The latest TIME magazine gives former U.S. Labor Secretary Robert Reich the opportunity to display his complete ignorance of basic economics.
Pick one: reform the tax code, reunionize the country or increase the minimum wage.
There’s no magic bullet. You’ve got to do a lot of things we used to do. You have to have a tax code that is more progressive. You need to raise the minimum wage so that nobody who’s working full time lives in poverty.
What should the minimum wage be?
I would say that a rule of thumb ought to be: Take the minimum wage of 1968, adjust for inflation and for productivity. You get to around $15 an hour.
And the highest tax rate?
Between 1946 and 1970, very prosperous years, the highest tax rate for the top earners was never below 70% — even under Dwight Eisenhower, whom no one called a socialist. We have so much deferred maintenance on roads and bridges and tunnels and ports. Money does have to be raised, and the rich have never been as rich.
Wouldn’t that take away the capital to create jobs?
The rich are not the job creators. The job creators are the vast middle class and everyone aspiring to join them, whose money businesses need in order to justify expanding and hiring.
If Reich ever took an economics class, he must have fallen asleep during the classes devoted to the minimum wage, tax rates, and job creation. Or, more likely, he learned from a Keynesian and/or Marxist who was just as wrong about the subjects then as he is now.
