Whats Wrong With The Economy? In 2:15 minutes.
- Thread starter MA-Caver
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Having heard Reich explain things before and having heard other economists also explain things, he is wrong.
The excessive government spending wasn't mentioned. Government regulation of industries wasn't mentioned.
Here is one take on why Reich is wrong:
http://www.thenewamerican.com/index.php/economy/commentary-mainmenu-43/4515-why-reich-is-wrong
From the article:
Peter Schiff, one of those rich entrepreneurs who is Reichs target (he is the founder of Euro Pacific Capital), explains the problem with this thinking: Reich believes that the cart pushes the horse. In his worldview, businesses produce goods and services simply because consumers spend. Therefore, anything that increases spending fuels growth. But that is exactly backwards. It takes capital formation, and the incentives only provided by a free market (which rewards success by providing products and services that customers need and want and are willing to pay for, and punishes failure to provide such products and services), to create production. Schiff puts it neatly: capital formation must precede production, which then allows for consumption.
Schiff adds:
Every consumer either lives off his own productivity or the productivity of someone else. When individuals work, the wages earned result from the productivity of [their] labor. The ability to consume is directly related to the production of goods or services that result from ones efforts....
In the Soviet Union, everyone had a job, yet workers had to stand in line for hours for basic necessities....
If stimulus could produce demand, then no nation would be poor.... African poverty would be wiped out if African governments simply printed money more freely. Africans are not poor because they lack currency to spend [consider Zimbabwe]; they are poor because their governments inhibit production, deny [private] property rights, abrogat[e] contracts, prevent the accumulation of capital, and nationaliz[e] profits.
Economist Thomas Sowell agrees with Schiff:
What would probably get the economy recovering fastest and most completely would be for the President of the United States and Congressional leaders to shut up and stop meddling with the economy ... [but] true believers [like Reich] have to believe that it is only because [government intervention and redistribution efforts havent] been tried long enough, or with enough money being spent.
Investors.com said on September 3 that all the actions this government has taken ... havent saved or created 3.8 million jobs, as claimed. Instead, theyve destroyed millions of jobs. But the administration remains clueless, hinting that it may seek another stimulus costing billions. This bunch is either willfully doing damage to the U.S. economy, or [is] completely incompetent.
With Robert Reichs credentials, its hard to believe that he is clueless or incompetent
The excessive government spending wasn't mentioned. Government regulation of industries wasn't mentioned.
Here is one take on why Reich is wrong:
http://www.thenewamerican.com/index.php/economy/commentary-mainmenu-43/4515-why-reich-is-wrong
From the article:
Peter Schiff, one of those rich entrepreneurs who is Reichs target (he is the founder of Euro Pacific Capital), explains the problem with this thinking: Reich believes that the cart pushes the horse. In his worldview, businesses produce goods and services simply because consumers spend. Therefore, anything that increases spending fuels growth. But that is exactly backwards. It takes capital formation, and the incentives only provided by a free market (which rewards success by providing products and services that customers need and want and are willing to pay for, and punishes failure to provide such products and services), to create production. Schiff puts it neatly: capital formation must precede production, which then allows for consumption.
Schiff adds:
Every consumer either lives off his own productivity or the productivity of someone else. When individuals work, the wages earned result from the productivity of [their] labor. The ability to consume is directly related to the production of goods or services that result from ones efforts....
In the Soviet Union, everyone had a job, yet workers had to stand in line for hours for basic necessities....
If stimulus could produce demand, then no nation would be poor.... African poverty would be wiped out if African governments simply printed money more freely. Africans are not poor because they lack currency to spend [consider Zimbabwe]; they are poor because their governments inhibit production, deny [private] property rights, abrogat[e] contracts, prevent the accumulation of capital, and nationaliz[e] profits.
Economist Thomas Sowell agrees with Schiff:
What would probably get the economy recovering fastest and most completely would be for the President of the United States and Congressional leaders to shut up and stop meddling with the economy ... [but] true believers [like Reich] have to believe that it is only because [government intervention and redistribution efforts havent] been tried long enough, or with enough money being spent.
Investors.com said on September 3 that all the actions this government has taken ... havent saved or created 3.8 million jobs, as claimed. Instead, theyve destroyed millions of jobs. But the administration remains clueless, hinting that it may seek another stimulus costing billions. This bunch is either willfully doing damage to the U.S. economy, or [is] completely incompetent.
With Robert Reichs credentials, its hard to believe that he is clueless or incompetent
Perhaps he doesn't feel those issues are as important as you have been told to believe.
Sean
Sean
This article gives another take on alleged wage stagnation:
http://www.minneapolisfed.org/publications_papers/pub_display.cfm?id=1140
From the above article: (If you can read this and not fall asleep...)
