Former Labor Secretary Robert Reich Photo by Steve Share

Reich, an economist who served in the Clinton administration and has advised President Obama, said elected officials are too focused on reducing the national debt while millions of Americans are unemployed and face loss of their homes and health care. Meanwhile, people have cut their spending, plunging the economy into its worst state since the Great Depression of the 1930s.

“We need jobs, not more cuts in the deficit,” Reich told the Summit for a Fair Economy at Southwest High School in Minneapolis. “That is the primary objective.

“You borrow, you put people to work and you rebuild the country,” he said. “If you get growth back, if you get jobs back, the debt shrinks as a proportion of the national economy and becomes more manageable.”

To create jobs, Reich advocates the federal government take an approach similar to Franklin D. Roosevelt’s New Deal that helped pull the country out of the Great Depression: WPA-type infrastructure projects to rebuild roads, dams and bridges, extended unemployment compensation benefits for the jobless and strong incentives for businesses to create jobs. In addition, the federal government should provide aid to states and cities to prevent mass layoffs of teachers, firefighters, law enforcement and other public service workers.

Some of these elements are captured in the jobs plan that Obama announced Thursday, but “a plan that is proportional to the size of the crisis right now would be much bigger and much bolder,” Reich said.

Participants in the Summit, which was organized by Minnesotans for a Fair Economy, applauded enthusiastically, especially when Reich raised the issue of growing inequality. Since the 1970s, the very wealthiest Americans have grown vastly richer, while the majority of Americans have seen their incomes stagnate.

As more and more people struggle, they look for someone to blame – immigrants, people of other races, the poor, Reich said. At the same time, “big corporations are now sitting on $2 trillion of cash” but not creating jobs. “We are fighting over a smaller and smaller share of a bigger and bigger pie.”

The solution, Reich said, is to adopt fair tax policies that lessen the burden on the poor and the middle class, make corporations and the wealthy pay their fair share and are targeted to narrow the gap between the haves and the have-nots.

Nowhere is the widening gap between rich and poor more evident than among people of color, Professor john powell told the Summit. powell, director of the Kirwan Institute for the study of Race and Ethnicity who previously founded and directed the Institute on Race and Poverty at the University of Minnesota, said workers have been set against each other while corporations use the legislatures and courts to gain more and more power.

“We are in the midst of the most extreme corporate realignment in 100 years. We are not only experiencing corporate welfare, low taxes but also undue influence of our political systems and our lives,” he said. “This movement threatens our democracy, our environment our civil and human rights. This may be one of the greatness challenges facing our country in the 21st century.”

Powell outlined the history of court decisions that gave corporations all the rights – but none of the obligations – of citizens. And he talked about the failure to make good on the promises made to African-Americans since the Civil War – that their rights would be protected and they would enjoy equal opportunity.

The current recession and growing structural inequality are hitting African-Americans and Latinos particularly hard. Solutions need to address those most in need, powell said.

“The strategy has to be targeted. The strategy has to acknowledge that people are situated differently . . . The idea that a rising tide lifts all boats is only good if you have a boat.”

Summit organizers said a broad mobilization around jobs was one aspect of the conference’s goal: to build a movement focused on “rebuilding an economy that will work for everyone” by addressing growing income and wealth inequality in Minnesota and around the country.

Ric Varco, political director of SEIU Healthcare Minnesota, leads a workshop on "Creating Quality Jobs for Minnesota." Photo by Steve Share

“Something extraordinary is happening here,” said Donna Cassutt, spokesperson for Minnesotans for a Fair Economy. “People who typically don’t work with one another are feeling the urgency to come together to address economic and racial injustices in a powerful way. People are ready to take bold action to win an economy that works for the majority of us—not just the very richest few—our state and nation.”

Reich applauded the effort to build the coalition.

“You coming together represent a formidable, powerful movement,” he said. “There is nothing about politics or the economy that cannot be changed.”

View video highlights of the Summit for a Fair Economy at the coalition’s website.

Learn more on Robert Reich’s blog.