Archive for ‘Robert Reich’

July 10, 2009

Robert Reich: Fool

There are plenty of reasons for economic gloom, but Robert Reich gets it all wrong:

In a recession this deep, recovery doesn’t depend on investors. It depends on consumers who, after all, are 70 percent of the U.S. economy.

“Recovery doesn’t depend on investors” is like saying farming doesn’t depend on farmers. Very simple question: The secret to capitalism is . . .?

CAPITAL! This is the one simple truth that the Left can never get their minds around. Other factors being equal, the firm with more capital wins. Of course, other factors are never perfectly equal, but in general, you can’t make capitalism work without capital, and what the U.S. economy is currently experiencing is primarily a shortage of capital.

This is why the Keynesian “stimulus” is doomed to failure, because it does nothing to fix the capital shortage. Tax cuts would increase the capital supply, but Democrats are fanatically opposed to tax cuts, especially “tax cuts for the rich” or reductions in corporate taxes.

Unfortunately for their fanaticism, you’re not going to increase the supply of capital very much by any other method, simply because (a) rich people have more money, and therefore cutting their taxes tends to produce more investment capital, and (b) the rich are not fools, and will not invest in U.S. companies hindered by high corporate taxes that put them at a competitive disadvantage in the world market.

The idiocy of people like Robert Reich — whose politically motivated hatred of “the rich” blind them to the most basic facts of economics — is a solid argument against voting for Democrats.

(Hat-tip: Memeorandum.)