Book Review: "Beyond Outrage" by Robert B. Reich

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In this series of "Book Reviews," I'll be reading through various non-fiction books and posting my thoughts as I read through them, along with quotes and relevant portions and synopses from the portion that I have read. I may do two a month, or just one, depending on my schedule and how long the book is.

To start this new series, I'll be doing Beyond Outrage: What Has Gone Wrong with Our Economy and Our Democracy and How to Fix It by Robert B. Reich. Robert Reich was, of course, Secretary of Labor under President Bill Clinton, serving only for President Clinton's first term. He also served Presidents Gerald Ford and Jimmy Carter, serving first as Assistant to the U.S. Solicitor General Robert Bork (1974-1976) and then as Director of Policy Planning Staff at the Federal Trade Commission under President Carter. He also served as a member of President Barack Obama's economic transition advisory board. Currently, he is a Professor of Public Policy at UC Berkeley.

With all of my Book Review segments, discussion is more than welcome. I am more than happy to debate my personal beliefs with regards to the subject matter and Reich's own opinions in the book.

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Introduction: Connecting the Dots

The book starts out with Robert Reich detailing what he believes to be the seven dots that need to be connected in order to understand what the problem with our American economy is and how to fix it. He explains it in a brief paragraph:


The first thing you need to do is connect the dots and understand how many troubling but seemingly unrelated things are interwoven. The challenge we face is systemic. The fundamentals of our economy are out of whack, which has distorted our democracy, and these distortions, in turn, are making it harder to fix the economic fundamentals. Later in the book we'll examine several of these dots in detail, but now I'd like you to see the big picture.

The seven dots are as follows (quoted directly from the book):


The first dot: For three decades almost all the gains from economic growth have gone to the top. In the 1960s and 1970s, the wealthiest 1 percent of Americans got 9-10 percent of our total income. By 2007, just before the Great Recession, that share had more than doubled, to 23.5 percent. Over the same period the wealthiest one-tenth of 1 percent tripled its share. We haven't experienced this degree of concentrated wealth since the Gilded Age of the late nineteenth century. The 400 richest Americans now have more wealth than the entire bottom half of earners - 150 million Americans - put together. Meanwhile, over the last three decades the wages of the typical worker have stagnated, averaging only about $280 more a year than thirty years ago, adjusted for inflation. That's less than a 1 percent gain over more than a third of a century. Since 2001, the median wage has actually dropped.

This connects to...

The second dot: The Great Recession was followed by an anemic recovery. Because so much income and wealth have gone to the top, America's vast middle class no longer has the purchasing power to keep the economy going - not, at least, without going deeper and deeper into debt. But debt bubbles burst. The burst of 2008 ushered in a terrible recession - the worst economic calamity to hit this country since the Great Depression of the 1930s - as middle-class consumers had to sharply reduce their spending and as businesses, faced with declining sales, had to lay off millions. We bottomed out, but the so-called recovery has been one of the most anemic on record. That's because the middle class still lacks the purchasing power to keep the economy going and can no longer rely on borrowing.

While at the same time...

The third dot: Political power flows to the top. As income and wealth have risen to the top, so has political clout. Obviously, not everyone who's rich is intentionally corrupting our democracy. For those so inclined, however, the process is subtle and lethal. In order to be elected or reelected, politicians rely greatly on advertising, whose costs have risen as campaign spending escalates. They find the money where more and more of the money is located - with CEOs and other top executives of big corporations and with traders and fund managers on Wall Street. A Supreme Court dominated by conservative jurists has opened the floodgates to unlimited amounts of money flowing into political campaigns. The wealth of the super-rich also works its way into politics through the corporations they run or own, which employ legions of lobbyists and public relations experts.
and their wealth buys direct access to elected officials in informal dinners, rounds of golf, overnight stays in the Lincoln Bedroom, and fancy boondoggles.

Which connects to...

The fourth dot: Corporations and the very rich get to pay lower taxes, receive more corporate welfare, and are bound by fewer regulations. Money paid to politicians doesn't enrich them directly; that would be illegal. Rather, it makes politicians dependent on their patrons in order to be reelected. So when top corporate executives or Wall Street traders and managers want something from politicians they have backed, those politicians are likely to respond positively. What these patrons want most are lower taxes for themselves and their businesses. They also want subsidies, bailouts, government contracts, loan guarantees, and other forms of corporate welfare, and fewer regulations. The tax cuts enacted in 2001 and 2003 - and extended for two years in 2010 - in 2011 saved the richest 1.4 million taxpayers (the top 1 percent) more money than the rest of America's 140,890,000 taxpayers received in total income.

Leading to...

The fifth dot: Government budgets are squeezed. With so much of the nation's income and wealth at the top, tax rates on top earners and corporations dropping, and most workers' wages stalling or declining, tax revenues at all levels of government have fallen precipitously. This has led to a major squeeze on public budgets at all levels of government. The result has been deteriorating schools, less college aid, crowded and pockmarked highways, unsafe bridges, antiquated public transportation, unkempt parks, fewer police officers, fewer social workers, and the decline of almost everything else the broader public relies on.

Which connects to...

The sixth dot: Average Americans are competing with one another for slices of a shrinking pie. There is now more intense competition for a dwindling number of jobs, a smaller share of total income, and ever more limited public services. Native-born Americans are threatened by new immigrants; private sector workers are resentful of public employees; non-unionized workers are threatened by the unionized; middle-class Americans are competing with the poor. Rather than feel that we're all in it together, we increasingly have the sense that each of us is on his or her own.

Which leads, finally, to...

The seventh dot: A meaner and more cynical politics prevails. Because of all these occurrences, our politics has become nastier, more polarized, and increasingly paralyzed. Compromise is more difficult. Elections are more venomous, political advertising increasingly negative. Angry voters are more willing to support candidates who vilify their opponents and find easy scapegoats. Talking heads have become shouting heads. Many Americans have grown cynical about our collective ability to solve our problems. And that cynicism has become a self-fulfilling prophecy, as nothing gets solved.

