Economic inequality in America today stems from a shift in the early 1980s when “the rules of the game changed,” former Labor Secretary Robert Reich recently warned.
In a candid conversation last month at The Progressive Forum in Houston about his latest memoir, Reich used his own story to unpack how America got to what he describes as a breaking point.
Reagan-Era Shift Marked A Turning Point
“The rules of the game changed,” Reich said, referencing the early 1980s, explaining how the Reagan administration reshaped the U.S. economy in ways that have had long-term consequences. “Up until then, the median wage continued to rise with productivity,” Reich said. But after that, the median wage, that is the wage of people smack in the middle, began to stagnate and more and more of the nation’s wealth and income went to the top.”
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Reich pointed to a series of Reagan-era policies he believes triggered this shift: tax cuts for the wealthy, weakened antitrust enforcement, and suppression of labor unions. He said these changes resulted in a slow erosion of working-class stability and widened the gap between rich and poor.
Reich also cited the 1971 Powell Memorandum, authored by Lewis Powell — a corporate lawyer who would later join the U.S. Supreme Court — as a call to arms from corporate America to reassert political influence. “That was the beginning,” he said, referring to the outsized political power of corporations today.
Trump Is the Outcome, Not The Cause
Reich argued that President Donald Trump is a symptom, not the disease. “Trump is not the cause of what we are in. He’s the consequence. He’s the ultimate outcome,” Reich said. The conditions that created him, he argued, have been in the making for decades.
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He recounted traveling through the Rust Belt in 2015 and hearing the same refrain: people wanted someone who would “shake the system up.” The fact that many voters were considering both Sen. Bernie Sanders (I-VT) and Trump for president made it clear to Reich that the appeal wasn’t ideology—it was authenticity and a desire for change.
A Missed Opportunity In The Clinton Years
Reich reflected on his time as labor secretary under former President Bill Clinton, criticizing the administration’s decision to prioritize deficit reduction over public investment. “I felt that he was succumbing to a kind of illusion that had been created by Wall Street,” he said. Ultimately, he failed to convince Clinton to push forward on investments in education, job training, and infrastructure.
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No Time For Cynicism
Asked what Americans can do, Reich urged action and resilience. “It’s perfectly fine to be depressed,” he said. “But it’s not appropriate to be cynical. A cynic feeds off of hopelessness. And what neofascists want is for us to be cynical. They want for us to give up.”
Reich closed with advice to younger generations: don’t chase happiness, chase meaning. He spoke movingly of his son, Sam, a high school dropout who went on to found Dropout TV. “Just love them to bits,” Reich said of parenting. For older Americans, he offered a simpler message: “We maintain our fizz through being passionate.”
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