Speaker 1: This is Bloomberg Business Week with Carol Masser and Jason
Speaker 1: Kelly on Bloomberg Radio. Well, as you know, the US
Speaker 1: government's not a massive stimulus program. Last week it included
Speaker 1: about half a trillion dollars for hard hit businesses. That
Speaker 1: was phased three. The government now looking at phase four.
Speaker 1: Former labor secretary and professor at the Goldman School of
Speaker 1: Public Policy at the University of California, Berkeley, Robert Reich
Speaker 1: argues that there is no reason to bail out big companies.
Speaker 1: He also has a new book out, The System. Who
Speaker 1: Rigged It? How We Fixed It? He joins us now
Speaker 1: on the phone near Berkeley. Uh in the Bay area. So, UM, Robert,
Speaker 1: nice to have you here with us. UM. Tell us
Speaker 1: a little bit about your writing, UH, and why you
Speaker 1: think the government shouldn't be bailing out big companies. Well,
Speaker 1: we need all of the taxpayer money we possibly have
Speaker 1: right now for individuals. That bill that was signed into
Speaker 1: law Friday night. Uh, it provides per person just a
Speaker 1: one time payment. Now, I don't know how many people
Speaker 1: listening to this program can get by for very long.
Speaker 1: On The typical American earns about a thousand dollars a week.
Speaker 1: And has expenditures that are just about that much per week.
Speaker 1: But twelve dollars is not going to extend nearly far
Speaker 1: enough in this pandemic, which is estimated to be uh
Speaker 1: two months, three months, possibly even four months. On the
Speaker 1: other hand, we agreed or at least provided in that
Speaker 1: bill for five hundred billion dollars of bailouts two very
Speaker 1: big companies, including airlines and Boeing, and a lot of
Speaker 1: other big companies and industries. Well, here's the issue. I
Speaker 1: think we should have learned this in the big bank
Speaker 1: bail out of two thousand eight. Uh. These companies have
Speaker 1: been in bankruptcy many times before. They know how to
Speaker 1: use the bankruptcy laws to get to reorganize their debts.
Speaker 1: It's not as if they have no collateral. They have
Speaker 1: a lot of assets. I mean, the airlines have planes
Speaker 1: and landing slots. They're gonna be worth a lot once
Speaker 1: the economy is back on track. The ships, the cruise ships,
Speaker 1: the hotel industry. I mean you talk about assets, these organizations,
Speaker 1: these corporations have very very large assets, and yet individuals
Speaker 1: have a great need right now. So I say, rather
Speaker 1: than bail out companies, let's bail out of people. If
Speaker 1: there is going to be a fourth co coronavirus Relief
Speaker 1: bill coming up, and it looks like there will be,
Speaker 1: let's focus it on people rather than on corporations. Well,
Speaker 1: and I want to talk to you about that fourth
Speaker 1: bill because it's going to include some infrastructure. I really
Speaker 1: want to get your thoughts on that, Bob. But before
Speaker 1: we get to that, I do want to ask you
Speaker 1: because I think this speaks exactly to what you write
Speaker 1: about in your book. I mean, clearly, part of what's
Speaker 1: going on here is the system is set up to
Speaker 1: do exactly what you described as the wrong thing in
Speaker 1: many ways, which is companies have an inordinate amount of
Speaker 1: power and influence in Washington to get that half a
Speaker 1: trillion dollars right exactly. And that's that's the problem. Now.
Speaker 1: You would have thought in times of national disaster emergency,
Speaker 1: certainly in wartime, all of those old power relationships suspended
Speaker 1: and companies stand and the government understands that we've got
Speaker 1: to make the first priority human beings and safety. But
Speaker 1: this time around we didn't quite get there. Now, there
Speaker 1: are some things in the bill that are good. Unemployment
Speaker 1: insurance six dollars over and above the unemployment people are
Speaker 1: eligible for. That's a step in the right direction. But
Speaker 1: if there is a fourth bill, let's just not worry
Speaker 1: about big companies. Let's worry about small businesses and individuals
Speaker 1: and families. They're the ones that need the help. Well.
Speaker 1: And you know what's interesting, because we've been having this conversation, um,
Speaker 1: Bob with a lot of our guests here, and and
Speaker 1: some say, well, you can't let these companies go down.
Speaker 1: You know they this is who could have guessed this
Speaker 1: black swan right, Nobody could have been prepared for it.
Speaker 1: I mean, what do you say to them? And and
Speaker 1: and and these folks will also say, you know, these
Speaker 1: companies employ a lot of workers. So by taking care
Speaker 1: of these companies, were taking care of the workers. Um,
Speaker 1: what's your response, Well, the companies are letting off workers
Speaker 1: right and left. In fact, this week, big companies are
Speaker 1: laying off probably several million additional American workers in addition
Speaker 1: to those who were laid off last week in the
Speaker 1: week before. So what is the point of taking care
Speaker 1: of big companies that will exist? I mean, these come
Speaker 1: at United Airlines isn't going anywhere, American Airlines isn't going anywhere.
