WEBVTT - Robert Reich on Bailing Out Families 0:00:00.160 --> 0:00:03.760 This is Bloomberg Business Week with Carol Masser and Jason 0:00:03.840 --> 0:00:07.000 Kelly on Bloomberg Radio. Well, as you know, the US 0:00:07.040 --> 0:00:10.600 government's not a massive stimulus program. Last week it included 0:00:10.600 --> 0:00:13.240 about half a trillion dollars for hard hit businesses. That 0:00:13.280 --> 0:00:16.200 was phased three. The government now looking at phase four. 0:00:16.280 --> 0:00:19.040 Former labor secretary and professor at the Goldman School of 0:00:19.040 --> 0:00:22.560 Public Policy at the University of California, Berkeley, Robert Reich 0:00:22.800 --> 0:00:25.520 argues that there is no reason to bail out big companies. 0:00:25.560 --> 0:00:27.840 He also has a new book out, The System. Who 0:00:27.920 --> 0:00:30.080 Rigged It? How We Fixed It? He joins us now 0:00:30.760 --> 0:00:35.120 on the phone near Berkeley. Uh in the Bay area. So, UM, Robert, 0:00:35.200 --> 0:00:37.559 nice to have you here with us. UM. Tell us 0:00:37.560 --> 0:00:40.640 a little bit about your writing, UH, and why you 0:00:40.720 --> 0:00:44.520 think the government shouldn't be bailing out big companies. Well, 0:00:44.520 --> 0:00:47.280 we need all of the taxpayer money we possibly have 0:00:47.840 --> 0:00:51.720 right now for individuals. That bill that was signed into 0:00:51.800 --> 0:00:58.160 law Friday night. Uh, it provides per person just a 0:00:58.200 --> 0:01:01.480 one time payment. Now, I don't know how many people 0:01:01.680 --> 0:01:04.839 listening to this program can get by for very long. 0:01:04.920 --> 0:01:10.200 On The typical American earns about a thousand dollars a week. 0:01:10.680 --> 0:01:14.839 And has expenditures that are just about that much per week. 0:01:14.920 --> 0:01:19.000 But twelve dollars is not going to extend nearly far 0:01:19.120 --> 0:01:22.520 enough in this pandemic, which is estimated to be uh 0:01:22.680 --> 0:01:26.120 two months, three months, possibly even four months. On the 0:01:26.160 --> 0:01:30.360 other hand, we agreed or at least provided in that 0:01:30.440 --> 0:01:36.040 bill for five hundred billion dollars of bailouts two very 0:01:36.080 --> 0:01:41.080 big companies, including airlines and Boeing, and a lot of 0:01:41.120 --> 0:01:45.440 other big companies and industries. Well, here's the issue. I 0:01:45.480 --> 0:01:47.680 think we should have learned this in the big bank 0:01:47.720 --> 0:01:51.720 bail out of two thousand eight. Uh. These companies have 0:01:52.560 --> 0:01:57.160 been in bankruptcy many times before. They know how to 0:01:57.280 --> 0:02:01.200 use the bankruptcy laws to get to reorganize their debts. 0:02:01.600 --> 0:02:03.440 It's not as if they have no collateral. They have 0:02:03.480 --> 0:02:06.440 a lot of assets. I mean, the airlines have planes 0:02:06.600 --> 0:02:09.240 and landing slots. They're gonna be worth a lot once 0:02:09.240 --> 0:02:13.600 the economy is back on track. The ships, the cruise ships, 0:02:13.960 --> 0:02:19.200 the hotel industry. I mean you talk about assets, these organizations, 0:02:19.200 --> 0:02:24.040 these corporations have very very large assets, and yet individuals 0:02:24.400 --> 0:02:26.959 have a great need right now. So I say, rather 0:02:27.000 --> 0:02:30.040 than bail out companies, let's bail out of people. If 0:02:30.040 --> 0:02:34.880 there is going to be a fourth co coronavirus Relief 0:02:34.960 --> 0:02:36.920 bill coming up, and it looks like there will be, 0:02:37.320 --> 0:02:40.919 let's focus it on people rather than on corporations. Well, 0:02:40.960 --> 0:02:42.519 and I want to talk to you about that fourth 0:02:42.560 --> 0:02:45.040 bill because it's going to include some infrastructure. I really 0:02:45.040 --> 0:02:47.239 want to get your thoughts on that, Bob. But before 0:02:47.240 --> 0:02:49.800 we get to that, I do want to ask you 0:02:50.000 --> 0:02:51.799 because I think this speaks exactly