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LIVE FROM THE HEADLINES

Interview With Robert Reich

Aired May 27, 2003 - 19:38   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

ANDERSON COOPER, CNN ANCHOR: A lot of kids graduating from college these days -- not really kids, I guess, any more. But the soft economy means hard times for a lot of those new grads and a lot of other people as well.
Though some grads are eying graduate school as an alternative for looking for work. But that might not be the best move, says our next guest, former Secretary of Labor Robert Reich joins -- looks at the problem in a recent op-ed piece in "The New York Times," called get a job.

Secretary Reich, currently a professor at Brandeis University, joins me live from Boston.

Secretary Reich, thanks for being with us tonight.

ROBERT REICH, FMR. SECRETARY OF LABOR: Well, Anderson, how are you doing tonight?

COOPER: I'm doing all right. I've got a job, so I'm breathing a sigh of relief here.

REICH: Well keep it if you possibly can. Don't go to graduate school unless you have to.

COOPER: Well, you know, I was interested to read your op-ed, because basically you're a guy who not only has a law -- you know, has an undergraduate degree, you have an M.A. from Oxford. You also have a law degree and you're telling people not to go to graduate school?

REICH: Unless they love a particular subject. If they love the law, if they love John Milton's poetry, by all mean. But right now is not necessarily a great time to go to graduate school or go to professional school if you want to earn more money because so many people aren't going to graduate school and professional school, there are so many graduates that will have advanced degrees that given the law of supply and demand, they're not going to earn that much more to begin with.

COOPER: An obviously, those graduate degrees cost a lot of money to begin with.

I want to read just one of things from your op-ed that caught our eye. It says that, "Many college graduates would do better to lower their sights in the short term and take a go-for job as in go for coffee in an industry or profession that interests them."

Is that for real? Do you think people should just take whatever job they can get in a -- even if it's, like, not a not paying job?

REICH: Well, I think so. If they can possibly afford an internship in an area that they're very interested in, Anderson, I think that would be good for them because it gives them a window into the world of work.

Or alternatively, recent college graduates, because they have more mobility geographically, could go to a part of the country where unemployment is still low and get a pretty good job, relative to the job they could have at home.

There are other alternatives for them. Again, it is important and employers are placing a greater and greater value on experience. On street smarts, on actually knowing, not only a particular terrain, but also knowing yourself, knowing what makes you happy, what gives you satisfaction, where you're going to spend your career.

COOPER: It is tough times for a lot of people out there. Tomorrow, President Bush is going to sign the $350 billion economic stimulus bill. You are obviously a Democrat, have been a vocal opponent of some of these moves by the current administration. Your thoughts on this signing?

REICH: Well, the economy certainly needs a stimulus. We've been losing jobs right and left, Anderson. As you know, two-and-a-half million private sector jobs lost since January of 2001. So the economy needs some stimulus, some push.

The problem is that if you give a tax break mostly to people who are wealthy, they're not going to take the extra money and spend it. The definition of being rich is you already spend as much as you want to spend. The most, I think, impressive and important stimulus would be a tax break for average working people.

For example, I've been pushing my own pet projects. I don't know that it's going to get any traction, certainly not in this administration, but that is providing an exemption for the first 15 or possible $20,000 of income from the payroll tax.

COOPER: Obviously, the Republicans can argue, you know, any tax break is good. Stimulus across the board is a good thing. It's money back in people's pockets.

Just want to read you something President Bush has said about the economic stimulus bill. He said, "By leaving American families with more to spend, more to save and more to invest, these reforms will help boost the nation's economy, create jobs. When people have extra take-home pay, there's greater demand for goods and services and employers will need more workers to meet that demand." You've been very pessimistic about the state of the economy right now. But there are a lot of people who say, Look, oil prices are down. Interest rates are incredibly low. A lot of people refinancing their mortgages, have cash in their pocket. Are things as bad as you paint?

REICH: Well, you just pointed to three of the good pieces of news and I wish I could be optimistic overall.

The problem is that there's not enough demand in the overall system right now, Anderson. We've got a lot of capacity, but the fact is we're running at 73, 74 percent of capacity. A lot of equipment idled and we have 8 and a half million people who are unemployed and almost 2 million people who were too discouraged even to look for work.

So these are not the kind of times where you have a lot of people going out and buying a lot. We're going deeper into debt. Consumers, unfortunately, are already very deep into debt and it's doubtful that they will continue to spend as much as they have simply because they're worried about keeping their jobs.

COOPER: As you look at the nine Democratic candidates or wannabe candidates at this point -- there may be a tenth coming down the pike as we all have heard today.

What do you see? Do you see any one out there with an economic stimulus bill that you support?

REICH: Well, I think there are several candidates who are promoting very good stimulus ideas. John Kerry has a plan that would be very similar to the one that I just suggested to you and that is exempting the first $15,000 of income from the payroll tax for a year. And now again, this would not cause any problem for Social Security because Social Security is good for the next 40 years, but it would provide an immediate stimulus since most Americans pay more in payroll taxes than they do in income taxes.

Other Democratic candidates like Richard Gephardt have an interesting plan. He would suspend the tax break at least with regard to the richest people in America and instead provide national health insurance. As we know, many people in this country, even if they have health insurance, are paying more for co-payments and deductibles and premiums than ever before and that is a drag on the economy.

COOPER: We're going to have to obviously leave it there and just wait and see if any of these proposals by the Democrats really get any traction, catching any attention in the upcoming election.

Appreciate you joining us, Secretary Reich.

REICH: Anderson, nice to talk to you. Bye-bye.

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