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Kane Rips Former Secretary of Labor Apart On Economic Policies

February 4, 2009

Wow, Kane (The Wrestler) wrote an amazing article blasting a former Clinton cabinet member on his economic policies. I knew that Kane was a student of Austrian Economics and the Ron Paul platform in general, but man this guy is smart. He needs to run for office. (The next Jesse Ventura? (Who also supported Ron Paul!..same with Val Venis))

Robert Reich was Secretary of Labor under Bill Clinton and is currently a professor at the University of California, Berkeley’s Goldman School of Public Policy

Professor Reich:

I have some questions about some of the points that you brought up when you appeared on CNN’s The State of the Union show Superbowl Sunday. Although all my own training in economics is purely autodidactic, it seems to me that your arguments rest on faulty premises.

When asked what is the fastest way for the government to create jobs (a question which itself relies on the erroneous presumption that the government has the ability to “create” jobs), you replied with a three-part answer, and first stated that “almost all economists agree” with you.

Whether almost all economists agree or not of no importance, but gives your answer an air of authority. Unfortunately, it is the policies of these same economists which have caused the mess in which America currently finds itself. While “almost all economists” may still possess authority in academia, their credibility on Main Street is sorely lacking. In addition, many economists do not agree with you. In fact, Austrian economists vehemently disagree with you.

In any case, you said that the government’s first priority should be to expand the social safety net, which will cause money to go directly into circulation.

Historically, government welfare programs have been wasteful, inefficient, and corrupt. Private charities do a much better job of administering aid to those in need with the final goal of helping the unemployed get back to work. Government programs, on the other hand, lead to longer periods of unemployment by encouraging welfare recipients to remain on the dole as long as possible.

I am also curious as to how you propose to fund these programs. There are only three ways that the government can raise revenue: taxation, borrowing, and printing (both the latter are actually forms of deferred taxation). All of these methods have dire implications for the economy. Direct taxation retards economic growth by punishing producers. Borrowing crowds out investment in the private sector. Printing money causes distortions in the market, misallocation of resources, and eventually destroys the purchasing power of the monetary unit.

In addition, of what importance is “money in circulation”? You contend that passing money around will create jobs, but the fact is that passing money around is simply passing money around. What you seem to be proposing is that the government take money from some people, and then give it to people on welfare so that they can buy stuff from the same people that the government originally took the money from in the first place. How is that going to create jobs? Why not allow the people with money to invest it and build their businesses so that they can hire the people to whom the government is planning on giving their money?…


Read the entire article here

Here is Kane’s Blog, where he is known as “Citizen X”

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