The Wealth of America
A graphic from Robert Reich's film Inequality For All

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.”

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