Robert Reich on Clinton’s Errors of Crippling Welfare to Repealing Glass-Steagall

[marmar]

from Democracy Now!:

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AMY GOODMAN: Some call it "welfare reform"; others, "welfare deform."

ROBERT REICH: Yeah, that so-called reform provided a maximum of five years in somebody’s life on, essentially, welfare. The assumption was that you would not have a deep recession or a depression that would go on nearly that long, and so that five years in a lifetime was about right. Well, what happened in 2007, 2008? We had a severe downturn. Who got caught in that downturn worse than anybody else? It was people at the bottom, in the bottom 20 percent, a lot of them minorities, a lot of them women. They are still caught in the downturn. Where is most of our unemployment? The welfare law, that maximum—gave them a maximum of five years, many of those people do not—are no longer eligible for anything. Their families are no longer eligible for anything. I mean, we, in signing—Bill Clinton, in signing that law, essentially condemned a substantial number of our most vulnerable people in this country to hardships that should never, in a civilized society, be imposed on anyone.

AMY GOODMAN: Bill Clinton did.

ROBERT REICH: Bill Clinton did. Now, again, the economy at that time was buoyant. We created—or at least presided over an economy, by then, that was down to 4 percent unemployment. But there was no guarantee that 4 percent unemployment would be the norm. I mean, on the inside—and then, subsequently, I said, we might have recessions, we might have 6 or 7 or 8 percent unemployment. You know, now, among the very poor, we have 20 percent or 25 percent high school dropouts, almost 30 percent unemployment. If we don’t have any safety net, it’s not only bad for them, it’s bad for the economy, because it means that we have a lot of people who have no money in their pockets at all. Only 40 percent of people who have lost their jobs now are eligible for unemployment benefits. I mean, not just welfare—I mean, we haven’t just slashed the welfare safety net, we don’t even have much of an unemployment benefit safety net left. For people who—you know, last night, I was talking with people who said, "The reason that Americans who are unemployed are not getting jobs is because their lives are too cushy. We’ve made it too easy for them. They get a lot of unemployment benefits." You know, where—what planet are these people on? I mean, 40 percent are eligible, and the average welfare—the average unemployment benefit is only about 20 to 30 percent of previous—your previous job compensation, in any event.

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ROBERT REICH: And it essentially allowed—once that Glass-Steagall was repealed, it allowed investment banks, the casino of Wall Street, to invade commercial banks and commercial deposits, and it allowed investment bankers to utilize commercial deposits for, essentially, gambling, Amy. And that, combined with these investment banks going public, becoming publicly held companies, really opened the floodgates to an era of even greater casino capitalism than we had before.

We’ve got to resurrect Glass-Steagall. I mean, it seems to me one of the problems we have with Wall Street right now is that there is still no constraint. The major Wall Street banks are bigger than they were before. They have better access to lower-cost money. That is, interest rates for them are at a preferable rate over other banks, so they have a competitive advantage that is going to enable them to get even larger. They know, and everybody else knows, they will be bailed out if they get in trouble, because they have already been bailed out. Without a resurrection of Glass-Steagall, and without legislation that caps the size of the biggest banks, that breaks up the biggest banks—something that the Dallas Federal Reserve Board, you know, the Dallas branch of the Federal Reserve Board, has advocated—we are going to see a replay of what happened in 2008, and with all the damage to everybody else, all of the ancillary damage to everybody else in the economy that that entails. ...................(more)

The complete piece (audio, video & transcript versions) is at: http://www.democracynow.org/2012/5/8/former_labor_sec_robert_reich_on

[pipoman]

1. Trying to mitigate his own involvement in the deconstruction and decimation of US labor

while serving as Labor Secretary..

[Skidmore]

2. Exactly, which is why I can't stand listening to him.

He tries to provide analysis for these programs he is on now and never once acknowledges that he actively appeared on programs back then advocating those very measures he is descrying as "errors."