Beyond Outrage: What You Need to Do - Beyond Outrage: What has gone wrong with our economy and our democracy, and how to fix it - Robert B. Reich

Beyond Outrage: What has gone wrong with our economy and our democracy, and how to fix it - Robert B. Reich (2012)

Part Three. Beyond Outrage: What You Need to Do

Someone recently approached me at the cheese counter of a local supermarket, asking, “What can I do?” At first I thought the person was seeking advice about a choice of cheese. But I soon realized the question was larger than that. It was: What can I do about what’s happening to America—an economic game increasingly rigged in favor of those at the top and against ordinary Americans, and a government that no longer seems to work for average people but is increasingly responsive to big money? In this part of the book I try to answer that question.

How to Make a Movement

I don’t know where the Occupier movement is heading, but I do know there’s great energy at America’s grass roots for progressive change—more energy now than I’ve seen in decades. The question is how to harness that energy and turn it into a sustainable and powerful progressive movement to take back our economy and our democracy from the regressive forces that have been gaining ground.

People who voted for Barack Obama in 2008 tend to fall into one of two camps: trusters, who believe he’s a good man with the right values and that he’s doing everything he can; and cynics, who have become disillusioned with his bailout of Wall Street, flimsy plan to tame the Street, willingness to jettison the “public option” in his health-care plan, and negotiating strategy that always seems to begin by giving away the store.

In my view, both positions are wrong. No president—even one as talented and well motivated as Obama—can get a thing done in Washington unless the public is actively behind him. As FDR said in the reelection campaign of 1936 when a lady insisted that if she were to vote for him, he must commit to a long list of objectives, “Ma’am, I want to do those things, but you must make me.”

If you believe Obama and the Democrats didn’t push hard enough in Obama’s first term to get done the things you believe in, you and others have got to push Obama and the Democrats harder next term. You also need to organize against the regressives. Don’t be fooled by the lies they’re telling, and don’t let others be fooled. The more you know and understand, the more powerful you will be at mobilizing others.

You can’t accomplish much on your own. You have to join with others and pull in many more. Legislators don’t pay attention to complaints or demands from individual constituents, but they pay lots of attention when those complaints or demands come from hundreds of constituents. The media likewise overlook press conferences organized by small groups, small demonstrations, and modest shows of political clout. But thousands of people gathered together can create news. And when tens of thousands turn out to vote for candidates who will support a progressive agenda, the media begin to see the makings of a political movement. To achieve strength of numbers, you need to be a public educator on a large scale—getting friends to mobilize their friends, and their friends to do the same. Together, you will be heard.

Get out of your ideological bubble. If most of the people you talk with agree with you, you’re wasting your time. You need to engage with people who may disagree or who haven’t thought hard about the issues. Reach across to independents, even to Republicans and self-styled Tea Partiers. Find people who are willing to listen to the facts and are open to arguments and ideas, regardless of the label they apply to themselves. We need them.

Occasionally, I come across demonstrators who are holding signs on street corners where I live, in Berkeley, California. Sometimes the signs ask drivers to honk if they agree that America should cut its defense budget or raise taxes on the rich or that climate change must be reversed. As you can imagine, those street corners can become fairly noisy. I appreciate the effort these demonstrators are making, but I wish they’d do it in places where fewer drivers would honk, and engage those who disagree with them in discussion rather than merely hold up signs. It’s too easy in modern America to preach to the converted because it’s increasingly easy to surround ourselves only with people who share our views.

Discussion isn’t enough. You also need to express yourself in ways that enable those who may initially disagree with you to understand. Appeal to the moral values you and they share. Avoid violence. Violence can put you on the front page, but it will not capture the hearts and minds of those you need to convince. You’ll be most convincing when you combine moral clarity with undeniable facts and common sense. Look for organizing opportunities—teachable moments that illustrate why a policy currently in place is wrongheaded or why another approach is needed. For example, every tax day—April 15—offers an opportunity to point out that if the rich don’t pay their fair share, the rest of us suffer from deteriorating public services or we have to make up the shortfall by paying more taxes.

