Refuting Robert Reich

6a012876c6c7fb970c019b00336fea970b-500wiFormer Clinton Labor Secretary and lifelong leftist Robert Reich has just released a new video for MoveOn.org, alleging that there is a “war” being waged on the poor and working families.

“What are they really after?” Reich begins, never bothering to explain who “they” are. His rant connects “seven dots” that point to a conspiracy of class oppressors who are “sinking” the poor with their opposition to big-government dependency programs, such as Food Stamps and long-term unemployment benefits. And once “they” get their way, “you’ll do exactly as they tell you,” Reich says.

Reich’s seven spurious claims, as over-worn and tired as they are, deserve to be responded to individually. It should be no surprise that each of Reich’s proposed “solutions” does its own damage to the poor, while offering little in the way of genuine social improvement.

1. “They’re against extending unemployment benefits for people who have been out of work for more than six months.”

The framing of this issue is dishonest at best. On first inspection, someone unfamiliar with the recent history of unemployment compensation extensions on Capitol Hill might sympathize with the idea of extending benefits for those out of work for “more than six months.” Six months, after all, is not an unimaginable amount of time to be chronically unemployed in the Obama economy.

The problem is, the recent benefit extension fight in Congress was not targeted just at workers who find themselves still treading water after six or seven months. Combined with state emergency benefits that usually last 26 weeks, federal add-ons initiated after the 2008 recession raised that total to 73 weeks, meaning people were eligible to collect benefits for almost a year and half. This was an unprecedented extension of the unemployment compensation program, and many Americans justifiably question the wisdom of such exceedingly long durations of unemployment benefits. 

One reason for this skepticism has to do with the indisputable capacity of benefit extensions to exacerbate long-term unemployment. Analyses conducted by the Federal Reserve Bank of San Francisco and the National Bureau of Economic Research (NBER) concluded that such extensions over the past five years have kept more than 600,000 out of the labor force by paying people not to work. Those claims were echoed in a survey of recently unemployed people in New Jersey commissioned by Alan Krueger of Princeton University and Andreas Mueller of the University of Stockholm. They discovered that after a burst of initial activity, people slack off on their job search and wait for something to happen. Moreover, it is likely more workers have been drawn into the mire of unemployment due to the benefit extensions: Another study from the NBER concluded that unemployment benefit extensions have increased overall unemployment by over 3 percent.

Workers are not benefited by being encouraged to remain unemployed for such long periods of time. Long-term unemployment dulls skill sets and makes workers less attractive to potential employers. The longer workers are enticed to stay unemployed, prolong the job hunt, or even dismiss jobs with lower pay, the weaker their resumes become when they inevitably reenter the job market. 

Leaving this aside, if Reich’s “they” bogeymen are meant to refer to Republican congressional leadership, his claim that “they are against” the benefits extension is also untrue. Republicans have approved renewal of the extension numerous times. This year, Republican lawmakers, led by Senate Minority Leader Mitch McConnell and House Speaker John Boehner, requested that the renewal of the extension be offset elsewhere in the budget and accompanied by job-creations measures, which Democrats refused. If Democrats had conceded to these commonsense compromises, it is more than likely unemployment insurance extension would have been approved for 2014.

2. “They don’t want to raise the minimum wage.”

A 2007 survey of 100 studies on the effects of raising the minimum wage was conducted David Neumark and William Wascher at the National Bureau of Economic Research. It revealed that a “sizable majority” of those studies, including those with the “most credible evidence,” concluded that raising the minimum wage produced “negative employment effects, both for the United States as well as for many other countries.” Even more tellingly, “the studies that focus on the least-skilled groups provide relatively overwhelming evidence of stronger disemployment effects for these groups.”

Furthermore, according to the Bureau of Labor Statistics (BLS) only 5 percent of hourly U.S. workers made the federal minimum wage or less in 2012. Among those earning it, 63 percent were second- or third-wage earners from households with incomes equal to three times the poverty line or more. Only 11.3 percent of workers who would experience the increase live in households officially designated as poor. As the BLS survey also reveals, most minimum wage earners are young, part-time workers with an average family income of $53,000 per year. If Reich wishes to help teenage, middle class burger-flippers he might have a point. 

