Robert Reich's Economic Aftershock and the Political Science of Inequality (failing economy predicted from his advice comes true again)

Robert Reich's Economic Aftershock and the Political Science of Inequality Lex Loeb Contributor Network . Robert Reich ,President Clinton's Secretary of Labor and professor economics is back with a new book just in time for the election called "Aftershock". First of all it has to be noted that he is not giving the book away for free which you might expect from the premiere socialist economist after Paul Klugman who happens to have a Nobel prize awarded to him. The theme of inequality of wealth is being used by democrats to counter the tea party movement and the Republican because class warfare based on perceived inequality of wealth has long been an effective propaganda tool for democrats and socialists to gain or retain power. Reich claims in his book that research led him to the conclusion that a vast disparity of wealth in America led to the housing bubble and then to the bank and stock market crash that followed by what feels like an enduring lingering economic recession. Reich Claims that in both 1928 and 2007 a precursor to the market crisis and collapse was disparity of income. His ah ha moment is what he says is a peak in each of these years of the rich owning more of the wealth of the country than should somehow be their fair share. Reich claims to know how to allocate capital better than the rich do and yet we just went though a major socialist biased stimulus spending program for about a trillion dollars and it actually did not do a whole lot to change the wealth disparity ratio. Some reports mainly coming out of socialist organization websites are saying that 20 percent of the richest Americans control over 84% of the nation's wealth. That sounds like amazing disparity and certainly a reason for higher taxes and class warfare right? It is not accurate. One report circulating is that 90% of American would prefer living in Swedish style socialism than under capitalism especially after learning that 20 percent control 84% of the nation's wealth! Wait one minute! Where do the figures come from? These figures are flawed because some of the wealthiest American own a lot of wealth that is not in the United States! Have you heard of Bill Gates and Phil Knight. They each have an extraordinary amount of wealth that gets tabulated under their name on the list but percentage is wealth that is not even in the USA. A Lot! Immediately when we consider that American Wealth of the very wealthiest people is multi-national then the total is no longer 84 percent but probably below 50%. The Average American like you and me, well we just don't have factories and facilities all over the world and it is rather difficult to understand how it is that we all should share in their ownership when it would not do us any good. What seems to be disproportionate wealth actually is much better being in private American hands than in public ownership. The problem we all see with China making direct investments in the US is disturbing to a lot of American Citizens more than having Chinese Businessmen having investments in the United States. The whole world would recent much more the US government owning economic producing assets in foreign countries than it already resents American private and corporate ownership. It would be perceived like one world socialist government if the US government owned and ran cola cola and Microsoft worldwide to somehow even up the wealth at home! Reich damn well knows that a good share of the disproportionate wealth inequality comes from foreign ownership. You you know how much of the Canadian economy is controlled by US financial / corporate interests. A lot and Reich does not explain how both the Canadian government and the US government can share all this wealth. Canadian interests own big productive properties in the US too. How then do we allocate the wealth to satisfy Reich? The question is really if the Swedes are really happy with Swedish Socialism. There is a big myth going on that All Swedish people have the same evened out wealth and access to their government as the richest among them. How many Americans have actually lived in Sweden? Not enough to know what it is really like in Stockholm. Stockholm is like the syndrome. Most Americans would make the move to Sweden and be out of there in a week or a couple of months once they realize that the big equality of wealth there is a sham. Not even American welfare recipients would want to stay in Sweden after fining out that they would be expected to work and might actually have a job assigned to them. The Super rich in Sweden are indistinguishable from American rich except that they tend not to keep their wealth in Sweden the way many Well to do American tend to keep the bulk of their money in the USA. Stockholm is a very lovely city at least on the outside. The common living quarters there are high priced cramped apartments that don't compare to what someone making a proportional amount of money in New York can afford. The Swedish rich have their villas in Spain and France and with taxes as they are are better off buying a fifth avenue property as an investment than bothering to be a sitting tax duck in Stockholm. As it happens some of the rich who own the American economy are are actually foreigners but their wealth should not make the economic disparity in the US worse. Their money coming to the US to buy up assets here puts money into circulation here not in Sweden. One of the biggest lies about Keynesian economic government stimulus is that is the only way to revive a collapsing economy. It is not. Lower taxes and incentives for capital formation and investment that includes access foreign investors can bring in much more than a mere trillion dollars! Did you know that Hong Kong, Singapore , Some Caribbean Islands, The Isle of Man in Great Britain and Swiss banks maybe holding more than 6 trillion dollars of capital that is attempting to be hidden in those offshore banks to