Don’t think you can be much of an activist by merely sitting behind your computer. I come across many good people who spend many hours online, disseminating petitions or raising money for causes they believe in. I admire them for it, but they need to bear in mind that the convenience of online political activism reduces its political significance. Elected representatives who receive virtual petitions know how little they may mean, relative to the exhausting work of getting out the vote or pushing a legislative agenda through to completion. All too often, virtual organizations and movements are fleeting. Their “members” feel no loyalty or connection to one another. Direct contacts, on the other hand, are more enduring. When people join together in person—when they sacrifice evenings to meet up—they can build the trust and energy required for the long haul.

Get out of your issue cocoon. It’s fine to fight for more efficient fuels or against climate change, or both; good to be concerned about human rights abuses or to push for gay rights or reproductive rights; worthwhile to mobilize around the needs of children, a single-payer health-care system, or cuts in military spending. But don’t be so mesmerized by any single issue that you fail to join with others on the bigger stuff that’s making it harder for the voices of average Americans to be heard on all of these issues and others: the growing concentration of income, wealth, and political power at the top; the increasing clout of global corporations and Wall Street; and the corruption of our democracy.

Don’t focus solely on Washington. Elections for president and Congress are obviously important, but in many respects the people elected to state and local offices have more day-to-day impact, making important decisions that affect the lives of countless people. Nor should you focus entirely on elections. Participate in corporate campaigns. Consumer boycotts of companies responsible for the largest political contributions, media attention to companies that award their top executives the fattest compensation packages while laying off the most workers, and pressure on their key investors can be important aspects of a broad-based corporate campaign to end the rigged game.

Be patient. Changes that alter the structure of power and widen opportunity require years of hard work, as those who toiled for the Civil Rights and Voting Rights Acts, or have been working for the rights of the disabled and gays, would tell you. It took thirty years of continuous fulmination for women to get the right to vote; fifty years of agitation before employers were required to bargain with unionized workers. Those who benefit from the prevailing allocation of power and wealth don’t give up their privileged positions without a fight, and they usually have more resources at their disposal than the insurgents. Take satisfaction from small victories, but don’t be discouraged or fall into cynicism. And don’t allow yourself to burn out. I’ve known many activists who take a kind of masochistic delight in working themselves to exhaustion. Eventually, their health suffers or their emotional resilience disappears. They reach a breaking point and cannot go on. These people don’t know how to pace themselves for the marathon run of a political movement.

Finally, instead of waiting for candidates to emerge with agendas and policy positions, take an active role in creating those agendas and get candidates to run on them. Tell incumbents you and others will work your hearts out to get them reelected on the condition they campaign on that agenda. Then, if and when they’re elected, keep up the heat and the support.

Too many of us think political activism begins a few months before Election Day and ends when winners are announced. I can’t tell you how many political campaigns I’ve been involved with (even my own, briefly, for governor of Massachusetts) that demand so much time and energy there’s none left once the results come in. That’s a big mistake. The day after Election Day is the real beginning. That’s when a loud and determined progressive movement needs to put pressure on newly elected officials and keep the pressure on. They must know you and others like you will continue to mobilize support for a progressive agenda, reward them for pushing it, and hold them accountable in the next election cycle if they don’t; that you will even go so far as to run candidates against them in their next primary—candidates who will run on that agenda.

The following are samples of what I mean. The first is an offer to the president—and implicitly to Democrats and other officials—to get behind him before and after the election, as long as he commits to a progressive agenda. It’s a prototype for the kind of message progressives might be sending and around which we could be organizing. The second is a prototype of a different kind—a “corporate pledge of allegiance” around which progressives might organize to make large companies more accountable.

