Title: Robert Reich's Critique of Fellow Boomers

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Brian: It's The Brian Lehrer Show on WNYC. Good morning again, everyone. With us now, former US Labor Secretary Robert Reich. Among our topics, President Trump's firing of the head of the Bureau of Labor Statistics after Friday's disappointing jobs report. Trump said it was rigged but cited no evidence. Sound familiar? This is widely being received as an effect of Trump's tariffs. Also, some commentators are saying we're now more like China. Maybe you heard a version of this on Marketplace last night. The politics determine the official jobs numbers rather than the other way around. The reliability of US economic data is no longer a global bedrock, potentially.

We'll sample from Trump economics advisor Kevin Hassett's explanation on Meet the Press and get Robert Reich's reaction. Reich also has a new book out today, a memoir of his life and work in labor economics and how he got to where we are economically in this country today, and how he proposes to improve things. The book is called Coming Up Short: A Memoir of My America. Robert Reich has recently retired as professor of public policy at UC Berkeley, still a columnist for Newsweek and The Guardian. He's a highly subscribed newsletter writer on Substack, in addition to the book, which again is called Coming Up Short: A Memoir of My America. Professor Reich, always good to have you on the show. Welcome back to WNYC.

Professor Reich: Thank you, Brian. Thank you for inviting me.

Before we even get to things like tariffs and labor statistics and interest rates, when you were with President Clinton, I think he argued that interest rates should be lower than they were. I'll invite you to talk about the opening of the book, in which your experience being bullied as a child helps establish your mindset about society. Would you like to tell some of that childhood story?

Brian: Sure. I am very short. I've always been very short, but about a head shorter than my peers. As a little boy, as many children were, I was bullied, but my bullying was very intense, I think, because I was so different, and I seemed so short, and I was easy prey for the bullies in the playground and on the bus. I felt powerless, I felt vulnerable, I felt, although I didn't know the word then, humiliated. I think that that stayed with me, particularly when one of the older boys who I asked to help protect me, years later, I learned that he had been registering voters in the South to vote during Freedom Summer in 1964, and he was murdered. His name was Mickey Schwerner.

I think, Brian, that that experience, just knowing that the person who helped protect me from the children bullies, the child bullies, had been himself killed by the real bullies, by the Ku Klux Klan, changed my life. It opened my eyes to the notion that bullying is not just some kids being mean. Bullying is happening all around us. I began to see bullying in terms of white supremacists bullying Black people, men bullying women, bosses, employers bullying employees, busting unions. I began to see it all around me.

As inequality has become wider, and you and I over the years have talked about this, that has created an opportunity for the economic bullies, the people at the top who have a lion's share of the wealth and the income in this country, more than ever before, to bully others, to misuse and abuse their wealth and turn it into political power. That's what we saw in the form of, for example, Elon Musk investing $0.25 billion in Donald Trump's campaign in 2024.

Donald Trump himself, the bully of bullies, firing the head of the Bureau of Labor Statistics for coming up with the truth that he doesn't like, basically firing the messenger. This is an authoritarian bully. This is somebody who, honestly, I never thought the United States would produce, that we would tolerate, but here he is, and here we are. My book is very much an account of my life, but it's also an account of how we got to where we are today. How did we get to the point where the bully of bullies is now president?

Brian: Listeners, we have about 20 minutes with Secretary Reich, Professor Reich, and so we can take a few questions during this conversation for him about the last 50 years of economic history or economics today. 212-433-WNYC, 212-433-9692, call or text. His new book, out today, is called Coming Up Short: A Memoir of My America. 212-433-9692. I think you placed the start of the shrinking of the middle class and the path to our current inequality in the 1970s. Correct me if I'm wrong. What were the main building blocks, as you see them, or maybe unbuilding blocks, that created today's concentration of wealth and working and middle class rage?

