Taking On Robert Reich And The Myth Of The 'Non-Working Rich'

Serious policy should be based on facts, not on anecdotes cherry-picked to match a political agenda. Before sweepingly concluding that the “fabulously wealthy” who “have never worked” are “undermining the moral foundations of American capitalism,” Reich should do his homework. His only offered evidence is that “six of today’s ten wealthiest Americans [most notably the Wal-Mart Waltons] are heirs to prominent fortunes.” Reich, in his usual fashion, simply assumes what he says is true. 


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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.

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Robert Reich's F Minus In Economics: False Facts, False Theories

I am appalled by the economic illiteracy encountered in leading newspapers, business magazines, and prominent web sites (the news section of the Wall Street Journal is no exception). Robert Reich’s Higher Wages Can Save America’s Economy – and Its Democracy (Salon.com) is only one of many examples. As a teacher of economics for over forty years and a co-author of a best-selling 1980s economics 101 textbook, I would have given Reich’s paper a resounding F, if he had submitted it for my elementary economics class.

Reich’s elevated credentials point to an automatic A+.  As a frequent TV pundit, author of 13 books, Chancellor’s Professor of Public Policy at the University of California at Berkeley no less, and self-identified as “one of the nation’s leading experts on work and the economy,” many readers will automatically believe his economic nonsense. As a former Secretary of Labor, readers would be surprised to learn that Reich does not appear to understand how wages and labor markets work.

Reich’s resume raises one red flag: He is not an economist but a lawyer – a Yale Law School classmate of Hillary Clinton, who studied a smattering of economics for his PPE (politics, philosophy, and economics) degree at Oxford – a Rhodes Scholar no less. I am no formal credentials snob. Non PhD economists, such as Robert Samuelson, write very good economics. Robert Reich is not one of them.

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