Screwball economic reasoning
With Bernie Sanders running as a self-identified “democratic socialist,” Hillary Clinton proclaiming “I am a progressive” and Donald Trump apparently competing for the title of the world's most narcissistic capitalist, a recent poll by the American Action Forum of likely Democrat voters shows 47 percent of those surveyed found “socialism” and “communism” to be either “favorable” or “very favorable.” Additionally, Americans under 45 say they favor socialism over capitalism by 46 to 19 percent.
It's time to look at how our economic thinking has gone so far off track.
A good place to start is with Robert B. Reich, former secretary of Labor in the Clinton administration, a professor of public policy at the University of California at Berkeley and a member of President Obama's economic transition advisory board.
Two weeks prior to the first inauguration of Barack Obama, Reich delivered a speech to the House Democratic Steering and Policy Committee recommending an expanded stimulus package of “$900 billion over two years.”
Insisting that the priority was to “get money out quickly” and plug the “huge holes in our safety nets,” Reich stated that the proposed jumps in infrastructure stimulus spending on roads, bridges, ports, levees, sewers and airports should be allocated via a planning model that favored more economic leveling by way of racial profiling.
“I am concerned, as I'm sure many of you are, that these jobs not simply go to high-skilled professionals or to white male construction workers,” said Reich. “I have nothing against white male construction workers,” but there are “other people who have needs as well.”
Reich argued his racial and group fairness case in more detail: “If construction jobs go mainly to white males who already dominate the construction trades, many people who need jobs the most — women, minorities and the poor — will be shut out.”
There was a bit of humility by Reich regarding centralization and the planned economic recovery: “Anyone who tells you they know exactly what to do doesn't know what they're talking about.”
In Reich's well-publicized worldview, it's group fairness that takes priority over individual achievement. “The American myth of the Triumphant Individual may have outlasted its time,” Reich has written. “The story of the little guy who works hard, takes risks, believes in himself and eventually earns wealth, fame and honor” is outmoded.
Instead, Reich has maintained that “we must begin to celebrate collective entrepreneurship.” Rather than heroic individualism, Reich has argued for a more benign world where central planners right the wrongs, determine production, distribute the rewards with “only modest differences in income” and knock the rough edges off anyone who doesn't demonstrate sufficient obedience to the collective.
Bottom line: “Success can be measured only in reference to collective results. We need to honor our teams more, our aggressive and maverick geniuses less,” said Reich
Hillary Clinton delivered a similar nugget of anti-capitalism and economic foolishness to loud applause at a Democrat political rally in Boston in 2014: “Don't let anyone tell you that it's corporations and businesses that create jobs.”
Ralph R. Reiland is an associate professor of economics at Robert Morris University and a local restaurateur (email@example.com).