3. “They’re against extending Medicaid benefits.”

Unfortunately, the disaster known as ObamaCare is doing precisely this. More than double the number of people who have signed up for healthcare via the exchanges have enrolled in Medicaid. Since Medicaid is government-subsidized insurance, it is paid for by a combination of funds from state and federal budgets. Prior to its expansion under ObamaCare, Medicaid had already become the largest line item in a typical state’s budget, exceeding such items as public safety, infrastructure, roads and, since 2009, education spending for kindergarten-through-12th-grade.

Yet there is a far bigger problem. Since Medicaid payments are 61 percent less that what private insurance pays, an increasing number of doctors refuse to accept new Medicaid patients. “About half of the physicians in many communities refuse to take Medicaid patients because the payment system is just too low,” reports James Capretta of the Ethics and Public Policy Center. Many doctors are still willing to take a certain percentage of such patients in order to fulfill a moral obligation, but they are not willing to put themselves out of business to do so.

In other words, many Americans enrolled in Medicaid are going to discover a reality that invariably eludes people like Robert Reich: “extending Medicaid benefits” isn’t remotely the same thing as getting actual healthcare. The end result will be rationing and denial of care for the millions of poor sold empty promises.

4. “They want to cut food stamps.”

As with much of the progressive lexicon, “cut” is a euphemism. In reality, food stamp usage has exploded, with a record-setting one-in-five American households on the program in 2013, according to the U.S. Dept. of Agriculture. Furthermore, the cost of the program has increased a whopping 164 percent over the last decade, and 36.8 percent since the Obama administration assumed control in 2009. Thus a program that cost the nation $58.2 billion in 2009 cost $79.6 billion last year. 

The latest Farm Bill under which the food stamp program operates does cut food stamp spending, but those cuts amount to $800 million per year, or approximately one percent of the overall total — a total that has grown exponentially, even as America remains saddled with a national debt of more than $17 trillion, along with unfunded liabilities that exceed $85 trillion. 

5. “They refuse to invest in education and job training.”

In reality the federal government alone has 47 job-training programs run by nine different agencies, according to the the U.S. Government Accountability Office (GAO). These programs cost the taxpayer $18 billion per year, and a 2011 report by the same GAO concluded that some of them are riddled with mismanagement, waste, fraud, abuse and corruption. The report further noted that since 2004, only 5 of the 47 agencies involved kept tabs on whether participants had actually secure jobs. “Little is known about the effectiveness of most programs,” the GAO concluded.

As for education, the federal government spent $138 billion in FY2013. In both real dollars and as a percentage of GDP, the United States outspent most of the world’s developed nations in education. When one factors in vocational training and college as well, the United States outspends all of them. Yet if bang for the buck counts, America comes up woefully short, routinely scoring well below other nations on international exams. 

But this is only part of the story. Every one of America’s true educational wastelands — namely, most of our major inner cities where graduation rates hover around 60 percent or less, where budgets are routinely on the verge of bankruptcy or already there, and where teachers unions fight tooth and nail for the miserable status quo — are Democrat strongholds. If Reich were truly interested in helping the poor and working class Americans he professes to care so deeply about, he’d be far more interested in challenging that status quo, which revolves around the unholy alliance of education unions and a Democratic Party beholden to their campaign contributions and marching orders.

6. “They don’t want to rebuild America’s crumbling infrastructure.”

Reich has an exceedingly short memory. The American Recovery and Investment Act of 2009, more familiarly known as the stimulus bill, was supposed to target the lion’s share of its $787 billion appropriation (increased to $840 billion in 2012) on “shovel-ready jobs.” One year later, President Obama admitted “there’s no such thing.” To be fair to Reich, infrastructure spending has taken a nosedive since its peak before the recession began, but it’s not because the state and local governments that provide the vast majority of infrastructure spending don’t want to spend the money. It’s because they can’t afford to do so.

Yet even in the midst of such cuts, America spends more on infrastructure than the progressive stronghold known as the European Union, at 3.3 percent of our GDP from 2006-2011, compared to only 3.1 percent for the EU. The clamor for increased spending is all about doing it with more borrowed money, with the American Society of Civil Engineers (hardly a neutral entity) calling for a $3.6 trillion “investment” between now and 2020. Congress’s most recently passed budget allocates $108 billion for federal construction accounts.

