I’m Chancellor’s Professor of Public Policy at the Richard and Rhoda Goldman School of Public Policy at the University of California, Berkeley, and senior fellow at the Blum Center for Developing Economies.
Do you have an opinion on the TPP agreement yet?
It’s a bad deal for most Americans. It’s designed mainly to protect the foreign investments of global American-based corporations (no surprise, since it was designed in large part by lawyers and lobbyists working for large U.S. based corporations), not to increase the number or quality of American jobs. And its investment dispute-settlement procedures enable global corporations (except for tobacco companies) to get damages from nations whose health, safety, or environmental regulations reduce corporate profits.
Have you seen the whole thing or are you just commenting on the 4 chapters that have been leaked?
I only know what’s been leaked — which raises another issue for me. I don’t see how the American people can instruct their representatives in Congress on how to vote on such a critical agreement without having had an opportunity to see the whole of it.
What were you doing when you were 24 years old?
Wondering what the hell I’d be doing when I was 30. I didn’t have any idea. I had been an art major in college. By 22 I was sure I wanted to be an architect. By 24 I wanted to be a writer and a philosopher, but I was also attracted to public policy.
I took your class at UC Berkeley in Spring 2012 and one of the points you emphasized was the danger of cynicism. I’m concerned that many of Bernie’s ardent supporters on Reddit will immediately snap back into cynicism if Bernie does not win the nomination. Do you think this will be the case? What advice would you give to these Sanders supporters if Hillary does become the Democratic nominee for President?
I worry about the same thing. Cynicism about politics is a self-fulfilling prophesy because, ultimately, it allows the moneyed interests to take over our democracy even more than they have already. If Bernie doesn’t get the nomination, we have to continue to work very hard — and set our sights beyond 2016 or even 2020, and work at the state and local levels as well. This has to be a movement that extends beyond a single candidate or a single election.
How do you feel about judicial elections in the states. If you approve of them, why? If you disapprove, what do you think would be a better method for choosing state judges?
State and local judges shouldn’t be elected. They should be appointed, with the advice and consent of the legislature. Electing them opens the door to campaigning, which invites big donors, and ends up threatening the impartiality of the judiciary and undermining public trust.
Do you think the TPP is going to help the economy or hurt it? What effect will it have on jobs? And was NAFTA a good or bad thing in your opinion?
I think it would hurt the economy because the economy depends on having a large and growing middle class (as well as poor who are able to ascend into the middle class) with the purchasing power to create jobs. One reason this “recovery” has been so anemic is the lack of aggregate demand coming from the bottom 90 percent. And the TPP will further erode the vast middle.
What was President Clinton like to work with?
I enjoyed working with him but, frankly, felt frustrated that I/we weren’t able to do more to reverse the trends of widening inequality that were evident even then.
Would you go on the ticket as VP if you were asked? My dream ticket right now is Sanders-Reich!
I can’t imagine anyone asking me to be on a ticket as VP. I’m not indulging in false modesty here. I’d be a terrible running mate. I don’t like campaigning. I hate to kiss derriers. I don’t do small talk. I’m miserable at remembering names and faces. I’m the very last person I’d ever want as a running mate.
Why are you are not running for office in some form? To improve America I believe we need more people in public office with your core values, education and mind set.
I want to urge everyone who is reading this today to seriously consider public office, elective or appointive. As I said above, I’m not fit temperamentally for elective campaigns but I do think holding office, even appointive office, even at the local level, is vitally important. I’ve urged young people to get involved in their own communities — run for school board, support local candidates you believe in, help mobilize and organize low-wage workers for a higher minimum wage. Much, much that you can do.
I have recently become interested in the concept of Basic Universal Income. What are your thoughts on the practicality of this, and do you think it would be a possible alternative to our current welfare system?
I endorse a basic universal income in my new book (“Saving Capitalism: For the Many, Not the Few”), financed by levy on patents. I argue that it shouldn’t be generous — most people would still have to or certainly want to work — but that it will be necessary as technological advances continue to erode the amount and the incomes of most working people.
Would you be willing to talk a little more about how this works? How can a levy on patents cover all of the associated costs required in offering a basic income? I’m guessing I should just go read your book, but anything you’d willing to share here might help you make another sale.
To the extent that we’re looking into a future of technologically-based unemployment or under-employment, intellectual property will become a key issue — how long a patent or copyright should run, what should be patentable or can be copyrighted, and what conditions should attach to a patents and copyrights. It’s on the basis of this logic that I come to some ideas and predictions.
What was your favorite memory of studying at Oxford?
I felt as if I’d been transported into the 19th century (or earlier). It was a great relief from the craziness I had experienced leading up to the election of Richard Nixon in 1968 (I’d campaigned for Eugene McCarthy and worked for Robert Kennedy before that, many of my friends were being drafted to go to Vietnam, and our cities were burning). But I think I would have gone a little crazy had I remained in that sanctuary for more than the two years the scholarship gave me.