The alternative explanation argues that the microeconomic statistics paint an inaccurate picture of the gains made by middle America, and that the gains of the affluent alone cannot account for the substantial economywide growth...
Since the underlying interest in this article is the standard of living, and fringe benefits contribute to workers' well-being, benefits should be included in the measures of labor compensation. Benefits are not included in the two microeconomic series on wages. This is not an error; the series are designed to measure income from wages and salary only.
National labor income per hour, on the other hand, does include wage supplements (benefits) as defined by the Bureau of Economic Analysis national income and product accounts. NIPA wage supplements include employer contributions to employee pension and insurance funds and employer contributions to government social insurance, but exclude benefits such as paid leave that are included in the BLS estimate mentioned above. Wage supplements per hour rose a substantial 90 percent from 1975 to 2005 and increased as a share of total NIPA compensation, wages and salary plus supplements, from 14.2 percent in 1975 to 19.4 percent in 2005.
The next step in making the wage series comparable, then, is to add benefits per hour to the existing series on average hourly earnings and the median hourly wage. Unfortunately, precise data on benefits at the individual level are not readily available. To get a sense of the magnitude of the impact of including benefits, I estimate benefits per hour for these series based on NIPA data.
http://www.minneapolisfed.org/publications_papers/pub_display.cfm?id=1140
From the above article: (If you can read this and not fall asleep...)
The alternative explanation argues that the microeconomic statistics paint an inaccurate picture of the gains made by middle America, and that the gains of the affluent alone cannot account for the substantial economywide growth...
Since the underlying interest in this article is the standard of living, and fringe benefits contribute to workers' well-being, benefits should be included in the measures of labor compensation. Benefits are not included in the two microeconomic series on wages. This is not an error; the series are designed to measure income from wages and salary only.
National labor income per hour, on the other hand, does include wage supplements (benefits) as defined by the Bureau of Economic Analysis national income and product accounts. NIPA wage supplements include employer contributions to employee pension and insurance funds and employer contributions to government social insurance, but exclude benefits such as paid leave that are included in the BLS estimate mentioned above. Wage supplements per hour rose a substantial 90 percent from 1975 to 2005 and increased as a share of total NIPA compensation, wages and salary plus supplements, from 14.2 percent in 1975 to 19.4 percent in 2005.
The next step in making the wage series comparable, then, is to add benefits per hour to the existing series on average hourly earnings and the median hourly wage. Unfortunately, precise data on benefits at the individual level are not readily available. To get a sense of the magnitude of the impact of including benefits, I estimate benefits per hour for these series based on NIPA data.
Hate to say it but I agree with Billi, the video is over simplified crap.
The US economy is double what it was in 1980, but that is on paper, manufacturing has essentially disappeared, and that was where the good middle class jobs were. Wealth today comes from investments and other forms of paper.
Dramatically cut spending, create new taxes, lower the debt, and get the good jobs back that have gone overseas, that is how you get the economy back on track.
The US economy is double what it was in 1980, but that is on paper, manufacturing has essentially disappeared, and that was where the good middle class jobs were. Wealth today comes from investments and other forms of paper.
Dramatically cut spending, create new taxes, lower the debt, and get the good jobs back that have gone overseas, that is how you get the economy back on track.
I agree with Ken Morgan on everything but the new taxes. Giving politicians more money to waste is just a way to continue on the course we have been on. You need to cut off the money supply to politicians, otherwise the problem will never get fixed.
On a side note, here is a video by Johan Norberg as he follows and updates a documentary made years ago by Milton and Rose Friedman. His documentary is "Free or Equal." The video is about 6 minutes long.
http://biggovernment.com/reasontv/2...updates-milton-rose-friedmans-free-to-choose/
On a side note, here is a video by Johan Norberg as he follows and updates a documentary made years ago by Milton and Rose Friedman. His documentary is "Free or Equal." The video is about 6 minutes long.
http://biggovernment.com/reasontv/2...updates-milton-rose-friedmans-free-to-choose/
Hugh Hewitt, constitutional law professor, practising attorney, author and radio host interviews someone who actually creates jobs, Bernie Marcus of Home Depot.
http://www.hughhewitt.com/blog/g/2afb40aa-76e4-465f-b382-879956dac34d
from the interview:
The Home Depot legend wasn't mincing words in my interview with him yesterday. He wants small businessmen to join www.jobcreatorsalliance.org, and he wants the president and his team to get a clue. The complete transcript is here. Key exchange:
http://www.hughhewitt.com/blog/g/2afb40aa-76e4-465f-b382-879956dac34d
from the interview:
The Home Depot legend wasn't mincing words in my interview with him yesterday. He wants small businessmen to join www.jobcreatorsalliance.org, and he wants the president and his team to get a clue. The complete transcript is here. Key exchange:
HH: Let me ask you, Bernie Marcus, people will be very interested in this, do you think we can turn this around? Can this economy go back to the era of growth that Home Depot experienced in the 80s and 90s? Is that possible again?