The only way we will likely see more infrastructure spending is with a growing economy. Obama could contribute to that growth if he would approve the Keystone pipeline, among other things. Perhaps he could explain why he won’t to Robert Reich.

7. “They’re out to bust unions.”

Unions are doing a good job of busting themselves. Nothing speaks louder to this reality than the debacle Big Labor perpetrated in Wisconsin, where their thug-like tactics were rejected by both Republican Gov. Scott Walker and the voters themselves. As a result of Walker’s triumph, a projected $3 billion-plus deficit turned into a projected $300,000 surplus in 2011. Much of it was accomplished by getting government union members to pay for a portion of their own healthcare and pensions and eliminating automatic pay and benefit increases that are strangling states like New York, Illinois and California.

On the national level, a recent study by the Mackinac Center reveals that right-to-work states have seen greater improvements in employment rates, income, and population growth than non-right-to-work states over the last 60 years. Critics attempt to obscure this reality by pointing to the fact that states with right-to-work laws have lower per capita incomes. Yet they fail to factor in the cost of living, which is far more expensive in states where union monopolies push government budgets, and the taxes that pay for them, ever higher. When cost of living is factored in,  people in right-to-work states have 4.1 percent higher per-capita personal incomes than those in non-right-to-work states.

Furthermore, in cities that have gone bankrupt, such as Stockton, and Detroit, the primary drivers of that bankruptcy were out-of-control legacy costs for government union workers. Of Detroit’s $12 billion in outstanding debt, $9.2 billion of it is comprised of health and pension benefits owed to retired workers. When the city filed for bankruptcy, it had 47 different public employee unions, and a worker at the Water and Sewer Department who collected $56,000 in pay and benefits for his job as a horse-shoer despite the department having no horses. Detroit also has three retired municipal workers collecting a pension for every two that are still working.

According to Heritage Foundation’s chief economist Stephen Moore, more than 60 American cities may be facing the same fate as the Motor City. “Keep an eye on ‘too big to fail’ cities like Chicago, Philadelphia, and New York,” he warns.

Moore goes on to cite the progressive ideology in general championed by Reich and others as the primary impetus for such failure. “For at least the last 20 years major U.S. cities have been playgrounds for left-wing experiments—high taxes on the rich; sanctuaries for illegal immigrants; super-minimum wage rules; strict gun-control laws; regulations and paperwork that makes it onerous to open a business or develop on your own property; crony capitalism with contracts going to political donors and friends; and failing schools ruled by teacher unions, with little competition or productivity.”

If Robert Reich had any intellectual honesty, he would answer his question, “What are they really after?” by examining who really benefits from large swathes of the population kept mired in poverty and being sucked into the mentality of dependency. It is no accident that every major American city besieged by poverty, crime, economic disfunction and failing schools is a Democratic stronghold. Reich’s proposals offer more of the same. They merely reassert a long-held belief by the American left that success is measured by how many people they get on government programs, not off government programs. Americas would do well to “connect the dots” regarding the utter bankruptcy of such ideology.

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  • herb benty

    Obama and the Dems KNOW how much they are driving America into bankruptcy. Notice the gleeful runaway spending, the removal of America’s best Generals, the backstabbing of our allys and traditional friends. They are doing all of this on purpose. Coulter was right about Obama ruining America for World Communism and Islam. This is Treason at the highest level.

  • VinnyFromIndy

    The modern conservative has gone insane. The GOP in the House has done nothing for the last few years except name libraries and offer up 50 meaningless and doomed to failure attempts to repeal Obamacare.

    The fact is that the GOP in the Senate has denied these benefits out of spite and some bizarre idea of payback on Harry Reid for changing the rules on the filibuster a few weeks back. Mitch McConnell said the day before the vote on the bill to extend benefits that many members of the GOP in the Senate were going to vote no to protest Reid’s changing of the filibuster rule. So, in short, they threw MILLIONS to the wolves in a petty act of revenge.

