Robert Reich's stale liberalism and conservative economics

Romney, Santorum and Obama all vow to fight for U.S. manufacturing. It's not just a lost cause; it's the wrong one [..]
Even if we didn’t have to compete with lower-wage workers overseas, we’d still have fewer factory jobs because the old assembly line has been replaced by numerically-controlled machine tools and robotics. Manufacturing is going high-tech.[...]
The fundamental problem isn’t the decline of American manufacturing, and reviving manufacturing won’t solve it. The problem is the declining power of American workers to share in the gains of the American economy. Robert Reich in Salon Feb 2012
The three foundations of "progressive" liberalism are exhibited here: conservative economics,  eagerness to help discredit the Democratic President, and empty populist rhetoric. The whole complex legal system of "free trade" from GATT to NAFTA, the tax favors for businesses that move production outside the USA, the high dollar policy that favors finance and the special tax favors to finance and oil companies, the laws that limit labor union activity (like boycotts) and regulations that force companies and cities to go through Wall Street for their financing are taboo topics in conservative economics. According to conservative economists, whether they call themselves Keynesians or not, the basic structure and evolution of the economy is because of  "laws" of economics (and technology) not because, for example, people like Robert Reich helped change the rules to benefit companies that import manufactured products. And the populism is just slogans not connected to any concrete plan to reverse the declining power of American worker - in fact it is used to discredit people who are helping improve the bargaining position of American workers.  You won't learn about President Obama's National Labor Relations Board (NLRB) assistance for the machinists union at Boeing from Reich or about how Labor Secretary Hilda Solis has been enforcing labor rights and occupational safety laws ( in marked contrast to the Department of Labor under  Robert Reich). What you will get is disingenuous stuff like this:
the president has not promised that if reelected he’d push for the Employee Free Choice Act, which would make it easier for workers to organize a union. He had supported it in the 2008 election but never moved the legislation once elected.
"Never moved" is a nice euphemism for "Congress didn't support it". And speaking of "didn't support", let's not forget Reich's attacks on President Obama during the rescue of the auto industry and Americas largest industrial union.

Here's what Mr. Reich wrote: 

GM has been on a downward slide for years. In the 1960s, consumer advocate Ralph Nader revealed its cars were unsafe. In the 1970s, Middle East oil producers showed its cars were uneconomic. In the 1980s, Japanese auto makers exposed them as unreliable and costly. Many younger Americans have never bought a GM car and would not think of doing so. Given this record, it seems doubtful that taxpayers will even be repaid our $60 billion. But getting repaid cannot be the main goal of the bail-out. Presumably, the reason is to serve some larger public purpose. But the goal is not obvious.
[...]
The purpose cannot be to create a new, lean, debt-free company that might one day turn a profit. That is what the private sector is supposed to achieve on its own and what a reorganization under bankruptcy would do. [...]
Middle-class taxpayers worry they cannot afford to bail out companies like GM. Yet they worry they cannot afford to lose their jobs. [...] The answer is not to bail out GM. It is to smooth the way to a new, post-manufacturing economy.. Robert Reich in June 2009
Putting aside Reich's apparently incurable need to sneer at Barack Obama, what's interesting about this essay is Reich's agreement with Mitt Romney that reforming GM is something "the private sector is supposed to achieve on its own". It was obvious at the time that there would be no private sector financing - except for a fire sale of GM and Chrysler assets and the dumping of the auto company pension obligations on the taxpayer. And it was also obvious that the fiasco at GM and Chrysler had been created in a large part by the dysfunction of the finance business. GM kept losing money and kept selling bonds that required it to divert more and more of its revenue to interest payments and commissions to Wall Street banks. Contrary to the theory, neither stockholders nor bondholders pushed to change a management that was clearly inept - and as GM lost more and more money and fell further behind on its pension obligations, it generated more and more profits for hedge funds and Wall Street banks. The economy does not operate according to the theory of conservative economics. The theory of conservative economics remains what it was when Henry Carey called it a system designed to explain and justify the misery it causes. The goals of liberalism, a more just society with freedom and opportunity for all people cannot be achieved on the basis of this stale theory.




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