BM: Listen, the American people are very resilient, unlike other people in the world. We just have to get out of their way. We just have to allow them to grow. And if we dont do that, and we cant keep putting in impediments. Look, I know so many small business people today. Nobody wants to expand. Theyre not willing to expand today. Theres such uncertainty out there. You have a group of people in Washington today, where theyre the bad guys. I mean, if a man has a successful small business, and hes making $200,000 dollars a year, hes the enemy of the world.
HH: Yeah. Do you think the President understands this at all, Bernie Marcus?
BM: I look, look. Im sure this guy is, Im sure his head is in the right place. He just doesnt understand it. He never worked for a day in his life. How would he know it?
HH: Yeah.
BM: He never had to make a payroll, and he has surrounded himself theres a statistic thats very important. They had a statistic on how many businesspeople worked in every administration. The typical one, the smallest one was something like 35% were in the business world. This administration, its 8%. Hes surrounded by college professors, hes surrounded by economic professionals, but nobody has ever created a job in this administration.
BM: Listen, the American people are very resilient, unlike other people in the world. We just have to get out of their way. We just have to allow them to grow. And if we dont do that, and we cant keep putting in impediments. Look, I know so many small business people today. Nobody wants to expand. Theyre not willing to expand today. Theres such uncertainty out there. You have a group of people in Washington today, where theyre the bad guys. I mean, if a man has a successful small business, and hes making $200,000 dollars a year, hes the enemy of the world.
HH: Yeah. Do you think the President understands this at all, Bernie Marcus?
BM: I look, look. Im sure this guy is, Im sure his head is in the right place. He just doesnt understand it. He never worked for a day in his life. How would he know it?
HH: Yeah.
BM: He never had to make a payroll, and he has surrounded himself theres a statistic thats very important. They had a statistic on how many businesspeople worked in every administration. The typical one, the smallest one was something like 35% were in the business world. This administration, its 8%. Hes surrounded by college professors, hes surrounded by economic professionals, but nobody has ever created a job in this administration.
In the past Western governments recieved much of their tax revenue from manufacturing, now that that source has dried up and business is primarily service based, the tax burden needs to be moved to the service sector. The US is basically the only deindustrialized western economy that has not moved to tax services the way they taxed manufacturing.
I support lowering taxes where ever possible, but cutting spending in the US will not be enough to solve the deficit and debt problems, the US gov't simply needs more income. Lower taxes when the problems are solved.
Don't forget the interest on the debt is huge. For every$10 billion in debt a country has, it pays $1billion in interest. You gusy are paying well over $1 trillion in interest every year. How the hell can that be sustainable?
I support lowering taxes where ever possible, but cutting spending in the US will not be enough to solve the deficit and debt problems, the US gov't simply needs more income. Lower taxes when the problems are solved.
Don't forget the interest on the debt is huge. For every$10 billion in debt a country has, it pays $1billion in interest. You gusy are paying well over $1 trillion in interest every year. How the hell can that be sustainable?
Here is an article that actually addresses the video by Reich:
http://biggovernment.com/lmeyers/2011/06/19/whats-wrong-with-robert-reich/
from the article, it addresses each point:
“virtually odor-free”.
Dot 1: Economy has doubled, but wages have been flat.
(Sound of furious scribbling). Nope. Dept. of Labor shows just the opposite.
Mr. Reich has lied to you. That’s right, I call it a lie. Because when someone says one thing and the government chart that collects the data — which I found in 30 seconds — tell another, I don’t know what else it could be.
Subtext: Regular people’s wages aren’t growing. This is not fair. Remember, “fair” = Socialism. We don’t live in a Socialist country.
Those familiar with debate know that, having proven the initial premise to be a lie, all statements that follow from it are also false. However, as my old math teacher used to say, “That was for the A students. I’ll repeat it for the B students”.
Dot 2: All gains from the economy go to the super rich.
Context and Omissions: What does he mean specifically by “gains from the economy”? Think about it. Can you answer that question? If you can’t answer it yourself, then you are forced to make an assumption. If your sympathies lie with the Left, you interpret this to mean that the rich are raping the middle and lower class. If you keep your Spock-like mind focused on reason, you recognize the statement is vague.
But we’ll take him at his word. He is, again, lying.
Dot 3: With money comes political power.
(Sound of furious head scratching). The text is correct. At last! If you have money, you can indeed influence politicians and government, to do things like lower taxes. Except….
