deeper and faster after he lost the election, when he refused to concede – claiming, again without any basis in fact, that it had been “stolen” from him.The poison came to the surface on January 6, 2021, when a group of his supporters – wielding weapons of war – invaded the U.S. Capitol and threatened the lives of members of Congress. Five people were killed. The same poison has now spread to senatorial and gubernatorial candidates who refuse to commit to November’s election results. The commitment to be bound by the results of an election is the most important commitment in a democracy. It is also the most important qualification for public office. It is the equivalent of an oath to uphold the Constitution.Candidates who refuse to commit to being bound by the results of elections should be presumed disqualified to hold public office. ***[Exactly one year ago today I began my daily communications with you. Thank you again for your support, your interest, and your thoughtful comments. The road ahead is filled with potholes, such as election deniers and candidates who won’t commit to being bound by election results. But if we make the journey toward a stronger democracy together, we have a better chance of achieving it.] This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

I’m against trafficking of migrants. But luring unsuspecting people onto planes with lies about jobs, housing, and education awaiting them, and then depositing them onto an island off the coast of Massachusetts that’s totally unprepared to receive them, is a form of human trafficking.The people you’re talking about aren’t American citizens. They have no rights. Even if they’re not Americans, U.S. law prohibits kidnapping people and moving them across state lines.I didn’t kidnap them. They’re here illegally! You don’t know that. Under our laws, these people are entitled to a hearing on whether they’re here legally — just like all the Cuban asylum seekers who for years have arrived in South Florida fleeing communism. What I’m doing is appropriate and legal! I’m paying for part of it with funds from last year’s American Rescue Plan. That money was for the COVID-19 health crisis. It isn’t a slush fund for whatever political stunt you dream up.I’m also using every penny of the $12 million Florida budgeted to relocate migrants. I have a responsibility to the people of Florida to send migrants out of the state! If you’re responsible for Floridians, why are you picking up people in Texas and transporting them to Massachusetts?Many of the people who cross the southern border into Texas end up in Florida. But the law gives federal officials the responsibility for handling immigration, not you.You don’t know the Constitution. Article 10 gives powers not delegated to the federal government to the States.No Governor, you don’t know the Constitution. Article 1 gives Congress the power to regulate commerce among the states. Neither you nor the state of Florida has the authority to off-load people you don’t want onto other states. I’m not the only governor doing this! I know. On Thursday Texas Governor Greg Abbott sent two surprise buses of migrants to Washington, D.C., where they were dropped off near the residence of Vice President Harris carrying all they have in clear plastic trash bags.And we red-state governors are going to do a lot more! So Republican governors can’t be bothered with pesky things like laws or the Constitution?The U.S. immigration and asylum systems are totally broken! Then why don’t you support fixing them instead of using immigrants as political fodder? Ask Republicans in Congress to stop blocking federal legislation creating paths to citizenship for millions of undocumented immigrants and to expedite asylum seekers and other legal immigrants.You don’t understand politics. You have to play hardball. You don’t understand morality or decency. You’re treating immigrants as if they’re political pawns rather than people. They’re no less people than was your maternal great-great-grandfather Salvatore Storti, who immigrated to the United States from Italy in 1904, or your great-great-grandmother Luigia Colucci, who joined Salvatore in the United States in 1917.Keep them out of this. And you’re treating the citizens of blue states as political hostages rather than fellow Americans. But they are no less American than the millions of retirees from blue states who have migrated to Florida, and their children and grandchildren who still live in blue states. We’re all in this together. No we’re not. And you’re acting as if governing is a child’s game rather than a pursuit of the common good. But it’s not a game. Our common good has depended on the sacrifices of generations of American service men and women, first responders, teachers, social workers, and public leaders who dedicated their lives to this nation. I don’t have to listen to your speeches. Look, I get it: Coping with immigration is difficult. It requires hard thought and hard work. You betcha. But you’re giving it neither. Interview over!I’m told you have presidential ambitions, Governor. If so, you might start acting like a statesman rather than doing stunts that make you a cynical clown. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