Personally, I think he has hit the nail on the head here, and the message should be non-partisan. He lays it out quite clearly and logically.

My personal opinion is that what he talks about is constantly unfolding before our very eyes. We have been divided as a nation since Thomas Jefferson and John Adams, against the warnings of George Washington, formed America's first political parties. But never has that division been so rancorous, so venomous, so...divisive, as it has since Barack Obama became President. Even with all the chaos and disaster of President Bush the Younger's administration, we were still fairly united as a people, particularly in the wake of 9/11.

I think about what Robert Reich has written, and I'm taken back to the debate between my Rep. Chuck Fleischmann and his primary challenger, Weston Wamp, that took place just a few days ago. For nearly the entirety of the hour-long debate, Rep. Fleischmann constantly tried to pin Wamp as a wolf in sheep's clothing - a Democrat running as a Republican to win over a conservative district - for only one reason: Wamp was traveling the entirety of our district, speaking to ALL 3rd district Tennesseans, about the issues and what they wanted to see from their future representative.

It has now become an unpardonable sin to reach out to EVERY resident of a district you intend to REPRESENT in the ivory halls of Congress. Rep. Fleischmann made it perfectly clear that a representative in the U.S. Congress should only be the representative of the party that elects them, rather than the representative of the citizens of the district that elected them.

This is where our political process has gone, friends. The central root of our problems (and I'm going a bit off subject for a moment) is the partisan divide that has only gotten worse with time. That divide is what causes the problems Robert Reich wrote about.

[zelmo1234]

His message is Well for the lack of a better word, Socialist bull shit!

#1 We have a shrinking middle class there can be no denying that, by about 7% of the population, but the percentage of poor in the country, has remained about the same since the late 50's

So if they are not adding to the rolls of the poor? where are they going? Yes there are more millionaires today than any time in the countries history

#2 We are not recovering from the recession because there is zero incentive for people to invest in the economic expansion of this country. Especially since you have a government that is pumping billions every month into the markets to insure that they continue to rise. The massive Regulations, taxation, and the ACA make it very hard to see a profit for investing in, or expanding our company! The buying power of the middle class has been reduce by the higher cost of insurance, and energy, direct results of policies instituted by this administration!

#3 while this is the closest he comes to something truthful it should read that the court has allowed those at the top to have a voice that was formerly held by unions. Our political system is broken not because I can run ads on TV, but because the federal government has decided that it can pick economic winners and losers. Not letting the market work to the advantage of all!

#4 Never in the history or this country have corporations and the wealthy paid such a high percentage of the total revenue. The USA has the highest corporate tax rate in the world. we have regulated many forms of manufacturing out of the USA, Taxations and regulations make it impossible to produce items in the USA and be able to compete with imported products. WE ARE A REGULATION NATION! And the sooner people figure out that the ACA is a tax and has nothing to do with improving your access to healthcare, the sooner we can fix part of the problem

#5 the governments budget is nearly half a trillion dollars more than it was just 6 years ago, that is not squeezing anything. However in the states that they have gotten government spending under control and have balanced budgets? The economies, even with all of the downward pressures from the feds, are starting to grow! We do not have a revenue problem with have a problem of government and the wasteful spending that is done on every pet project that our supposed leaders desire.

#6 the economy is not a pie. If I make a billion dollars an hour, this does not effect the amount that you can make by a nickel! the shrinking jobs market is a direct result of the taxes, regulations, the ACA, and lack of a sound energy policy of this government and administration. there is no reason to invest in the economy of the USA, because there is no profit in it! especially when I can have a guarantee of about 15% profit because the government is pumping so much money into the market. And I have a lower tax rate on the earnings than I do corporate profits

#7 politics has always been a nasty business, but the reason for the polarization is that nobody is running on ideas? The democrats have ran their last 3 elections on we are not GWB Can you think of any idea that either part has on the table that they are actively trying to sell to the people of the USA.

If you have a lack of ideas, then you are stuck with the politics of personal destruction. Something that Professor Robert advocates for and not against.

He is a socialist and thus his book is based on fantasy and not reality!

[Green Arrow]

His message is Well for the lack of a better word, Socialist bull shit!

Question is, are you going to show how he's wrong? My guess is no (but I cheated and read the whole post before I responded).


#1 We have a shrinking middle class there can be no denying that, by about 7% of the population, but the percentage of poor in the country, has remained about the same since the late 50's

So if they are not adding to the rolls of the poor? where are they going? Yes there are more millionaires today than any time in the countries history

Certainly, and that's a bad thing.


#2 We are not recovering from the recession because there is zero incentive for people to invest in the economic expansion of this country. Especially since you have a government that is pumping billions every month into the markets to insure that they continue to rise. The massive Regulations, taxation, and the ACA make it very hard to see a profit for investing in, or expanding our company! The buying power of the middle class has been reduce by the higher cost of insurance, and energy, direct results of policies instituted by this administration!

If you read what he says, you'll notice that he mocked the idea that we were in a recovery. He called it "anemic" and "so-called."


#3 while this is the closest he comes to something truthful it should read that the court has allowed those at the top to have a voice that was formerly held by unions. Our political system is broken not because I can run ads on TV, but because the federal government has decided that it can pick economic winners and losers. Not letting the market work to the advantage of all!

No, it shouldn't say that, because it's absurd. Those at the top have always had a voice. Carter was our poorest President, and even he was a 1%er. Now they get even more of a voice than they already had, and more of a voice than anyone has. Corporations should not be able to pump ridiculous amounts of money into our political process. Neither should unions, and nobody should be able to donate more than anyone else.

For all your fearmongering about Russia, I'm rather surprised that you want us to have the same oligarchic system they have.