Subtext and Omissions: Super-rich = Republicans. Alas, some of the Super-rich are also Democrats. At least, I think they are. Since super-rich hasn’t been defined, we don’t know, do we? But here’s what we do know. Opensecrets.org is a great website where you can see who contributed money to politicians. You’ll find that corporations donated just as heavily to Democrats as Republicans, and that unions were only outspent 53% – 47%.
So, yes, I’m sure plenty of people lobbied for lower taxes. But plenty of people were also lobbying for increased salary and benefits for unions, especially public employee unions, real wages that also benefited from lower taxes (The Bush Tax Cuts benefited all Americans in every tax bracket).
http://biggovernment.com/lmeyers/2011/06/19/whats-wrong-with-robert-reich/
from the article, it addresses each point:
“virtually odor-free”.
Dot 1: Economy has doubled, but wages have been flat.
(Sound of furious scribbling). Nope. Dept. of Labor shows just the opposite.
Mr. Reich has lied to you. That’s right, I call it a lie. Because when someone says one thing and the government chart that collects the data — which I found in 30 seconds — tell another, I don’t know what else it could be.
Subtext: Regular people’s wages aren’t growing. This is not fair. Remember, “fair” = Socialism. We don’t live in a Socialist country.
Those familiar with debate know that, having proven the initial premise to be a lie, all statements that follow from it are also false. However, as my old math teacher used to say, “That was for the A students. I’ll repeat it for the B students”.
Dot 2: All gains from the economy go to the super rich.
Context and Omissions: What does he mean specifically by “gains from the economy”? Think about it. Can you answer that question? If you can’t answer it yourself, then you are forced to make an assumption. If your sympathies lie with the Left, you interpret this to mean that the rich are raping the middle and lower class. If you keep your Spock-like mind focused on reason, you recognize the statement is vague.
But we’ll take him at his word. He is, again, lying.
Dot 3: With money comes political power.
(Sound of furious head scratching). The text is correct. At last! If you have money, you can indeed influence politicians and government, to do things like lower taxes. Except….
Subtext and Omissions: Super-rich = Republicans. Alas, some of the Super-rich are also Democrats. At least, I think they are. Since super-rich hasn’t been defined, we don’t know, do we? But here’s what we do know. Opensecrets.org is a great website where you can see who contributed money to politicians. You’ll find that corporations donated just as heavily to Democrats as Republicans, and that unions were only outspent 53% – 47%.
So, yes, I’m sure plenty of people lobbied for lower taxes. But plenty of people were also lobbying for increased salary and benefits for unions, especially public employee unions, real wages that also benefited from lower taxes (The Bush Tax Cuts benefited all Americans in every tax bracket).
some more from the article: Keep in mind when Reich talks about union vs. non-union he doesn't mention the fact that unions are trying to force people to join them. Look at the unions using their ties to the government trying to keep Boeing from moving part, only part, of their operation to a right to work state. The National Labor Relations Board has stopped the move. Where they think they have that right is beyond me. Some heads need to roll at NLRB for this craziness. Here is more of the article:
Dot 5: Middle class divided
(Sound of furious passing of gas). This is the most egregious and revolting statement. Mr. Reich continues to foment class warfare. He claims “union vs non-union” are competing for the “scraps left behind”. The truth is that non-union people aren’t screaming at union workers at all, other than forcing them to join a union against their will if they don’t work in a right-to-work state. Meanwhile, the truth is that it is union workers who are behaving like thugs, even going so far as to disrupting the Special Olympics. “Native born vs. immigrants”. Do I need mention the subtext? Americans do not have a problem with immigrants. They have a problem with illegal immigrants, who have taken away millions of American jobs by committing a crime — entering this country illegally.
...................................................
When ILLEGAL immigrants work for less than the going rate in construction and all the other area's that they work, they cut out LEGAL immigrants as well as actual CITIZENS and suppress their wages. Ask anyone in the construction trades.
Dot 5: Middle class divided
(Sound of furious passing of gas). This is the most egregious and revolting statement. Mr. Reich continues to foment class warfare. He claims “union vs non-union” are competing for the “scraps left behind”. The truth is that non-union people aren’t screaming at union workers at all, other than forcing them to join a union against their will if they don’t work in a right-to-work state. Meanwhile, the truth is that it is union workers who are behaving like thugs, even going so far as to disrupting the Special Olympics. “Native born vs. immigrants”. Do I need mention the subtext? Americans do not have a problem with immigrants. They have a problem with illegal immigrants, who have taken away millions of American jobs by committing a crime — entering this country illegally.
...................................................
When ILLEGAL immigrants work for less than the going rate in construction and all the other area's that they work, they cut out LEGAL immigrants as well as actual CITIZENS and suppress their wages. Ask anyone in the construction trades.
poollshark
Orange Belt
Some people have a problem with immigrants........
http://video.google.com/videoplay?docid=4094926727128068265#
http://video.google.com/videoplay?docid=4094926727128068265#
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