What are the most important steps toward creating good jobs at good wages, and an economy and democracy that work for all of us and not just a few? (3:54)

An Offer to the President (and to Democrats and Other Officials in 2012 and Beyond)

Mr. President, we hear what you’re saying about the dangers to our economy and our democracy of the increasing concentration of income and wealth at the top. We agree. We are prepared to work hard over the next six months to get you and other Democrats reelected, and others elected. And we’ll keep working after that to help you and to help other Democrats and like-minded officials—as long as you (and they) commit to the following agenda:


The top 1 percent has an almost unprecedented share of the nation’s wealth and income yet the lowest tax rate in thirty years. Meanwhile, America faces colossal budget deficits that have already meant devastating cuts in education, infrastructure, and the safety nets we depend on. The rich must pay at the same rate they did in the 1950s and 1960s. Income in excess of $1 million should be taxed at 70 percent. There should be more tax brackets at the top and higher rates in each of those top brackets. Absurdly, the top bracket is now set at $388,350 with a tax rate of 35 percent; the second-highest bracket, at 33 percent, starts at $178,650 for individuals. But the big money is way higher. And all sources of income, including capital gains, should be treated the same. It’s scandalous that the four hundred richest Americans should pay an average of 17 percent tax on their incomes, a rate lower than that paid by many in the middle class. That’s because so much of the income of the super-rich is considered capital gains, now taxed at only 15 percent. Close this loophole. (Don’t penalize true entrepreneurs, though. If owners have held their assets for at least twenty years, keep their capital gains low.)

You have suggested a 30 percent minimum percentage tax on millionaires, which would yield about $50 billion a year in new revenue. You also want to let the 2001 and 2003 Bush tax cuts expire for taxpayers making over $250,000 a year, which would return the capital gains rate to 20 percent and the top rate on income and dividends to 39.6 percent. This is better than anything the regressives have come up with, but your plan falls short of what’s needed to tame the projected budget deficit and do everything else the nation must do. Sixty years ago Americans earning over $1 million in today’s dollars paid 55.2 percent of it in income taxes, after taking all deductions and credits. If they were taxed at that rate now, they’d pay at least $80 billion more annually, which would reduce the budget deficit by about $1 trillion over the next ten years.


The richest one-half of 1 percent of Americans, each with over $7.2 million of assets, own 28 percent of the nation’s total wealth. Given this almost unprecedented concentration, and considering what the nation needs to do to rebuild our schools and infrastructure, as well as tame the budget deficit, a surtax is warranted. It would generate another $70 billion a year, and $750 billion over the decade.


This would bring in more than $250 billion over ten years while slowing speculators and reducing the wild gyrations of financial markets.

That’s $2 trillion right there—a significant slice off the long-term budget deficit. Every one of these tax changes can be accomplished if Americans understand what’s really at stake here. If the rich don’t pay their fair share of taxes, the rest of us will have to bear more of a burden. That burden will come in the form of either higher taxes on us or less money for the things we depend on—including health care, education, infrastructure, and national defense.


In the likely absence of a bipartisan budget deal, there will be an automatic across-the-board ten-year cut in the defense budget of nearly $500 billion, starting next January. But this isn’t nearly enough. In the next five years, the Pentagon will still spend more than $2.7 trillion, closer to $3 trillion when adjusted for inflation.

You can save hundreds of billions more without jeopardizing the nation’s security by ending weapons systems designed for an age of conventional warfare. Shrink the F-35 fleet of stealth fighters—the costliest Pentagon procurement project in history—whose performance has been awful. You’ve declared your commitment to arms control, but if you followed through, you could save billions more. Cut the number of deployed strategic nuclear weapons, ballistic missile submarines, and intercontinental ballistic missiles. Finally, take a cleaver to the Navy and Air Force budgets. Most of the action is with the Army, Marines, and Special Forces. You can save billions more from programs no one can justify and few can understand.


You’ve recommended an independent commission to come up with cuts in Medicare if its yearly costs rise half a percent faster than the national economy. That’s better than what the Republicans want, but it still assumes that the rising Medicare costs are the fundamental problem when the real problem is a wildly inefficient health-care system—for which Medicare can be the solution. Some features of your new health-care law will slow the rise of costs—insurance exchanges, for example, could give consumers clearer comparative information about what they’re getting for their insurance payments—but the law doesn’t go nearly far enough.

Use Medicare’s huge bargaining leverage over drug companies and health-care providers to bring down health-care costs and to move from a pay-for-service system to a pay-for-healthy-outcomes system. We’re spending almost two and a half times more on health care per person than other advanced nations, yet the typical American doesn’t live as long as the citizens of those nations and we have a higher rate of infant mortality. That’s because here doctors and hospitals have every incentive to spend on unnecessary tests, drugs, and procedures but have little incentive to keep people healthy.

