Danny ChaiFreakonomics recently had a Q&A with former Labor Secretary Robert Reich, and I couldn’t believe how much I agreed with him. I almost violently agreed, if that’s possible. Some snippets:
But don’t get an M.B.A.! We have too many M.B.A.’s as it is, and they’re killing the economy!
Yes.
Republicans have been very good and very disciplined at framing policies in ways that average Americans find attractive. Democrats aren’t disciplined at anything; that’s why they’re Democrats.
Coming from a Democrat. And it’s true.
Q: What do you believe would really happen, if in a growing economy (such as the one we had under President Clinton), we left the rate be, and allowed the economy to grow large enough for say, 99 percent employment?
A: We’d have inflation.
This is one thing that bugged me about Dave, a movie I generally loved. But a central plot point is his jobs bill that promises to give a job to everyone in the country who wants one. I know barely any economics but even I know enough that that makes no sense. There has to be some unemployment so that we don’t have runaway inflation. Maybe that sounds cold, but that’s economics.
Q: Do you think that corporations should still hold a status similar to citizenship, but in a diminished form? If so, what would that form look like?
A: As I’ve argued in my latest book, Supercapitalism, corporations are not citizens and should not be treated as such. They’re contracts, pieces of paper. Hence, there should not be corporate criminal liability; corporations shouldn’t pay income taxes; corporations should have no right to sue the federal government; corporations should have no constitutional
rights.
Amen. I know nothing about law, but the concept of corporations being legal persons afforded certain constitutional rights like people is dumbfounding to me.
The most important thing we can do to reduce global poverty is to end agricultural price supports and eliminate tariffs and quotas on agricultural commodities coming into the U.S. These make it difficult if not impossible for developing nations’ farmers to sell their produce on world markets. They also raise food prices for U.S. consumers, and drain the Treasury of money needed for other purposes.
I could not agree more. Every time I think about our farm subsidy system I get angry.
Q: Is a liberal arts education a worthwhile investment? Does it have value in today’s labor market, or is it an outdated concept?
A: The purpose of a liberal arts education isn’t just to make more money (four-year college grads have lifetime earnings that are about twice that of the typical high-school grad without any college) but also to be able to have a fuller life and be a more engaged and responsible citizen. So yes, without a doubt, it’s a worthwhile investment.
That gets at a beef of mine, that education is viewed solely as an economic investment. That’s, if not poisonous, at least a way-too narrow way of looking at education.
Economists tend to believe that economic efficiency and economic growth are the two most important values. Therefore, any policies that reduce the incentive to work hard are suspect. (Economists worry, for example, that a higher Earned Income Tax Credit for low-wage workers may discourage them from working harder, since wage increases would lead to correspondingly larger declines in the E.I.T.C. wage subsidy.)
This strikes me as wrong-headed. The economy exists to make our lives better; we do not exist to make the economy better.
Man, that last sentence is so true and something so many people don’t consider correctly. The point isn’t to grow the economy. The point is to grow the economy to better peoples’ lives. The latter is the most important thing.
Anyway, I really agree with how he thinks things through. Robert Reich – another person I’m a fan of.