Bring Your Questions for Former Labor Secretary Robert Reich

Robert ReichRobert Reich

Robert Reich, perhaps best known as labor secretary under Bill Clinton, recently announced his endorsement of Barack Obama. He explains his decision on his blog.

Reich has served in three national administrations, and implemented the Family and Medical Leave Act while he was labor secretary. He was awarded the Vaclev Havel Foundation Prize for his work in economic and social thought. He is currently professor of public policy at the Goldman School of Public Policy at the University of California and has written eleven books, the most recent of which is Supercapitalism.

He is co-founding editor of The American Prospect magazine and offers weekly comments on public radio’s “Marketplace” about such topics as returning favors, and failed sales pitches.

We are very happy he has agreed to field questions from Freakonomics readers. Please fire away in the comments section below and, as with past Q&A’s, Reich will provide the answers in short course.

Addendum: Reich answers your questions here.


Do you think the growing income inequality in America is a product of economic forces (globalization, skill-based technological change, immigration) or political and social factors (decline of union membership, for instance)?


We hear a lot of complaints from labor unions that free trade treaties like NAFTA hurt U.S. companies, even though many companies can and do make changes to compete profitably, even while prices fall for U.S. consumers. Aren't these labor unions really arguing in favor of gouging U.S. consumers in their opposition to new trade treaties?

Chris Whitworth

Engergy is a topic that is not discussed much other than by news reporters telling us gas has reached record highs, as if we didn't already know this.

Many Americans dream of somehow casting off the shackles of our dependency on the Middle East for the oil we so desperately need. After all, if we didn't need Arab oil, there would be no particular need to fight in an Arab war. We could go home and let them sort out their issues on their own and let them figure out what to do with their oil. This dream has recently been fueled by reports of a large untapped field of oil in the Dakotas with reserves equal to what the Saudis are sitting on.

As I think about it, what would motivate the oil companies to develop this reserve? They are making plenty of money without the expense of all that drilling and getting past local governments. There appears to be no move to build more refining capacity. We hear that the last new refinery went online in the 70's. I don't recall hearing anything recently about a major refiner seeking approval to build a new refinery, but was turned down, only vague mentions that it is impossible to get approval for a new one. What capacity we have is not being fully utilized for fear these aging plants might break or burst into flames if they are pushed too hard. Even if these two conditions were solved, putting a lot more oil on the market doesn't help support the price of oil, quite the opposite. I guess the domestic producers would get to keep more of a smaller per-barrel price.

How do we get out of this mess?


Kevin McKague

If I understand the role of the Federal Reserve in adjusting the prime rate correctly, then it's traditional mission is to raise rates when unemployment rates get too low, that is, when there is too much currency in the hands of potential consumers. I understand the need to prevent inflation in such conditions, but I am uncomfortable with what is an essentially an independent branch of government actively working to keep a certain percentage of Americans out of work.

What do you believe would really happen, if in a growing economy (such as the one we had under President Clinton), if we left the rate be, and allowed the economy to grow large enough for say, 99% employment?


Mr. Reich

As an Economics graduate student I often find myself sifting through the BLS data hoping to find statistical trends. When some of my professors mention BLS data, they often say something like this "...the BLS data, if it's accurate..." I don't believe they're really questioning the validity of the data as much as they're emphasizing that our findings depend greatly on the soundness of the data.

So my question is, how accurate is the BLS data and what could or should be done to make it as sound as possible?

Mike Roddy

Let's assume that the science (as evidenced by Nicholas Stern's latest comments) predicts a climate future even more dire than the latest IPCC reports, and this becomes more clear in the next couple of years. This would indicate that more immediate and drastic action to curb global warming is required. Steps would include no net deforestation, phasing out US coal plants and replacing them with solar thermal and wind power within 5 years, all plug in vehicles, halting all ethanol programs, less energy intensive agriculture and meat production, etc. The goal would be to return global carbon to the 350 level, as proposed by Bill McKibben.

Whether China and India go along or not, what do you think would be the economic impact of this kind of transformation? I realize the steps listed above are not going to be implemented, but as an exercise I am interested to see if we would experience either a big loss in competitiveness or dangerous economic disruptions.


