Review: Beyond Outrage

At first, I though Robert Reich's 2012 book 'Beyond Outrage' was about his inability to express how angry he was, much like Tracy Morgan's Al Sharpton in this SNL skit.

Rather, it's about how we need to move *beyond* our anger, and take action on the issues facing us. His book is divided into three parts.

In 'The Rigged Game,' Reich describes how our economic system is set up to disproportionately advantage those who are already doing well. He chronicles the post-World War II economic environment, and describes how globalization and deregulation have enabled the top 1% of income earners to accumulate an ever greater share of national wealth.

This part is interesting, but it leaves an unanswered question -- is it better to have a poorer, more equal society (like Mao Tse-tung's China) or a free-er, more unequal society (like the U.S. since 1980)? Both the U.S. and China were more equal societies before 1980, but they suffered from more rigid economic structures. (Remember how booking an airline ticket used to work?) Since then, both societies have suffered from rising inequality, but even the poor have benefited from lower prices. On the whole, haven't globalization and deregulation been worth it?

Reich seems to recognize the benefits of globalization and deregulation, but his thesis that more and more Americans have been left behind in the past 35-40 years remains true. Real wages have stagnated, feeding the “Make America Great Again” narrative. It makes me wonder how the inequality part could have been prevented, or at least better mitigated.

In 'The Regressive Right,' he explains how conservatives have adapted William Graham Sumner's Social Darwinism to the political world. Rather than distribute wealth across the whole spectrum of society, regressives believe the rich owe no greater debt to society than anyone else. The fact that they are rich shows they know how to handle wealth better than anyone else, and so they *deserve* to have a great share.

This section is my favorite because it details 10 myths propagated by regressives. The interesting thing is that this book was written in 2012, but you can still identify key policy points espoused by our current administration:

1. Trickle-down economic policies generate more jobs. Regressives promote lower tax rates for the rich in the belief that they will use it to generate economic opportunities for middle and lower classes. But this is not true, as shown in this article found -- of all places -- in Forbes magazine. [Source]
   
   As entrepreneur Nick Hanauer reasons, trickle-down economics is just another way for those in power to convince those not in power to give them what they want, with no guarantee of anything in return. [Source]
   
   And here's another thought -- back in 2006, the Heritage Foundation trumpeted the 2003 Bush tax cuts as 'Wildly Successful.' They even said 'This growing economy may prove to be Bush's most impressive domestic policy achievement.' [Source]. Yet less than two years later, the economy was suffering from the biggest recession since 1929. Did lower taxes really help anything, or was it all just a sham to benefit those who didn't need help in the first place?
   
   
2. Lower taxes for corporations would create more jobs. The theory here is that taxes divert resources to the government rather than toward economic growth. The problem is that in today's globalized business environment, multinationals use different countries' tax codes to pay outrageously low taxes. (Ever heard of the Double Irish or Dutch Sandwich? [Source]) U.S. multinational companies are among the last groups of organizations who need lower taxes.
   
   And this talk of a 'tax holiday' to repatriate profits? It doesn't work as advertised. Corporations will continue to push for it, but there was no evidence it created jobs in 2004, none in 2011, and there's none now. [Source] Rather than creating jobs, tax holidays allow multinationals to pay bigger dividends and buy back stock shares.
   
   
3. Shrinking the size of the federal government would create a better economy. Regressives says the federal government is a heavy burden on everyone. But what should be cut in order to do that? The Environmental Protection Agency? The Social Security Administration? The military? The Department of Veteran's Affairs? Those departments all do important work for critical constituencies.
   
   We look to the federal government to act as an arbiter for our society. The answer is not to shrink the federal government; the answer is to make it work for everyone.
   
   
4. We'd have a better economy if we had fewer regulations. Again, regressives hide in the generalizations. What parts of the economy would benefit from what regulations being removed? Big businesses, such as large banks, would love to see Dodd-Frank repealed because it limits their ability to take on additional risk and make bigger profits. But that doesn't mean we'd have a better economy.
   
   So when the president talks about giving Dodd-Frank regulations a 'haircut' so that banks can 'loan to people that are going to create jobs,' I'm skeptical. If Dodd-Frank ever prevented it, you have to wonder why it was ever enacted in the first place back in 2010.[Source]
   
   
5. The economy would improve if we cut the budget deficit. The question is *how* you cut the deficit. Are regressives willing to pay higher taxes to curb government borrowing and lower interest rates for borrowers? No, but they *are* willing to cut spending on government entitlement programs. And from what we've seen in the countries that have suddenly imposed austerity measures, the most vulnerable sectors of society are the hardest hit. [Source]
   
   
6. Medicare and Medicaid need to be scaled back. It's true that health care costs have risen significantly in recent years, but rather than scaling back coverage, why not use these programs' size and influence to negotiate lower prices for medicines?
   
   Or what about this crazy idea -- saving money by *buying* the entire company that makes the Hepatitis C medication?[Source]. It speaks volumes about the disfunction of our current system that this would even be logical, but the correct solution is fixing the system, not scaling it back.
   
   
7. Our safety nets are too generous. In 2011, Newt Gingrich attacked President Obama as 'the best food-stamp president in American history.' [Source] . I would think this should be a point of pride, considering how many people suffered as a result of the Great Recession, but regressives argue that those who take advantage of these programs are essentially lazy people who are gaming the system.
   