avoid big government taxation. It is not just American money squirreled away in those safe haven banks. No its money from well to do people all over the world and as much as 6 times more than the stimulus obama package we suffered. That kind of wealth can jump start a lot of economies across the globe. Sweden is pretty much in what most Americans would find to be a perma-recession compared to the frenzied economic activity they are used to here. Did you know that Swedish car manufacturing companies were in bad shape from union control long before GM and Chrysler were here. Volvo was once a part of Ford because Swedish capitalism was not exactly working as well as the myth says it does. Yes Sweden does have some amazing companies including Ikea and one that makes cell phones but do you think that wealth is really shared exactly as you have heard in the myths? A lot of Swedes would be happy to risk coming to the US because life there is like a feudal fiefdom for them. Everything is overly controlled by the Swedish government because the government socialism is mostly about allocating wealth to people who work for the government and there is not really any real work that the government needs to do so they confabulate stupid bureaucratic tasks to keep things looking like there is full employment. Everything is necessarily more honest in Sweden than in the US they watch each other and report to authorities. Some think the higher suicide rates among the Swedes is due to their boring over regulated existence and the over rated system of socialism they are Stockholm syndrome prisoners of. Robert Reich work is not just flawed because he fudges the numbers to show more massive inequality of wealth ownership than there is in the USA. Reich omits pertinent data about how to compare apples to apples and apples to oranges. China before the communist party embarrassed capitalism which we now see they are extremely successful with was more like a country like North Korea where 1% of the richest people in North Korea owned 99% of the financial assets of the country. The wealth disparity in China might now even be worse than what ever the US is because about 200 million Chinese control most of the wealth of the country out of 1 billion people. Almost 200 million now live almost as well as middle class Americans or Japanese people but the rest work for less than $6 a day. China has vastly improved for everyone with American style capitalism and it does not matter how you calculate the inequality. Socialism had worse inequality than the capitalist experiment there. There is hardly anyone worse off in China except for landowners who were forced by the communist party to give up their property to communist party officials to help get their economic ball rolling. Not only does Reich operate with false facts and figures he skews them to make his story sound reasonable. Some other examples of where Reich completely fabricates his evidence are Russia, Argentina and France after Napoleon. Communism dies in Russia as the Soviet Union Collapses. Who comes out owning most of the wealth of the country? A plutocracy. The wealthier the plutocracy becomes the wealthier the country becomes and the distribution of wealth disparity in Russia is worse than in the USA. When you could not buy eggs in communist Russia without standing in a line for two days I guess Reich thinks that is a great improvement over Russia with American size supermarkets today that are not just for the communist party members. Argentina...it was one of the wealthiest countries in the world before the socialist Peronists took over! A similar mess can be seen in Venezuela today. Wealth was very concentrated in Prue socialist Argentina and the country was among the wealthiest on earth after the socialists came to power Argentina became an economic basket case. Milton Friedman's students went to Chile and helped them move away from socialism and Chile is a great economic miracle compared to Argentina where everyone who is not a big honcho government official is equal and poorer than in nearby Chile! Argentina has immense resources just languishing in economic despair for all their years of socialism . Try naming one multi national corporation from Argentina and you probably can't but Brazil with much more free wheeling capitalism does have some you will know about or already do! Cuba--Basket Case of socialism where the rich party officials live in Miami style condos with air conditioning and shop in American style super markets not open to the rest of the people there who live with the windows open in buildings that are Prue colonial and have never been fixed since the revolution and all they get to eat is beans and rice. The Robert Reich Diet? That would be an aftershock to go down the socialist pathway he wants to lead us down with his Berkeley Elitists allocating all the wealth as they feel best in their hearts is for the benefit of all. Anyone who has ever lived on an American Indian Reservation might already be used to Swedish Style socialism and not even know it yet. Most Americans finding they were suddenly living on a socialist reservation of their own would be as in shock as most tea party members are with Obama! Reich then blasts all forms of American productivity that has made it number one on earth including women in the workplace. He says it by necessity. I know too many families where both the husband and wife work and i know they do tend to live in bigger homes than the ones where the husband only works. Lots of American families have $80,000 incomes and this is because both husband and wife work. The real reason $80,000 has lost purchasing power is because of what Reich does not want to tell you is the cause--spending on big government that causes inflation. The only reason Americans have trouble seeming to loose purchasing power is government and this is mostly due to inflation. Reich says that speculation in investments is caused by the rich essentially having too much money. The fact of the matter is that government speculates