NPI's Cascadia Advocate

Offering commentary and analysis from Washington, Oregon, and Idaho, The Cascadia Advocate is the Northwest Progressive Institute's unconventional perspective on world, national, and local politics.

Saturday, April 13th, 2019

Documentary Review: Robert Reich’s “Inequality for All” is an essential film

Inequal­i­ty for All is a film based on the work of Robert Reich, a Pro­fes­sor of Pub­lic Pol­i­cy at the Uni­ver­si­ty of Cal­i­for­nia at Berke­ley and for­mer Sec­re­tary of Labor under Pres­i­dent Bill Clin­ton.

This film pre­dates his oth­er film, 2017’s Sav­ing Cap­i­tal­ism by four years, and while there is some over­lap in the films, such as Reich’s expla­na­tion of the myth of the “free” mar­ket, both are worth see­ing for all the infor­ma­tion in them.

Some scenes in the film are from Reich’s Berke­ley “Wealth and Pover­ty” class. He tells the stu­dents that they will explore three ques­tions over the course of the class: what is hap­pen­ing, why, and if it is a prob­lem.

He explains that some inequal­i­ty is inevitable under cap­i­tal­ism.

Inequality For All

Inequal­i­ty For All
Release Year: 2013
Direc­tor: Jacob Korn­bluth
Run­ning Time: 1 hour, 29 min­utes
Watch the trail­er

“The ques­tion is not inequal­i­ty, per se. The ques­tion is, when does inequal­i­ty become a prob­lem? How much inequal­i­ty can we tol­er­ate and still have an econ­o­my that’s work­ing for every­one and still have a democ­ra­cy that is func­tion­ing?” Reich asks.

The film exam­ines some of the data about inequal­i­ty in the Unit­ed States, includ­ing how the lev­els of inequal­i­ty in 2001 just before the Great Reces­sion mir­rored the pre­vi­ous peak of inequal­i­ty in 1928, the year before the start of the Great Depres­sion. Also notable is that in 2012, the rich­est four hun­dred Amer­i­cans had more wealth than half the Unit­ed States pop­u­la­tion put togeth­er.

Reich explains that house­hold and fam­i­ly spend­ing is sev­en­ty per­cent of the Unit­ed States econ­o­my, and the mid­dle class is the heart of that house­hold and fam­i­ly spend­ing. The mid­dle class is what keeps the econ­o­my going.

“There’s no way you can sus­tain the econ­o­my over the long term with­out a strong and vibrant and grow­ing mid­dle class. Can’t be done,” Reich says.

Unfor­tu­nate­ly, the mid­dle class is strug­gling and has been going down­hill for years.

The film then jumps to Seat­tle, spot­light­ing local entre­pre­neur and ven­ture cap­i­tal­ist, Nick Hanauer. Hanauer says he gen­er­al­ly makes between $10 and $30 mil­lion per year between his var­i­ous busi­ness­es. One makes mat­tress­es and pil­lows.

“The prob­lem with ris­ing inequal­i­ty is that few­er and few­er peo­ple can afford to buy the prod­ucts we make,” Hanauer says. (The rich, on their own, don’t pro­vide enough of a mar­ket for most Amer­i­can busi­ness­es.)

He uses him­self as an exam­ple. Of course the vast major­i­ty of the mil­lions he earns each year is not spent. He says he has “no idea what hap­pens with my mon­ey” but he is sure “it isn’t cre­at­ing any kind of social util­i­ty oth­er than a return for me.”

After the film shows mul­ti­ple news clips with peo­ple talk­ing about “job cre­ators,” Hanauer tears into this fram­ing.

“Some­times we think that this is a debate over facts and fig­ures and data. I think if you believe that, you’re fool­ing your­self,” he begins.

“When some­body calls them­selves a ‘job cre­ator,’ they’re not describ­ing the econ­o­my or how the econ­o­my works, although that’s what it sounds like. What they’re real­ly doing is mak­ing a claim on sta­tus, priv­i­leges, and pow­er.”

It is cus­tomers, he says, who are the real job cre­ators.

“We need to replace trick­le-down eco­nom­ics with mid­dle-out eco­nom­ics. And indeed, every place you look on Earth where you find pros­per­i­ty, you find mas­sive invest­ments in the mid­dle class and the poor, because at the end of the day, they are the true job cre­ators,” Hanauer con­tin­ued. “The most pro-busi­ness thing you can do is to help mid­dle class peo­ple thrive.”

The film piv­ots back to Reich, who explains how, start­ing in the late 1970s, a gap between pro­duc­tiv­i­ty and wages, which his­tor­i­cal­ly rose togeth­er, start­ed to grow. Over the last thir­ty-plus years, pro­duc­tiv­i­ty has con­tin­ued to go up, but wages flat-lined. He attrib­ut­es this to not just the decline of unions, but two oth­er major under­ly­ing issues: glob­al­iza­tion and tech­nol­o­gy.

Con­trary to pop­u­lar belief, he says, glob­al­iza­tion and tech have not reduced the num­ber of jobs avail­able to Amer­i­cans.

These forces have, how­ev­er, reduced the pay of many Amer­i­cans, even though costs for goods and ser­vices have gone up. So peo­ple are work­ing hard­er and hard­er and hard­er, and get­ting nowhere, Reich says.

He then explains how we don’t have to look to oth­er coun­tries for a mod­el of how to make things bet­ter, but rather just look to our own past: the Unit­ed States in the three decades after World War II.

At that time, the vir­tu­ous cycle was in full effect.

