Review: Robert Reich’s economic lessons in ‘Inequality for All’

Smart, funny and articulate, Robert Reich is the university professor we all wish we’d had. He’s so accessible and entertaining he takes a subject that sounds soporific and makes it come alive like you wouldn’t believe in “Inequality for All.”

That topic, as the title indicates, is the widening income gap in the United States between the hugely rich and the rest of us. Reich and documentary director Jacob Kornbluth turn out to be the ideal collaborators to tell the story of what that gap is, why it happened and why it’s important, all in a totally engaging way.

In addition to his impeccable classroom style (we seem him teaching his popular “Wealth and Poverty” class at Berkeley), Reich’s real-world credentials are impressive, including a stint as secretary of Labor under President Bill Clinton.

PHOTOS: Movie Sneaks 2013

Kornbluth, for his part, employs his skills as a dramatic feature director (his little-seen 2001 “Haiku Tunnel” is charming) to bring energy and vigor to the way this film is structured, making especially good use of lively animation and vivid charts.

Of course, as noted, Kornbluth has a great subject in Reich, who is constantly making jokes about his 4-foot-10 height and his longevity in government: “I was a special aide to Abraham Lincoln,” he deadpans to his students. “Those were tough times.”

Even tougher times, however, exist today for the American middle class, and “Inequality” starts by laying out the extent of the problem: The richest 400 people in this country have more wealth than the 150 million who make up the bottom half of the population. Equally disturbing, 42% of Americans born into poverty will not make it out as opposed to 30% of Britons and 25% of Danes.

Despite this, Reich makes it clear that he is no enemy of capitalism and has no problem with the amount of inequality that is inevitable if we are to incentivize behavior.

But Reich also takes care to point out that there really is no such thing as a free market. There are always rules, and the question is, whom do these rules benefit, whom do they hurt, and why did they begin to shift over the past 30 years?

INTERACTIVE: From Toronto to the Oscars? Well...

“Inequality’s” key point starts from the frequently heard contention from wealthy folks that they are “job creators.” Not so, Reich insists. Consumer spending is 70% of the U.S. economy, and the real job creators are the middle-class buyers.

Helping make this point is Seattle-based venture capitalist Nick Hanauer, one of several people the film interviews, whose initial family business was pillow manufacturing. Hanauer’s annual income is between $10 million and $30 million, but, he points out, “a person like me doesn’t buy 1,000 pillows. Even the richest person sleeps with only one or two. The most pro-business thing you can do is to help middle-class people thrive.”

Since the mid-1970s, when wages flattened, the middle class has done everything but thrive. Reich reports three strategies, now maxed out, that families used to cope with that situation: Women entered the work force, people worked longer hours and took second and third jobs, and homeowners used their houses as piggy banks.

While globalization and technology are often cited as contributing to job loss, Reich says they were more important as wage reducers. Also a key factor here is the Wall Street pressure to keep profits high, a state often achieved by slashing pay. One of the most affecting moments in the film has working wife Nancy Rasmussen sobbing into the camera after a $12-an-hour wage cut: “If you have millions of dollars, why do you need that little bit I have?”

When Reich is asked which country our economy should emulate, he has a surprising answer: the United States. In the three decades after World War II, an era he calls “the great prosperity,” the U.S. had “the largest middle class the world had ever seen,” a situation that led to “a virtuous cycle” of even more prosperity.

Reich isn’t eager for more income equality just to be a good guy. He makes the case, backed by conversations with conservatives like former Sen. Alan Simpson, that “widening inequality could undermine democracy” if it leads to what Simpson calls “government on the auction block.”

“Inequality for All” concludes with footage of people at both Occupy and Tea Party rallies: Except for styles in facial hair, it can be hard to tell the groups apart.

“A lot of people feel the game is stacked against them, and losers in rigged games get angry,” Reich points out. “We are losing equal opportunity in America, our moral foundation stone.” It’s hard to watch this persuasive documentary and feel that’s nothing to worry about.

‘Inequality for All’

No MPAA rating

Running time: 1 hour, 25 minutes

Playing: At Landmark, West Los Angeles

kenneth.turan@latimes.com