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Monday, June 25, 2018

Inequality for All Is ‘The Progressive Economic Narrative: The Movie’

Inequality for All Is ‘The Progressive Economic Narrative: The Movie’

The new film starring Robert Reich delivers a powerful message about what’s wrong with the economy, though it may leave viewers wondering what they can do about it.

With the release of the documentary Inequality for All today, the core progressive story about what is wrong with the economy is now on the silver screen. For those of us who have been working to articulate what we call a progressive economic narrative, it is a major milestone.

The right spent decades projecting its view that prosperity is created through limited government and free markets, concepts that still dominate most Americans’ thinking, even as the American dream is becoming a nightmare for more and more families. The new movie provides a powerful way to popularize a very different story.

Inequality for All is based around a big lecture course that Robert Reich gives at the University of California Berkeley. Reich and the film’s director, Jacob Kornbluth, mix facts, infographics, documentary footage, and profiles of families whose lives have been scarred by the new economy with the personal story of Reich’s lifelong work to push for a just economy, including his frustrations serving as Labor Secretary during President Clinton’s first term. Reich’s personality, his humor, feistiness, and passion, drive the film.

The progressive economic narrative can be encapsulated in four sentences:

—Working families and the middle class are getting crushed while the super-rich game the system.
—Working families and the middle class are the engines of the economy.
—We build a strong middle class through decisions we make together.
—It’s up to us to build an America that works for all of us.

Inequality for All tells the same story. In the movie, Reich ties the vast increase in income inequality to the loss of unionization, the diversion of economic growth from wages to CEO compensation and profits, the financialization of the economy, cutting taxes for the wealthy, and the failure of government to keep investing in education and infrastructure.

Reich shows how a virtuous cycle of higher wages and productivity, which put more money in consumers’ pockets, thus driving the economy forward and raising revenues for government investment, was replaced by a vicious cycle in which stagnant wages undercut consumer purchasing, leading to lower demand and more layoffs along with declining tax revenues and government spending.

While most Americans know that the rich are getting richer while everyone else is being squeezed, the crucial contribution the movie makes is explaining the two key economic concepts needed to discredit the conservative economic story.

The most powerful messenger for the first concept is not Reich, but Nick Hanauer, a Seattle billionaire, who made his fortune in both the old and new economies. Hanauer’s family business is one of the world’s largest pillow manufacturers, but his latest fortune is as an early Amazon investor. Hanauer tours his pillow-making factory, pointing out that “a person like me who earns 1,000 times as much as the typical American doesn’t buy 1,000 pillows a year. Even the richest person only sleeps on one or two pillows. The pillow business is quite tough, as it is for many, many industries, because fewer and fewer people can afford to buy the products we make.”

When consumers are able to afford a new item, many now go to places like Amazon, which Hanauer points out employs 60,000 employees to achieve the same volume of sales that mom and pop businesses would hire 600,000 for.

The second key concept, hammered home over and over again by Reich, is “We make the rules of the economy and we have the power to change those rules.” He says his first studies of economics, as a Rhodes Scholar, taught him that there was “no such thing as a perfectly free market anywhere. Government sets the rules by which the market functions… The real question is who these rules benefit and who they hurt.”