Robert Reich Demonstrates Amazing Stupidity



Good heavens!  The absurdity of this man’s ideas rival his intellectual twin, Paul Krugman! 

Reich has an article up at HuffPo…

The Non Zero-Sum Society

It’s a rather rambling bit of history and legitimate economic concerns.  But, it’s mostly about the decline of unions.  It contains some inanities and, of course, blames Republicans for some of the woes.  It contains this bit of stupidity…..

If they [edit note: “they” meaning the very wealthy] were rational, the wealthy would support public investments in education and job-training, a world-class infrastructure (transportation, water and sewage, energy, internet), and basic research — all of which would make the American workforce more productive.

It floors me when I read this stuff.  It mendacious.  I’ve never once seen, heard, or read a wealthy person stating something against these things.  There is no advocacy group against a good infrastructure.  And, with the amazing amount of money we’ve spent on it, we should already have one.  But, the left never spends the money on what they say they’re going to, and politicians who just love to spend regardless of whether it’s a worthwhile project or not.  See the “bridge to nowhere” and Cali’s train that still doesn’t run, and won’t run anywhere useful when it does. 

Then Reich demonstrates his profound ignorance……

In the 1950s, when the U.S. economy was growing faster than 3 percent a year, more than a third of all working people belonged to a union. That gave them enough bargaining clout to get wages that allowed them to buy what the economy was capable of producing.

See what he did there?  He did like most leftists do, he mis-assigns a correlation as a causation.  Earlier in the piece he wrote …..

The Bureau of Labor Statistics estimates 7 out of 10 growth occupations over the next decade will be low-wage — like serving customers at big-box retailers and fast-food chains.

He then makes some very irrational and stupid comparisons…….

But wait. Other nations subject to the same forces have far higher levels of unionization than America. 28 percent of Canada’s workforce is unionized, as is more than 25 percent of Britain’s, and almost 20 percent of Germany’s.

First of all, the US economy is nothing like Canada’s, Britain’s, nor Germany’s.  But, if the pinhead had been paying attention, he’d know that the US economy is performing as well or better than Britain’s and Germany’s.  Canada is doing better, but then, they’re actually engaged in wealth creation.  They do strange stuff like mining, drilling, and forestry stuff.  (Watch for the US’s inadequate economy overwhelm Canada in the very near future.)  Then Reich completely falls off the rails and attacks a favorite of the left, Wal-Mart. 

Don’t blame globalization and technological change for why employees at Walmart , America’s largest employer, still don’t have a union. They’re not in global competition and their jobs aren’t directly threatened by technology.

The average pay of a Walmart worker is $8.81 an hour. A third of Walmart’s employees work less than 28 hours per week and don’t qualify for benefits.

Walmart is a microcosm of the American economy. It has brazenly fought off unions. But it could easily afford to pay its workers more. It earned $16 billion last year. Much of that sum went to Walmart’s shareholders, including the family of its founder, Sam Walton.

No, Robert, you twit, Wal-Mart cannot easily afford to pay more to it’s workers.  The reason Wal-Mart is successful is that they’re able to keep their prices down.  Wal-Mart has 2.1 million employees.  If all of the profits at Wal Mart went to the employees, that would increase their annual pay by ~$ 7600.  But, then that would leave nothing for improvements, maintenance, expansion, or anything else.  Let’s say Wal-Mart raises the hours worked to average 40 per employee at $8.81.  Assuming Reich’s numbers are correct, the annual payroll of Wal-Mart would be about $26,937,456,000.  Moving to a 40 hour work week would increase payroll by 42.8% or about $11,529,231,000.  But, then, if they did that, they’d have to pay all the benefits, as well.  Which, suddenly makes all the profits vanish.  Reich doesn’t seem to understand this.  Companies must make a profit or they cease to exist.  Reich thinks that our economic success depends on making $8.81/hr workers full time and bankrupting one of America’s finest companies?  So, what is Reich’s solution to the US economic woes?

Walmart should be unionized. So should McDonalds. So should every major big-box retailer and fast-food outlet in the nation. So should every hospital in America.