What do you think of the budget/tax plans of the presidential candidates? Who offers the best deal for income growth across classes?
The worst budget/tax plan is Donald Trump’s — which is less a plan than an exhortation. Jeb Bush’s is almost as bad. I think Bernie Sanders offers an excellent framework, although he hasn’t yet filled in the details. I expect Hillary Clinton to come up with one soon.
Who are some of your favorite US presidents, and why?
Truman had guts and gumption, and didn’t get the credit he deserved when he was president. Lyndon Johnson was so badly tarnished by Vietnam that we forget what an extraordinary progressive he was and what an amazing politician. I admire what I know of Teddy Roosevelt and, of course, his fifth cousin Franklin. But my favorite of all is Abraham Lincoln.
If Hillary Clinton maintains her sizable lead and becomes the nominee, will you vote for her? Why or why not?
Of course. She’s far, far, far better than any of the Republican candidates. Frankly I’ve never seen a stranger and less qualified bunch of Republican candidates in my lifetime.
Why do you think unions have lost their power and influence in America and do you believe unions could ever get back to an optimal level (such as in the 1950’s and 60’s)?
In 1955, a third of all workers in the private sector of the U.S. economy were unionized — which gave the working class significant bargaining power to get a fair share of the gains from growth. That’s a large part of the reason why the American middle class continued to grow and gain ground as the economy grew. But starting in the late 1970s, unions began to erode, until now fewer than 7 percent of the private sector workforce is unionized — a key explanation for why the middle class is shrinking. What happened? Partly globalization and outsourcing. Partly technological displacement. But also politics. Ronald Reagan’s firing of the air-traffic controllers (who had no legal right to strike) legitimized union busting by major corporations. And the unfriendly takeovers by junk-bond financiers (the earlier equivalent of private-equity managers) added to the incentives on CEOs to treat workers as costs to be cut rather than as assets to be developed — and encouraged further union bashing.
Do you have any recommendation for how best to address the “Socialism equals Communist Tyranny” mindset that doesn’t further alienate the misinformed or come across as condescending?
When you hear someone talk about “socialism,” my recommendation is that you gently suggest that “ism’s” don’t really help advance the conversation. Every advanced nation — even the social-Democratic nations of Denmark and Sweden — is organized around private property and voluntary exchange, but the specific rules vary, and therein lies the most important issue: Do the rules benefit the vast majority or are they rigged to benefit those at the top?
Do you think we’ll ever reach a “post scarcity” economy where automation, AI, and robotics run the bulk of the economy while people are left to their own devices?
As I relate in my book, John Maynard Keynes, writing in 1928, foresaw an economy that within a hundred years (2028) would be almost completely automated — so much so that no one would have to work. What Keynes left out was how anyone would be able to afford the automated goods and services, because no one would have a job. That’s why we need to focus on how to redistribute income from the owners of the coming robotic economy to the rest of us. (I suggest one way in the book but I don’t want to give away the plot.)
What is your favorite genre of music? And what do you most regret not doing during your tenure in the Clinton admin?
Jazz, of all kinds. Not fighting hard enough against the Wall Street types in the administration (although I fought them tooth and nail).
What do you think of worker cooperatives (employee owned and run companies)? Do you think there is a potential for them to replace the stock corporation as the primary economic institution?
We do need to move toward the system we had through much of the first three decades after World War II — which was more like “stakeholder capitalism” than “shareholder capitalism.” Worker ownership, cooperatives, and/or strong labor unions capable of negotiating profit-sharing or gain-sharing agreements — all of these would help widen the circle of economic gain-sharing. I don’t think we need a revolution to get this (but we probably need a revolution in campaign financing).
My friend recently mentioned how the government runs the DMV. It’s terrible. A contender for the worst government-run system in America. Why would we hand over millions of dollars more for the government to then run our healthcare, paid maternity leave, etc. when the government proves it already sucks at managing such large numbers in an efficient way?
The reason I wrote “Saving Capitalism: For the Many, Not the Few,” is to get us out of this interminable debate over whether you believe the market or government is the superior alternative. There is no market without government rules. Right now, government is funding more than half of all health care in America, but is doing so through private for-profit health insurers, who are busily merging into giant corporate leviathans. This is insane. A single-payer system, as most other advanced nations have, would be far more efficient and less costly.
A lot of the American public has been lead to believe that where a person ends up in life is solely a function of how “hard” they worked to get there. This is not true in the majority of cases and a person’s economic position in life is far more a function of where they were born and who their parents are. The lesser off are vilified and stereotyped as being lazy due to this belief and therefore somehow deserving of their place in society. This prevents a great deal of good legislation like increased minimum wage, accessible health care and education etc. because a large portion of America believes if someone didn’t “work” for it then they don’t deserve it. How do we change this very American perception such that we can start to look out and provide for the many rather than the few and pass meaningful legislation to make many American’s lives better?