Hello friends,Welcome back to my Saturday coffee klatch. Today I’m offline with family, so instead of our regular klatch, I’m bringing you a terrific conversation I just had with Nse Ufot, CEO of New Georgia Project (NGP). NGP is one of the most important grassroots voting-rights organizations — in one of the most important voting states. NGP is now registering over 600,000 young people and people of color to vote in all 159 of Georgia’s counties. Nse describes the organization as a “tech startup inside a civil rights and voting rights organization” to build the power of working people in Georgia. I’m so pleased to be able to share with you this inspiring discussion about the on-the-ground fight for democracy. We cover:* Who has power in our system — and the need to cultivate new voter power through grass-roots organizing. * How to train organizers — by teaching them how to listen (because potential voters “have twice as many ears as they do mouths.”)* How to motivate non-registered voters to step up — by asking people to discuss what they need.* How to keep people coming to the polls — even though those with power will continue to put up obstacles.* How to get people the information they need — in a voting system that’s barely changed in a century. * And what will happen in 2024 and beyond — and why Nse, as an optimist, is “ready to cancel the apocalypse.” (I agree!)My thanks to Nse and all of her colleagues and volunteers at the New Georgia Project. Thanks also to Kevin McCormick who composed the tune we use as today’s coffee klatch theme song.Heather Lofthouse and I will be back next week. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

Yesterday, Donald Trump threatened that if he is indicted on a charge of mishandling classified documents after leaving the White House, there would be “problems in this country the likes of which perhaps we’ve never seen before,” adding “I don’t think the people of the United States would stand for it.”These words followed on last month’s threat by Senator Lindsey Graham that if Trump is prosecuted, there would be “riots in the street.” Trump appeared to endorse Graham’s threat, sharing a video link on his Truth Social platform.Trump’s latest threat requires four responses:1. Trump is daring the Justice Department to prosecute him, in effect asserting he is above the law. He is not above the law. The Justice Department is methodically and carefully sifting through evidence and presenting it to a grand jury. Neither the Department nor the grand jury should be intimidated by Trump’s latest threat.2. Trump’s rhetoric is dangerous. We have already seen the consequences of what happens when Trump invites a mob to the streets. Five people died on January 6, 2021. Many more – including members of Congress and the former Vice President – could have been killed on that day. Since the FBI search of Mar-a-Lago, Trump’s incendiary words have fueled death threats to numerous federal officials, judges, and lawmakers. All Americans should condemn Trump’s latest threat and incitement to violence. 3. We are dealing with a sociopathic narcissist who wants nothing more than to divide the nation over himself. This is not a matter of left versus right, liberal versus conservative, Democrat versus Republican. It is a question of the Constitution and the rule of law versus authoritarianism and tyranny. If Trump prevails — if he intimidates law-enforcement officials from doing their jobs over his attempted coup or his theft from the White House of secret documents — we lose our democracy. The media must stop covering this as if there are two sides to this story. There are not. 4. The time has come for Republican lawmakers, candidates, and rightwing media owners and personalities to show some backbone and vigorously repudiate Trump. Their failure to do so before now has created a monster that threatens to consume this country. It is up to them to tell their constituents, followers, readers and viewers that there is no place in America for Trump’s threats to law enforcement and his incitements to violence. Mitch McConnell, Kevin McCarthy, Lindsey Graham, Sean Hannity, Tucker Carlson, Rupert Murdoch, and others must say it loudly and clearly: We repudiate Trump and his threats. No person is above the law. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

