Expanding on Robert Reich’s Pledges for Democrats – there’s a lot to like, but we can improve on it

1. We’ll eliminate Trump’s across-the-board tariffs.

2. We’ll bust up monopolies.

3. We’ll fight for stronger unions.

4. We’ll raise the national minimum wage to $20 an hour.

5. We’ll make housing more affordable.

6. We’ll cut health care costs by making Medicare available to everyone.

7. We’ll get working families help with child care and elder care.

8. We’ll give working families paid family leave.

9. We’ll provide a universal basic income if adequate-paying jobs are unavailable.

10. We’ll raise taxes on the wealthiest to pay for this.

There are many good policies here. Let me make a few comments about these in order as presented.

Tariffs – Nothing really to add here.

Monopolies¹– This is an incredibly important step. But it will take a lot of work to undo the incredible scale and scope of monopolization in the US economy. This is a project to undo fifty years of pro-monopolization government policies.

My favorite example of market concentration is found in the toothpaste aisle of your grocery store.

Monopolization is so widespread that even the production of fire trucks is controlled by just three companies!

Stronger unions – In a similar vein, this is undoing 50 years of anti-union government policies, supplemented by vigorous corporate attacks. Beyond unions, we need to add real worker representation on corporate boards. This needs to include both publicly traded and private companies.²

We’ll raise the national minimum wage to $20 an hour. – We need a living wage policy that reflects actual living costs at a regional level, which is annually adjusted to increases in the cost of living. This minimum wage should apply to every employee³, whether full-time or part-time. A good place to research actual regional living wage proposals is the MIT Living Wage Calculator. For example, for a single person with no dependents living in West Palm Beach, FL the MIT Living Wage Calculator calls for a living wage of $24.74 per hour. In my old hometown of Cambridge, MA, that would be $31.95 per hour. You can look up your hometown. The calculator also provides an interesting array of data about typical costs of living.

An Aside about Job Structure – full-time permanent employment used to be the norm. But starting in the 1980s, management began developing employment models that made workers disposable. This is the gig economy. Part of this shift includes eliminating or greatly reducing job benefits. This includes the virtual elimination of fixed-benefit retirement plans in favor of employees contributing to 401 (k) plans.

Further – The standard 40-hour workweek needs to be changed. Forty hours may have made sense back in 1936, but today the rest of the developed countries have evolved to much shorter work hours. Americans work more hours than their peers in developed countries. In 2020, the average annual hours worked in the US was 1,791, compared to 1,497 in the UK, 1,490 in France, 1,427 in the Netherlands, and 1,349 in Germany. Thus, on average, Americans work 20% more hours than those in the Netherlands or 55 additional 8-hour days compared to Germany.

We’ll make housing more affordable – This is totally inadequate. To merely focus on private equity, zoning, and gentrification is to miss a basic fact about capitalism. It does not produce housing for working and lower-middle-class people. This is the reason that from the Great Depression through 1975 or so, there were significant government programs to build housing. That is needed now. One only needs to look at our developed country partners to see that the government plays a key role in the provision of housing.

We’ll cut health care costs by making Medicare available to everyone. – This is totally inadequate. Not only is American healthcare incredibly expensive, it is also profoundly bad. We spend nearly 50% more per person on healthcare than our developed-country competitors. Worse, our healthcare outcomes are similar to those in poor countries. Women and babies are particularly at risk in this regime. We need to get rid of for-profit healthcare. Let’s choose any of the ten or more healthcare systems already proven to be both economical and providing world-class outcomes.

We’ll get working families help with child care and elder care. and We’ll give working families paid family leave. – Drop “working” from these policies. All families should have access to these. And, the word “help” is an inadequate description of a fully functioning system to support families. Further, paid vacation time should be included.

We’ll provide a universal basic income if adequate-paying jobs are unavailable. First, if we have a minimum wage that is truly a living wage, there should be no jobs that do not provide a living wage. Second, Reich is missing a major opportunity to leverage our country’s underutilized resources to meet unmet needs. The government can create programs to meet these needs without fear of inflation as long as the programs draw on resources (labor and materials) that are underutilized. This is what a sovereign government can do by spending money in those areas. As the chart below demonstrates, the US economy runs with plenty of extra productive capacity continuously.

We’ll raise taxes on the wealthiest to pay for this. This is a reasonable start. But the details count. Besides raising marginal tax rates⁴ (the top marginal tax rate under Republican President Eisenhower in the 1950s was 91%; today it is 37%) and enforcing them, we need to end the preferential treatment of capital gains on financial assets (currently 15%), ban offshore tax evasion, and more. The IRS needs to be funded to a level that allows it to compete with the fleets of tax lawyers employed by the rich and corporations.

What’s missing from Reich’s “pledges”?

Financialization of corporations

Reich cites monopolization as a structural evil in the economy. This is great. But he does not address the conversion of much of the economy to the extraction of money rather than the production of goods and services. This is generally referred to as the financialization of the economy. This includes the shift in executive compensation toward pay packages that combine cash and stock bonuses tied to quarterly and annual sales and profit targets. This drives management to focus on extracting as much money as possible as quickly as possible, with little to no thought for the future of the company’s customers, products and services, and workers. This has led to an environment in which profits are not being reinvested in the company but distributed to management and shareholders.

Stock buybacks are a key tool in financialization. Stock buybacks occur when a company uses its funds to buy its own shares on the market. This reduction in the number of shares outstanding leads to a rise in the stock’s price. Until 1982, under Reagan, stock buybacks were illegal; they were considered to be stock price manipulation, which it obviously is.

In the last couple of decades, stock buybacks have become a huge transfer of wealth.

BTW – for comparison, US GDP in 2024 was $27 trillion.

The Finance Sector – a bloated empire of gambling

We desperately need to undo the legal changes made under President Clinton. These chiefly include the repeal of Glass-Steagall, the 1930s law that separated commercial and investment banking, and the Commodities Futures Modernization Act of 1999, which legalized gambling in the financial markets. The latter created the environment in which trading on derivatives⁵ and other gambling look-a-likes led to the meltdown of the global financial industry in 2008-9, with the resulting bailout by governments around the world.