For example, almost 95 percent of cases of lower-back pain are best relieved through physical therapy. But American doctors and hospitals routinely do expensive MRIs and then refer patients to orthopedic surgeons who often do even more costly surgery—because there’s not much money in physical therapy. Twenty percent of the people who go into a hospital for diabetes, asthma, or a heart condition are back within a month; they’d do better if a nurse visited them at home—a common practice in other advanced countries—to answer their questions and make sure they are taking their medications. But nurses don’t make home visits to Americans with acute conditions, because hospitals and nurses aren’t paid for making them. Instead of reimbursing doctors and hospitals for the costly tests, drugs, and procedures, pay them for keeping people healthy.


The Republicans’ plan would simply funnel money into the hands of for-profit insurers whose administrative costs are far higher than Medicare’s. Your approach is smarter but doesn’t address the underlying problem. The real answer to providing broad coverage and keeping a lid on costs is to allow anyone at any age to join Medicare.

Medicare’s administrative costs are in the range of 3 percent—well below the 5-10 percent costs borne by large companies that self-insure, even further below the administrative costs of companies in the small-group market (amounting to 25-27 percent of premiums), and much lower than the administrative costs of individual insurance (40 percent). It’s even below the 11 percent costs of private plans under Medicare Advantage, the current private insurance option under Medicare. Medicare for all would reduce the colossal waste in the current system. Right now we’re spending $30 billion a year fixing medical errors—the worst rate among advanced countries—partly because we keep patient records on computers that can’t share the data. Patient records are continuously rewritten on pieces of paper and then reentered into different computers, which leads to errors. Meanwhile, administrative costs are eating up 15-30 percent of all health-care spending in the United States. That’s twice the rate of most other advanced nations. This money goes mainly into collecting money: doctors collect from hospitals and insurers, hospitals collect from insurers, insurers collect from companies or from policyholders. At some hospitals, billing clerks outnumber physicians. A third of nursing hours are devoted to documenting tests and procedures so insurers have proof.

Estimates of how much would be saved by extending Medicare to cover the entire population range from $58 billion to $400 billion a year. More Americans would get quality health care, and the long-term budget crisis would be sharply reduced.

Your new health-care law requires people to buy health insurance from private insurers. This “individual mandate” spreads the risk of someone needing medical care to younger or healthier people, thereby enabling private insurers to afford to take on older or sicker customers with preexisting medical conditions or to maintain coverage indefinitely for people who become seriously ill. Yet the individual mandate is deeply unpopular. It not only offends libertarian sensibilities but also worries some moderates and liberals who fear private insurers will charge too much because of insufficient competition in the industry. Republicans see an opportunity here to destroy the new health-care law by attacking the individual mandate.

But there’s another way to spread medical risks across the public. It’s the same framework used by Social Security and Medicare—public insurance financed by payroll taxes. Not only are these programs enormously popular—“Don’t take away my Medicare!” was a rallying cry among some conservative populists during the debates over the health-care law—but they rest on a more widely accepted relationship among the individual, the government, and the market. Both Medicare and Social Security require every working American to “buy” them. The purchase happens automatically in the form of a deduction from everyone’s paycheck. Such payments are viewed not as federal mandates that encroach upon individual freedoms, or as payoffs to private companies likely to make even more money from mandatory purchases of their products, but as well-deserved entitlements. Americans are accustomed to paying for public insurance through their payroll taxes. Indeed, the biggest problem with Social Security and Medicare is they’re so popular that politicians have had a hard time trimming their benefits to match payroll tax revenues.

Republican attacks on the individual mandate will give you an opportunity for policy jujitsu. Move to amend the new health-care law and create Medicare for all—premised on payroll taxes and public insurance, the system Americans prefer. The public will be behind it, as will the courts.