Professor Reich: In the book, Brian, I talk about the 1971 memo from Lewis Powell, who by then was not yet a Supreme Court justice. He was a lawyer in Richmond, Virginia. He was asked by the US Chamber of Commerce to write a memo that the Chamber of Commerce would distribute broadly to the business community, to the CEOs of America, explaining what they had to do in order to avoid what the Chamber felt was increasing power among environmentalists and consumer activists and labor unions and others.

Lewis Powell, in response, wrote a memo that said, "You have to become more politically powerful, American business, corporations. You've got to invest in campaigns. You've got to become a major player in politics. You've got to make sure that you join together with other companies and basically change politics to favor you and favor other big corporations."

Brian: Was that really new with Lewis Powell in 1971? We had been through the robber baron Gilded Age era. We were through the, what's good for General Motors is good for America. Was it really so new that corporations were flexing their muscles in the political system?

Professor Reich: Yes, it was new in the sense that, yes, we had been through the Gilded Age in the late 19th century, early 20th century, and we had been through the Great Depression, obviously. By the time the Second World War ended, there was a social compact in America between business and labor and government that recognized that the role of business was not just to maximize profits. It was also to respond to the other stakeholders, employees, and people in communities where big corporations were headquartered, and the needs of the nation.

It sounds kind of hokey for me to even say this now. It sounds improbable. Actually, after the Second World War, after the country had been through a depression and war and had survived together by working together, there was a very different sense of what this economy and what American politics could be and should be. Now, my book is about my generation, born in 1946, the Baby Boomers. I remember as a child--

Brian: By the way, same year as Clinton was born, same year as Trump was born, right?

Professor Reich: Yes, and George W Bush and Dolly Parton and Cher. [laughs] A lot of us were born in that year.

Brian: I was going to say, which one does not belong, until you also threw Cher in there, but go ahead.

Professor Reich: What I remember from my childhood and the reason I start in 1946 is because that was the time in which the greatest generation, so-called, my parents' generation, having gone through a Great Depression and World War II, they bequeathed to us a nation that not only had essentially conquered the world economically and held back the Nazis and the Axis powers, but also created the largest middle class the world had ever seen, with a social compact and a social agreement expelled out in all sorts of ways.

That if people really did apply themselves, they played by the rules, they worked hard, they would do better, and their children would do even better than they would do, and that if corporations got richer and richer and made more profits, those corporations and their employees would do better and better. Employees would do better and better. That social compact started to come apart in the late '70s and early 1980s. In part, Ronald Reagan was the quintessence of the rejection of that contract. The point is that we made a U-turn, and I remember it.

I remember I was in my 30s, others of my generation were wondering, "What is this new ethic? Greed is good." You remember that? I think a lot of people were surprised that the social compact had come apart. From the late 1970s onward, the median wage, the wage of the person right in the middle, adjusted for inflation, went almost nowhere. While the country and the economy continued to do better and better, the lion's share, most of the gains from economic growth went to people at the top. That inequality and the corruption that came from that really is, I think, the precursor to Donald Trump.

Brian: There's so much I want to get to with you, or would like to, in our limited time. I want to jump ahead to something that I think is a very important economic and historical tension that exists to this day, and you were in the middle of it when you were in government. You were Labor Secretary in President Clinton's first term, 1993 to 1997. As part of this arc of history, I want to play two soundbites. Here is President Clinton as he signed NAFTA, the North American Free Trade Agreement Act, with Canada and Mexico in 1993.

President Clinton: In a few moments, I will sign the North American Free Trade Act into law. NAFTA will tear down trade barriers between our three nations. It will create the world's largest trade zone and create 200,000 jobs in this country by 1995 alone. The environmental and labor side agreements negotiated by our administration will make this agreement a force for social progress as well as economic growth.

Brian: President Clinton in his first term. Here's President Trump in his first term with something that will sound familiar to many people today.

President Trump: I have long contended that NAFTA was perhaps the worst trade deal ever made. Since NAFTA's adoption, the United States racked up trade deficits totaling more than $2 trillion, and it's a much higher number than that. With Canada and Mexico, it lost vast amounts of money and lost 4.1 million manufacturing jobs, and 1 in 4 auto jobs was about 25% of our auto jobs, even more than that.