too. Government spends trillions on a war in Iran and Afghanistan as one example. By the end of the war over 6 trillion dollars may have been spent on both wars and by then the war with Iran will begin for another 4 trillion dollars of spending. You don't need to be Ron Paul to see that that is a form of speculation worse than investors investing in the next Goggle or drug company that may help to cure cancer. Governments gone crazy with the money printing presses are the only reason so many people worldwide are speculating on the price of Gold pushing it up and up and up beyond sanity. So not only does government speculate....as it did with the costly failed war on drugs, wars on poverty , war for public housing projects where all the units eventually get torn town, it causes people to speculate because it is speculating. Reich does not want you to know that all he wants you to do is think of the horror of 84% of the wealth of the country, including more than 20% of the world assets, being owned by 20 percent of Americans as if that is a reason for a class war. Somehow the government he has in mind is run by some guy like Bill Clinton who never speculates not even risks a liaison with Monica Lewinsky in the oval office. The US government spends more on gambling than anyone in Vegas on a daily basis and we can't even be sure how good the judgment of our leaders is in being in control of all that money for redistribution purposes. Reich credits labor unions being legalized by FDR for the biggest boom in American Wealth in its history and in the history of the world--but wait a single minute and look at China again in comparison. China starts with the ultimate labor union in control of everything and almost ends in a fiasco like the Soviet Union did. Labor unions cannot be credited for Chinese overall success because they did not. American Labor unions mostly thrive these days as public employee unions. Countless companies have gone under leaving no one with a job because of labor unions including airlines and almost general motors. General Mothers is now a zombie company and may very well be the living dead because it is not known yet if it can afford the union and the promised benefits to workers under the present government ownership which wants to lead investors to believe all problems are fixed when they are just masked over with a pretty propaganda picture. The entire US auto industry almost has become unsustainable under the weight of union contracts already. GM's success may hing on China trade more than on US Operations and by then it will have major Chinese ownership partners which subtracts and adds from the net wealth that Reich says is overly concentrated. I have seen nothing yet that union ownership of part of GM is necessarily making for union wage concessions and benefit concessions required to keep it out from a delayed bankruptcy. Reich's story is bad science. Just as bad as science of the so called great social scientist Karl Marx has proved to be. Marx was essentially a journalist and a science fiction writer because there is nothing scientific about anything he said about the necessity of socialism in curing all the world's social ills. Socialism created a bigger mess in Europe during the banking collapse than in the US. People don't even know what really happened. European bank were in worse shape thanks to socialism in Europe than the American counter parts. They came to rely on Fannie Mae and Freddie mac guarantee paper just because of the same illusion created by the US government for local consumption of full faith and credit paper the euro banks balance sheets were worse to begin with and soon after we saw the euro take a big hit too. Reich says that us banks are becoming too concentrated. That is because the government made them bigger instead of letting a few of them fail as maybe they should have! He talks about how bad this concentration is because it is more future too big to fail then before. It is true but his man in the Whitehouse had everything to do with the solution. And then reality dawns again. The concentration of the US banks is now more like Canada's has been. Reich and friends will tell you how great the Canadian banking system is or was not to get caught up in the banking crisis this last time around. So it is more BS where good is bad and bad is good and everything needs to be re-allocated by by people who spend most of their time getting elected or seizing power. Don't bother reading this stupid book Even if this great socialist economist gives you a copy for free which would be the way to do it will out any profit motive.... Read Milton Friedman's Free To Choose and Parkinson's Law instead. You never rely on the invisible hand of Adam Smith for anything so why would you rely on the visible hand of government to do better than you have already seen governments do? Go live in Sweden before you start to believe it is a better place to work or start a business than here in America. The perfect place to live is Lala land I believe they have a king and a royal family and maybe the nobility there are all unionized public employees? Putting profits over people is the big socialist class war fare cry that comes after the wealth disparity thing and then you get to live in a socialist country for a while and you find out that then you have governments that put profits over people. In oregon the socialists take over arts organizations and the amazing thing is the ticket prices are outrageously expensive. Bill Clinton Robert Reich's former employers makes over 100 thousand dollars for an event appearance that may or may not include giving a short speech and that is a prime example of how socialists get rich quicker. There is no disparity in that is there for Reich? I would have to pay over $100 to go hear Clinton come to speak at some event for socialists in Portland--now that is absurd wealth disparity. Certainly Clinton is not rich enough yet because the 30 million dollars he ammased after leaving office is not yet a billion dollars. . Close