#4 Never in the history or this country have corporations and the wealthy paid such a high percentage of the total revenue. The USA has the highest corporate tax rate in the world. we have regulated many forms of manufacturing out of the USA, Taxations and regulations make it impossible to produce items in the USA and be able to compete with imported products. WE ARE A REGULATION NATION! And the sooner people figure out that the ACA is a tax and has nothing to do with improving your access to healthcare, the sooner we can fix part of the problem

That's bullcrap. It's been proven that most big corporations actually pay a negative tax (http://www.usatoday.com/story/money/business/2013/10/23/big-companies-pay-no-taxes/2480281/), which means they are making money to not pay taxes. What it really is, is the fringe rich/upper middle class that are paying the vast majority of the nation's tax burden. Big corporations are getting just as much of a free ride as the 47% you guys like to bring up all the time.


#5 the governments budget is nearly half a trillion dollars more than it was just 6 years ago, that is not squeezing anything. However in the states that they have gotten government spending under control and have balanced budgets? The economies, even with all of the downward pressures from the feds, are starting to grow! We do not have a revenue problem with have a problem of government and the wasteful spending that is done on every pet project that our supposed leaders desire.

No, we're SPENDING half a trillion more dollars, but that's not the budget because we have no budget.


#6 the economy is not a pie. If I make a billion dollars an hour, this does not effect the amount that you can make by a nickel! the shrinking jobs market is a direct result of the taxes, regulations, the ACA, and lack of a sound energy policy of this government and administration. there is no reason to invest in the economy of the USA, because there is no profit in it! especially when I can have a guarantee of about 15% profit because the government is pumping so much money into the market. And I have a lower tax rate on the earnings than I do corporate profits

The problem Reich has (and I agree with) is that government spending isn't going to save the economy, only the poor and middle class spending can save the economy, and for the aforementioned reasons, that's not happening.


#7 politics has always been a nasty business, but the reason for the polarization is that nobody is running on ideas? The democrats have ran their last 3 elections on we are not GWB Can you think of any idea that either part has on the table that they are actively trying to sell to the people of the USA.

If you have a lack of ideas, then you are stuck with the politics of personal destruction. Something that Professor Robert advocates for and not against.

He's running on ideas. You don't want people running on ideas, you just want them running on your ideas.


He is a socialist and thus his book is based on fantasy and not reality!

Something you still have not shown beyond personal opinion.

[Bob]

His message is Well for the lack of a better word, Socialist bull shit!

#1 We have a shrinking middle class there can be no denying that, by about 7% of the population, but the percentage of poor in the country, has remained about the same since the late 50's

So if they are not adding to the rolls of the poor? where are they going? Yes there are more millionaires today than any time in the countries history

#2 We are not recovering from the recession because there is zero incentive for people to invest in the economic expansion of this country. Especially since you have a government that is pumping billions every month into the markets to insure that they continue to rise. The massive Regulations, taxation, and the ACA make it very hard to see a profit for investing in, or expanding our company! The buying power of the middle class has been reduce by the higher cost of insurance, and energy, direct results of policies instituted by this administration!

#3 while this is the closest he comes to something truthful it should read that the court has allowed those at the top to have a voice that was formerly held by unions. Our political system is broken not because I can run ads on TV, but because the federal government has decided that it can pick economic winners and losers. Not letting the market work to the advantage of all!

#4 Never in the history or this country have corporations and the wealthy paid such a high percentage of the total revenue. The USA has the highest corporate tax rate in the world. we have regulated many forms of manufacturing out of the USA, Taxations and regulations make it impossible to produce items in the USA and be able to compete with imported products. WE ARE A REGULATION NATION! And the sooner people figure out that the ACA is a tax and has nothing to do with improving your access to healthcare, the sooner we can fix part of the problem

#5 the governments budget is nearly half a trillion dollars more than it was just 6 years ago, that is not squeezing anything. However in the states that they have gotten government spending under control and have balanced budgets? The economies, even with all of the downward pressures from the feds, are starting to grow! We do not have a revenue problem with have a problem of government and the wasteful spending that is done on every pet project that our supposed leaders desire.

#6 the economy is not a pie. If I make a billion dollars an hour, this does not effect the amount that you can make by a nickel! the shrinking jobs market is a direct result of the taxes, regulations, the ACA, and lack of a sound energy policy of this government and administration. there is no reason to invest in the economy of the USA, because there is no profit in it! especially when I can have a guarantee of about 15% profit because the government is pumping so much money into the market. And I have a lower tax rate on the earnings than I do corporate profits

#7 politics has always been a nasty business, but the reason for the polarization is that nobody is running on ideas? The democrats have ran their last 3 elections on we are not GWB Can you think of any idea that either part has on the table that they are actively trying to sell to the people of the USA.

If you have a lack of ideas, then you are stuck with the politics of personal destruction. Something that Professor Robert advocates for and not against.

He is a socialist and thus his book is based on fantasy and not reality!

What you say comes very close to explaining the collapse when you add in my video from CSPAN posted this day as a very important video.

Discussion Housing Finance Reform | Video | C-SPAN.org (http://www.c-span.org/video/?320533-1/discussion-housing-finance-reform)

I urge all to study that presentation on CSPAN

I confirm your findings.

I would show respect for Robert Reich and his book were it not well known that he represents Democrats. He shills for socialists. He only works for Democrats. He spins the Democrat view.

To honor him with a book review shows me that the best economists are just ignored in favor of the Democrat shill.

Your number 5 should address the national debt that is both known and hidden. The known part is nearing 18 trillion dollars. This is not merely a closet full of cash, or a home full of cash, a trillion dollars takes up football fields of cash. A trillion dollars is no tiny matter.


https://www.youtube.com/watch?v=WFP-2_iDYMU

Incomes are not banked. I admit part of incomes end up in banks, but the savings rate of Americans is terrible. It is not all their fault. Take fuels for instance. If Obama decided / Democrats decided, that fuel prices would fall, make no mistake, they would fall. They went up super fast when Obama was put into office. Fuel costs could be saved. Further, food production is more expensive and so is shipping to market as well as extraneous costs passed to the buyer, all due to prices of fuels. Make no mistake, you can't simply pass a law and trucks, trains, busses and autos magically get more miles per gallon. Look at how they get autos to get more fuel economy. They shrink them.

