Robert Reich

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  • WSJ Claims Clinton Penalizing Tax-Dodging Corporations Is Akin To “Class Warfare”

    Editorial Board Calls For “Trumpian Pragmatism” On Corporate Taxes Even Though Journal’s Own Reporting Shows Experts Prefer Clinton On The Economy

    Blog ››› ››› ALEX MORASH

    The Wall Street Journal blasted Democratic presidential nominee Hillary Clinton’s plan to assess a tax on corporations that move overseas as “familiar class-warfare artillery” and claimed that what these supposedly overburdened American multinational corporations really deserve is "Trumpian pragmatism" in the form of massive tax cuts. The editorial, which promoted a number of discredited and misleading talking points to advocate for corporate tax cuts, was published just hours before the Journal reported on a survey of over 400 economists showing an overwhelming expert preference for Clinton’s economic policies.

    In an August 21 editorial, the Journal attacked Clinton’s push to rein in corporate tax avoidance schemes as a means of “class warfare” and “the sort of thing banana republics impose when their economies sour.” Clinton’s plan would be to levy an “exit tax” on corporations that engage in a process called “tax inversion,” wherein an American multinational corporation acquires a foreign company and claims its taxable profits are now based outside the United States. Rather than imposing a tax on companies that try to skirt federal law -- and using the revenue to invest in critical infrastructure projects, as Clinton has suggested -- the Journal advocated for what it called “Trumpian Pragmatism”: slashing the corporate tax rate by more than half as a way to “deter inversions” and convince companies to relocate in the United States. From the August 21 edition of The Wall Street Journal:

    The Democrat would impose what she calls an “exit tax” on businesses that relocate outside the U.S., which is the sort of thing banana republics impose when their economies sour. She’d conduct a census and then categorize any multinational with more than 50% U.S. ownership as a domestic concern that would be subject to a tax on its deferred profits if it inverts. She isn’t specifying the punitive tax rate.


    Mr. Trump proposes to cut the U.S. corporate rate to 15% from 35% (or 40% counting average state rates). Fifteen percent is low enough to deter inversions while making the country more attractive to capital investment and better primed for higher wages. He would also offer a preferential rate of 10% for the $2 trillion already earned overseas.

    Mrs. Clinton calls this tax-cutting for billionaires and corporate-jet owners, which shows how unhappy her Presidency could be. Such Trumpian pragmatism—10% of $2 trillion is better than 35% of $0—is the only realistic way for Mrs. Clinton to fund her infrastructure plan, and Republicans in Congress have sounded out Democrats for such a deal for years. President Obama has rebuffed their entreaties, settling for nothing—and now Mrs. Clinton is setting herself up for the same.

    Despite the editorial board’s claims against Clinton, reporter Ben Leubsdorf actually reported in the Journal’s Real Time Economics blog on August 22 that business economists overwhelmingly prefer Clinton as the best candidate on the economy. According to a recent survey by the National Association for Business Economics (NABE) that Leubsdorf cites, 55 percent of the 414 economists surveyed believed Clinton “would do the best job of managing the economy” compared to just 14 percent who picked Republican nominee Donald Trump. (Trump registered less support in the survey than did Libertarian nominee Gary Johnson, who garnered 15 percent.)

    An independent economic analysis of Clinton’s plan from Moody’s Analytics found it would boost job creation by roughly 10 million jobs over four years -- over 3 million more jobs than would be gained by maintaining current economic policies. When Moody’s ran the same analysis of Trump’s tax plan, which the candidate has since revised, it found that his proposals were likely to stymie economic growth and job creation while increasing the debt and deficit, largely for the benefit of “very high-income households” like his own.

    When CNNMoney correspondent Cristina Alesci and CNN analyst Ali Velshi compared Clinton's economic plan to Trump’s on the August 17 edition of CNN's Legal View with Ashleigh Banfield, Alesci noted that Clinton's plan would largely benefit the middle class while Velshi reported that the lack of details in Trump's economic plan makes it "unclear ... who it actually helps and who it doesn't." Velshi added that experts believe parts of Trump's plan, including the child care tax deduction, are "designed for higher-income, more affluent families."