Mike Salisbury

What incentives can government or society provide to individuals to encourage actions that benefit those individuals and society in the long-term (20-50 years for individuals, 20-100 years for society)?


Barack Obama said last week he favors raising the capital gains tax for "fairness" reasons, even though a higher tax rate may not increase tax revenue. Wouldn't a higher capital gains tax rate eventually lead to less investment and fewer new jobs created?


As an educator, what skills/courses do you recommend to your students to insure their job security?

What if your too old to be an auto mechanic, but loath the thought of getting an MBA?


What steps, if any, can the US take to consider staying at par with China(projecting for the next 25 years), in terms of economic growth, capital, GDP, etc?


Mr. Reich,

In your book Supercapitalism you talk about how you think labor unions need a seat at the bargaining table in order to bring around more equality in earnings. I see this point but I wonder what you think of a situation where unions become so powerful that they force companies to teeter on the brink of bankruptcy because they have given such generous salaries/benefits. How do you prevent a powerful union from threatening the long term viability of a company or even a whole industry?


Do you believe in redistribution of wealth via taxation?

What role should taxation assume in government?

Seth Gitter

Mr. Reich,

As an Econ Professor and Democrat I'm still having trouble with the protectionist talk of the two candidates. I was particularly upset at Obama saying one thing, while Goldsbee was saying the right thing (from an economist's perpsective). Do you think Obama is handling trade issues properly or should he be more pro-free trade?

Finally as a Grinnell College class of 2002 student, thanks for one great graduation speech!

Michael Williams

The real question is, how do we get out of this mess?

William Cross

Dr. Reich,

What is it like working for the President? What was a typical day? Did you often interact with the other secretaries? What sorts of tasks were you responsible for? What sorts of tasks did you often delegate to others in your department?

Bob Palacios

Mr. Reich, What does the US have to do in order to raise the value of the dollar against world currencies? I think this is an issue that is not focused on enough, and will cause the US a long term recession unless steps are taken to strengthen the dollar. Thank you.


What measures will you recommend to the incoming president to implement a fair and sustainable income and wealth distribution? Do you believe that wealth concentration is bad for the economy and can U.S. manufacturing be revived to be competitive again?

Labor has been relegated to the backseat in favor of capital which has given illusory gains. Are you in favor of rescuing failed investments undertaken by excessive risk-takers even when their failure would cause systemic disruptions?


1) You have known the Clintons almost their entire adult lives. The public persona of Bill Clinton has changed during this election cycle. He seems to be much less positive than in the past. He looks and sounds almost angry at times. Is this the real Bill coming out under pressure and without all the stagecraft afforded a President? Or is it something else.

2) What prompted the students at Brandeis to vote you Professor of the Year? What were you teaching at the time and what made you stand out that year in particular? How does this honor rank compared to others you have received?

Keith M from Canada

Mr Reich,

One of America's biggest labour issues is the loss of low-skill industrial jobs like auto manufacturing leaving these workers either unemployed or facing layoffs or wage cuts. Under the NAFTA, these jobs look to be heading south to Mexico where lower labour and environmental standards enable companies to manufacture the same product for cheaper. This was a contentious issue during the Ohio primaries this year and the same in Pennsylvania. But to me it looks like these Americans are being paid ridiculous overinflated salaries and are losing jobs to individuals that work harder over a longer day for less money and don't have as powerful of labour unions. Isn't this just the free market doing what its designed to do? Wouldn't Adam Smith cringe at the new rise of US protectionism which, as shown by the 2002 steel tariff, turns out to have an adverse effect on the US economy?

Caitlin O

I'm surprised there are no other female commentators. There must be some other econ girls out there. It kind of leads to my question - I'd be interested to know your thoughts on the feminisation of poverty and the male-female wage differential. How much of that is due to career choice?

As a fellow Grinnell 02 graduate (great speech, and hi Seth!) I'd like to know: Is a liberal arts education a worthwhile investment? Does it have value in today's labour market, or is it an outdated concept?
Is America's higher education producing the workforce that will be needed to compete with China and India in the future? What needs to change and why? What does the US do right when it comes to education?