Robert Reich on the Economy: ‘The Goal Is Not Growth Per Se’

Robert Reich: Jeb Wrong About Americans Needing To Work More (RealClearPolitics)

HAYES: “This is the great paradox of the modern American economy. It was true before the great crash. It’s been particularly exacerbated after the great crash, which is that productivity wages have completely become detached from each other. So, you used to make 60 widgets an hour for your boss, now you can make 65 widgets an hour. You’re not seeing that improvement in the money you’re taking home.”
REICH: “That’s right. People are working harder than ever and yet the money and the productivity they are generating, most of it is going to the top. And this is a big change from what we had in the first three decades after the Second World War when there was a direct relationship between what people earned and how productive they were. Then around the time Ronald Reagan was president, wages flattened out, adjusted for inflation, yet productivity continued to go up. For Jeb Bush, it’s all the same Bushonomics, for Jeb Bush to say people need to work harder to improve productivity in order to get growth puts on its head exactly what’s going on. The real problem is you’ve had growth, you have productivity, but none of that has trickled down to average workers.”
HAYES: “Yeah, and I also wonder about this idea of 4% growth. It’s one of these things, sure, I’m pro 4% growth. I would love for there to be 4% growth. But the economic theory here seems to be essentially the thing restraining American growth is Americans don’t work enough. The pushing out of the productivity frontier, the frontier of the possible capacity of the economy that the thing keeping us tethered back is on the labor side as opposed to investment in capital and things like that.”
REICH: “Yeah, in fact it — this kind of view does not even consider the reality that one of the reasons you don’t have enough growth is the vast middle class of America doesn’t have the purchasing power to keep the economy going. All the money and all the wealth has been going to the very top. This is the great Republican blinder. They simply are unable to see the reality of what’s going on, that wages and wage stagnation is the key problem in the economy and that trickle down economics of a kind we’ve practiced since Ronald Reagan really has not worked. In fact, it’s been a huge failure. The goal is not growth per se. The goal is good jobs with good wages. And if Republicans don’t understand that and if Jeb Bush doesn’t understand that, you know, we are in trouble.”