Robert Reich: 3 biggest myths about the economy

Herewith the three biggest mythologies that prevent us from seeing what’s really happening to our political economy:


1. The “job creators” are CEOs, corporations, and the rich, whose taxes must be low in order to induce them to create more jobs. Rubbish. The real job creators are the vast middle class and the poor, whose spending induces businesses to create jobs. Which is why raising the minimum wage, extending overtime protection, enlarging the Earned Income Tax Credit, and reducing middle-class taxes are all necessary.

2. The critical choice is between the “free market” or “government.” Baloney. The free market doesn’t exist in nature. It’s created and enforced by government. And all the ongoing decisions about how it’s organized – what gets patent protection and for how long (the human genome?), who can declare bankruptcy (corporations? homeowners? student debtors?), what contracts are fraudulent (insider trading?) or coercive (predatory loans? mandatory arbitration?), and how much market power is excessive (Comcast and Time Warner?) – depend on government.

3. We should worry most about the size of government. Wrong. We should worry about who government is for. When big money from giant corporations and Wall Street inundate our politics, all decisions relating to #1 and #2 above become biased toward those at the top.

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(from my FB page)

I agree with the principles laid out here. It is a no-brainer that enriching and/or empowering the middle class provides the octane to drive out economy. When they prosper America prospers . . . .