to what you write 0:02:51.800 --> 0:02:53.880 about in your book. I mean, clearly, part of what's 0:02:53.880 --> 0:02:56.600 going on here is the system is set up to 0:02:56.680 --> 0:03:00.240 do exactly what you described as the wrong thing in 0:03:00.280 --> 0:03:03.600 many ways, which is companies have an inordinate amount of 0:03:03.639 --> 0:03:06.760 power and influence in Washington to get that half a 0:03:06.800 --> 0:03:10.880 trillion dollars right exactly. And that's that's the problem. Now. 0:03:10.960 --> 0:03:15.720 You would have thought in times of national disaster emergency, 0:03:16.360 --> 0:03:21.440 certainly in wartime, all of those old power relationships suspended 0:03:21.840 --> 0:03:25.320 and companies stand and the government understands that we've got 0:03:25.400 --> 0:03:30.400 to make the first priority human beings and safety. But 0:03:30.760 --> 0:03:33.840 this time around we didn't quite get there. Now, there 0:03:33.840 --> 0:03:36.560 are some things in the bill that are good. Unemployment 0:03:36.640 --> 0:03:40.480 insurance six dollars over and above the unemployment people are 0:03:40.640 --> 0:03:43.640 eligible for. That's a step in the right direction. But 0:03:43.680 --> 0:03:47.600 if there is a fourth bill, let's just not worry 0:03:47.640 --> 0:03:52.200 about big companies. Let's worry about small businesses and individuals 0:03:52.240 --> 0:03:55.920 and families. They're the ones that need the help. Well. 0:03:55.920 --> 0:03:58.880 And you know what's interesting, because we've been having this conversation, um, 0:03:59.200 --> 0:04:01.200 Bob with a lot of our guests here, and and 0:04:01.280 --> 0:04:03.280 some say, well, you can't let these companies go down. 0:04:03.400 --> 0:04:06.200 You know they this is who could have guessed this 0:04:06.240 --> 0:04:09.320 black swan right, Nobody could have been prepared for it. 0:04:09.400 --> 0:04:11.240 I mean, what do you say to them? And and 0:04:11.600 --> 0:04:13.640 and and these folks will also say, you know, these 0:04:13.640 --> 0:04:15.920 companies employ a lot of workers. So by taking care 0:04:15.960 --> 0:04:19.080 of these companies, were taking care of the workers. Um, 0:04:19.080 --> 0:04:22.520 what's your response, Well, the companies are letting off workers 0:04:22.640 --> 0:04:25.760 right and left. In fact, this week, big companies are 0:04:25.839 --> 0:04:29.600 laying off probably several million additional American workers in addition 0:04:29.640 --> 0:04:31.800 to those who were laid off last week in the 0:04:31.839 --> 0:04:35.520 week before. So what is the point of taking care 0:04:35.560 --> 0:04:38.240 of big companies that will exist? I mean, these come 0:04:38.240 --> 0:04:42.279 at United Airlines isn't going anywhere, American Airlines isn't going anywhere. 0:04:42.320 --> 0:04:44.720 These companies are three or four or five months from 0:04:44.760 --> 0:04:47.039 now are still going to be there. It's the height 0:04:47.040 --> 0:04:49.719 of folly to think that these companies can't take care 0:04:49.720 --> 0:04:52.839 of them those And again, just if we're talking about 0:04:52.839 --> 0:04:56.920 the airlines, every major airline has gone through bankruptcy over 0:04:56.960 --> 0:04:59.880 the past twenty years at least once in order to 0:05:00.120 --> 0:05:03.960 arrange its debts, and its creditors know how they do it, 0:05:04.120 --> 0:05:06.599 and its creditors are willing to let them do it 0:05:06.640 --> 0:05:10.320 because of all the assets they have. These companies are contracted. 0:05:10.400 --> 0:05:13.279 There are a bunch of contracts, they are a bunch 0:05:13.320 --> 0:05:18.320 of executives top executives, and they are some big investors. 