UYGUR: Wall Street fat cats are raking in more cash than before the recession, that`s amazing. But Republicans are doing everything they can to give them even more breaks. Maybe that`s even more amazing. Robert Reich on the water against the middle class, next.
UYGUR: There`s now new evidence that the middle class in this country remains under siege despite some good signs on the job`s front. The latest number shows that economy added 244,000 jobs in April, beating expectations. That`s of course is good news. The jobless rate is now at nine percent, that`s not really good news. In fact, that`s a little higher than last month, but analysts say that it shows people have confidence in the job market and have resumed actively searching. President Obama says, it`s proof that the economy is on the rebound.
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PRES. OBAMA (D), UNITED STATES: We just went through one of the worse recessions in our history. Worst in our lifetimes, the worst since the great depression. But this economic momentum that`s taking place here and else it`s taking place all across the country.
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UYGUR: Btu one of the problems is the jobs Americans are getting are pretty low-paying. Sixty two thousand were created by McDonald`s alone last quarter. So, that`s a huge chunk of the jobs created last quarter. But as the average working person is struggling, corporate profits are soaring. Was CEOs raging in like they`ve never done before literally? In fact, the Fortune 500 companies made a combine $10.8 trillion last year and their preference went up 81 percent. That`s a stunning number. In 2010, the average compensation for an S&P 500 CEO was $9 million. That`s their average. That was up 24 percent from 2009. So what are politicians doing about all this? Are they going to create jobs? Seeing that we`re still at nine percent unemployment? No, they`re doing a betting of corporations. Republicans are now busy trying to fight against the Consumer Financial Protection Bureau which would protect consumers, and they`re also busy passing new laws to help the bankers as if they weren`t helped enough. Are there no bounds of reason?
Joining me now is former Clinton Labor Secretary Robert Reich, he`s now professor at UC Berkeley, and he`s going to help us try to figure this thing out. Great to have you here as always.
ROBERT REICH, FORMER CLINTON LABOR SECRETARY: Hi, Cenk.
UYGUR: Hey, so first question is, look, how long we`ve been told, hey, if the corporations do well — and they`ve got these big profits, they`ll hire more people. The Republicans keep chanting job creators, job creators, but it doesn`t appear they are creating nearly enough jobs. So, why is there this disparity?
REICH: Well, one reason Cenk that they are doing so well, and we see corporate profits almost up to pre-recession levels right now is because they`re their cutting payrolls. I mean, payrolls are one of their biggest costs, and if they can cut their payrolls and ship the jobs abroad or replace the jobs with automated machinery or the internet or software, that means more money for the corporation and higher profits. And that exactly what`s happening. Jobs are really not coming back at the rate that they should be coming back largely because these corporations basically want to make more money.
UYGUR: So, when the Republicans tell us night in, and night out gigs, oh, we got to create more jobs by giving more breaks to the businesses and banks. I mean, how, and by the way, they`re doing it right now. You can talk to us about those, you know, laws they`re passing to protect the bankers as we speak. How much nonsense is that based on this evidence, these facts?
REICH: Well, it`s a lot of nonsense, in fact it`s huge nonsense, Cenk. I mean, these big corporations are now sitting on almost $2 trillion of cash. They don`t know what to do with it. They`re buying back their own shares of stock in order to further increase stock prices, and executive pay because so much executive pay is related to shares of stock. And they are doing mergers and acquisitions, buying up other companies, again, they are expanding production abroad. They are not expanding jobs here in the United States by any reasonable amount. I mean, you know, the job numbers look pretty good. But if you consider that we need about 350,000 new jobs every single month for the next three or four years to get back to six percent unemployment, we`re really, this is a very poor jobs number, and a very poor jobs report, given what we all to be seeing in a recovery.
UYGUR: Look, and part of the problem here is that the whole idea that they`ve been pushing for over 30 years now, this trickle down economy just doesn`t work. Let me give you two graphs here that are, you know, really telling. When you look at the top one percent of Americans, their average income tax rate has decline from 34.5 percent in 1980 all the way down to 23.27 percent. Now, the number you`re looking at there is their income, their share of total income for the country. It went up from 8.5 percent to 20 percent. So, what they told us is, hey, if you lower our taxes, as we did there now, that`s the number you`re looking at there, don`t worry, you know, it will come down to you, but it didn`t. We got nine percent unemployment. Where did it go? It went to them, it went from 8.5 percent to 20 percent.
REICH: Exactly, Cenk. There`s simply no trickle down. I mean, trickle-down economics is a big fat lie. And we have right now many, many top executives, CEOs, Hedge Fund managers, Wall Street executives, they`re making oodles of money, and they are paying 15 percent taxes. That`s lower than most secretaries, lower than most lower middle class, working class people. How are they getting away with it? Because they`re capital gains, they`re treating it more and more of their income as capital gains and its dividends that are taxed now at 15 percent. I mean, they are setting the rules. You and I, average working Americans across this country, the middle class, are not setting the rules.
UYGUR: Look, that`s because they rigged the rules, as you say. Because they bought the politicians. One last real quick thing, let me show you a chart, graph of income and equality. We`re now between Uganda and the Ivory Coast. We have worse income inequality than Pakistan, Kazakhstan, Ethiopia, what has become of this country? And if you don`t have a middle class, who`s going to buy those goods?
REICH: Well, exactly, Cenk. In fact, one of the reasons we are having such a hard time coming out of the gravitational pull of the great recession is because so many people don`t have enough money. I mean, what we ought to be doing right now, and what our politicians is watching and ought to be doing, instead of worrying about the long-term budget deficit, and cutting spending, and all of that stuff, what they ought to be doing is worrying about putting cash, more money, and more jobs for average working people. I mean, you know, cut payroll taxes.
UYGUR: Right.
REICH: I mean, create a WPA for people, if you can`t provide another way of creating jobs.
UYGUR: All right. Secretary Reich, thank you so much. We`ve got to go. We`ll be right back.
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