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Robert Reich gets an F minus in economics.

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Robert Reich's F Minus In Economics: False Facts, False Theories

Robert Reich's F Minus In Economics: False Facts, False Theories

Robert Reich peddles a bunch of stale, Marxist talking points, including the groaner about Henry Ford raising wages so his employees could buy his cars.

''My F grade is also not based on Reich’s politics, which are quite different from my own. I award it instead for Reich’s incorrect facts and his embarrassing misunderstanding of basic issues about which economists agree.


In Reich’s liberal vision, it is not Henry Ford, Gordon Moore, Jack Welch, Warren Buffet, Bill Gates, Steve Jobs, and hundreds of thousands of medium and small business owners “who make the basic bargain at the heart of America.” Instead, it should be the federal government with progressive taxes, minimum wage laws, and pro-labor regulatory agencies that gives us a prosperous system that, in President Obama’s words, “spreads the wealth around.”
 
Robert Reich's F Minus In Economics: False Facts, False Theories

Robert Reich's F Minus In Economics: False Facts, False Theories

Robert Reich peddles a bunch of stale, Marxist talking points, including the groaner about Henry Ford raising wages so his employees could buy his cars.

''My F grade is also not based on Reich’s politics, which are quite different from my own. I award it instead for Reich’s incorrect facts and his embarrassing misunderstanding of basic issues about which economists agree.


In Reich’s liberal vision, it is not Henry Ford, Gordon Moore, Jack Welch, Warren Buffet, Bill Gates, Steve Jobs, and hundreds of thousands of medium and small business owners “who make the basic bargain at the heart of America.” Instead, it should be the federal government with progressive taxes, minimum wage laws, and pro-labor regulatory agencies that gives us a prosperous system that, in President Obama’s words, “spreads the wealth around.”

Thanks for sharing your thoughts, Paul! I'll bet Reich won't win the election in 2020.
 
Oh but you'l see his dopey ideas echoed by the Dem klown Kar. Fo sho!
 
If we want to encourage higher pay from companies then incentives need to be put in place to pay more.
Part of the start was lowering corporate taxes.

next is to just start offering more incentives for non-executive pay.
 
Paul Roderick Gregory (author of the OP opinion piece) has amazing credentials and no one should doubt all that education, he also leans towards supply side economics in principle with roots going back to gold-era standards for fiscal and monetary policy. That does not mean all of his suggestions are necessarily wrong, the guys has a PhD in economics from Harvard University, it is just that he tends to apply market economic principles as if we exist solely within that space.

We do not, we have been a mixed economic model going back to before the period that Gregory and Reich are arguing about... what lead up to the Great Depression and how that applies to the most recent Financial Collapse.

Because Gregory does not hide his conservative economics lean nor does Reich hide his more liberal take on economics, we end up arguing about is the age old fight we have in the economics area of the forums all the time... Supply side driven economics against demand side driven economics. Said another way conservative leaning economics (top - down principles) against Keynesian economics including post Keynesian and elements of MMT (economic participation modeling.)

The political aspect is what makes this troubling as that tends to cloud these economic principle based arguments of empowering any party in an economy to better participate in it. Worse, Gregory and Reich both tend to ignore the true intention of economics as an academia. Study of behavior to develop principles that in practice stabilize the natural amplitude of the economic cycle.

On a long enough timeline market economics is just as likely to destroy itself as planned economics. Left and right leaning politics aside for just a moment, that is why we fall in the middle somewhere as a mixed economic model to handle faults.

And those faults that caused the Great Depression and more recently the Financial Collapse are being oversimplified for political purposes... and that makes both Reich's piece and Gregory's response deserving of an F. Neither really discusses the economics of what happened, they both just cherry pick data (some in error) just to make their political points. Which is what those always end up being... protection of wealth against distribution of wealth.

BTW, saying F- is just being an asshole about it.
 
If we want to encourage higher pay from companies then incentives need to be put in place to pay more.
Part of the start was lowering corporate taxes.

next is to just start offering more incentives for non-executive pay.

You can't encourage higher wages from corporations. Wages are considered a cost of production equal to the cost of materials and energy and infrastructure and outsourced parts and like every other cost of production corporations will always seek to keep them at a minimum. That's a fact of life. Lower corporate taxes if you want- there's other reasons why that might be a good move (emphasis on 'might') but it won't encourage higher wages.
Fact is, free market principles apply to wages, like everything else.
 
One recalls so many economists agreeing that there wouldn't be an economic meltdown in 2008.
 
You can't encourage higher wages from corporations. Wages are considered a cost of production equal to the cost of materials and energy and infrastructure and outsourced parts and like every other cost of production corporations will always seek to keep them at a minimum. That's a fact of life. Lower corporate taxes if you want- there's other reasons why that might be a good move (emphasis on 'might') but it won't encourage higher wages.
Fact is, free market principles apply to wages, like everything else.

yep and things can be done in the market to encourage certain behaviors.
 
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