You understand the importance of education, but your proposed budget doesn’t begin to remedy the scandal of the nation’s schools in poor and middle-class communities. Most teachers in these schools are paid less than $50,000 a year, and classrooms are crammed. These schools can’t afford textbooks or science labs, and they’ve abandoned after-school programs and courses like history and art. The reason: school budgets across America depend substantially on local property taxes that continue to drop in lower-income communities. The federal government should come to their rescue. You also need to help the states finance early childhood education so that every preschooler can begin school ready to learn. And help restore the nation’s system of public higher education, which has been decimated by state budget cuts.

Meanwhile, America’s infrastructure is crumbling. Our roads, bridges, water and sewer systems, subways and other forms of public transit, gas pipelines, ports, airports, and school buildings are all in desperate need of repair. Deferred maintenance is taking a huge toll. The American Society of Civil Engineers has given the nation’s infrastructure an overall grade of D. The percentage of the national economy going to infrastructure continues to drop—from 1 percent in 1960 to barely three-tenths of 1 percent now. It’s time to rebuild America while at the same time expanding high-speed Internet and modernizing the electricity grid.

Over the long term the only way to improve the living standards of most Americans is to invest in our people—especially their educations, and the communications and transportation systems linking them together and with the rest of the world. Spending on these is fundamentally different from other categories of government spending because these outlays are investments in the future productivity of our people. There’s no problem with borrowing from the future in order to finance investments in the future. Families do it all the time. While it might be irresponsible for a family to go into debt in order to finance a worldwide cruise, it would be highly responsible for the same family to borrow money in order to help finance their kids’ college educations. Businesses also borrow in order to increase future productivity. If they didn’t, they’d be out of business. Such borrowing makes sense as long as the return on the investment is higher than the cost (principal plus interest) of the borrowing.

It’s cheaper than ever for the United States to borrow; the yield on the ten-year Treasury bill is hovering around 2 percent. That’s because global investors want the safety of dollars. Europe is in a debt crisis, many developing nations are gripped by fears the contagion will spread to them, Japan remains in critical condition, and China’s growth is slowing. Now is the ideal time to redevelop the public goods America desperately needs.


There is no good reason why banks should ever be permitted to use people’s bank deposits, insured by the federal government, to place risky bets on the banks’ own behalf. Yet Wall Street lobbyists have made sure the new Dodd-Frank law has enough loopholes to allow financiers to continue to gamble with other people’s money. The so-called Volcker rule in the new Dodd-Frank Act was designed as a compromise—a kind of Glass-Steagall lite—but under the pressure of Wall Street’s lobbyists it is too weak to do the job. The only way to stop the looting is to bring back Glass-Steagall. The act was put in place after the crash of 1929 to prevent financiers from gambling with people’s bank deposits but was repealed in 1999, and its repeal contributed to the crash of 2008.


The sad lesson of the Dodd-Frank legislation is that Wall Street is too powerful to allow effective regulation of it. We should have learned that lesson in 2008 as the Street brought the rest of the economy—and much of the world—to its knees. The Street’s leviathans do not generate benefits to society proportional to their size and influence. To the contrary, they represent a clear and present danger to our economy and our democracy. The best way to avoid another bailout is to break them up and then put a cap on the maximum size of the biggest banks.

There is precedent. The Sherman Antitrust Act of 1890 and its companion, the Clayton Act of 1914, were designed not only to improve economic efficiency by reducing the market power of economic giants like the railroads and oil companies but also to prevent companies from becoming so large that their political power would undermine democracy. Trustbusters during the first decades of the twentieth century tamed American industry and arguably saved capitalism from its own excesses. We’ve come to a similar juncture a century later, but this time it’s big finance that has to be tamed.

The banks were too big to fail before the bailout and are even bigger now. Twenty years ago, the ten largest banks on the Street held 10 percent of America’s total bank assets. Now the six largest hold over 70 percent. And the biggest four have a larger market share than ever. Their size gives them special privileges at the Fed—lower interest rate charges and special drawing rights—which provides them with a competitive advantage over their smaller competitors. And with this advantage they’re sure to grow even larger.