    In addition, it should be noted that since the unemployment program began decades ago, there has NEVER been a time when extensions were not granted when the unemployment rate was above 6% nationally. That is until this time when the GOP has balked. Even when given ways to pay for the bill, the GOP has refused, This has nothing to do with paying for the bill as the author of this article suggests.

    Lastly, I hope all of my Republican friends that are being thrown over a cliff by the GOP understand that not only does your party not care what happens to you and your family, but your fellow conservatives have turned on you as well. Simply read this thread and you can clearly see that you are now a moocher and taker and they could not care less that you may have worked 10, 20, 30 or 40 years steadily. No, the minute you lost your job and took unemployment, you became a moocher and a taker. I hope for some of you the scales have dropped from your eyes and you now see clearly which party is the source of your immediate and severe pain – the GOP.

    • NAHALKIDES

      Since you don’t even know the difference between Conservative and Establishment, or that it’s the latter than controls the GOP, there’s little point in listening to you. In fact, Conservatives do care about the “little guy” – deeply, but Democrats care only for power. If you and your Democratic friends really cared about people, you’d want them to have jobs, real jobs, in the private sector. You’d agree to repeal Obamacare immediately since it’s probably costing more jobs right now than any other thing, and you’d agree to open the Keystone pipeline – in fact, you’d agree to open up drilling all across the U.S.

      When you advocate those things, maybe we’ll listen to you. Until then, stop wasting our time.

  • The Facts

    It’s funny how raising wages meets with moral outrage, but raising prices is met with religious fervor.

    • reader

      Of course, comrade Lenin used to be big on short and catchy slogans meant to rile up the gullible masses, but he and his henchmen were pretty good at messaging. What you wrote here is not so much. Sorry to tell you, pal, but, when the lines of a new utopia are drawn, you will be out in a rice field, not in the chairman chair.

      • The Facts

        It’s clear you’re more comfortable talking about Lenin than about the subject. Lenin is an easy subject to dispute. Have fun talking about Lenin with a Leninist.

        • reader

          You are a leninist, that’s why I’m talking to you about him.

          • The Facts

            OK, whatever you say, Mr. Hypnosis. Don’t let the part where I read “The State and Revolution” and disagree with it get in your way.

          • reader

            Judging by your style, I’m sure you’ll tell us everything about your disagreements with lenin in one of the threads discussing the situation in and around Israel.

          • The Facts

            Not really. I don’t talk about Lenin all that much.

          • reader

            But you’re channeling
            lenin all the time, even by not mentioning him by name. Lenin was big on secrecy – his favorite word was “CONSPIRACIA.” But you surely know this already.

          • The Facts

            The null set is the subset of every set.

          • reader

            Yeah.
            Ground control to major Tom, your circuits dead, there’s something wrong Can you hear me, major Tom?
            I mean, bot…

          • Softly Bob

            Your name is laughable. Typical Leftist Orwellian new speak. Truth = Lies, Freedom = Slavery.
            If you were truly honest, you’d call yourself ‘The Fictions’.

        • objectivefactsmatter

          You might have disagreements with him, but that doesn’t mean you aren’t following his ideas. One of his ideas was exploiting useful idiots. That means the idiots didn’t need to be “Leninist” to fulfill his wishes.

          • dnteatylwsno

            Which was proven in 2008 and 2012

    • SoCalMike

      The fact is those who advocate coercive minimum wage laws are advocating maximum unemployment.
      Rising wages is a good thing if it is done voluntarily usually associated with higher output, productivity or competition but when done at the point of a gun, i.e. government, the result is lost jobs.
      Notice the proponents never advocate raising the minimum wage to 50 or 100 dollars an hour. Even the True Believers at that point would start to get it.

      • The Facts

        You have this seemingly profound view of economics, and yet you are snuggled way up the rear end of the weapons industry. Your job depends on selling guidance interfaces to an entity that has to go across the world to kill people and steal their land for an oil pipeline. You are paid out of one of the largest tax appropriations/ theft of hard earned dollars other than Medicare, the military appropriation. You play at capitalism. You engage in a pretend capitalism within a larger communism.

    • objectivefactsmatter

      No, it’s unneeded and harmful government interference that pisses off the smart people. It’s actually fairly easy to understand when you look at it that way. Undoing all of the Marx-derived fallacious memes is what takes all the work.