I see not mid sized cars around here, I see tiny cars. Some have rear wheels almost, it seems, touching the front wheels. They are smaller than was the 1950 Ford. I can guage them with my car and my car appears to be several feet wider. Maybe it is an illusion.

That said, the economy has many problems. And Obama nor Reich is the pal of the proper repair. They still are committed to socialism.

I thank @Zelmo for a superb well thought out presentation as to why Reich is wrong.

I once started to read one of his books and it took no time for me to understand his books are about politics. His economic lessons leave a lot to be desired. I realize he gained fame and I am but a mere poster. But the man is still a hack. To review the book of a hack takes guts.

[Bob]

Question is, are you going to show how he's wrong? My guess is no (but I cheated and read the whole post before I responded).

My question is do you intend to show how he is right? He was brought here by you and you claim he is correct. Let your proofs start.

I gave two links that show he is wrong.

Let me take housing as a start since it was this part of the economy that is deemed to be the first domino.

Housing collapsed mostly due to Government interference. Not by Bush, but by laws. First was the ill conceived ruling in a TX court case that ordered blacks (by group) to get loans they were not qualified for.

When you force the banks to loan to those not qualified, and it is law, you distort the market. Why hedge funds? To make up for the distortions in the market. Banks needed and wanted insurance. All a hedge fund amounts to is insurance. AIG got into trouble covering hedge funds. Banks got into trouble when those poor credit rated people flooded the market and stopped making payments. I also blame fuel costs for the first event of that crash. A lot of the poor did not live close to jobs. They commuted to jobs and when fuel costs skyrocketed, during Bush, they had to find money to both pay for fuel and payments on the home. A former homeless person must realize how fuel and home payments keep you homeless.

[Bob]

Has it occurred to Obama's biggest fans that for almost his entire time in office, Obama has had no budget?

This spending is not on budget, it is off budget.

Say what you will about GW Bush but he had a budget each and every year.

[Green Arrow]

Has it occurred to Obama's biggest fans that for almost his entire time in office, Obama has had no budget?

This spending is not on budget, it is off budget.

Say what you will about GW Bush but he had a budget each and every year.

This is off-topic.

[Green Arrow]

My question is do you intend to show how he is right? He was brought here by you and you claim he is correct. Let your proofs start.

I gave two links that show he is wrong.

Let me take housing as a start since it was this part of the economy that is deemed to be the first domino.

Housing collapsed mostly due to Government interference. Not by Bush, but by laws. First was the ill conceived ruling in a TX court case that ordered blacks (by group) to get loans they were not qualified for.

When you force the banks to loan to those not qualified, and it is law, you distort the market. Why hedge funds? To make up for the distortions in the market. Banks needed and wanted insurance. All a hedge fund amounts to is insurance. AIG got into trouble covering hedge funds. Banks got into trouble when those poor credit rated people flooded the market and stopped making payments. I also blame fuel costs for the first event of that crash. A lot of the poor did not live close to jobs. They commuted to jobs and when fuel costs skyrocketed, during Bush, they had to find money to both pay for fuel and payments on the home. A former homeless person must realize how fuel and home payments keep you homeless.

You did not explain how your links proved him wrong. What statement of his that I quoted is proven wrong by your links?

And I already provided a link proving his point.

[zelmo1234]

Question is, are you going to show how he's wrong? My guess is no (but I cheated and read the whole post before I responded).

Certainly, and that's a bad thing.

If you read what he says, you'll notice that he mocked the idea that we were in a recovery. He called it "anemic" and "so-called."

No, it shouldn't say that, because it's absurd. Those at the top have always had a voice. Carter was our poorest President, and even he was a 1%er. Now they get even more of a voice than they already had, and more of a voice than anyone has. Corporations should not be able to pump ridiculous amounts of money into our political process. Neither should unions, and nobody should be able to donate more than anyone else.

For all your fearmongering about Russia, I'm rather surprised that you want us to hav the same oligarchic system they have.

That's bullcrap. It's been proven that most big corporations actually pay a negative tax (http://www.usatoday.com/story/money/business/2013/10/23/big-companies-pay-no-taxes/2480281/), which means they are making money to not pay taxes. What it really is, is the fringe rich/upper middle class that are paying the vast majority of the nation's tax burden. Big corporations are getting just as much of a free ride as the 47% you guys like to bring up all the time.

No, we're SPENDING half a trillion more dollars, but that's not the budget because we have no budget.

The problem Reich has (and I agree with) is that government spending isn't going to save the economy, only the poor and middle class spending can save the economy, and for the aforementioned reasons, that's not happening.

He's running on ideas. You don't want people running on ideas, you just want them running on your ideas.

Something you still have not shown beyond personal opinion.


Ok well I thought that I would not have to post the facts again, but should have know better

http://mjperry.blogspot.com/2010/09/us-poverty-rate-1959-to-2009.html

poverty rate is nearly the same

http://mjperry.blogspot.com/2010/09/us-poverty-rate-1959-to-2009.html

middle class has shrunk by about 10%

So there are more rich people, and they can spend a lot more than middle class people

Now add to that the increased cost of Food, Energy , and healthcare and the poor and middle class have even less.

PEOPLE GETTING WEALTHY IS NOT A BAD THING

Right as I said the closest that he came to being right was on the recovery. You can't have a recovery unless business is investing in and growing their business. When the government makes it far better to invest in stocks? Then the economy does not grow.

