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Sunday, May 1, 2011

Robert Reich's new book, Aftershock

Many thanks. Good constructive thoughts and criticism.

Robert B. Reich

Chancellor's Professor of Public Policy

Goldman School of Public Policy

University of California, Berkeley

Author, "AFTERSHOCK: The Next Economy and America's Future"

You may find this interchange of interest.

Dear Bob

Anyway, I have just finished Aftershock and I am really impressed. Your analysis of the problem and the causes are spot on perfect.

However, while you understand that the country is driven by cycles, I get the impression you think they are political cycles. They are not. They are business cycles. They have been occurring in developed economies for over 800 years and the characteristics are always the same. You can find a short, very clear description in our book, The Great Recession Conspiracy (which I am attaching). Reinhart and Rogoff came to the same conclusion in This Time Is Different, but they needed 463 pages to say it. We only needed a 100 pages and you can skip Section Three.

But here comes the more difficult problem. In What Should Be Done; A New Deal For The Middle Class, your ideas too frequently involve creating complicated solutions full of government when simpler solutions would accomplish the same end. Take the Reverse Income Tax. The same result would come from abolishing ALL deductions and different classes of income. That would level the playing field and put a few accountants out of work, but it would not require a huge government agency to administer it. And think of the money we could save doing away with most of the IRS and its incredible muck of rules.

I spent part of my life working for private industry and part of it working for the government. It is very clear to me that we need both parts, and that each sector does some things better than the other. And some things a lot worse. Onward...

A carbon tax is a good idea. We need gas prices approaching Europe. That would give individuals lots of incentives to change the way they do things,and we have demonstrated that we will do exactly that without government help, and do a much better job.

A re-employment system is a bad idea. Companies don't want the job of re-training employees. They much prefer to hire already qualified employees. But this is a place where the government can do the job. Community Colleges are already in place and can do an excellent job of re-training. In The Great Recession Conspiracy we have several examples of how that is working perfectly right now.

School vouchers; our school system is in so much trouble I am open to try anything. And college funding is a horrible problem. We are in the process of helping our grandson's parents finance his college education, and it is terrorizing. Your idea may be worth trying.

In The Great Recession Conspiracy, we explain exactly how to stop the growth rate of medical care spending, and how to bring down costs. The U.S. is the only civilized country that doesn't provide medical care for every one. If you haven't read it, T. R. Reid's The Healing of America is splendid. We have experienced medical care in France, the UK and Australia, and it was every bit as good as here.

We also explain how to solve the Social Security "problem" in The Great Recession Conspiracy.

Public goods, Of course! California has a magnificent set of state parks and beaches, and they should be free to everyone. Same for National Parks.

Money out of Politics; Good Grief!!! Yes, a thousand times. But public funding won't work. Remember how fast Obama bailed out? The only thing I can think of is an absolute $100 limit and your idea of a blind trust. You are right. Special interests now run the country. See my blog for lots of examples.

And one thing you glossed over. Obama sold out the Financial Reform Bill to his campaign contributors. (See my blog for details.) And if we don't fix TBTF, we will be on track to lose another $14 Trillion in a few years. We have solutions in The Great Recession Conspiracy.

So, thanks for your book. It is comforting to know some else agrees with you, however imperfectly.

1 comment:

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