0:05:18.360 --> 0:05:23.640 But none of those requires or deserves a bailout, particularly 0:05:23.680 --> 0:05:25.960 at a time when so many individuals and so many 0:05:26.000 --> 0:05:29.760 families are being such are being hit hard hits, so 0:05:29.839 --> 0:05:33.279 hard hits. This is a health emergency. Not only do 0:05:33.320 --> 0:05:36.560 we want to get income income support to people and families, 0:05:36.600 --> 0:05:39.680 we want to get healthcare support to people in families 0:05:40.080 --> 0:05:42.120 who need it, and we want to we want to 0:05:42.160 --> 0:05:44.760 do it immediately. Well, let's continue our conversation with former 0:05:44.800 --> 0:05:47.640 Secretary of Labor Robert Rice. He's also a professor now 0:05:47.920 --> 0:05:50.159 at the Goldman School of Public Policy at the University 0:05:50.160 --> 0:05:54.840 of California, Berkeley, joining us from the Bay Area. So, Bob, 0:05:54.839 --> 0:05:57.039 I want to pick up where we left off, you know, 0:05:57.160 --> 0:06:01.360 sort of talking about maybe the state the worker uh 0:06:01.360 --> 0:06:04.599 and labor here in the United States right now? How 0:06:04.680 --> 0:06:09.360 much do you worry about the essentially sort of fracturing 0:06:09.560 --> 0:06:13.040 of the healthcare UH system? You know, based on the 0:06:13.160 --> 0:06:16.919 stresses that you're seeing there. Oh, I'm very worried about it, 0:06:16.960 --> 0:06:19.280 as we all should be, because all the reports we're 0:06:19.279 --> 0:06:21.320 getting from all over the country is that our health 0:06:21.320 --> 0:06:25.440 care system is already at capacity, if not over capacity. 0:06:25.480 --> 0:06:28.320 In places like New York, we're finding a hospitals just 0:06:28.400 --> 0:06:31.880 can't deal with all of the people who need desperately 0:06:32.279 --> 0:06:36.880 need help ventilators and I see us uh and even 0:06:37.600 --> 0:06:41.480 people inside the hospital, nurses, orderly doctors that can't find 0:06:41.520 --> 0:06:45.200 the protective equipment that they need. UH. We'll find that 0:06:45.279 --> 0:06:50.000 the entire health care system is flooded to way, way 0:06:50.040 --> 0:06:53.159 beyond its capacity within the next two or three weeks. 0:06:53.640 --> 0:06:56.440 I think the big question for the future is whether, 0:06:56.680 --> 0:07:02.400 having experienced all this, Americans change their minds about whether 0:07:02.600 --> 0:07:08.279 healthcare ought to be organized as now is largely as 0:07:08.320 --> 0:07:12.160 a for profit corporate venture, or whether we do need 0:07:12.240 --> 0:07:15.520 to think about a different kind of healthcare system. Well, 0:07:15.560 --> 0:07:17.880 and that's what I was curious about. You know what, 0:07:17.880 --> 0:07:23.160 what you see how the coronavirus pandemic will ultimately change 0:07:23.160 --> 0:07:26.480 our world? You know, you know how you know, once 0:07:26.520 --> 0:07:29.240 we get emerged from the immediate crisis, what's the most 0:07:29.240 --> 0:07:32.920 important and your view underappreciated way that the world um 0:07:33.080 --> 0:07:36.720 will be different. Well, if you look at how wars 0:07:37.360 --> 0:07:40.120 have changed public attitudes in the United States, and I'm 0:07:40.160 --> 0:07:44.560 thinking particularly of the Second World War, America was able 0:07:44.760 --> 0:07:50.360 to accept certain kinds of changes that really the country 0:07:50.560 --> 0:07:54.160 didn't want to accept before. Look, and that's true also 0:07:54.240 --> 0:07:57.040 the Great Depression. It's because of the Great Depression that 0:07:57.120 --> 0:08:01.800 we were able to institutionalize social security, something that we 0:08:02.880 --> 0:08:06.680 would not have have had the political and social capacity 0:08:06.800 --> 0:08:10.960 for accepting. Uh. The same thing with medicare after the 0:08:11.000 --> 0:08:16.400 Second World War in nineteen Medicare was again something that 0:08:16.600 --> 0:08:19.800 although it's very popular now as is social security, at 0:08:19.800 --> 0:08:23.280 that time, we accepted it because we felt like we 0:08:23.280 --> 0:08:26.280 were all in this together. We had emerged from not 0:08:26.400 --> 0:08:29.320 only the World War Two, but also the Korean War 