   While, yes, I've heard of people who game the system and sell food stamps for cash, and I can see how anyone would be upset at that, I have to disagree with the overall assessment. When I was a lieutenant, my family was on the Women, Infants, and Children (WIC) program. It wasn't a huge benefit, and I wouldn't consider myself to have been in dire straits, but it helped at a time when my family was at-risk. And that's what these programs are for.
   
   Every system is open to abuse, and while I'm sure everyone would like rules that could prevent those abuses, I think it's better to inadvertently include more people on the program than risk excluding someone who really needed help.
   
   
8. Social Security is bad and should end. The regressives who say this point to the fact that Social Security will have payout problems in the future to argue that it should be privatized now. But privatization of Social Security would cause more problems than it would solve. Individual retirement accounts for everyone sounds good when the market is doing well, but Social Security is needed to complement private programs. Remember President Bush's failed 2005 initiative to privatize Social Security? It seemed like an even worse idea when markets tanked in 2008.) [Source]
   
   Nevertheless, Paul Ryan still seems intent on pushing this through, despite the societal risks of a purely market-based retirement program. [Source]
   
   Besides, if people really see Social Security's insolvency as a problem, why not instead lift the $127,200 income cap instead? [Source] But no -- regressives don't like that idea because that would mean the top 1% of income earners -- the same people who have benefited more than anyone in the recovery since 2008 -- would have to pay more into a system that they don't really need for themselves.
   
   
9. It's unfair that middle and lower income people pay less in federal taxes, and some don't pay any at all. No -- it's *completely* fair. Everyone pays the same percentage tax on the first $18,000 of income. And everyone pays the same percentage tax on their next whatever dollars in income. The top tax bracket these days is almost 40%, but that's only on income over $475,000. I don't see how -- if you're making more than $475,000 a year -- you have a whole lot of room to say you're being treated unfairly, at least as far as taxes go.
   
   And consider this -- back in the 1950s and early 1960s, the top tax bracket was 91% (for income over $400,000). Sounds bad, but not even Nixon seemed to have a problem with a 70% tax rate for income over $200,000. [Source] I think rich people should just be glad we don't go back to that.
   
   
10. A flat tax would be fairer. No it wouldn't. Rich people pay more income tax because they are rich. Poor people pay less because they are poor. Sounds pretty fair the way it is, especially since social mobility has taken a nosedive since the 1980s. [Source]. These days, being rich is not so much the result of your smarts, talents, or capability as because your *parents* are rich.
    
    Besides, we already have a flat tax -- it's called sales tax. If you want to buy something, you have to pay the same percentage tax everyone else pays, no matter how rich or poor you are.
    
    Perhaps you come from a state that doesn't tax groceries, but there are states that do, and that seems pretty unfair to me. Oklahoma, Tennessee, South Dakota, and West Virginia all have food sales taxes of 5% or more. [Source].

Taken together, the evidence against regressive initiatives is overwhelming, but increasingly irrelevant because no one debates on these points. Rather, regressives rely on ad hominem attacks, the 'last refuge of those lacking logic or facts.' Reich believes that we're not necessarily more polarized than at any point in the past. It's 'the regressive right's unwillingness to seriously debate them.'

On this, I can see there's another contributing factor -- the ideological bubbles that so many people live in. If you agree with everything you see and read and everyone you talk to agrees with you, then you're probably living in a bubble. And the fragmentation of the media these days means you can choose any kind of news you want without anyone confronting you with uncomfortable realities.

In the final section, called 'What you need to do,' Reich lists ways people should be involved in politics. It's not enough to simply be angry and wait for the next election day. People need to make their voices heard, and this is the difficult part. Organizers need to understand how to get through the four 'work avoidance mechanisms,' of denial, escape, scapegoating, and cynicism. And he lists some policies that would help make our system more equitable.

Among his best ideas are:

1. A 0.5% tax on financial transactions. If you buy a pair of shoes, you have to pay a state sales tax (unless you're in Alaska, Montana, new Hampshire, Delaware, or Oregon). And states are starting to turn the screws on Amazon, forcing them to collect sales tax on online transactions. Yet no one charges a tax on those who can afford to buy stocks. Is there a reason why we should pay taxes when we buy shoes but not stocks?
   
   
2. Cutting the military budget. How is it that we spend more on our military than the next seven or eight countries combined [Source], and yet only three out of 58 Army brigades are ready to fight? [Source]

The problem is not the amount of money we spend, but how we spend it. Sequestration forced some difficult budget cuts for the military -- ones that couldn't be absorbed in acquisitions contracts. We need to relook how we're spending our money, and invest in systems that generate combat capability, not just pork for key congressional districts.

To summarize, Reich's book explains how we got to our current economic situation, who threatens to make it even worse, and what we can do about it. At its core, the issue is one of values: as a nation, what are we going to concerned ourselves with?

Do we want a society oriented toward success for those who are already rich, fit, healthy, and working? Or do we want one that sees value in those at the margins -- the elderly, the minorities, the children, and the unemployed? Reich looks at the times when American society was at its best and favors the latter. I agree. A city on a hill cannot be hidden.... (Matthew 5:14)