    Trump’s tax plan would sharply reduce corporate tax rates from 35 percent to 15 percent and create three individual income tax brackets of 12, 25, and 33 percent. The Trump plan has been lambasted by economists as “nonsense,” and media fact-checkers ridiculed its “pathetic” lack of details. Nobel Prize-winning economist and New York Times columnist Paul Krugman slammed Trump for promoting more of the “standard voodoo” economics frequently pushed by Republican supply-side advocates. Economic policy professor and former Secretary of Labor Robert Reich blasted Trump and his economic advisor Stephen Moore for attempting to rebrand the “sheer lunacy” in Trump’s original tax plan into the “normal nonsense of supply-side, trickle-down economics.”

    For its part, The Wall Street Journal is no stranger to pushing discredited “trickle-down” tax cuts, so the editorial board’s decision to embrace Trump’s implausible platform in the face of overwhelming evidence is no surprise.

  • Economists And Experts Trash Trump’s “Nonsense” Supply-Side Economic Plan


    Economists and tax policy experts from across the political spectrum slammed Republican presidential nominee Donald Trump’s rewritten tax and economic policy proposals, which he unveiled during an August 8 speech at the Detroit Economic Club. Fact-checkers and journalists had already heavily criticized the speech for being “detail-devoid” and “short on specifics.”

  • Media Ignore Economic Growth, Expert Analyses In Debt Ceiling Coverage

    Warnings From Economists Like Paul Krugman Consistently Overlooked

    Blog ››› ››› ALBERT KLEINE

    Media outlets have focused heavily on the topics of deficits and debt, while largely ignoring economic growth during their coverage of the debt ceiling debate. However, experts agree that the need for growth is more pressing than problems of debt, and that growth itself can be a deficit reduction tactic.

    A Media Matters study of television coverage over the past three weeks found that while pundits and guests focused heavily on discussing the debt ceiling, the topic of economic growth was sorely lacking. Of the total 273 segments analyzed, only 33 mentioned economic growth.


    Instead of touching upon economic growth, Media Matters found that guests and hosts spent most of their discussions focusing on other issues, such as the role of entitlement spending and political leverage in negotiations between parties.

    While the debt ceiling issue is certainly important - and failing to raise it would have a negative impact on the overall economy - many economists have eschewed the focus on debt, arguing instead that economic growth should be the primary concern.

    Nobel Prize-winning economist Paul Krugman has long argued that the media and political focus on debt is misguided, and that recent increases in debt were necessary to prevent the economy from entering another recession. Jared Bernstein, senior fellow at the Center on Budget and Policy Priorities, further argues that the focus on deficits and debt distracts policymakers from the very real problem of sustained high unemployment and a weak economy.

    In fact, Krugman echoed Bernstein's point on the January 28 edition of MSNBC's Morning Joe:

  • Fox Wins Straw-Man Argument Against Taxing Millionaires At 100 Percent


    Fox News is distorting President Obama's economic agenda by pushing the straw-man argument that taxing the entirety of millionaires' incomes would fund the government for less than three months. In fact, Obama has proposed no such thing, and this Republican talking point obscures the billions in revenue that would be generated from letting the Bush tax cuts expire for wealthy households.

  • Reich On O'Reilly's Communist Accusation: It's Burying The National Dialogue "In Doo-Doo"

    Blog ››› ››› EMILY ARROWOOD

    In an April 23 blog post, former Labor Secretary Robert Reich responded to Bill O'Reilly for labeling him a Communist who "secretly adores Karl Marx." Reich stated: "For the record, I'm not a Communist and I don't secretly adore Karl Marx."

    Reich added that ad hominem attacks such as these are destructive to public discourse and are merely "the last refuges of intellectual boors lacking any logic or argument."

    From Reich's post:

    For the record, I'm not a communist and I don't secretly adore Karl Marx.

    Ordinarily I don't bother repeating anything Bill O'Reilly says. But this particular whopper is significant because it represents what O'Reilly and Fox News, among others, are doing to the national dialogue.

    They're burying it in doo-doo.

    O'Reilly based his claim on an interview I did last week with Jon Stewart on the Daily Show, in which I argued that because America's big corporations were now global we could no longer rely on them to make necessary investments in human capital or to lobby for public investments in education, infrastructure, and basic R&D. So, logically, government has to step in.

    Since when does an argument for public investment in education, infrastructure, and basic R&D make someone a communist or a secret adorer of Karl Marx?

    But obviously, O'Reilly has no interest in arguing anything. Ad hominem attacks are always the last refuges of intellectual boors lacking any logic or argument.

    This is what's happening to all debate all over America: It's disappearing. All we're left with is a nasty residue.

    In Washington, Democrats and Republicans no longer even talk. They just vent charges and counter-charges.

    Reich's whole piece is well worth a read.