0:08:29.360 --> 0:08:31.560 and the Cold War. We were still in the Cold War. 0:08:31.640 --> 0:08:34.720 We were all in it together. I think that after 0:08:34.760 --> 0:08:37.880 this pandemic, it is possible now I'm I hope, I'm 0:08:37.920 --> 0:08:41.240 not looking at it through two rosy colored glasses, but 0:08:41.360 --> 0:08:43.920 I think it is possible that we may understand that, 0:08:44.320 --> 0:08:49.280 at least with regard to minimum safety nets and minimum healthcare, 0:08:50.000 --> 0:08:52.520 we need to do much more for our country and 0:08:52.960 --> 0:08:55.760 each other than we are doing now. We can't ever 0:08:55.920 --> 0:09:01.000 afford to find ourselves so unprepared and so uh with 0:09:01.160 --> 0:09:04.200 so lacking in the basics. The richest country in the 0:09:04.200 --> 0:09:08.360 world can't even make sure that all of its people 0:09:08.400 --> 0:09:12.280 are safe. That makes no sense. And will this, Bob, 0:09:12.320 --> 0:09:14.640 do you think in the short term or if there 0:09:14.840 --> 0:09:19.960 is a different administration come next January, will it change 0:09:20.000 --> 0:09:24.240 the way certain governmental entities, including maybe the one that 0:09:24.240 --> 0:09:27.480 that you oversaw, Will it change the way they operate 0:09:27.600 --> 0:09:30.480 given what we've seen in this crisis. Well, let me 0:09:30.520 --> 0:09:33.400 say this, it's hard to know obviously what what's going 0:09:33.400 --> 0:09:35.080 to change and what's not going to change. But I 0:09:35.080 --> 0:09:39.520 think Americans as a whole are gaining a deeper appreciation 0:09:39.559 --> 0:09:43.120 of how important government is and when government does not 0:09:43.440 --> 0:09:47.439 really function as it should most of the time for 0:09:47.600 --> 0:09:50.560 most of us, it's just an irritation. Now it's a 0:09:50.559 --> 0:09:53.000 matter of life and death. And I think that changes 0:09:53.040 --> 0:09:57.280 the calculation, It changes the stakes, and people emerging Americans 0:09:57.320 --> 0:10:00.600 emerging from this may say, we may say to ourselves, now, 0:10:00.640 --> 0:10:03.280 again there's no guarantee, but we may say to ourselves, 0:10:03.320 --> 0:10:05.960 you know, we really do have to have a government 0:10:06.440 --> 0:10:10.920 that works well, that functions well. We cannot have leadership 0:10:11.080 --> 0:10:14.040 and people in responsible positions that don't know what they're doing. 0:10:14.120 --> 0:10:16.560 We've got to have a public health system that is 0:10:17.080 --> 0:10:19.960 the best in the world. Why not, Bob? I want 0:10:20.000 --> 0:10:21.240 to ask you about the book that you wrote, The 0:10:21.280 --> 0:10:23.480 System Who rigged Out? How we fix it? And you 0:10:23.520 --> 0:10:28.560 do really get into, um, the injustices that have been created, um, 0:10:28.720 --> 0:10:32.000 you know, in terms of wealth, in terms of power. Uh, 0:10:32.040 --> 0:10:34.640 And how so many Americans have lost confidence in our 0:10:34.679 --> 0:10:38.439 political and economic system. When did wealth become such a flashpoint. 0:10:38.480 --> 0:10:41.240 I mean, you know, my dad was first generation here. 0:10:41.360 --> 0:10:44.880 You know, his parents came over from Europe. Um. You know, 0:10:46.000 --> 0:10:50.080 you know, creating a better life for subsequent generations it 0:10:50.200 --> 0:10:53.679 was attainable, it was possible, And creating wealth for your 0:10:53.720 --> 0:10:57.280 family was you know, looked at highly something happened and 0:10:57.320 --> 0:10:59.839 broke down in our system. I feel like, well, several things, 0:11:00.040 --> 0:11:02.760 and very big things happened. I mean, for four decades 0:11:03.080 --> 0:11:06.320 after the Second World War, the middle class continued to 0:11:06.360 --> 0:11:10.680 grow and wages for most people continued to increase. But 0:11:10.840 --> 0:11:14.680 then starting in the nineteen eighties, wages stagnated for most people. 