First, we need to understand that people are not paid what they’re “worth” in any moral or socially-responsible sense of the term. A hedge-fund manager pulling in $1 billion a year isn’t “worth” that sum, except in the tautological sense that that’s what he earns. A CEO of a big corporation who’s now typically getting 300 times the pay of the average worker isn’t “worth” that much more than he/she was raking in fifty years ago, when the typical CEO of a big company got 20 times the pay of the average worker. Next, we need to work very hard to raise the minimum wage and expand the Earned Income Tax Credit, and also remove the corporate tax deduction for executive pay in excess of $1 million a year. Just for starters.
Do you have any regrets from your time in public office? Lessons about politics or American government or even yourself that you have taken away from the experience? Would you ever consider working in government again, if asked by a Sanders or HRC administration? What position do you think would suit your abilities and allow you to be an effective public servant again?
My biggest regret is I didn’t make even more of a ruckus than I did (as it was, I was a terrible pain in the ass for Bill Clinton and others). He shouldn’t have signed that punitive “welfare reform” bill in 1996, for example. As to future public service, of course I’d serve if asked. Any of us who’s asked to serve has a public responsibility to do so. But I can’t say I’d head back to Washington with my tail wagging and my heart aflutter. It’s very hard work, and Washington has become a war zone.
You talk a lot about the need to get money out of politics (which I 100% agree with). I’m wondering if you think this should be done with a Constitutional Amendment that explicitly does so, or if it would be better to do a larger amendment that includes things like independent redistricting commissions, moving Election Day to a weekend/making it a holiday, minimum number of days for early voting, ex. Essentially do you think it’s better to focus on the single issue of money in politics, or would it be better to package them all into one amendment?
It’s terribly difficult to amend the Constitution (as it should be). We have essentially two methods. One is through Congress and state legislatures. The other is through a constitutional convention. All the amendments that have been added to the original Constitution (beyond the Bill of Rights) have come through the first method. The second is fraught with danger because if irresponsible people are sent to a convention, there is no way to constrain what they are capable of doing. Or to state the matter another way, let’s try to amend the Constitution, but let’s do so through Congress and the states, and when we do so let’s overturn both “Citizens United” and also “Buckley v. Valeo” (which held that money is the equivalent of speech).
What can a person in my early 20s do to be more involved in getting people aware of the real problems facing us today?
Spread the truth. Counter the poison being fed to the country daily by Fox News and Rush. Use social media to do so.
I know you are a political economist so your probably don’t delve too much into the technicals, but what are your thoughts on Piketty’s book “Capital in the 21st Century”? Everyone is always going back and forth about free market vs. Keynes but Piketty basically argues that the original classical model is itself flawed. We’ve always assumed Cobb-Douglas where capital and labor multiply at even proportions. But he thinks there is some variable we haven’t accounted for that causes capital to gain a larger share over time. His work is pretty convincing. Thoughts?
I’m very impressed by Piketty’s work and I think he’s basically correct, although it’s of limited relevance to the widening inequality in the U.S. over the last 35 years because most of that has been related to income rather than wealth. In my book I discuss a factor that Piketty leaves out, but I think is enormously important — the vicious cycle created with income (and wealth) move upward, creating enormous political power at the top, capable of changing the rules o the market to further enhance income (and wealth) at the top. This vicious cycle can explain much of what’s happened here.
What is next in the field of Public Policy?
What’s lacking in public policy is political and community organizing. We can have the finest policy ideas imaginable but if we don’t have people organized and mobilized to ensure they’re enacted and implemented, those beautiful policy ideas are worth nothing.
Why do you think it’s been so difficult to engage and educate the American public on the effects of modern “free market” politics? There seems to be a lot of misinformation about a government’s role in capitalist society.
I just had coffee with a fellow here in Cincinnati who calls himself a conservative Republican. It was a very friendly conversation. I asked him where he got his news and his political views. He told me he didn’t read much, but he listened every day to hours of Rush Limbaugh and occasionally tuned in to Fox News. Rush and Fox have done more to mislead more Americans than almost any other propagandistic effort in modern history.
I don’t understand much about corporate taxes. Why do you think corporate taxes are necessary? A lot of economists believe that a flat tax will raise tax revenue from corporations. What is your take on this?
A flat tax is inherently regressive because it lowers the rates on high incomes and increases rates on lower incomes. Corporate taxes raise a different set of issues. I’ve argued for years that we should eliminate the corporate tax and substitute a tax on the actual owners of corporate capital (see “Supercapitalism.”)
Where do you think the line is between government intervention and privatization? In other words, when should we regulate and when should we just leave something be?
We can’t have a market without rules, so the whole vocabulary we’ve developed of “regulating the market” and “government intervention in the market” creates a false understanding of what’s really going on. The issue is who has most influence over the continuous rule-making that defines the market, and whether these rules help the vast majority or enrich a small group at the top.