    • gray_man

      Raising wages makes prices raise.
      Learn some basic economics.
      Dumcaf.

  • ObamaYoMoma

    They are not 7 leftwing arguments. They are 7 Marxist arguments instead, and people will continue to ignore you, especially on the left, as long as you continue to mislabel them as being leftwing as opposed to Marxist. Marxism is easy to attack and leftwingers are all Marxists. Hence, stop being politically correct and call them what they are: radical Marxists and then attack Marxism and all of its devastation.

    • Johnnie the Jew

      Yeah makes you laugh how leftarded socialists who are allegedly atheists as I seem to remember the state is “god” in marxism, get behind the defence and support of the most toxic, twisted god theology, or rather totalitarian ideology (idiotlam), with such religious zeal. What a bunch of dim witted dhimmi spewmeisters. Don’t they see what walking contradictions they are. Contemptuous clowns the lot of them.

    • Chris Mankey

      “leftwingers are all Marxists”

      No, they aren’t, Mister clownshoes. I really wish the right hasn’t become so filled with insane people.

      • objectivefactsmatter

        “leftwingers are all Marxists”

        If you count the dupes and useful idiots, he’s absolutely correct.

      • ObamaYoMoma

        Quit denying reality you unhinged radical Marxist leftist!

        • Chris Mankey

          Shut up, moron!

          • ObamaYoMoma

            Truth hurts!!!

  • rbla

    Reich has nothing to say regarding the two main causes of inequality – mass third world immigration and outsourcing due to unfair trade deals. In fact during his time in the Clinton administration American jobs and technology were shipped off en masse to China at the behest of Clinton’s big contributors, And where was Reich when his colleague Rubin spearheaded the trashing of Glass-Steagall? Finally its one thing to call for raising the minimum the wage; its another to actually enforce it against employers hiring illegal aliens.

    • NAHALKIDES

      Probably the biggest driver of inequality today is government controls – by picking winners and losers, government has a large say in who is successful and who is not. Also, we should note that income inequality is not per se a bad thing but a good thing.

  • Hawkeye3939

    Reich, Obama, Rodham-Clinton,and all the other “Progressives” are, in reality, doctrinaire Marxists. They bristle at being correctly identified because their subterfuge depends on an unwitting class of low information voters. I love to watch The Five on FoxNews because whenever the terms “socialist,” “communist.” or “Marxist” are used, Beckel goes into a frenzy, virtually frothing at the mouth and saying such nonsense as “you don’t know what socialism is.” Oh, we know just exactly what socialism is, and Obama is driving us into it every day. Socialism, by the way, is one of the way stations on the road to Marxist Communism.

  • SoCalMike

    Robert Reich is an economic illiterate and a fraud for trying to pass himself off as an economist. On top of those has he ever earned a dime of his own money?

    • AlanMacDonald

      SoCal, I’m all for cutting taxes.

      Let’s start with the biggest tax on the American people, our country, our environment, and our whole world — the hidden 20 trillion dollar per year tax imposed by ‘Empire-thinking’ individuals and this corporate, financial, militarist, media/propaganda, extra-legal, and dual-party Vichy government in allowing massive ‘negative externality costs’ to be dumped on our society, in order to generate faux-profits for the Disguised Global Empire, while these phony economists and modern alchemists turn not lead, but paper (CDOs), oil pollution, Merchant of Death weaponry, and the rest of this destructive crap into gold (for them), and the end of life on earth (for us).

      Do some analysis on the level of global negative externality costs relative to F500 profits and get back to me when you get smart, dick-head dunce.

      Best luck and love to the fast expanding ‘Occupy the Empire’
      educational and non-violent revolutionary movement against this
      deceitful and Disguised Global EMPIRE, which can’t so easily be
      identified as wearing Red Coats, Red Stars, nor funny looking Nazi
      helmets —- quite YET!