Corporations do pay taxes, now we have a lot of deductions but on average we pay 13% compared to 11% world average and many countries not charging any corporate tax. Now there are companies like GE that promise to by Chevy Volts to make the President look good and they can make 5.5 billion and pay zero in taxes

Corporations are taxes, and the top 10% are paying nearly 80% of all income tax they should have a voice or we have taxations without representation. And that we fought a revolution over. Now eliminate corporate taxes, and they would have no reason to have a voice

Unless you get control of energy, food, and healthcare costs the poor and middle class swill never again have disposable income Professor Robert and his party are the reason for these rising costs

He is running on socialism, which is exactly what the Russians have.

he is advocating for economic change that has been proven to fail and is using deception to try and sell it.

[zelmo1234]

I don't think that we are going to get our friend Green to engage on this.

We will have to agree to disagree on what the truth is!

[Peter1469]

I disagree with the 5th dot; budgets are not squeezed. The US is taking in record tax revenues. At the current rate of spending, we could seize all of the assets of the rich and run the government for about 8 months.

[Chris]

I have to agree with zelmo, Reich gets the economics wrong in seeing the economy as static and set, a pie, instead dynamic and growing. That misunderstanding permeates his points with the notion wealth is something that is competed for and moves from class to class, is not being moved well or fast enough, and, at least by implication, needs by government to be redistributed. While not as obvious he makes the converse error that government is something to dynamically grow without taking it away from the people.

I agree with Reich the rich are getting too rich but he doesn't go far enough beyond criticising the clout of the rich to see and criticize that this happens because of and through government.

So if you're a progressive, a socialist, or social democrat, you will like the book, and in that the book succeeds.

[Bob]

This is off-topic.

Budgets of the USA are off topic?

Reich the economist and budgets are off topic?

[Green Arrow]

Budgets of the USA are off topic?

Reich the economist and budgets are off topic?

The topic is Reich's book.

[Bob]

Question is, are you going to show how he's wrong? My guess is no (but I cheated and read the whole post before I responded)



Certainly, and that's a bad thing.



If you read what he says, you'll notice that he mocked the idea that we were in a recovery. He called it "anemic" and "so-called."



No, it shouldn't say that, because it's absurd. Those at the top have always had a voice. Carter was our poorest President, and even he was a 1%er. Now they get even more of a voice than they already had, and more of a voice than anyone has. Corporations should not be able to pump ridiculous amounts of money into our political process. Neither should unions, and nobody should be able to donate more than anyone else.

For all your fearmongering about Russia, I'm rather surprised that you want us to have the same oligarchic system they have.



That's bullcrap. It's been proven that most big corporations actually pay a negative tax (http://www.usatoday.com/story/money/business/2013/10/23/big-companies-pay-no-taxes/2480281/), which means they are making money to not pay taxes. What it really is, is the fringe rich/upper middle class that are paying the vast majority of the nation's tax burden. Big corporations are getting just as much of a free ride as the 47% you guys like to bring up all the time.



No, we're SPENDING half a trillion more dollars, but that's not the budget because we have no budget.



The problem Reich has (and I agree with) is that government spending isn't going to save the economy, only the poor and middle class spending can save the economy, and for the aforementioned reasons, that's not happening.



He's running on ideas. You don't want people running on ideas, you just want them running on your ideas.



Something you still have not shown beyond personal opinion.
How Reich is wrong you ask? Look, to me nothing he said that I care to argue about has that much truth to it, not when the topic is the USA economy and why it failed.
Dot 1 he rants about where the money went. I know where it went. I also know the money supply is balanced upwards by the Feds upon needs of the economy.

Dot 2 he rants about the slow recovery. Well doh. We know it is slow. And it has nothing to do with wealth headed up. This is what people say who do not understand money, velocity of money nor the term money for that matter. The middle class and poor class certainly lack the money or the economy would be wild. Thus far his points don't point to a solution.
Dot 3. He is off into politics. I pass. Why, I smell that he is about to blame the rich.
Dot 4. Bingo, the old saw blame Corporations. This is one of the things that Reich pulls that disgusts me. Who supports the Feds more than the rich and corporations? Nobody. 47 percent of the public escapes income taxes. Talk about a massive tax break. I bitch from time to time about AMD who produce alcohol used as motor fuels. Still the boys in DC enjoy paying them 50 cents per gallon. Forcing me to use it though I get far better economy on pure gasoline. I kept track of my fuel economy in many states and found that Wyoming gets me the best fuel economy.

It seems to me this is a gimmick to tax the rich more which no doubt will leave them plenty of cash to expand business. :rollseyes:

Dot 5 does not improve the cash flow of the middle class nor the poor. Most workers largest bills are a home payment, food and fuel. What it amounts to is this example. Suppose zelmo1234 would mail to each tenant a cash amount of $200 per month to improve the economy. Persuade him.

Dot 6. Yes we are working for fewer jobs. I have explained this more than ten times. Robots. I told people to memorize who replaces them. Maybe 1 robot replaces 3 workers. What happened to the two workers? Even common computers replace people. Take when one wants a tax service. The old days they ran to HR Block and now they simply click a key and they get all the tax advice they can want. How many humans lost a job in the offices?

We use a system daily that costs jobs.
Dot 7 is more of his politics.

I suggest the following happen.
1. Study capital formation
2. Study cash flow, including a full understanding of velocity of money. This one thing will show you the how and why taxes do as they do. The higher the velocity of money, the more revenue to the Feds. When Clinton had his cash rush due to the dot.coms, he got a lot more revenue. That and that is why the alleged surplus happened. More than politics, it was sheer luck. When it collapsed, it did during Bush so he got caught with a recession. Which he fixed. Bush understood economics where Obama is still in the dark. Want to know why I know?

Listen to Obama talk. He simply will not discuss economics as he should discuss it. Bush did talk economics. Bush actually worked his ass off trying to prevent the housing crash. Obama had no clue it could happen. See his speeches when he was a senator.

[Bob]

The topic is Reich's book.

Then why did you include your states politics?