Brian: Professor Reich, I believe you were a critic of NAFTA, even as he worked for President Clinton at its inception. Who was more right about 1990s trade policy, Bill Clinton or Donald Trump?

Professor Reich: Donald Trump is partly right. Now, I say this, Brian, with a lot of qualifications, because the biggest problem American workers faced after NAFTA was not NAFTA itself. It was the ascension of China to the World Trade Organization, pushed by the Clinton administration, also pushed by the Clinton administration, I should say. It was that it was Chinese goods that flooded the United States. It was Chinese imports that actually were largely responsible for the loss of about 2.5 million manufacturing jobs.

The other 2.4 million manufacturing jobs lost in that era was due to technological change, that is, robotics and numerically controlled machine tools and all sorts of other gadgets inside companies that enabled companies to lay off workers. They didn't need as many workers. The one-two punch of China, and then a little bit NAFTA, and then technology basically hollowed out American manufacturing. I don't believe that putting up tariffs against the rest of the world right now, as Donald Trump is doing, is going to bring jobs back because, number one, technology has not stopped. Technology is still going to be in whatever factories are re-established, if there are any factories re-established in the United States.

Number two, the reason manufacturing jobs were as good as they were in 30 or 40 years ago was largely because of trade unions, because unions made those manufacturing jobs good-paying jobs with good benefits. Now we have a very tiny unionized portion of the union workforce left. I think in those days, in the '50s and '60s, 35% of the private sector workforce was unionized. Now it's down to 6%. American workers just simply don't have the bargaining power, so even if you have the manufacturing jobs in America, notwithstanding technology, they're still not going to be great jobs because they don't have any unions behind them.

Brian: How much is this, even with what you were saying about unions as an X-factor here, a tension point in the thinking of progressive economists like yourself or the progressive movement? You mentioned after NAFTA came the World Trade Organization agreement, also under President Clinton. We remember there were the big anti-corporate dominance protests in Seattle, the iconic protest of their day from the left in 1999, out of concern for economic and environmental exploitation and concentration of wealth.

Today, the opposition to the Trump tariffs can sound as if free trade with low tariffs and the ability of companies to get cheap labor in Bangladesh or somewhere, so Americans can buy cheap stuff, is as clean as mom and apple pie. It must be more complicated than that to you.

Professor Reich: [chuckles] It's much more complicated. It's interesting. It's important. It's complicated. The two sides of free trade we know and we've known for years, one side is you can get cheaper goods from around the world, and that's good. Consumers are better off. The other side is that workers are not necessarily better off, particularly if big corporations have no loyalty whatsoever. Their only loyalty is to shareholders, and they are eager to make things around the world wherever they can do so most cheaply.

Most consumers are also workers, and workers are consumers. We're not talking about two different groups of people. It is a tradeoff, and I think the way we deal with that tradeoff as a nation is we are very selective and careful. I think Joe Biden understood this. That is, you combine selective tariffs, which are really import taxes, they are paid for by American consumers, but you combine them with an industrial policy that focuses on the industries of the future, like semiconductors and wind and solar batteries and so on, and you train the workforce to do the new jobs that are associated with those emerging industries.

Now, here again, Brian, this is something that is not new. I remember talking about this with you, maybe 20 or 30 years ago. It's difficult to do politically, as we have seen. You don't want to do what Donald Trump is doing. That is basically putting tariffs on everything so consumers pay through the nose. Those import taxes are highly regressive in the sense that they take a much larger bite out of the paychecks of lower-income workers and, at the same time, do nothing to help the economy move forward.

Instead, you're protecting steel and oil and gas and the old industries of the past that you don't really want to hang on to. China is moving at galloping speeds into the emerging, the new economy. You've got to, if you want the United States standard of living to be possible, to be higher in the future, we have got to embrace those future industries.

Brian: My guest for another few minutes is former Labor Secretary and UC Berkeley Professor Robert Reich. His brand new book, out today, is called Coming Up Short: A Memoir of My America. Lance in Nyack, you're on WNYC with Robert Reich. Hi, Lance.