That way, more Americans would have enough money in their pockets to get the economy moving. And everyone — even the very rich — would benefit.

Yes, I can see it now.  I’m going to McDonalds to order a Big Mac and fries for the low price of about $30 and think I’m going on my way to financial success!!! 

Here is a list of Reich’s past achievements and qualifications.  

Reich is currently Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California, Berkeley. He was formerly a professor at Harvard University‘s John F. Kennedy School of Government[4] and professor of social and economic policy at the Heller School for Social Policy and Management of Brandeis University. He has also been a contributing editor of The New Republic, The American Prospect (also chairman and founding editor), Harvard Business Review, The Atlantic, The New York Times, and The Wall Street Journal.  He attended Dartmouth College, graduating with an A.B. summa cum laude in 1968 and winning a Rhodes Scholarship to study Philosophy, Politics, and Economics at Oxford University.[9] Reich subsequently earned a J.D. from Yale Law School, where he was an editor of the Yale Law Journal.

God help us all. 

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9 Responses to Robert Reich Demonstrates Amazing Stupidity

  1. Latitude says:

    every time I hear the liberals talk about infrastructure……I know it really means windmills and easy bake ovens
    and at the same breath…they spend all that money on infrastructure….and say there’s no money for Social Security, Medicare, etc…..and that’s not their money….that’s money we put into an account for us to use later

  2. cdquarles says:

    The other false premise here is that ‘infrastructure’ wouldn’t get built if ‘big Fed’ didn’t order it. BZZT wrong. It still would be built (toll roads/bridges built a lot of it back in the day and still does) privately and by mostly the same ‘private’ construction contractors. What would happen in such a scenario is that more highways would be built and no passenger rail, More airports would be built, more mining would get done, more drilling, more … wait for it …. real economic activity.

  3. philjourdan says:

    Same story, different ignorance. If all those were unionized, 3 things would happen.

    #1 – Prices would go up
    #2 – Employment would go down
    #3 – Unions would siphon off a large part of the increase leaving the employees no better off than before.

    Clowns can argue against this. But they are arguing from stupidity, not reality. I was part of the wage inflation of the 80s. I can tell you unequivocally that the company I worked for (a multi-billion dollar company) reduced staffing by 40% during that decade due to increased wages. Yes, Customer service did suffer (they are no longer around), but while sales remained flat, wages kept going up (minimum wage increases), so we cut head count. I know this because I was the one making that decision (not names, that was left to others, but numbers).

    I also know that while parts of the company were Unionized, they always earned less than their counterparts in the SAME market.

    As a retailer, we could not raise prices (competition). But had we the chance, we would have to cover the costs.

    Reich is not a twin of Krugman. While Krugman is a moron, Reich is merely an imbecile. Krugman is not smart enough to know he is stupid. Reich is.

    What Reich wants is to raise all salaries – not realizing that with that raise, so go the prices, leaving the lowest paid workers no better off, unless they were part of the fortunate ones that lost their job due to the higher wages.

    • cdquarles says:

      Actually, and particularly before the Reagan income tax reforms, they are worse off. Higher wages put you in a higher tax bracket. So you paid more taxes on the margin. Add in the great inflation of the time, yep, your purchasing power went down for everything other than computers or cell phones or anything electronic.

  4. DirkH says:

    “Don’t blame globalization and technological change for why employees at Walmart , America’s largest employer, still don’t have a union. They’re not in global competition and their jobs aren’t directly threatened by technology.”

    Ca. 1995 Walmart tried to conquer Germany and bought a bankrupt chain of big box stores and relabeled them to Walmart. They had a big marketing campaign. The experiment lasted two years or so. They couldn’t get a foothold in the German market. They were more expensive than our discounters. I couldn’t believe it.

    The French chain Carrefour tried the same. They failed as well.

    The Germans on the other hand are in France, UK, USA, Australia, you name it. (Aldi, Lidl. Trader Joe’s is owned by Aldi)

    If Reich doesn’t know about this global war that has been raging for decades he should better not write anything about retail chains.

  5. Pingback: » Robert Reich Demonstrates Amazing Stupidity | suyts space

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