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Thursday, September 12, 2013

Sorry, Mr. Reich: Your Economics Grade Is Still F (Reply to Robert Reich)

In my Robert Reich’s F Minus In Economics: False Facts, False Theories, I gave Professor Reich an F for his Higher wages can save America’s economy — and its democracy. For those who missed it, the reasons for my grade (as a 40-year teacher of economics) are Reich’s lamentable disregard for facts and his lack of knowledge of basic economics. My specific criticisms included:
First, Reich’s assertion that America’s growth and prosperity rest on a “basic bargain” that corporations pay their workers enough so that they can buy their products is wrong.  Reich claims the bargain was pioneered by Henry Ford in 1914, who decided to pay his workers enough to buy his Model T’s.
Second, historical statistics show Reich’s assertion that the Great Depression was caused by businesses allowing wages to stagnate and profits to soar in the 1920s is false.

2 comments:

  1. Just want to let your fat fascist ass know i support Robert Reich, so SUCK IT ! just so you know there are people out here who HATE you and what you stand for

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  2. It appears that Mr. Reich's supporters (e.g., allen) follow suit and show no manners. Oh, Behave!

    So, I direct this to Mr. Reich: Going against the principles of economics gets you so far Mr. Reich. Soviets did. Now, they have no country or economy or democracy.

    Mr. Reich may have one thing going for him. Since, 35% of wages and salaries are social welfare benefits, then increasing minimum wage will reduce this percentage (for those who can hold on to their jobs).

    "...enterprise...supply the buying public in the best possible and cheapest way with those commodities and services...' [Ludwig von Mises]. In a global economy, higher minimum wage increasing cost of production at home (US) diverts consumer demand towards foreign products. One must ask Mr. Reich, ceteris paribus, If Ford costs more than Toyota, then which one will 'you' buy? ( note: the use of 'you' is of the royal variety')

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