      Liberty, democracy, justice, and equality
      Over
      Violent (‘Vichy’ disguised)
      Empire,

      Alan MacDonald
      Sanford, Maine

      We don’t merely have a “Big Money”/Citizens United problem, or a
      domestic tyranny and NSA SPYING problem, or a gun/fear problem, or an MIC problem, or an ‘Austerity’ problem, or an expanding wars problem, or a ‘drone assassinations’ problem, or a vast income & wealth
      inequality problem, or a Wall Street ‘looting’ problem, or a Global
      Warming and environmental death-spiral problem, or the world’s
      largest political prisoner problem, or a crappy un-healthy insurance
      problem, or, or, or …ad nauseam — but what we REALLY have is a
      hidden VEMPIRE cancerous tumor of GLOBAL EMPIRE which is the prime CAUSE of all these underlying, related, and mere ‘symptom problems’.

  • Tradecraft46

    Look, he is not offering arguments, but article of faith. Someday his religion will be disestablished too.

  • http://www.clarespark.com/ Clare Spark

    If conservatives and Republicans want to get back workers, they should look at their own programs for betterment of the working class and publicize them more effectively, in language that ordinary people can understand. We are at a crossroads. See http://clarespark.com/2014/02/12/is-most-work-alienating-and-boring/. “Is most work alienating and boring?” Culture wars may appeal to some or all in the conservative base, but culture wars neglect basic economics, health, and education, ceding this turf to Democrats and hard leftists.

    • gawxxx

      just your opinion clare , and we all know about opinion’s ,

      • objectivefactsmatter

        He article asks valid and useful questions. That’s more than I can say about your comment.

  • http://www.shugartmedia.com/ Chris Shugart

    Yeah, there’s a war going on. It’s a war against govt. thievery, make no mistake.

  • JohnLeB

    Go fuck yourself you fucking moronic republican shill.. You try being out of work for 6 months with NO JOBS!!!!

    • Western Canadian

      Feel free to that obungle for the lack of jobs. Oh, wait, you would rather defend him than tell the truth…

    • Wolfthatknowsall

      You’re a class act, obviously. What happened? I would have thought you were a natural for Harvard Law …

    • Marcus Maxon

      you have outlived your usefulness it appears.

  • truebearing

    Reich babbles about the plight of the poor, but look at his list of “solutions” and ask yourself how any of them do anything but keep you poor. Unemployment benefits? Food Stamps? Medicaid? A minimum wage job? These are the definition of poor, not the solution to poverty. The moron doesn’t know the difference. That’s some utopian dream he’s selling.

  • Harry_the_Horrible

    There IS a war on poor and working families. It is being waged by the Chamber of Commerce and their allies in the Democrat and ‘Pubbie parties who are trying legislate amnesty for invading barbarians.

  • watsa46

    The great example comes from across the Atlantic, where in several countries individuals move from end of school to unemployment till retirement without having work ONE hour. This is what the left wants to impose on this country. These unemployed people become like the millions of illiterate and ignorant Muslims in North Africa and ME. They are just meat for WAR.

  • NeedsVacation

    ABSOLUTELY REDICULOUS!

    How dare the Republican Senators refuse to move forward a bill that was crated during the Bush administration when the unemployment rate was (lower) then it is now.

    The Republicans are heartless and offer zero contribution to this debate except amendments to the bill benefiting themselves and nobody else.

    Call your states Congressional leaders and express your concerns — its the only way to move matters like this forward.

    Good luck

  • sydchaden

    Reich is a genuine, progressive, humanitarian. I recall his speech at the University of California at Berkeley, California, in which he outlined the goals of what has since become ObamaCare. In reference to the elderly, Reich said that the biggest cost of healthcare was keeping the old folks alive, and that was going to stop. “We’re just going to let them die”, he said, and the students and faculty cheered wildly. And, of course, they all voted for Obama and are delighted that Obama was elected, and ObamaCare passed. I wish that someone could put a copy of Reich’s speech in the hands of every person on Medicare, so that they could understand what the plan is.

  • TM

    This person has no real understanding of the importance of helping the poor become the middle class through investment in education and training so as to improve spending and therefore the economy..so simple really. Forget about the co-orporations, they;re just a result of the middle class being able to spend.

  • shazam iam

    Is it true that every time you lie, you shrink a little?

  • Nighthawk

    Reich is the pyromaniac returning to the scene of the fire crying, “Oh, isn’t this terrible!”