Lance: Hey, Brian. Thanks for taking the call. Hi, Professor Reich.

Professor Reich: Hello, Lance.

Lance: It's a pleasure to hear you talk. I'm afraid my question may take the conversation back to your origin point.

Brian: That's okay. So much of this book is economic history, so I'm glad you called with this. Go ahead.

Lance: If you think the impact of Milton Friedman's essay back in 1970 about the goal of corporations as profits above all else, if you think that had a major impact.

Professor Reich: I do, Lance. Milton Friedman had a major impact in that he was saying in 1970 that the goal should be profits above all else. He wasn't saying that the goal is, he was saying what corporations ought to strive for is profitability. They cannot be socially responsible. They should not try to be socially responsible. By socially responsible, Milton Friedman was talking about, be good to your workers, be good to your communities, be good to your nation, understand that you have these social responsibilities. I think that was a terrible mistake.

I think it was a terrible mistake for the corporate raiders of the 1980s to essentially force companies to put profits above all else. I think it's a terrible mistake for Donald Trump to say, "You must not worry about diversity or equity or inclusion." He's made DEI bad words. I'm sorry. Diversity, equity, inclusion, social responsibility, being an economic steward and an environmental steward. I think these are very important aspects of being a big corporation today.

Brian: Let me get to the current news about the disappointing jobs numbers and Trump firing the head of the Bureau of Labor Statistics on the day they came out last Friday, Erika McEntarfer. As we've heard him do with the 2020 election and other things, he claimed the numbers were rigged but provided no evidence. I want to play a clip from NBC's Meet the Press on Sunday. The guest defending Trump is his economic advisor, Kevin Hassett, and the moderator, Kristen Welker, reads from something a former Trump official wrote about how the head of the BLS could not have stepped in at the last minute and politically rigged the data. Listen.

Kristen Welker: Let me ask you about what William Beach, he was the last commissioner of the Bureau of Labor Statistics. He was appointed by President Trump. He was sharply critical of this decision to get rid of his successor. I want to read you what he wrote. He says, "These numbers are constructed by hundreds of people. They're finalized by about 40 people. These 40 people are very professional people who've served under Republicans and Democrats."

"The commissioner does not see these numbers until the Wednesday prior to the release on Friday. By that time, the numbers are completely set into the IT system. They've been programmed. They are simply reported to the commissioner so the commissioner can on Thursday brief the president's economic team. The commissioner doesn't have any hand or any influence or any way of even knowing the data until they're completely done. Isn't this the very definition of shooting the messenger?

Kevin Hassett: [chuckles] Absolutely not. The bottom line is that there were people involved in creating these numbers. If I were running the BLS and I had a number that was a huge, politically important revision, the biggest since 1968, actually revision should be smaller because computers are better and so on, then I would have a really long report explaining exactly what happened. We didn't get that. We didn't get that. Right now, Goldman Sachs, people on Wall Street are wondering, "Where did these revisions come from, and why do they keep happening?"

What we need is a fresh set of eyes over at the BLS. There are great career staffers. One of the top BLS staffers is actually working in the White House to help us understand the jobs numbers. When I saw the jobs revisions, I literally called up that person and said, "I think there's a typo," because I've been following these numbers all the way back when I worked with Alan Greenspan for something like 40 years that I've never seen revisions like this.

Brian: Trump economic advisor Kevin Hassett on NBC's Meet the Press with moderator Kristen Welker. They then went on to air things President Trump said earlier this year when previous monthly jobs numbers produced by the same people look more rosy. Here's that short montage credit to NBC News.

President Trump: The numbers were much better, as you know, than projected by the media. In three months, we have created 350,000 jobs. Think of that. A lot of jobs have been created. That's what happened this morning.

Brian: Professor Reich, what's your take on what's going on here?

