Former Labor Secretary, professor, author, and certified genius Robert Reich lists the seven economic lies that hurt America. Coincidentally, all of these lies have been pushed by Fox News, talk radio, and the rest of the conservative media. When I have linked to a Robert Reich article in the past I have seen two main criticisms - that Robert Reich is short and that Robert Reich's last name is Reich. Both are true, so hold those comments. http://www.huffingtonpost.com/robert-reich/7-biggest-economic-lies_b_3756241.html
Not only is Bob Reich consistently wrong, but he is intolerably short. Did Bob ever have a non-socialist thought in his life?
You realize his standard of evidence is lower than the standard used to suggest that the stimulus worked? You know, the whole, "it's far worse than we said it would be, but if we didn't do it it would have been even worse." Based on the standard of evidence used in the video, low wages stagnated after the tax cuts, therefore tax cuts don't help low wages at all. Okay. So, unemployment went up and the economy tanked after the stimulus, therefore the stimulus didn't work. It's too bad he doesn't seem to understand anything beyond the face of things. It's really too bad for a man of such high standing. (but please, don't try resting his arguments on his laurels, because there have been men of far higher standing than him who disagreed)
"Any examples of him being wrong?" Taxcutter says: His slavish adherence to socialistic and Keynesian ideas.
lee doren does a good renuttal to one of robert reich thoughts i believe. crisis of capitalism - the critique
I like Robert Reich, and I am a conservative. He is the yin to my yang. I've read some books of his that have pointed out areas where capitalism does not function as effectively as government. I appreciate his countering views, but they are not all true. I'll dissect them 1-7. 1. Trickle down economics. He calls it a farce, but this is no more true than me telling you a 0% tax rate is the best outcome for us all. Wealth does trickled down, taxes help it trickle down to the American people. We are a global economy now though, so his stance is that enough hasn't trickled down to Americans, and I actually kind of agree here, but his reasoning is false. Wealth is trickling down to the WORLD's poor not America's poor. this makes sense too, since our poor are comparatively rich to the rest of the world. 2.)Higher taxes on the rich hurt the economy. He disproves this by showing post WWII data when tax rates were 70%, BUT what he doesn't show is that with increased globalization, wealth is a LOT more mobile than it was in the 1950's. You raise tax rates then and the wealth stayed because other nation's didn't have the infrastructure, the information, or were communist. As these barriers erode, mobility rises, and tax rates in the 1950's become obselete. 3.) Smaller govt. increases jobs. He denies this, and to a point he is correct, but again its a matter of equilibrium. There is gain to be had with government jobs, but this line has lessening rates of return, it doesn't constantly go up, it would be my opinion that government is too large, but not that we should abolish it. 4.) Cutting spending will fix the economy. He refutes this by saying we need to grow our way out of this problem not cut our way out, but again this is relative. You can't grow yourself out of every problem. If you do it once, spending just increases, and causes you to have to do it again. Again I feel while it is not ALWAYS the case that one should cut rather than grow, it is true in our current case. 5.)Medicare and Medicaid are killing the budget. He refutes this, and i actually agree with him here because health care is an area that capitalism (with a representative democracy) doesn't do well with, mainly because it requires a monetary value be assigned to each human life, and once you breach this value (which is different depending on how rich you are), you don't get treatment (and die). Thankfully we don't live in a society that allows its constituents to die in the hospital parking lot, but in doing so we've given a human life a priceless value, which has driven costs through the roof. I'm sure Obamacare is not the perfect answer, but it is my hope that we will tweak it to be as effective as possible and that this outcome is better than having to choose between letting people die in the parking lot, (which would eventually be almost everyone since health care would become much too unaffordable) 6.) Social Security is a Ponzi scheme. It is not a ponzi-scheme I agree, and i also am glad that it is a function of government. In Fact the only time it might APPEAR to be a ponzi scheme is when a small amount of people are paying SS for a larger amount of retirees, which is the case now due to a population bubble (baby boomer gen) is retiring and medicine is causing them to live much longer. It needs to be tweaked to acknowledge for higher life expectancy, and the government needs to be more responsible with the money. Remember the exact opposite was true when the baby boomers were working, we had HUGE OVERAGES, which instead of being saved for this generation were squandered increased spending to win elections by your trustworthy govt. 7.) Lower income tax rates for the poor is not fair. He says it is fair because other taxes take up larger part of their income, and I would agree again, BUT I do think it important to mention these lower income tax rates for the poor so that they are aware of the fact that we DO have a progressive tax code, which is needed, but globalization has blurred the line as to just where it should be.