0:11:15.160 --> 0:11:18.440 And although the economy continued to grow, it didn't go 0:11:18.559 --> 0:11:23.680 into most people's pocketbooks. It went increasingly into the pockets 0:11:23.720 --> 0:11:26.440 of the people at the top. Uh. And that's where 0:11:26.640 --> 0:11:30.520 wealth went. And that's the sense of rigging that people 0:11:30.600 --> 0:11:34.280 have because a lot of that wealth went in turn 0:11:34.679 --> 0:11:40.360 into politics, into influenced peddling, into lobbying. It wasn't until 0:11:40.520 --> 0:11:44.560 two thousand and eight, really, and the explosion of Wall Street, 0:11:45.000 --> 0:11:47.760 that many people kind of opened their eyes and said, 0:11:47.760 --> 0:11:51.520 wait a minute, this, this system is corrupt. Wall Street 0:11:51.600 --> 0:11:55.200 got us into this problem. Wall Street got bailed out. 0:11:55.720 --> 0:11:59.280 No big Wall Street executive went to jail. And yet 0:11:59.440 --> 0:12:02.920 I have lost my home, or my job, or my savings. 0:12:03.440 --> 0:12:06.800 This is fundamentally unfair. I I don't I don't want 0:12:06.840 --> 0:12:11.280 this anymore. I am I'm outraged about this. And we 0:12:11.320 --> 0:12:13.680 saw both on the left and the right, um, you know. 0:12:13.760 --> 0:12:15.800 And on the right it was the Tea Party movement. 0:12:15.840 --> 0:12:19.480 On the left, the so called occupying movement we saw 0:12:19.480 --> 0:12:23.760 in twenties. I mean, look, Donald Trump and Bernie Sanders 0:12:23.840 --> 0:12:26.920 came out of nowhere. They were not politicians, they were 0:12:27.000 --> 0:12:31.680 anti establishment politicians. And uh, and I think that feeling 0:12:31.760 --> 0:12:35.720 is still very much there. There's no reason why the 0:12:35.880 --> 0:12:39.120 wealthy and the powerful should be kind of behind the 0:12:39.200 --> 0:12:43.080 scenes doing as well as they are, particularly now in 0:12:43.120 --> 0:12:46.240 a national emergency. Well, and that's where I want to end. 0:12:46.280 --> 0:12:48.959 We've only got about a minute left, Bob, But help 0:12:49.120 --> 0:12:52.320 help us synthesize what we're going through now with the 0:12:52.360 --> 0:12:55.440 financial crisis and what it may mean sort of all 0:12:55.440 --> 0:12:58.440 stirred up together. Well, I think what it means is 0:12:58.520 --> 0:13:02.280 that Americans are more pensitive than ever before to the 0:13:02.320 --> 0:13:06.360 inequities in our system. Uh. The fact that, for example, 0:13:06.440 --> 0:13:11.200 the biggest corporations are exempt from paid seek leave provisions 0:13:11.320 --> 0:13:15.280 in the second Corona Coronavirus bill, or that you have 0:13:15.920 --> 0:13:19.240 a slush fund of five billion dollars that the president 0:13:19.280 --> 0:13:23.520 doesn't even want an independent, special kind of attorney general 0:13:23.679 --> 0:13:28.400 or investive investigative presence in the White House able to 0:13:28.760 --> 0:13:32.679 oversee what he and Steve Manuchin are doing, or that 0:13:32.800 --> 0:13:35.640 you've got a huge break for real estate investors in 0:13:35.760 --> 0:13:40.080 the coronavirus package hundred and seventy billion dollars worth that's 0:13:40.120 --> 0:13:43.319 hidden in the small print. Well, people are finding out 0:13:43.360 --> 0:13:46.640 about these things, and it's not that the reaction in 0:13:46.720 --> 0:13:49.880 most times would be a kind of shrug of cynicism. 0:13:50.160 --> 0:13:52.440 But now I think people are angry, and they're going 0:13:52.440 --> 0:13:56.160 to be angrier when they find out more about where 0:13:56.200 --> 0:13:58.960 all of this money went. All right, what a treat 0:13:58.960 --> 0:14:00.840 for us. Thank you so much. Robert Reich is former 0:14:00.880 --> 0:14:03.360 Secretary of Labor. His book The System, Who Rigged It? 0:14:03.440 --> 0:14:06.400 How We Fix It? Pick It Up. He's a provocative guy. 0:14:06.480 --> 0:14:09.040 He's got some big ideas. We really really appreciate his 0:14:09.120 --> 0:14:09.600 time with us.