Professor Reich: It's very simple. Brian, the president is doing what he has done for years. If he doesn't like what he hears, he does shoot the messenger. He takes it out on the messenger. He doesn't acknowledge facts. He hates facts. What also disturbs me about what you just played is he has an economic advisor, and he has other people around him who put loyalty to Trump above loyalty to the country. There's an issue of integrity. These people around him should understand that they cannot just repeat his lies. As to revisions of the job numbers, look, I was labor secretary, the Bureau of Labor Statistics, when they get better information, as they do, over time, they always revise the job numbers. This is nothing new.

Brian: He said this is a historic size of downward revisions, and therefore it looks unlikely to him that the original counts could have been that wrong.

Professor Reich: I'm sorry. [chuckles] The Bureau of Labor Statistics is the crown jewel of American data in terms of economics. I, as labor secretary, spent a lot of time making sure that there was absolutely-- My duty was to make sure there was no possible political interference in the Bureau of Labor Statistics. My subsequent labor secretaries, I'm sure, did the same thing because you want to preserve the integrity, you want to maintain the credibility of the Bureau of Labor Statistics.

Brian: What's at stake by not maintaining that credibility if people are tempted to just write it off as, "There goes Trump firing somebody and blowing smoke again?" Are the consequences bigger than that potentially?

Professor Reich: There are huge consequences because this is not just for the United States, but it's for the world. Everybody takes the cue from places like the Bureau of Labor Statistics, especially as to what is going on in the American economy. Is it a healthy economy? Are jobs really growing or are jobs shrinking? Are we in danger of moving into a recession or are we, on the other extent, the other extreme, in danger of inflation? Or it could be stagflation. It could be both, but whatever it is, you have to have data, you have to have trusted data. Brian, it's the same thing when he, that is Trump, goes off on the Fed, on Jerome Powell, and he says, no, that Powell has got to reduce interest rates.

Brian: Clinton wanted the Fed to reduce interest rates to promote growth, didn't he, when you were Labor Secretary?

Professor Reich: No. In fact, the rule in the White House, the rule among every cabinet member was, you must not criticize the Fed, because the integrity and trustworthiness and credibility of the Fed in terms of its decisions on interest rates had to be independent. It was important for the financial markets, for investors, for everyone who is looking at the American economy to trust that the Fed was doing what it had to do, either to restrain inflation or to prevent a recession. If those were politicized, if people thought, "It's just the President making the Fed do those things," then nobody would trust that the Fed was actually acting in response to the economy, the real economy.

Brian: I know we're over our scheduled time. Do you have time for one closing question? If you've got to go, I understand.

Professor Reich: No, no, of course. I have plenty of time.

Brian: In the book, one of the things that you rail against, I guess, starting in the Reagan era, was this obsession with the national debt as being a conservative talking point that increased inequality. Listener writes, "Considering the looming national debt, how long before the USA is screwed?" They put it that bluntly. Now, a lot of people say the debt at its multi-trillion dollar levels and growing and Trump adding to it is actually a problem that could become really serious for the United States. What's your view? Then we're out of time.

Professor Reich: At a certain point, the debt becomes so large relative to the United States economy that it does become a problem because it means that the government is paying more and more, that is, American taxpayers are paying more and more in on the debt instead of providing safety nets or infrastructure or everything else we need, and that itself is a problem. I think we are tipping over into very dangerous territory.

When Donald Trump and the Republicans take money, $1 trillion out of Medicaid, which is necessary for people, children, for poor people, for working class people to have the health care they need, and deliver a major tax break going mostly to very rich people, it's not just a question of the debt, Brian. It's a question of fundamental unfairness. It really boggles the mind that what Trump and the Republicans are doing to this economy, and not just the economy, we're talking about our life together as members of the same society, as people who have some responsibility to the common good. I've never seen anything like this. I never expected we would have essentially a dictator.

Brian: Robert Reich, former Labor Secretary. You can see his current commentaries on his highly subscribed newsletter on Substack. He's got a brand new book out today called Coming Up Short: A Memoir of My America. Thank you so much for joining us on the day of the release of your book.

Professor Reich: Thank you, Brian.

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