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Robert Reich is Clueless

The opinions expressed by columnists are their own and do not necessarily represent the views of Townhall.com.

You may remember Robert Reich -- he served as Secretary of Labor during Bill Clinton’s first term. Mr. Reich has fashioned himself as an economist since he left that lofty federal post, and he frequently leads the argument for positions on the left wing of the Democratic Party while attempting to present himself as a man of reason. He has once more pontificated the left-wing position on the problems of our stagnant economy and thereby shows how lost the left continues to be regarding a free-market economy.

Reich is certainly a smart man, a very educated man and a very accomplished man. Having said that, he could still very well have blind spots. Reich has taken the lead in arguing for another round of stimulus money. This position is without regard to the fact that half of the original funds have not been spent and that it appears Joe Biden will be spending the summer buying votes for Democrats throughout the country by toting how the stimulus money is creating jobs in local districts.

It is in the pages of The Huffington Post that Mr. Reich has returned to once again argue his case. He asserts that because of a combined lack of consumer and business spending, the only solution to continue growing the economy is for the government to spend more money it does not have and thereby eliminate any chance of a double dip recession. He makes the constructive argument for people who believe government is the answer on most if not all occasions.

For example, Mr. Reich could have read Arthur Laffer’s recent piece in the Wall Street Journal forecasting a double dip recession because of the significant tax increases coming in 2011 after the Bush tax cuts expire. Laffer stated that 2010 looks better because people are creating income this year to avoid the steep tax increases coming after the end of the year. He reflects on the mistake made in 1982 by the Reagan Administration (of which Laffer was a part) for postponing tax cuts until 1983. This caused people to forestall income-generating activity in 1982, deepening an existing recession until the tax cuts went into effect.

If Mr. Reich thinks reading the opinion page of the Wall Street Journal is too out there for his left-wing brain, he could alternatively read the pages of the New York Times with their recent article stating why loans to small businesses are not gaining momentum. He would come to realize that banks have no confidence that these businesses are strong enough to be creditworthy. More importantly, he would also learn that many small businesses are hesitant to take on any debt for expansion because of the uncertainty of taxes and other government regulation.

Mr. Reich could also read how the Business Roundtable, a group of big businesses that has been mostly favorable toward President Obama that has broken with him because of a series of policy moves which they find hostile toward job creation. The troubling policies cited include stalled free trade agreements, restrictions on drilling, end to secret ballots in union elections, increased taxes on foreign earnings, expanded damages for pay discrimination and EPA regulation of greenhouse gases. They claim the Administration exhibits through these policies and other moves an anti-business atmosphere that has put a chill on expansion of United States operations.

Or he could just pay attention to the political landscape in the country. People are highly concerned about the level of debt being created by the various governmental levels. Reich would have to consider the political furor to be borne from ignorance in order to come to the conclusion that more governmental debt is the only solution to our economic woes. But that would be counterintuitive as even if you felt the hordes of dismayed individuals to be totally ignorant, you would still have to accept that their perceptions have had a chilling effect on the economy and job growth and thus tax revenues. Throwing more debt on the pile will just cause an even greater reaction with an even further stall of private sector activity.

Mr. Reich is not the only egghead on the left who endorses further governmental recklessness. Paul Krugman has expressed similar thoughts in his column for the New York Times. Certainly they provide each other comfort. In turn, the Obama Administration is encouraged and offers more debt-based expenditures like the $50 billion gift to the states to keep union employees for their governments off the unemployment lines and states from facing the reckoning of their long-term financial malfeasance.

The private sector will create the necessary level of jobs to bring the unemployment level down to a historical level of full employment when one of two things happens: Either Obama stops listening to people like Reich and reverses his anti-business policies hindering job growth, or we wait until January 20, 2013 to inaugurate president #45.

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