[Bob]

I have to agree with zelmo, Reich gets the economics wrong in seeing the economy as static and set, a pie, instead dynamic and growing. That misunderstanding permeates his points with the notion wealth is something that is competed for and moves from class to class, is not being moved well or fast enough, and, at least by implication, needs by government to be redistributed. While not as obvious he makes the converse error that government is something to dynamically grow without taking it away from the people.

I agree with Reich the rich are getting too rich but he doesn't go far enough beyond criticising the clout of the rich to see and criticize that this happens because of and through government.

So if you're a progressive, a socialist, or social democrat, you will like the book, and in that the book succeeds.

I on the other hand don't care how much money the rich earn.

If they bank it, I will use it.

If they spend it, I will work and make that income.

If they use it for education, I will be educated.

I still wish on the forum other than zelmo1234 who happens to be supremely financially smart, there would be some sign the rest of the posters would be maturing on economics. We have lawyers who can talk law. But why is there such a piss poor understanding of economics?

A lot of the wealthy will discuss compound interest. This is a serious topic. ROI is one more important topic. Most have no idea what ROI even means. Wage earners can live and retire and not have clue one what I am talking about.

Along with compound interest, a topic that must be understood, and this is velocity of money. I enjoy that topic.

What i am talking about is explained best this way.

Say you are a taxpayer. And you pay each turn of the merry go round. And if you can find out a way to spin the merry go round faster, you collect more revenue.

So, the idea is that as the economy moves faster, as it did for Bush, he got more revenue with lower taxes.

If you collect 2 dollar per spin, and you spin one time per hour, you net 2 dollars. If you spin 5 times per hour, you get a multiple. So if taxes were 2 dollars and now are 1 dollar, the 5 times spin will net you 5 dollars. Thus this explains how Bush dropped taxes yet netted more per year. So did Reagan using this system. Some will of course tell me to spin it 5 times at $2 per spin and collect ten dollars not 5 dollars. If only it worked that way. What happens is people won't take the ride. You don't gain, you lose the 2 dollars you had been getting.

When Obama drove up fuel prices (his speeches did it) what he did was slow down the economy. Workers paying $20 per week for fuel suddenly paid up to $100 for fuel. Clearly this hurt them.

Key is to make sure you spin the economy in a way to keep it spinning. Paving a country road pays a brief wage. But it is a terrible long term way to make an income. Those workers are guaranteed short term employment when they need long term employment. We know very well what produces a reliable long term income. I wish Obama knew.

[Green Arrow]

Part One: The Rigged Game

Section: Free Enterprise On Trial

Reich introduced the first section of Part One as follows:


The presidential candidate Mitt Romney said free enterprise is on trial. He's right, but it's not on trial in the way he assumed. The attack on it is not coming from the left. It's coming from the grass roots of America - right, left, and center. And it's been triggered by an overwhelming consensus that Wall Street, big corporations, and the very wealthy have rigged it to their benefit. Increasingly, the rewards have gone to the top, while the risks have been borne by middle- and lower-income people. At the same time, the very wealthy are getting a greater share of total income than they did at any point in the last eighty years. Their tax rates are lower than they've been in a generation. Republicans want us to believe that the central issue is the size of government, but the real issue is whom government is for. Public institutions are deteriorating. We're saddled by the most anemic recovery from the worst economy since World War II, while the basic bargain linking pay to productivity continues to come apart.

I'm reading this section now and will post the relevant quotations later.

[Green Arrow]

I don't think that we are going to get our friend Green to engage on this.

We will have to agree to disagree on what the truth is!

I was at work, but you're right. I've said my piece, and to say anything else would be to repeat myself. I gave you a link showing that over 50 corporations are either paying no taxes at all or are getting paid to not pay taxes (negative tax). You ignored the link and repeated your (now proven false) statement that they pay higher taxes than anyone. That tells me that you're not interested in debate, but are only interested in preaching.

[zelmo1234]

Part One: The Rigged Game

Section: Free Enterprise On Trial

Reich introduced the first section of Part One as follows:



I'm reading this section now and will post the relevant quotations later.

This is another false assumption.

The economy is experiencing stagnation, because of the size and scope of government and it is precisely those policies that have decreased the buying power of the poor and middle class, creating the fire sale for the wealthy

[zelmo1234]

I was at work, but you're right. I've said my piece, and to say anything else would be to repeat myself. I gave you a link showing that over 50 corporations are either paying no taxes at all or are getting paid to not pay taxes (negative tax). You ignored the link and repeated your (now proven false) statement that they pay higher taxes than anyone. That tells me that you're not interested in debate, but are only interested in preaching.

Absolutely not, I am sure that if you really look into it, there are a lot more than 50 that will pay not taxes. My distribution business will likely pay no taxes this year, and we are having a fantastic year? So how can this be. Well we are expanding the warehouse, we purchased a new fleet, and are installing a computerized conveyer system in preparation for the mandates of the ACA to kick in.

We are also installing a new computer system, with many automated ordering features that allow the dealer network, to have real time access to information and order status without the constraints of our business hours or having to talk to a person.

Remember the wonderful ACA makes it so I can only have 49 total employee's or I will have to provide a system that would bankrupt the company!

So even though we are having a great year, it is highly likely that at the end of the your, with the investments made, the company will actually lose money. Thus I will pay NO taxes.

You see we have to cut workers,

[Green Arrow]

This is another false assumption.

The economy is experiencing stagnation, because of the size and scope of government and it is precisely those policies that have decreased the buying power of the poor and middle class, creating the fire sale for the wealthy

You know, if you'd wait for the explanation of the introductory paragraphs, you might actually find something you agree with. As it is, you're arguing with INTRODUCTIONS. You haven't even bothered to wait for the real meat of the book.

[zelmo1234]

You know, if you'd wait for the explanation of the introductory paragraphs, you might actually find something you agree with. As it is, you're arguing with INTRODUCTIONS. You haven't even bothered to wait for the real meat of the book.

