Robert Reich: Spread Ownership Because ‘Whole Country Ought to Be Part of’ Stock Market Gains
Former U.S. Labor Secretary Robert Reich made a very curious statement on Monday’s Morning Joe. During a roundtable discussion on income inequality, former congressman Harold Ford Jr. (D-Tenn.) asked Reich what policies, besides raising the minimum wage, the government should employ in order to improve economic mobility and increase middle class purchasing power. [Video below. MP3 audio here.]
Reich, who is significantly to the left on economic issues, signaled his support for expanding the earned income tax credit, but then added that we should also “spread ownership,” asserting, “ [W]e really do have to spread, seriously, ownership because if most of the gains are coming from stock rate gains, the whole country ought to be part of that.”
Reich was referring to another panelist’s earlier comment that an increasing percentage of overall wealth comes from dividends and capital gains. But it is unclear what the former secretary meant by spreading ownership. He did note that “George W. Bush and others have talked about the ownership society.” However, Bush’s idea of an “ownership society” had more to do with people taking ownership of their lives through personal responsibility.
As we well know, Reich is no fan of President Bush and certainly is critical of free-market capitalism. It is unlikely that he shares Bush’s conservative interpretation of an “ownership society.”
When Reich said “the whole country ought to be part of that,” was he trying to suggest that more people buy stocks in current corporations? Or was he actually calling for the government to nationalize more industries so that more people can own stock and benefit from stock rate gains? It’s not clear either way.
Somebody on the Morning Joe panel should have asked for clarification, but alas, no one did. Host Joe Scarborough ended the discussion immediately after Reich made his perplexing comment. Viewers were left to wonder what the former Labor secretary meant, and just how radical (or not) his comment was.
Below is a transcript of the exchange:
STEPHANIE MEHTA, Fortune Magazine: If you look at what's been happening -- and Joe, you raised the specter of technology – technology has really had a very negative impact on labor in some ways because, you know, companies are using technology to replace people who used to do manual tasks. And in some cases, the efficiencies have been great. But that's all been going to corporations’ bottom lines. That has not been going to reinvest in new projects and new services that, you know, then in turn employ people.
HAROLD FORD JR: Just building on that. You talk – I happen to agree with you. I mean, I don't know if I'm at 15 yet, but I'm in agreement with where you want to go. This alone, we've discussed on this show, won't solve all of these issues and reconcile a lot of these tensions that exist in the economy. What other ideas should we be employing to increase the purchasing power of the middle class, to improve mobility in the country, which clearly has suffered as a result of technology changes and other things as well?
ROBERT REICH: I think we've got to expand the earned income tax credit. Every time I use those words, everybody's eyes glaze over. But it's a terribly important program that is a wage subsidy for people who are low-income. If you do those two – that is, raise the minimum wage, expand the earned income tax credit – you're getting at least some purchase on the problem. But going back to Stephanie’s point, we've also got to spread ownership. You know, George W. Bush and others have talked about the ownership society. Well, we really do have to spread, seriously, ownership because if most of the gains are coming from stock rate gains, the whole country ought to be part of that.
JOE SCARBOROUGH: All right, Robert Reich, thank you so much. It's always great to see you. We'll see you out in Berkeley soon. Stephanie, thank you so much. We appreciate it.