I appreciate your thoughtful, polite, intelligent response. My first question to you, no offense intended, is why are you wasting time here if you are more knowledgeable about these issues than Robert Reich? Now, to your numbered list: 1) TRICKLE-DOWN ECONOMICS. You say that it's NOT a farce, then say the money is going out of the country, helping the poor overseas. What's not farcical about that? If taxes on high layers of income were taxed like in the 1950s the money could be invested in our education, infrastructure, etc. You might remember that when Clinton partially undid trickle-down by raising taxes on the rich the economy improved and that when Bush lowered them back, it got worse. Coincidence? 2) OBSOLETE TAX RATES. It seems you keep throwing around the term “globalization” to fix all the problems in your argument. Reich is well-aware of the effects of globalization, and fully takes them into account. I was lucky enough to find his book THE WORK OF NATIONS at a library book sale and have read it twice and refer to it often. 3) SIZE OF GOVERNMENT. It's popular to say it's too large, but no one seems to have a good argument for that view. Ask people if they want less food inspection, fewer safety forces, less road repairs, etc. and they are stuck. 4) AUSTERITY. You say it's appropriate now, but all evidence is against that view. Bad economic times are when it's NOT appropriate. 5) HEALTH CARE. Our health care costs at least twice as much as in other countries. Pre-existing conditions aren't covered. OTHER COUNTRIES are doing something right. 6) SOCIAL SECURITY. Are we really living longer? Studies show that it's mainly professionals that are living longer. A small tweak to the upper limits of income subject to the tax will fix all the age problems. 7) TAX RATES ON THE POOR. You mention a progressive tax code, but that is no longer true. As Reich mentions in THE WORK OF NATIONS, and as we see everyday in the news, Republicans have been replacing progressive taxes with regressive taxes, and they've been reducing the progressivity of taxes wherever they can. That was a key part of Reaganomics, which has been such a disaster, and which we are still practicing. Reich spends a lot of time explaining this in THE WORK OF NATIONS. He says that progressive taxes, like the federal income tax, have been cut, and have been replaced by state and local taxes which tend to be REGRESSIVE. The net result is that taxes overall have gone up on the non-rich, but have gone WAY DOWN on the rich.
Well as for your first point, Robert Reich is more knowledgeable than me, but that doesn't make him infallible. There are differing view points out there from others who disagree with him who are also more knowledgeable than me or him. I try to read books on both sides of the aisle as it seems to me the problem with most viewpoints is there lack of ability to see the second side of the coin, which is basically all I'm pointing out in my assessments of these 7 lies (Which I would only consider 2-3 actually being false enough to be a lie). You reference The Work of Nations by Reich as a reference point to how well he understood globalization, but you have to remember the book was written in the early 90's and much has changed as far as our understanding of the implications of globalization. I personally enjoyed his book Super-Capitalism which was written much further along into globalization and helps to point out aspects of life that are difficult if not impossible to "capitalize". For a great counter-view I recommend Thomas Friedman's The World is Flat as it takes on globalization 15 yrs in the future from Reich's book. I'll be brief for the 7 counter points: 1.) Trickling down to starving Chinese workers isn't farcical. Tax rates of the 60's would mobilize wealth to other nations as it is much easier done now than in the 1960's 2.) As mentioned this book was written more than 20 yrs ago, before the internet was connected for the masses. When you're losing manufacturing jobs in the 90's to China and still keeping 5% unemployment globalization is great as it shares the wealth with other nations while lowering COGS to you, when unemployment is over 8% it's not so cool, so how do we stop the trend? Higher Taxes? 3.) I think there are many functions of government that are necessary and great, but there is a good amount of fat to trim. My argument for this would be our lack of money, and lack of options to get more of it given our global position. 4.) If this is true one would NEVER cut spending, because there are only 2 situations here and they both lead to more spending: 1.) Bad Economic times = stimulus and growth not cutting 2.) Good Economic times mean no one is going to get elected talking about the things we should cut ... so either way we increase spending, doesn't this sound fiscally unsustainable? 5.) I agreed with him and you here. When we value something as priceless as a society capitalism gouges us. Since we can't assign a price, government will need to. 6.) We are indeed living longer. When SS was dreamed up we weren't expected to make it to 60 on average for a male, now the average is almost 79. You didn't address the second side of the issue as a large amount of people currently need SS compared to a relatively small amount who contribute, not to mention government squandering the additional money generated when this was opposite in the 50's and 60's. About the further taxing the rich solution, see globalization from someone else's eyes besides Reich's 20 yrs ago. 7.) We do have a progressive tax code, by that I mean the more you make the more your taxed. So I agree its necessary. You believe it doesn't go far enough, but we tax our rich among the highest in the world. We're tied for third just behind Japan and the United Arab Emirates. http://www.kpmg.com/global/en/servi...esources/pages/corporate-tax-rates-table.aspx
