You Cannot Build Up By Tearing Down
by David Trumbull -- March 4, 2011
A friend from Andover recently sent me a Huffington Post essay written by Cambridge’s Robert Reich. I read things from Professor Reich from time to time and always end up at the same conclusion: Reich is smart and perceptive; he has a knack for finding a neglected truth that, once put into writing, seems so self-evident that you can’t believe you missed it; but at the end he falters and falls into old left clichés, debunked Keynesian economics, and 1930s Socialist cant.
Reich in this piece “The Republican Shakedown” accuses Republicans of being tools for the rich, hoodwinking middle-class Americans (in the largely non-unionized private sector) into thinking that government and unions in the public sector are the cause of our economic stagnation under President Obama. Implied is a “divide and conquer” theory of domination of the system by they rich and powerful.
Certainly, I agree that setting one part of the middle class (private sector) against another (public sector) is not good for either. In the past we Americans had leaders, such as Ronald Reagan, who (quoting William John Henry Boetcker (1873–1962)) proclaimed: “You cannot lift the wage earner by pulling down the wage payer.” To which I add: you cannot raise up private-sector workers by tearing down public-sector workers. And, from the article, it appears that Professor Reich agrees, so far.
However, this is exactly where Reich, who is so perceptive up to this point, goes on autopilot and lapses into socialist canards. His solution is not to stop trying to better yourself by tearing down someone better off, rather his answer is to tear down someone even better off. Aside from the question of whether “soaking the rich” is sound policy economically or ethically, Reich’s flawed conclusion—we need substantial tax increases on the rich—is absolutely refuted by his argument. On the one hand he says the problem is that the rich have distorted and broken the system. On the other hand he says the answer is higher taxes on the rich. But if the rich have the inordinate influence he says, then won’t they simply use it to corrupt the tax code in their favor?
The answer is not to tear down the rich but to build up the middle class. To do that we need to rebuild our manufacturing economy, and to do that we need to press the “reset” button on our trade policy and reject the free trade agreements with Communist Vietnam that President Obama is pursuing. We also need to embrace a trade policy which includes provisions to offset the value added taxes of our trading partners and a tariff that compensates for some trading partners’ illegal currency manipulation. Rather than Professor Reich’s “shakedown” what we need is a SHAKE-UP in Washington, and the Republicans may be the only ones who can do it.