In February, five big banks reached a deal with government authorities over dubious mortgage practices and foreclosure abuses. In exchange for reducing the principal on the mortgage loans of distressed homeowners by $17 billion, the banks have been absolved of many legal claims against them. But given that close to eleven million borrowers are underwater on their loans by about $700 billion, this settlement is barely a drop in a huge bucket. Although some homeowners should have known they were borrowing excessively, most reasonably assumed housing prices would continue to rise. It wasn’t their fault that the banks created a housing bubble that burst, causing home values to plummet. And most of the banks’ wrongdoing has never been fully investigated, including possible tax, trust, and securities violations.

In your State of the Union address in January, you promised a new investigation into mortgage abuses, a broader inquiry that could lead to a much larger package of relief. Launch it, with all the legal resources it needs. Allowing millions of homeowners to remain in their homes and reversing the collapse of housing prices would be good for almost everyone, including banks whose balance sheets have been weakened by the slide in home values.

Modify the bankruptcy laws to allow struggling homeowners to declare bankruptcy on their primary residence. This will give them more bargaining leverage with the banks to reorganize their mortgage loans. Why should the owners of commercial property and second homes be allowed to include these assets in bankruptcy but not regular homeowners?


Finally, Mr. President, in order to get any of this done—and more—we have to get big money out of politics. If income and wealth in America were as widely shared as in the first three decades after World War II, we’d have less reason to worry. But now, with an almost unprecedented concentration of money at the very top, the Supreme Court’s 2010 decision in Citizens United v. Federal Election Commission invites the worst corruption we have witnessed since the Gilded Age. As you yourself have said, it’s a direct threat to our democracy.

We were disappointed you set up and endorsed your own super PAC. We understand why: Your aides fear $500 million or more will be funneled to Romney by a handful of rich individuals and corporations through right-wing super PACs like American Crossroads. Your campaign manager says you couldn’t “unilaterally disarm.” But we don’t believe refusing to be corrupted this way would really amount to unilateral disarmament. To the contrary, we think this would have given you a rallying cry that nearly all Americans would get behind: More of the nation’s wealth and political power is now in the hands of fewer people and large corporations than since the era of the robber barons of the Gilded Age. I will not allow our democracy to be corrupted by this! I will fight to take back our government!

It’s too late to reverse yourself on this, but you must double your efforts in your second term to clean up the mess the Supreme Court has created. Commit to appointing Supreme Court justices who will reverse the ruling in Citizens United. And lend your support to a constitutional amendment to declare that corporations are not citizens entitled to contribute to political elections and that Congress has the power to set limits on campaign spending.

In the meantime, fight for public disclosure of all donors to super PACs and other organizations that are nothing more than political fronts. Support a law requiring corporations to get the approval of every shareholder before spending corporate funds—the shareholders’ money—on politics. Any shareholder who doesn’t approve should be refunded for such expenses in proportion to his or her share of the company.

Go to bat for a system of public financing that would be available to any presidential or congressional candidate supported by at least 5 percent of the voting public. These funds would provide two dollars for every dollar raised from small donors (each giving no more than $1,000), so candidates could succeed without relying on a few billionaires pumping unlimited sums into a super PAC.

Finally, here’s a step you don’t even need congressional approval for: issue an executive order forcing big government contractors to disclose their political spending, and ban all political activity by companies receiving more than half their revenues from the U.S. government. Lockheed Martin, the nation’s largest contractor, got more than $19 billion in federal contracts last year while spending millions lobbying Congress to get even more. Sixty-four of Lockheed’s lobbyists are former congressional staffers, Pentagon officials, or White House aides. Two are former members of Congress. Lockheed has also been spending more than $3 million a year on political contributions to friendly members of Congress.

Lockheed is not alone. The ten biggest government contractors are all defense contractors. Every one of them gets most of its revenues from the federal government and uses a portion of that money to lobby for even more defense contracts.

That’s one reason the defense procurement budget keeps growing. The drawdown of troops from Iraq in 2011 was supposed to save money, but Lockheed and other giant defense contractors are making sure much of the anticipated savings goes to new weapons systems. Lockheed recently delivered a budget bombshell with a proposed tab of more than $1 trillion for a fleet of F-35 Joint Strike Fighter jets. In the wake of the Citizens United ruling, there’s no limit on what Lockheed and other defense contractors can spend on politics. That’s why you must put an end to this increasingly expensive conflict of interest by banning all political activities by corporations getting more than half their revenues from the federal government.

