Robert Reich Misleads

     So this video by Robert Reich explaining the economy has been popping up lately on many forums I've noticed:

Now I'm no economist, but I can spot nonsense and propaganda on this kind of stuff, and Mr. Reich really takes the cake for it here. First, note how he pulls two stunts, which are to cite wages and act as if America is divided into fixed classes. Wages are not incomes. Wages are a part of incomes. Incomes are wages plus the various fringe benefits that people get. In certain areas, wages have been stalled, yes, even though incomes per capita have been going up consistently over the years, but that is likely because of the rising cost of healthcare which is making it where more and more of a person's income is having to go towards healthcare costs instead of wages.

And "the top 5%" are not a fixed class. There is not a permanent poor class, a permanent middle-class, and a permanent rich class that people are born into, there are income quintiles. The actual people in those income quintiles change all the time. Many of the people currently in the top 5% were in the bottom earners ten, twenty, or thirty years ago, and probably quite a few in the middle-income quintiles or even lower-income quintiles now are folks who were in the highest-earning quintiles up until the recession hit. Essentially, Mr. Reich is making the very widespread fallacy of confusing what is happening in statistical categories with what is happening with actual human beings. So when Leftists say things like, " 'The Rich' have gained X amount over the years," it's really a nonsensical statement, because "The Rich" are oftentimes the same people who were "The Poor" some years ago. Also, Mr. Reich might bother looking at just who has gotten the major tax cuts over the years. We currently have 50% of Americans paying ZERO Federal income tax (LINK), with more of the overall tax burden being shouldered by the highest-earning 5%.

President Bush cut taxes for everyone, with some of the biggest percentage cuts going to the bottom earners. And he did things like double the Child Income Tax Credit from $500 per child to $1000 per child. It is through these various tax credits that many people end up paid by the federal government as opposed to paying it. No politician could say it, but personally I think what really what needs to be done at some point is to re-levy taxes on this 50% not paying anything. I'm not saying lower and middle-income people should pay high taxes by any means, but the ones not paying anything, that needs to stop, especially the ones getting paid by the government. There also is the problem in that while the amount of tax revenue as a percentage of the GDP that the government takes in has stayed relatively uniform, government spending per capita has continually been increasing over the years. In addition, Mr. Reich seems to expect equal gains across the economy, which makes no sense at all. Of course the wealthier are going to gain more than the lower earners, otherwise they would never have gotten wealthy in the first place. And also, again, "The Rich" aren't a fixed class.

Regarding public schools and infrastructure, well the U.S. has some of the highest per pupil spending with not necessarilly the best results, and if one compares on a state-to-state level, it depends. Some states spend more and get better results, some states spend less and get better results. Washington D.C. has the highest per pupil spending with some of the worst results. As for infrastructure, well we had a $820 billion stimulus of which only a fraction was allocated for infrastructure work, so I don't buy this argument either. The government had ample opportunity to spend money on fixing America's infrastructure, but didn't do it.