The cycle goes like this: increas­ing pro­duc­tiv­i­ty leads to increased wages; increased wages mean work­ers buy more; peo­ple buy­ing more leads com­pa­nies to hire more peo­ple; more peo­ple work­ing means tax rev­enues increase; the gov­ern­ment then uses these increased rev­enues to invest more in our soci­ety; increased pub­lic sec­tor invest­ment allows work­ers to become bet­ter edu­cat­ed, which in turn allows for even more pro­duc­tiv­i­ty, and the econ­o­my expands.

Unfor­tu­nate­ly, says Reich, these days many peo­ple “buy into the lie [that] ‘gov­ern­ment is bad, the mar­ket is good. Every­thing that gov­ern­ment does works against you and every­thing the mar­ket does helps you.’ ” This myth ignores how mar­kets have been rigged and restruc­tured over the last few decades to fur­ther enrich those at the top, at the expense of every­one else.

Reich then explains that when the mid­dle class does­n’t share in eco­nom­ic gains, rather than the uplift­ing vir­tu­ous cycle, you get a down­ward vicious cycle: wages stag­nate, mean­ing work­ers buy less, then com­pa­nies down­size and tax rev­enues decrease, prompt­ing our elect­ed rep­re­sen­ta­tives to cut essen­tial pub­lic ser­vices, work­ers are then less edu­cat­ed and unem­ploy­ment ris­es, and deficits grow.

Sounds pret­ty famil­iar, huh?

As if all of this isn’t bad enough, anoth­er thing that must be wor­ried about when inequal­i­ty reach­es such high lev­els is it’s impact on our democ­ra­cy.

“With mon­ey comes the pow­er to con­trol pol­i­tics,” says Reich, not­ing how the amount of mon­ey going to lob­by­ists goes up every year.

“It’s not that peo­ple are rich,” says Reich, “It’s that they abuse their wealth by lob­by­ing for bailouts and sub­si­dies and tax­es that are going to entrench their wealth. That’s the rea­son why the rules have changed so dra­mat­i­cal­ly.”

For exam­ple, the top mar­gin­al tax rates used to be much high­er.

Under Pres­i­dent Eisen­how­er, a Repub­li­can, they were at the high­est rate in his­to­ry, 91%. It was not until Ronald Rea­gan’s time that rates went below 70%, and now the top rate is only 37%. Cap­i­tal gains are taxed at an even low­er 15%.

Hanauer, a bil­lion­aire, says his effec­tive tax rate is only 11%.

“When you give rich busi­ness peo­ple tax breaks all in the name of job cre­ation, all that real­ly hap­pens is that the fat cats get fat­ter. And of course that’s what’s hap­pened over the last thir­ty years.”

There is no sin­gle solu­tion to income inequal­i­ty, Reich says, but because we make the rules of the econ­o­my, that means we have the pow­er to change those rules. To coun­ter­act the pow­er that those with all the mon­ey have, it will just take more effort. “You’ve got to mobi­lize. You’ve got to orga­nize,” says Reich.

“You’ve got to ener­gize oth­er peo­ple.”

The more we can get peo­ple to under­stand this, espe­cial­ly the rich, the more we can impact the gov­ern­ment to fix the rules of the game so that they no longer tilt so decid­ed­ly in the favor of those that are already rich.

“Inequal­i­ty for All” ends with footage of that last day of Reich’s class at Berke­ley, where he encour­ages his stu­dents that, no mat­ter how enor­mous the prob­lem is, indi­vid­u­als can have an impact.

“I choose to be here, in this course, because I believe in you,” he says.

Just as I write, in the hopes that it gives peo­ple more infor­ma­tion and inspires them to take action.

You can watch “Inequal­i­ty for All” on Net­flix or for a fee on YouTube, iTunes, Vudu, Google Play, or Ama­zon Prime Video. Reich also main­tains an inter­est­ing blog, which also has many infor­ma­tive videos if you pre­fer that to read­ing his posts, and has an active Face­book pres­ence. I’ve fol­lowed him on Face­book for years and find his posts insight­ful and also ground­ing in this dystopi­an age of Trump.

Robert Reich is also the author of numer­ous books, includ­ing “After­shock”, which is the basis for “Inequal­i­ty for All.”

Adjacent posts

  • Donate now to support The Cascadia Advocate


    Thank you for read­ing The Cas­ca­dia Advo­cate, the North­west Pro­gres­sive Insti­tute’s jour­nal of world, nation­al, and local pol­i­tics.

    Found­ed in March of 2004, The Cas­ca­dia Advo­cate has been help­ing peo­ple through­out the Pacif­ic North­west and beyond make sense of cur­rent events with rig­or­ous analy­sis and thought-pro­vok­ing com­men­tary for more than fif­teen years. The Cas­ca­dia Advo­cate is fund­ed by read­ers like you: we have nev­er accept­ed adver­tis­ing or place­ments of paid con­tent.

    And we’d like it to stay that way.

    Help us keep The Cas­ca­dia Advo­cate edi­to­ri­al­ly inde­pen­dent and freely avail­able by becom­ing a mem­ber of the North­west Pro­gres­sive Insti­tute today. Or make a dona­tion to sus­tain our essen­tial research and advo­ca­cy jour­nal­ism.

    Your con­tri­bu­tion will allow us to con­tin­ue bring­ing you fea­tures like Last Week In Con­gress, live cov­er­age of events like Net­roots Nation or the Demo­c­ra­t­ic Nation­al Con­ven­tion, and reviews of books and doc­u­men­tary films.

    Become an NPI mem­ber Make a one-time dona­tion