A few days ago, I received an email from an associate producer at the Dr. Phil Show. They recently came across my film “Inequality for All” and wanted to know “if I’d be interested in joining Dr. Phil as an expert guest for an upcoming episode.” Hey, why not? The Dr. Phil Show is the number 1 rated daytime TV talk show in America. It has over 2 million viewers. I have lots to say to those viewers about the perils of widening inequality. Then I read the rest of the email. “For this conversation we will be asking questions like do college admissions enroll minorities over prospective Caucasian students? Are Caucasian teachers and professors being laid off to ‘make up for past discriminations’ against minority educators, as seen in Minneapolis?” These were the only questions included in the email. In other words, it will be a show about favoritism to Black people over white people. What’s going on here? The Dr. Phil Show isn’t on Fox News. It’s carried by CBS. Phil McGraw himself isn’t a rabid right-winger. At least not that I know of. (He did appear on Fox News soon after the start of the pandemic to argue against temporarily closing down the economy — claiming that the likelihood of dying from COVID was no greater than likelihood of dying in a car accident or drowning in a swimming pool. By that time 3,000 people had died of the infection. Two years later, it had taken the lives of 1 million.)But the point I want to make isn’t solely about Dr. Phil. It’s about the people who produce popular TV talk shows. They decide two hugely important things: (1) the topics to be discussed, and (2) how those topics are framed.These two decisions determine what issues the the public focuses on (out of an almost infinite number bubbling up each day) and what’s debatable about them (out of an almost infinite number of possibilities). And these two determinations in turn fuel public emotions — ranging from anger, indignation, and outrage, to hope, pride, and confidence. They affect our daily conversations. They shape our politics. They divide or connect Americans. They help set the national agenda. Take the recent contract agreement between the Minneapolis teachers union and the Minneapolis school district — the issue Dr. Phil’s associate producer wants me to talk about. That contract says that if school budgets must be cut, white teachers will be laid off before those from “underrepresented” populations, regardless of seniority. If school budgets then expand, “underrepresented” teachers will be reinstated before white teachers, regardless of seniority.MAGA outlets, blogs, and social media sites have gone nuts over this. Racial preferences for Black people have become a hot-button issue, especially among struggling working-class whites. Viewed this way, this issue lends itself to the rightwing argument that “coastal elites” have rigged the economic game against white working people in favor of “less-deserving” people of color. Naturally, this infuriates a lot of working-class whites.Presumably, this is the debate Dr. Phil’s producer has in mind. But it’s the wrong issue and the wrong debate. Go a bit deeper and you’ll see why. The goal of the Minneapolis school board is to remedy continuing effects of past discrimination, by supporting “the recruitment and retention of teachers from underrepresented groups” [emphasis added]. This is a particularly important goal in Minnesota’s schools, where 5.6 percent of licensed teachers identify as a teacher of color or American Indian, compared to 30 percent of students.Research shows having teachers of color in the classroom has a positive impact on students — not just students of color but also on white students — including improved test scores and higher graduation rates.But in a last-in-first-out seniority system, teachers of color are more likely to be laid off when budgets are cut. That’s because they’ve entered the profession more recently, so have less seniority.In the Minneapolis public schools, fewer teachers of color are tenured than white teachers. State law requires that teachers be on probation until completing three consecutive years of work.So the new Minneapolis contract is serving a particularly important public purpose in a system where seniority and tenure would otherwise discriminate against people of color. The contract is leveling the playing field and helping insure that more teachers of color are in classrooms. But do you think for a moment that I’d be able to explain all this on the Dr. Phil Show? Not a chance. I’ve been doing television interviews for forty years. I’d be lucky if I got out two sentences before another guest, representing the “other side” of the issue, jumped down my throat, charging “racism!” So what are millions of daytime TV viewers likely to learn from this discussion about whether “Caucasian teachers” are “being laid off to ‘make up for past discriminations’ against minority educators, as seen in Minneapolis?” That government is favoring Black teachers over white teachers — and that lots of people are mad about it. I’m sending my regrets. My bigger regret is that the national conversation is in the hands of producers chasing ratings and advertising dollars, with no regard for how they’re distorting the public’s understanding of what’s important or the core choices lying ahead.** This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe

Hello friends,Welcome back to my Saturday coffee klatch with my colleague Heather Lofthouse (Executive Director of Inequality Media Civic Action — and my former student), where we talk about the highs and lows of the week, over morning coffee. Today we discuss:— The death of the Queen, what she symbolized for Britain and America, and why King Charles III may be the last of the British royals.— Judge Eileen Cannon — the Trump appointee whose decision this week to appoint a “special master” to look over the top-secret documents Trump stole from the United States and review for executive privilege makes absolutely no logical sense. — The midterm elections coming closer, and why the Supreme Court’s decision overruling Roe v. Wade may be an even bigger motivator of voters than Trump Republicans’ attacks on democracy.— My pick for the season’s best TV series.— Why Californians have been willing to voluntarily reduce electricity consumption during this heat wave. And today’s poll: This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit robertreich.substack.com/subscribe