In previous posts I described my disappointment with President Obama's shift from a liberal campaign to a moderate presidency. In this post I discuss another moderate: Robert Reich.

In 2000 he published The Future of Success. In it he claimed: "Most of us are more prosperous than ever before. We own more. We're able to get terrific deals." And: "Today we can see the emergence of a vibrant new economy brimming with innovations. ... Jobs will be abundant, many of them exciting and well paid."
Robert Reich
Reich was wrong. He was the Secretary of Labor for President Clinton from 1993 to 1997. He had a unique opportunity to help the common worker. But he missed it. Vast segments of our population were experiencing employment and income decline. He should have fought for the middle class when he had the chance. Instead he predicted utopia. Oops!

In 2007 he published Supercapitalism. His thesis is summarized here: "The real explanation [for the widespread decline of economic prosperity] involves the way technologies have empowered consumers and investors to get better and better deals–and how these deals, in turn, have sucked relative equality and stability, and well as other social values, out of the system."

Reich does not admit he got it wrong back in 2000. He just accepts the miserable plight of common workers as a fact. Then he blames technology for our woes. He dismisses other explanations as "mostly nonsense." Among the nonsense explanations he specifically sites are: greed, globalization, financial deregulation, tax cuts for the wealthy, etc. Here is an example of how he defends egregious, greedy executive pay practices:
  • "But the super-rich are not at fault. The market is generating these outlandish [high compensation] results. And the market is being driven by us as consumers and investors."
  • "Boards are willing to pay more and more for CEOs and other top executives because their rivals are paying more and more for them. And all are willing to pay more because, in effect, consumers and investors are pressuring them to."
This is typical "moderate-talk." It's like doublespeak. First he liberally denounces income disparity, then conservatively blames technology, not board directors or policymakers, and certainly not economists.

Reich published Aftershock in 2010. Here he defends his 2007 thesis that technology was the culprit, but now adds globalization: "The underlying problem emerged around 1980, when the American middle class started being hit by the double whammy of global competition and labor-replacing technologies." But in 2007 he dismissed globalization as a cause of our woes, and offers no explanation for the change of tune. And he doesn't explain how he missed the demise of the middle class as Labor Secretary, or why he predicted utopia in 2000.

Reich further revises his story: "Instead of implementing a new set of policies that would enable the middle class to flourish under these very different circumstances, political leaders ... embraced deregulation and privatization, attacked and diminished labor unions, cut taxes on the wealthy, and shredded social safety nets." On the one hand, Reich clearly makes a liberal statement here. But on the other hand, in 2007 he thoroughly discredited these types of liberal policies as "mostly nonsense." Will the real Robert Reich please stand up?

My conclusion is that you can't trust a moderate. They say liberal things one day, and conservative things the next. I should be happy that Reich has now embraced the need for liberal policies that directly benefit the middle class. But I can't help but wonder what side of the fence he will be on tomorrow.
Part 1 of this post defined liberal and conservative economists, where liberals advocate for changes that clearly support common citizens, and conservatives don’t. Now the most liberal economists are listed, and the topic of "moderates" is addressed.

The most famous of today's conservative economists is probably Robert Lucas. He was awarded an economics Nobel in 1995, and works at the University of Chicago. Yes, Milton Friedman’s old school.
Other prominent members of the ultra-conservative Chicago economists club are: Eugene Fama, John Cochrane and Raghuran Rajan. This group of four should be awarded a gold medal for doing the greatest good for the least number of people; it does the best job of serving the wealthy few.

One school trying to compete with Chicago’s infamy is Florida State. The Koch brothers have taken over the economics department there, and dictate which professors meet their ultra-conservative standards. Who knows; maybe they can buy Chicago’s top spot?

No list of top conservatives would be complete without Robert Barro. He is the self-appointed Paul Krugman attack-dog. He has gone so far as to claim that Krugman has no business talking about economics. Barro’s viciousness emphasizes the importance of Krugman to common citizens.

Moderate economists are trickier to spot. One day they say things that support common citizens, and the next day they say the opposite. The leading economic moderate is none other than Ben Bernanke, head of the Federal Reserve. (If you want to learn more about the Fed, click here.)

When the Obama transition team was at work in late 2008, Bernanke supported economic stimulus to help common citizens. But rather than support bold, decisive steps in proportion to the tremendous magnitude of the problem, he took a moderate stance. He compromised with conservative economists and bankers. The results speak volumes: we are still in a depression. Moderate economics is just conservative economics in slower motion. It eventually does more harm than good.

Why? Take our current crisis. After Obama’s and Bernanke's moderate steps failed, a conservative backlash was launched, which is creating even more economic suffering.

Even though the only outright beneficiaries of conservative economics are the wealthy few, huge numbers of “wealthy few wannabes” have joined the conservative ranks. They correctly conclude that moderate economics failed, but they wrongly hope that conservative economics will help them.

To summarize, there are two types of economists: liberals and conservatives. The liberals are led by Paul Krugman. The conservatives are led by Robert Lucas and his gang at the University of Chicago. And moderates are nothing more than conservatives disguised in wolf's clothing.
Every citizen needs to know there is no such thing as an unbiased economist. Each one has a political bias, and it colors every aspect of their work.

There are only two types of economists: conservative and liberal. Some insist there is a third category of "moderates." I'll address them in Part 2 of this post.

Conservative economists support the wealthy few. Occasionally one of them will show their bias and say something like "greed is good." But for the most part they rarely admit it publicly.
The best way to detect a conservative economist is to ask yourself a simple question: "Are they advocating for something that directly benefits me?" If the answer is no or unclear, then there's a good chance you've spotted a conservative economist. A fallback question would be: "Do you support Keynesian economics, or massive government spending to end recessions and depressions?" If they do, they're liberal. If not, they're conservative.

In fact, it's always safest to assume that an economist is conservative, because most of them are. It's how they are trained ... and how they are paid.

Conservative economists condemn government programs that help common citizens. They attack them with terms like "fiscally irresponsible" or "inflationary." Or they describe progressive taxation, where wealthy people get a higher tax rate than poor people, as "class warfare." They frequently use lofty phrases like "free markets" or "the wisdom of the markets" with religious undertones, as if their economic views are divinely inspired or rooted in universal truths. They falsely assert that the US has the "highest living standard" or the "strongest economy in the world."

Conservative economists insist that everyone benefits when the wealthy few are paid incredible amounts of money. They claim the economy thrives when income and wealth grows faster at the top of the pyramid than for the rest of us. They insist that the wealthy few "earned it" and are "worth every penny" when in fact the vast majority of executive fat cats get their money from their board buddies, who expect the same thing in return from their board buddies, in a self-reinforcing chain of executive compensation favors.

Don't be fooled by Nobel awards. The arch-villain of all modern-day economists was Milton Friedman. He got one back in 1976. This award helped launch a huge wave of conservative deregulation which ultimately created our current depression (See It's a Depression, Stupid!).

And don't be so foolish as to think Democratic presidents only appoint liberal economists! Most of the top appointments made by Clinton and Obama to the Treasury and the Fed were very conservative economists. Republicans were delighted.

The only safe assumption about an economist is that they are conservative. The burden of proof is on them. Either they advocate for programs that directly benefit common citizens, or they don't.

The most famous of liberal economists today is Paul Krugman. Everything he writes is driven by an earnest attempt to advocate for common citizens. He is unafraid to say he supports many aspects of Keynesian economics, which would be an act of professional suicide for almost anyone else. You see, he has a Nobel award, too. So it's hard to summarily dismiss him.

In Part 2 of this post, I list some of the most famous conservative economists, and discuss the tricky category of "moderate."