Robert Reich on Bailing Out Families

He also has a new book out, The System. Who Rigged It? How We Fixed It? He joins us now on the phone near Berkeley. Uh in the Bay area. So, UM, Robert, nice to have you here with us. UM. Tell us a little bit about your writing, UH, and why you think the government shouldn't be bailing out big companies. Well, we need all of the taxpayer money we possibly have right now for individuals. That bill that was signed into law Friday night. Uh, it provides per person just a

one time payment. Now, I don't know how many people listening to this program can get by for very long. On The typical American earns about a thousand dollars a week. And has expenditures that are just about that much per week. But twelve dollars is not going to extend nearly far enough in this pandemic, which is estimated to be uh

two months, three months, possibly even four months. On the other hand, we agreed or at least provided in that bill for five hundred billion dollars of bailouts two very big companies, including airlines and Boeing, and a lot of other big companies and industries. Well, here's the issue. I think we should have learned this in the big bank bail out of two thousand eight. Uh. These companies have

been in bankruptcy many times before. They know how to use the bankruptcy laws to get to reorganize their debts. It's not as if they have no collateral. They have a lot of assets. I mean, the airlines have planes and landing slots. They're gonna be worth a lot once the economy is back on track. The ships, the cruise ships, the hotel industry. I mean you talk about assets, these organizations, these corporations have very very large assets, and yet individuals

have a great need right now. So I say, rather than bail out companies, let's bail out of people. If there is going to be a fourth co coronavirus Relief bill coming up, and it looks like there will be, let's focus it on people rather than on corporations. Well, and I want to talk to you about that fourth bill because it's going to include some infrastructure. I really

want to get your thoughts on that, Bob. But before we get to that, I do want to ask you because I think this speaks exactly to what you write about in your book. I mean, clearly, part of what's going on here is the system is set up to do exactly what you described as the wrong thing in many ways, which is companies have an inordinate amount of power and influence in Washington to get that half a trillion dollars right exactly. And that's that's the problem. Now.

You would have thought in times of national disaster emergency, certainly in wartime, all of those old power relationships suspended and companies stand and the government understands that we've got to make the first priority human beings and safety. But this time around we didn't quite get there. Now, there are some things in the bill that are good. Unemployment insurance six dollars over and above the unemployment people are

eligible for. That's a step in the right direction. But if there is a fourth bill, let's just not worry about big companies. Let's worry about small businesses and individuals and families. They're the ones that need the help. Well. And you know what's interesting, because we've been having this conversation, um, Bob with a lot of our guests here, and and some say, well, you can't let these companies go down.

You know they this is who could have guessed this black swan right, Nobody could have been prepared for it. I mean, what do you say to them? And and and and these folks will also say, you know, these companies employ a lot of workers. So by taking care of these companies, were taking care of the workers. Um, what's your response, Well, the companies are letting off workers

right and left. In fact, this week, big companies are laying off probably several million additional American workers in addition to those who were laid off last week in the week before. So what is the point of taking care of big companies that will exist? I mean, these come at United Airlines isn't going anywhere, American Airlines isn't going anywhere. These companies are three or four or five months from

now are still going to be there. It's the height of folly to think that these companies can't take care of them those And again, just if we're talking about the airlines, every major airline has gone through bankruptcy over the past twenty years at least once in order to arrange its debts, and its creditors know how they do it, and its creditors are willing to let them do it because of all the assets they have. These companies are contracted.

There are a bunch of contracts, they are a bunch of executives top executives, and they are some big investors. But none of those requires or deserves a bailout, particularly at a time when so many individuals and so many families are being such are being hit hard hits, so hard hits. This is a health emergency. Not only do we want to get income income support to people and families, we want to get healthcare support to people in families who need it, and we want to we want to

do it immediately. Well, let's continue our conversation with former Secretary of Labor Robert Rice. He's also a professor now at the Goldman School of Public Policy at the University of California, Berkeley, joining us from the Bay Area. So, Bob, I want to pick up where we left off, you know, sort of talking about maybe the state the worker uh and labor here in the United States right now? How much do you worry about the essentially sort of fracturing

of the healthcare UH system? You know, based on the stresses that you're seeing there. Oh, I'm very worried about it, as we all should be, because all the reports we're getting from all over the country is that our health care system is already at capacity, if not over capacity.

In places like New York, we're finding a hospitals just can't deal with all of the people who need desperately need help ventilators and I see us uh and even people inside the hospital, nurses, orderly doctors that can't find the protective equipment that they need. UH. We'll find that the entire health care system is flooded to way, way beyond its capacity within the next two or three weeks.

