Robert Reich: Who You Calling a Liar?

Robert Reich begins his recent column, "The Republicans' Big Lies About Jobs (And Why Obama Must Repudiate Them)," with a quote from George Orwell's novel, 1984: "And if all others accepted the lie which the party imposed -- if all records told the same tale -- then the lie passed into history and became the truth."

The reader might deduce from Reich's headline and from his opening quote that lying is the subject at hand. And indeed, Reich then quotes what he calls a "whopper" from House Majority Leader Eric Cantor: "Cutting the federal deficit will create jobs."

Reich responds: "It's not true. Cutting the deficit will create fewer jobs."

Now this is passing strange. You see, Reich was the Secretary of Labor in the Clinton administration, and he has repeatedly touted Clinton's record of creating tens of millions of jobs during the 1990s. But Reich doesn't seem to recall that the deficit came down dramatically each year during Clinton's tenure, from a -$290 billion deficit in 1992 to a +$236 billion surplus in 2000, the largest surplus ever (Table 1.1).

Maybe Reich thinks that the gangbusters job creation during this era of deficit reduction is some fluke. Or perhaps Reich thinks that there would have been even more job creation in the 1990s had deficits risen. But I would wager that Reich's trouble in remembering this "anomaly" is due to the fact that it doesn't fit with his theory.

This same relation between deficit reduction and job creation can be seen from 2004 through 2007, when deficits fell by $252 billion. You know, maybe Reich's problem is that the last two periods of significant deficit reduction coincided with Republican control of both Congress and the budget. Maybe our Orwellian rewriter of history is none other than our old buddy Robert Reich.

Reich asserts: "Less government spending reduces overall demand."

This also is odd, as government has been spending as never before, and yet we have this "demand problem." Reich has been droning on about lagging "demand" for months while government has been spending like there's no tomorrow. (I demand that Reich rethink his position on "demand.") But Reich drones on:

"Cutting taxes on the rich creates jobs." Nope. Trickle-down economics has been tried for thirty years and hasn't worked. After George W. Bush cut taxes on the rich, far fewer jobs were created than after Bill Clinton raised them in the 1990s.

This is just lazy, as Reich's thirty years includes the Clinton era that Reich touts. In fact, "trickle-down economics" worked for Clinton, as Clinton practiced Reaganomics more than Reagan did. And Reich conveniently forgets about Clinton's tax rate cuts.

What we have here is a fundamental disagreement about what is the bigger threat to America: a dearth of jobs or out-of-control government deficits. For the man without a job, the bigger problem is jobs. But the size of our cumulative government deficits has gotten to the point where it threaten to take down the economy, the currency, America's preeminence in the world, and maybe everyone's job.

In deciding which is the bigger threat to America, consider that the unemployed make up only a tiny part of the workforce. Although economists don't put a precise number on it, a 5 percent unemployment rate is considered full employment. (Unemployment, by the way, got below 5 percent in each of the two periods of deficit reduction cited above; so much for Reich's theory.) During the Great Recession, unemployment topped out at just above 10 percent and receded back to 8.8 percent. So all this debt Reich expects the American people to gladly accept is for sake of about 5 percent of us.

Indeed, the top-to-bottom restructuring of America is being conducted for the few. Most Americans have jobs, health insurance and aren't in foreclosure nor bankruptcy. But we are racking up unimaginable debt, consigning future generations to tax slavery, changing the America we knew, and turning this nation inside out, all for a 5 percent minority.

And we're doing all this without really addressing the problem of how to create jobs.

Reich has never created a job; he's spent his career in government and academia. Reich thinks that merely putting money in people's hands will goose the magic multiplier effect and jobs will be created. But what America needs are entrepreneurs, venture capitalists and risk-takers to start up new industry.

As for liars, damn liars and statisticians: Calling one's ideological opponents "liars" is pathetic, and it's beneath Mr. Reich. But what's worse is when big-city newspapers run such propaganda on their op-ed pages -- especially when it's easily refuted.

Jon N. Hall is a programmer/analyst from Kansas City.
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