You said that you would be posting relevant quotations, So I assume that you are posting the meat of the book.

I am sorry if I have mad the wrong assumption

So far what you have posted is a line of talking points often used by the DNC Professor Robert is a socialist, so you are likely to agree with his statements and I am not likely to find them to be what I believe to be the truth

His solutions are likely to involve the government, while I am of the belief that the Government is the problem, the reason that the top percentage is doing so will is directly because of some of the policies that he thus far has been advocating. I know I have benefited form them. With the free trade agreements signed by President Clinton and GWB, it has created a global economy

Corporate taxes can not be compared to what they once were, but must be compared to what is happening now in the world. So if the effective tax rate of all corporations in the USA is over 13% and we already agree that some corporations do not pay taxes, though we disagree as to why that is, then the rate of those being taxes is much higher than 13% is it not!

And if I, as a business owner and especially a manufacture can move my corporation to a country that has lower corporate taxes or no corporate taxes, then of course I can add that to the bottom line of the company.

Now if I am making a product that is price sensitive. like shoes for example and my competitor is taking advantage of adding that 13% to the bottom line? Well I am almost forced to take actions to do the same.

This is a huge hit to the revenues of government and the economy, as not only do you lose the corporate taxes, but the wages of the workers either decrease or disappear, their buying power is decreased, thus causing more people to be downsized city and state governments receive less in revenue and now require a federal subsidy or bail out!

All because people like Professor Robert believe in the social justice of a high corporate tax rate

[Green Arrow]

You said that you would be posting relevant quotations, So I assume that you are posting the meat of the book.

I am sorry if I have mad the wrong assumption

I'm posting relevant quotations that explain sections I am reading. So far, I've clearly notated that I've only quoted from the introductions.


So far what you have posted is a line of talking points often used by the DNC Professor Robert is a socialist, so you are likely to agree with his statements and I am not likely to find them to be what I believe to be the truth

His solutions are likely to involve the government, while I am of the belief that the Government is the problem, the reason that the top percentage is doing so will is directly because of some of the policies that he thus far has been advocating. I know I have benefited form them. With the free trade agreements signed by President Clinton and GWB, it has created a global economy

Corporate taxes can not be compared to what they once were, but must be compared to what is happening now in the world. So if the effective tax rate of all corporations in the USA is over 13% and we already agree that some corporations do not pay taxes, though we disagree as to why that is, then the rate of those being taxes is much higher than 13% is it not!

And if I, as a business owner and especially a manufacture can move my corporation to a country that has lower corporate taxes or no corporate taxes, then of course I can add that to the bottom line of the company.

Now if I am making a product that is price sensitive. like shoes for example and my competitor is taking advantage of adding that 13% to the bottom line? Well I am almost forced to take actions to do the same.

This is a huge hit to the revenues of government and the economy, as not only do you lose the corporate taxes, but the wages of the workers either decrease or disappear, their buying power is decreased, thus causing more people to be downsized city and state governments receive less in revenue and now require a federal subsidy or bail out!

All because people like Professor Robert believe in the social justice of a high corporate tax rate

Well, we shall find out. Part One explains why he thinks the game is becoming rigged against average, working Americans and for wealthy plutocrats. In Part Two, he addresses the rise of his critics on the right and where he believes their views will take us. In Part Three, he explains his own solutions.

[zelmo1234]

Green you are likely to agree with his solutions, I am likely to see them as the problem.

So far his accusations are based on false information or should I say perceptions. As long as the left things that the massive off shoring of jobs is do only to greed, then we will not be able to stop this practice. As long as the left cry's about the buying power of the poor and middle class but doesn't nothing to alleviate the cost of energy, food and commodities, as well as their policies that cause the value of the dollar to decrease. we can't fix the problem.

Professor Robert is and has been a socialist for a long time. You are going to love his solutions, but unless you create protection against off shoring, they will only bring more of the same. His policies are trying to fill a bath tub by adding more water, but refusing to plug the hole in the bottom, If you add enough water, (stimulus) you can get it full for a short time, but when you shut the water off you are left with an empty tub

[Peter1469]

Reich is not talking about Capitalism here. He is talking about corporatism, or crony capitalism..., do you get the sense that he is sincere with this? Or it is just a straw man that is an easy win for him?

The second part of the argument is the old value of capital v. labor argument. The US lowered taxes on capital gains to encourage people to invest in the markets. Everyone thought that was smart. At least until the gains in capital increased so much higher than the increase in the value of labor (which can't drastically increase since it is more objective than subjective).


Part One: The Rigged Game

Section: Free Enterprise On Trial

Reich introduced the first section of Part One as follows:



I'm reading this section now and will post the relevant quotations later.

[Green Arrow]

Reich is not talking about Capitalism here. He is talking about corporatism, or crony capitalism..., do you get the sense that he is sincere with this? Or it is just a straw man that is an easy win for him?

I believe he is sincere, yes. I watched his documentary on Netflix, Inequality for All, and he called out million/billionaires on both sides that he believed were controlling the process (what Beyond Outrage is all about. I also had the pleasure of meeting him once, when I still lived in Cali, and he did not seem like a deceptive guy. I think he genuinely believes in what he espouses, and that it is the best solution that helps the most people.


The second part of the argument is the old value of capital v. labor argument. The US lowered taxes on capital gains to encourage people to invest in the markets. Everyone thought that was smart. At least until the gains in capital increased so much higher than the increase in the value of labor (which can't drastically increase since it is more objective than subjective).

You lost me :tongue: I'm more of a theorist when it comes to economics, preferring to deal in philosophy (which I can handle fluently) than in hard economic data (which is like Greek to me :tongue:) :tongue:

[Peter1469]

I believe he is sincere, yes. I watched his documentary on Netflix, Inequality for All, and he called out million/billionaires on both sides that he believed were controlling the process (what Beyond Outrage is all about. I also had the pleasure of meeting him once, when I still lived in Cali, and he did not seem like a deceptive guy. I think he genuinely believes in what he espouses, and that it is the best solution that helps the most people.