Speaker 1: These companies are three or four or five months from
Speaker 1: now are still going to be there. It's the height
Speaker 1: of folly to think that these companies can't take care
Speaker 1: of them those And again, just if we're talking about
Speaker 1: the airlines, every major airline has gone through bankruptcy over
Speaker 1: the past twenty years at least once in order to
Speaker 1: arrange its debts, and its creditors know how they do it,
Speaker 1: and its creditors are willing to let them do it
Speaker 1: because of all the assets they have. These companies are contracted.
Speaker 1: There are a bunch of contracts, they are a bunch
Speaker 1: of executives top executives, and they are some big investors.
Speaker 1: But none of those requires or deserves a bailout, particularly
Speaker 1: at a time when so many individuals and so many
Speaker 1: families are being such are being hit hard hits, so
Speaker 1: hard hits. This is a health emergency. Not only do
Speaker 1: we want to get income income support to people and families,
Speaker 1: we want to get healthcare support to people in families
Speaker 1: who need it, and we want to we want to
Speaker 1: do it immediately. Well, let's continue our conversation with former
Speaker 1: Secretary of Labor Robert Rice. He's also a professor now
Speaker 1: at the Goldman School of Public Policy at the University
Speaker 1: of California, Berkeley, joining us from the Bay Area. So, Bob,
Speaker 1: I want to pick up where we left off, you know,
Speaker 1: sort of talking about maybe the state the worker uh
Speaker 1: and labor here in the United States right now? How
Speaker 1: much do you worry about the essentially sort of fracturing
Speaker 1: of the healthcare UH system? You know, based on the
Speaker 1: stresses that you're seeing there. Oh, I'm very worried about it,
Speaker 1: as we all should be, because all the reports we're
Speaker 1: getting from all over the country is that our health
Speaker 1: care system is already at capacity, if not over capacity.
Speaker 1: In places like New York, we're finding a hospitals just
Speaker 1: can't deal with all of the people who need desperately
Speaker 1: need help ventilators and I see us uh and even
Speaker 1: people inside the hospital, nurses, orderly doctors that can't find
Speaker 1: the protective equipment that they need. UH. We'll find that
Speaker 1: the entire health care system is flooded to way, way
Speaker 1: beyond its capacity within the next two or three weeks.
Speaker 1: I think the big question for the future is whether,
Speaker 1: having experienced all this, Americans change their minds about whether
Speaker 1: healthcare ought to be organized as now is largely as
Speaker 1: a for profit corporate venture, or whether we do need
Speaker 1: to think about a different kind of healthcare system. Well,
Speaker 1: and that's what I was curious about. You know what,
Speaker 1: what you see how the coronavirus pandemic will ultimately change
Speaker 1: our world? You know, you know how you know, once
Speaker 1: we get emerged from the immediate crisis, what's the most
Speaker 1: important and your view underappreciated way that the world um
Speaker 1: will be different. Well, if you look at how wars
Speaker 1: have changed public attitudes in the United States, and I'm
Speaker 1: thinking particularly of the Second World War, America was able
Speaker 1: to accept certain kinds of changes that really the country
Speaker 1: didn't want to accept before. Look, and that's true also
Speaker 1: the Great Depression. It's because of the Great Depression that
Speaker 1: we were able to institutionalize social security, something that we
Speaker 1: would not have have had the political and social capacity
Speaker 1: for accepting. Uh. The same thing with medicare after the
Speaker 1: Second World War in nineteen Medicare was again something that
Speaker 1: although it's very popular now as is social security, at
Speaker 1: that time, we accepted it because we felt like we
Speaker 1: were all in this together. We had emerged from not
Speaker 1: only the World War Two, but also the Korean War
Speaker 1: and the Cold War. We were still in the Cold War.
Speaker 1: We were all in it together. I think that after
Speaker 1: this pandemic, it is possible now I'm I hope, I'm
Speaker 1: not looking at it through two rosy colored glasses, but
Speaker 1: I think it is possible that we may understand that,
Speaker 1: at least with regard to minimum safety nets and minimum healthcare,
Speaker 1: we need to do much more for our country and
Speaker 1: each other than we are doing now. We can't ever
Speaker 1: afford to find ourselves so unprepared and so uh with
Speaker 1: so lacking in the basics. The richest country in the
Speaker 1: world can't even make sure that all of its people
Speaker 1: are safe. That makes no sense. And will this, Bob,
Speaker 1: do you think in the short term or if there
Speaker 1: is a different administration come next January, will it change
Speaker 1: the way certain governmental entities, including maybe the one that
Speaker 1: that you oversaw, Will it change the way they operate
Speaker 1: given what we've seen in this crisis. Well, let me
Speaker 1: say this, it's hard to know obviously what what's going
Speaker 1: to change and what's not going to change. But I
Speaker 1: think Americans as a whole are gaining a deeper appreciation
Speaker 1: of how important government is and when government does not
Speaker 1: really function as it should most of the time for
Speaker 1: most of us, it's just an irritation. Now it's a
Speaker 1: matter of life and death. And I think that changes
Speaker 1: the calculation, It changes the stakes, and people emerging Americans
Speaker 1: emerging from this may say, we may say to ourselves, now,
Speaker 1: again there's no guarantee, but we may say to ourselves,
Speaker 1: you know, we really do have to have a government
Speaker 1: that works well, that functions well. We cannot have leadership
Speaker 1: and people in responsible positions that don't know what they're doing.