I think the big question for the future is whether, having experienced all this, Americans change their minds about whether healthcare ought to be organized as now is largely as a for profit corporate venture, or whether we do need to think about a different kind of healthcare system. Well, and that's what I was curious about. You know what, what you see how the coronavirus pandemic will ultimately change

our world? You know, you know how you know, once we get emerged from the immediate crisis, what's the most important and your view underappreciated way that the world um will be different. Well, if you look at how wars have changed public attitudes in the United States, and I'm thinking particularly of the Second World War, America was able to accept certain kinds of changes that really the country didn't want to accept before. Look, and that's true also

the Great Depression. It's because of the Great Depression that we were able to institutionalize social security, something that we would not have have had the political and social capacity for accepting. Uh. The same thing with medicare after the Second World War in nineteen Medicare was again something that although it's very popular now as is social security, at that time, we accepted it because we felt like we

were all in this together. We had emerged from not only the World War Two, but also the Korean War and the Cold War. We were still in the Cold War. We were all in it together. I think that after this pandemic, it is possible now I'm I hope, I'm not looking at it through two rosy colored glasses, but I think it is possible that we may understand that, at least with regard to minimum safety nets and minimum healthcare, we need to do much more for our country and

each other than we are doing now. We can't ever afford to find ourselves so unprepared and so uh with so lacking in the basics. The richest country in the world can't even make sure that all of its people are safe. That makes no sense. And will this, Bob, do you think in the short term or if there is a different administration come next January, will it change the way certain governmental entities, including maybe the one that that you oversaw, Will it change the way they operate

given what we've seen in this crisis. Well, let me say this, it's hard to know obviously what what's going to change and what's not going to change. But I think Americans as a whole are gaining a deeper appreciation of how important government is and when government does not really function as it should most of the time for most of us, it's just an irritation. Now it's a

matter of life and death. And I think that changes the calculation, It changes the stakes, and people emerging Americans emerging from this may say, we may say to ourselves, now, again there's no guarantee, but we may say to ourselves, you know, we really do have to have a government that works well, that functions well. We cannot have leadership and people in responsible positions that don't know what they're doing. We've got to have a public health system that is

the best in the world. Why not, Bob? I want to ask you about the book that you wrote, The System Who rigged Out? How we fix it? And you do really get into, um, the injustices that have been created, um, you know, in terms of wealth, in terms of power. Uh, And how so many Americans have lost confidence in our political and economic system. When did wealth become such a flashpoint. I mean, you know, my dad was first generation here.

You know, his parents came over from Europe. Um. You know, you know, creating a better life for subsequent generations it was attainable, it was possible, And creating wealth for your family was you know, looked at highly something happened and broke down in our system. I feel like, well, several things, and very big things happened. I mean, for four decades after the Second World War, the middle class continued to

grow and wages for most people continued to increase. But then starting in the nineteen eighties, wages stagnated for most people. And although the economy continued to grow, it didn't go into most people's pocketbooks. It went increasingly into the pockets of the people at the top. Uh. And that's where wealth went. And that's the sense of rigging that people have because a lot of that wealth went in turn

into politics, into influenced peddling, into lobbying. It wasn't until two thousand and eight, really, and the explosion of Wall Street, that many people kind of opened their eyes and said, wait a minute, this, this system is corrupt. Wall Street got us into this problem. Wall Street got bailed out. No big Wall Street executive went to jail. And yet I have lost my home, or my job, or my savings. This is fundamentally unfair. I I don't I don't want

this anymore. I am I'm outraged about this. And we saw both on the left and the right, um, you know. And on the right it was the Tea Party movement. On the left, the so called occupying movement we saw in twenties. I mean, look, Donald Trump and Bernie Sanders came out of nowhere. They were not politicians, they were anti establishment politicians. And uh, and I think that feeling

is still very much there. There's no reason why the wealthy and the powerful should be kind of behind the scenes doing as well as they are, particularly now in a national emergency. Well, and that's where I want to end. We've only got about a minute left, Bob, But help help us synthesize what we're going through now with the financial crisis and what it may mean sort of all stirred up together. Well, I think what it means is that Americans are more pensitive than ever before to the

inequities in our system. Uh. The fact that, for example, the biggest corporations are exempt from paid seek leave provisions in the second Corona Coronavirus bill, or that you have a slush fund of five billion dollars that the president doesn't even want an independent, special kind of attorney general or investive investigative presence in the White House able to oversee what he and Steve Manuchin are doing, or that you've got a huge break for real estate investors in

the coronavirus package hundred and seventy billion dollars worth that's hidden in the small print. Well, people are finding out about these things, and it's not that the reaction in most times would be a kind of shrug of cynicism. But now I think people are angry, and they're going to be angrier when they find out more about where all of this money went. All right, what a treat for us. Thank you so much. Robert Reich is former Secretary of Labor. His book The System, Who Rigged It?

How We Fix It? Pick It Up. He's a provocative guy. He's got some big ideas. We really really appreciate his time with us.