So here’s the deal, Mr. President (and Democratic candidates for Congress): We’ll give you a mandate to do all this and more in your second term, and we’ll stand behind you as you try to get it enacted. As long as you stand behind us.

The Corporate Pledge of Allegiance

If the Supreme Court and most regressives insist big American corporations are people that deserve to be treated as American citizens, and be given tax breaks and special advantages to create jobs here, we should expect those corporations to show some loyalty to this country. So why not have big American corporations take a pledge of allegiance to the United States? It wouldn’t be a legal requirement. It would be entirely voluntary. Corporations that take the pledge would be able to say in their advertisements, “We pledge allegiance to the United States.” And American consumers would be free to boycott those that don’t take the pledge. In fact, you might consider organizing just such a boycott.

Here’s what a corporate pledge of allegiance might look like:

Our corporation pledges allegiance to the United States of America. To that end:

We pledge to create more jobs in the United States than we create outside the United States, either directly or in our foreign subsidiaries and subcontractors.

We further pledge that no more than 20 percent of our total labor costs will be outsourced abroad. If we have to lay off American workers at a time when we’re profitable, we will give those workers severance payments equal to their weekly wage times the number of months they’ve worked for us.

We pledge to keep a lid on executive pay so no executive is paid more than fifty times the median pay of American workers. We define “pay” to include salary, bonuses, health benefits, pension benefits, deferred salary, stock options, and every other form of compensation.

We pledge to pay at least 30 percent of money earned in the United States in taxes to the United States. We won’t shift our money to offshore tax havens, and we won’t use accounting gimmicks to fake how much we earn.

We pledge not to use our money to influence elections.

This isn’t too much to ask, is it? Again, it wouldn’t be a legal requirement; corporations would be free to pledge or not to pledge. And consumers would be free to boycott those corporations that don’t make the pledge or that disregard it. But at least we’ll know which corporations that enjoy the benefits of American citizenship act like American citizens. That’s important this election year and beyond.

A Final Note on the Basic Choice, This Election Year and Beyond: Regression or Progression, Social Darwinism or the Public Good

America is not the only place struggling with a collision between regressive forces lurching backward toward more authoritarian, intolerant, and unequal societies and progressive forces striving for more democracy, tolerance, and equal opportunity. The details differ, but the larger forces are similar. You see it in Spain, Greece, and Italy, whose citizens are being squeezed by bankers insisting on austerity. You see it in Chile and Israel, whose young people are revolting against limited opportunity and widening inequality. It’s on view in the Middle East, whose “Arab spring” has turned into ongoing struggles to create functioning democracies. You see it even in China, whose young and hourly workers are demanding more, and whose surge toward inequality in recent years has been as breathtaking as its surge toward modern capitalism.

But it is likely to be in America—still the world’s largest economy and its most influential practitioner of democracy—where the collision is most consequential. And I believe we will once again show the world that when our ideals are tested, we do not bend. We do not move backward. We do not tolerate rigged games.

The great arc of American history reveals an unmistakable pattern. Whenever privilege and power conspire to pull us backward, we eventually rally and move forward. Sometimes it takes an economic shock like the bursting of a giant speculative bubble; sometimes we just reach a tipping point where the frustrations of average Americans turn into action. Look at the progressive reforms between 1900 and 1916; the New Deal of the 1930s; the civil rights struggle of the 1950s and 1960s; the widening opportunities for women, minorities, people with disabilities, and gays, starting in the 1960s and continuing, in fits and starts, to the present day; and the environmental reforms of the 1970s. In each of these eras, regressive forces reignited the progressive ideals on which America is built. The result was fundamental reform.

It will happen again—but it will not happen automatically. The nation’s forward movement has always depended on the active engagement and commitment of vast numbers of Americans morally outraged by how far our economy and our democracy have strayed from our ideals—and committed to move beyond outrage to real reform.

Your outrage and your commitment are needed once again.

That’s what we need to do, that’s why things are as screwed up as they are, that’s why the dice are loaded against most average Americans—and this is what you can do. (1:41)