Speaker 1: We've got to have a public health system that is
Speaker 1: the best in the world. Why not, Bob? I want
Speaker 1: to ask you about the book that you wrote, The
Speaker 1: System Who rigged Out? How we fix it? And you
Speaker 1: do really get into, um, the injustices that have been created, um,
Speaker 1: you know, in terms of wealth, in terms of power. Uh,
Speaker 1: And how so many Americans have lost confidence in our
Speaker 1: political and economic system. When did wealth become such a flashpoint.
Speaker 1: I mean, you know, my dad was first generation here.
Speaker 1: You know, his parents came over from Europe. Um. You know,
Speaker 1: you know, creating a better life for subsequent generations it
Speaker 1: was attainable, it was possible, And creating wealth for your
Speaker 1: family was you know, looked at highly something happened and
Speaker 1: broke down in our system. I feel like, well, several things,
Speaker 1: and very big things happened. I mean, for four decades
Speaker 1: after the Second World War, the middle class continued to
Speaker 1: grow and wages for most people continued to increase. But
Speaker 1: then starting in the nineteen eighties, wages stagnated for most people.
Speaker 1: And although the economy continued to grow, it didn't go
Speaker 1: into most people's pocketbooks. It went increasingly into the pockets
Speaker 1: of the people at the top. Uh. And that's where
Speaker 1: wealth went. And that's the sense of rigging that people
Speaker 1: have because a lot of that wealth went in turn
Speaker 1: into politics, into influenced peddling, into lobbying. It wasn't until
Speaker 1: two thousand and eight, really, and the explosion of Wall Street,
Speaker 1: that many people kind of opened their eyes and said,
Speaker 1: wait a minute, this, this system is corrupt. Wall Street
Speaker 1: got us into this problem. Wall Street got bailed out.
Speaker 1: No big Wall Street executive went to jail. And yet
Speaker 1: I have lost my home, or my job, or my savings.
Speaker 1: This is fundamentally unfair. I I don't I don't want
Speaker 1: this anymore. I am I'm outraged about this. And we
Speaker 1: saw both on the left and the right, um, you know.
Speaker 1: And on the right it was the Tea Party movement.
Speaker 1: On the left, the so called occupying movement we saw
Speaker 1: in twenties. I mean, look, Donald Trump and Bernie Sanders
Speaker 1: came out of nowhere. They were not politicians, they were
Speaker 1: anti establishment politicians. And uh, and I think that feeling
Speaker 1: is still very much there. There's no reason why the
Speaker 1: wealthy and the powerful should be kind of behind the
Speaker 1: scenes doing as well as they are, particularly now in
Speaker 1: a national emergency. Well, and that's where I want to end.
Speaker 1: We've only got about a minute left, Bob, But help
Speaker 1: help us synthesize what we're going through now with the
Speaker 1: financial crisis and what it may mean sort of all
Speaker 1: stirred up together. Well, I think what it means is
Speaker 1: that Americans are more pensitive than ever before to the
Speaker 1: inequities in our system. Uh. The fact that, for example,
Speaker 1: the biggest corporations are exempt from paid seek leave provisions
Speaker 1: in the second Corona Coronavirus bill, or that you have
Speaker 1: a slush fund of five billion dollars that the president
Speaker 1: doesn't even want an independent, special kind of attorney general
Speaker 1: or investive investigative presence in the White House able to
Speaker 1: oversee what he and Steve Manuchin are doing, or that
Speaker 1: you've got a huge break for real estate investors in
Speaker 1: the coronavirus package hundred and seventy billion dollars worth that's
Speaker 1: hidden in the small print. Well, people are finding out
Speaker 1: about these things, and it's not that the reaction in
Speaker 1: most times would be a kind of shrug of cynicism.
Speaker 1: But now I think people are angry, and they're going
Speaker 1: to be angrier when they find out more about where
Speaker 1: all of this money went. All right, what a treat
Speaker 1: for us. Thank you so much. Robert Reich is former
Speaker 1: Secretary of Labor. His book The System, Who Rigged It?
Speaker 1: How We Fix It? Pick It Up. He's a provocative guy.
Speaker 1: He's got some big ideas. We really really appreciate his
Speaker 1: time with us.