Seven Big Economic Lies

Do tax cuts for the rich trickle down to the rest of us? And does taxing the rich hurt the economy? Is Social security a Ponzi scheme? Robert Reich, Secretary of Labor under President Bill Clinton, presents his list of seven popular-wisdom economic claims that are untrue. Feel free to debate.

16 Comments on "Seven Big Economic Lies"

  1. Mamagriff50 | Jan 27, 2012 at 1:58 pm |

    Alright! Short, simple so the simplist of us can understand.       Mr. Reich, why don’t you run for President? Finally someone I would vote for.

  2. Liam_McGonagle | Jan 27, 2012 at 2:03 pm |

    Fair play.
    But you know the Paul crowd will have their undies in a bundle because Reich didn’t happen to mention any of their pet issues, some of which happen to be true and legitimate (e.g., ruinous cost of immoral wars, corporate corruption of watchdog agencies).
    Of course the answer to those problems wouldn’t be to declare a free for all where the fattest wallet wins.  But the vitriol expended rarely allows the discussion to get that far.
    It’s a shame that the discussion never approaches synthesis, and instead is locked into an “on one hand/on the other” approach.

    • So true.  The solution should be to vote for someone who combines the best of both worlds: war AND debt slavery!  Obama 2012!  Mitt Romney 2012!  Won’t matter!  Bankers win!  War profiteering thru the roooof baby!!

      • SayYouWannaRevolution | Jan 27, 2012 at 10:15 pm |

        Ain’t it the fuck’n truth 🙁

      • Liam_McGonagle | Jan 28, 2012 at 12:13 pm |

        Uh-huh.  So where’d you get thrown off course?  “Ruinous”? “Legitimate”?

        It’s pretty hard to discuss these things without using at least one 3-sylable word.

  3. Mr Willow | Jan 27, 2012 at 3:07 pm |

    Hey, look, a #1!

  4. marklar_primus | Jan 27, 2012 at 4:31 pm |

    I would disagree that less government would mean less jobs. That’s a roughly zero sum equation as those people would still be deemed necessary and would be paid for by other means. Teachers, policemen and firemen wouldn’t just disappear. He is correct that it wouldn’t create more jobs though.

    He doesn’t address the biggest fallacy of economics which is that wages are derived from capital. Wages are, in fact, derived from labor. The value of the products created by labor is merely converted to monetary form and paid out to the worker after the fact with the lion’s share sucked away by the employer in the form of increased capital goods. Even if the goods upon which the worker are not finished in a single wage cycle the goods upon which some quantity of labor has been invested has increased in value even if it is not yet practical to convert that value into a cash sum through sale of the goods. In fact, labor is the only source from which any amount of capital can ever be derived.

    • Irving Greenfield | Jan 27, 2012 at 6:43 pm |

      Also when people talk about shrinking the size of government, they mean the federal government. Firemen, teachers, and police do not work for the federal government.

    • Liam_McGonagle | Jan 28, 2012 at 12:22 pm |

      Why just believe things when you can knowfor a fact one way or the other?  Knowledge is better than belief any day of the week.

      Historically, every $1 spent by the average federal government agency produces over $9 in GDP, compared to slightly over $5 for the non-financial corporate sector, barely over $1 for state governments.  Corporate finance actually sucks $0.80 out of the economy for every $1 they touch.

      While individual programmes and agencies may be more productive than others, on balance it is a clear mistake to cut the overall level of federal spending during an economic crisis.  Just ask David “Boy Wonder” Cameron how great his austerity project is going in Britain:

  5. Why is it that I don’t believe a word this guy says?  True, cutting federal spending doesn’t increase jobs.  But continuing to spend spend spend money that we don’t have doesn’t help either. Increasing taxes is not the answer, reduce the govt in all cases. They are all wasteful and the private sector could and would do the job much more efficiently.  There are so many places that fat is obese, do your damn job. No more of this federal or state jobs that let employees do very little and still have a job.  Why are we paying for license tags for vehicles that are not used in commerce?  Fine, call it something else and asses fees accordingly but our private vehicles not owned for or operated by any company are not used in commerce and we should not be getting bent over for it.  My truck is considered for hire truck and it is not, I never requested that but that is the way they screw us even more.
    Get rid of these racist hiring practices.  Why are all the govt employees I see mexican? I know they aren’t all mexican but so many are and I’d be very surprised if even half of them checked out as being legal workers in the USA.

    I’m not blind but people tell me, no way, this or that. Bullshit!  Take the blinders off and if you that think this way lost that union or govt paycheck you would also see it, but that’s what it’s gonna take for people to see.

    Ah hell, where was I.   This guy is full of crap.

    • Great idea. For every good, middle-class job we eliminate in the civil service, we could create two minimum wage jobs at cleanly-run, efficient corporations like Walmart and McDonalds…and then work both of them to support ourselves. 

  6. Brian Metz | Jan 27, 2012 at 10:39 pm |

    Wow – Robert Reich on Disinfo – how cutting edge – 

  7. Happypedro | Jan 27, 2012 at 10:52 pm |

    In general, what Reich says is correct, and well said.  Also, cut the military budget down to only basic needs.  The USA is an empire that is ending and can no longer be sustained, so it’s not only morally correct to eliminate the industrial-military-corporate complex, but wise in terms of having a chance at a healthier society in the United States, but in the rest of of the world as well.  Additionally, a progressive tax system is necessary and good.  And funneling much money into research, development, and manifestation of green technologies for the greater good.  Anything is is going to lead to an ever increasingly horrible planet to live on.  

  8. brent's polemics | Jan 28, 2012 at 4:32 pm |

    You guys are such effing hacks. And so thoroughly establishment-entrenched, too. You use a Clinton acolyte’s words to “prove” the fallacy of economic ideas, mostly conservative ones? Shut. The. Fuck. Up. Already. Thank you.

  9. Oops, he forgot to mention the trillion a year we are spending on war and military. How does an economist overlook the single biggest waste of our tax dollars?

  10. Um … wow!  Was any of that true?

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