You lost me :tongue: I'm more of a theorist when it comes to economics, preferring to deal in philosophy (which I can handle fluently) than in hard economic data (which is like Greek to me :tongue:) :tongue:

Capital - I mean the money made off investments.
Labor - the money made with work. Hourly or salary.

Many claim that the income inequality problem is caused by capital earning much more money than labor. Or perhaps that the tax rates on capital are much less than on labor (at least for long term capital gains).

[Chris]

Reich's version of cronyism puts the onus of the problem only on business and not on government.

[Green Arrow]

Reich's version of cronyism puts the onus of the problem only on business and not on government.

I have yet to see that in his documentaries and books.

[Green Arrow]

Capital - I mean the money made off investments.
Labor - the money made with work. Hourly or salary.

Many claim that the income inequality problem is caused by capital earning much more money than labor. Or perhaps that the tax rates on capital are much less than on labor (at least for long term capital gains).

What do you think it is?

[Chris]

I have yet to see that in his documentaries and books.

I have yet to see him blame government. When he connects dots he connects riches going to the top to economic downturn followed by power going to the top not in terms of government but again corporation gaining influence.

Naturally he can't criticize the government he expects to fix everything. The only thing he really says about government is its budget is being squeezed.

[Peter1469]

What do you think it is?

I think the concept of lower taxes on long term capital gains is a smart move if we want to have people invest in the markets. I don't have a problem with it.

[Bob]

Green you are likely to agree with his solutions, I am likely to see them as the problem.

So far his accusations are based on false information or should I say perceptions. As long as the left things that the massive off shoring of jobs is do only to greed, then we will not be able to stop this practice. As long as the left cry's about the buying power of the poor and middle class but doesn't nothing to alleviate the cost of energy, food and commodities, as well as their policies that cause the value of the dollar to decrease. we can't fix the problem.

Professor Robert is and has been a socialist for a long time. You are going to love his solutions, but unless you create protection against off shoring, they will only bring more of the same. His policies are trying to fill a bath tub by adding more water, but refusing to plug the hole in the bottom, If you add enough water, (stimulus) you can get it full for a short time, but when you shut the water off you are left with an empty tub

The term "Greed" should be reserved for the few times it is in context with reality.

The man had ten thousand dollars in his pocket and saw the child with a scoop of ice cream. In a fit of greed, he took the boys food. That is GREED.

But in general, one advances by providing to the public some goods or services they value. If you are a CPA, your value will be your knowledge. Same with a teacher.

So, which is paid more income? Which is greedy should they earn more than the other person?

Is Oprah Winfrey Greedy because she can earn $450 million dollars anually?

Has she depleted the available amount of cash when she earns $450 million? Is somebody getting a raw deal when she earns that much cash?

The answer is found in economics 101.

Companies are rushing to off shore today. The tide is not reversing. This is a signal to business that the government policies are terrible. Not that companies are greedy. Companies off shore as a defense. They have a duty to the owners. I compare Reich to the man who takes a pan of water from the shallow end of the pool and dumps it into the deep end with the idea he just improved the level of water (economy)
@zelmo1234 (http://thepoliticalforums.com/member.php?u=588) once again gives a splendid account of how things really do work.

A bit on Reich. For a man as famous as he is, his net worth is very low. However would he appreciate being called greedy.
http://www.celebritynetworth.com/richest-politicians/democrats/robert-reich-net-worth/ (About 4 million dollars)

[Bob]

Absolutely not, I am sure that if you really look into it, there are a lot more than 50 that will pay not taxes. My distribution business will likely pay no taxes this year, and we are having a fantastic year? So how can this be. Well we are expanding the warehouse, we purchased a new fleet, and are installing a computerized conveyer system in preparation for the mandates of the ACA to kick in.

We are also installing a new computer system, with many automated ordering features that allow the dealer network, to have real time access to information and order status without the constraints of our business hours or having to talk to a person.

Remember the wonderful ACA makes it so I can only have 49 total employee's or I will have to provide a system that would bankrupt the company!

So even though we are having a great year, it is highly likely that at the end of the your, with the investments made, the company will actually lose money. Thus I will pay NO taxes.

You see we have to cut workers,

And that is how the system should work.

[Bob]

http://thepoliticalforums.com/images/misc/quote_icon.png Originally Posted by Bob http://thepoliticalforums.com/images/buttons/viewpost-right.png (http://thepoliticalforums.com/showthread.php?p=693102#post693102)
My question is do you intend to show how he is right? He was brought here by you and you claim he is correct. Let your proofs start.

I gave two links that show he is wrong.

Let me take housing as a start since it was this part of the economy that is deemed to be the first domino.

Housing collapsed mostly due to Government interference. Not by Bush, but by laws. First was the ill conceived ruling in a TX court case that ordered blacks (by group) to get loans they were not qualified for.

When you force the banks to loan to those not qualified, and it is law, you distort the market. Why hedge funds? To make up for the distortions in the market. Banks needed and wanted insurance. All a hedge fund amounts to is insurance. AIG got into trouble covering hedge funds. Banks got into trouble when those poor credit rated people flooded the market and stopped making payments. I also blame fuel costs for the first event of that crash. A lot of the poor did not live close to jobs. They commuted to jobs and when fuel costs skyrocketed, during Bush, they had to find money to both pay for fuel and payments on the home. A former homeless person must realize how fuel and home payments keep you homeless.



You did not explain how your links proved him wrong. What statement of his that I quoted is proven wrong by your links?

And I already provided a link proving his point.

Actually had you closely reviewed my links, it is obvious they prove he is wrong. Follow the links as I did and you won't need me to explain it to you. If you get stumped, ask me. Let me try this. He blames the rich. My links blame the system.

I took his points, each at a time and put them to rest.