Robert Reich simply loves to pronounce upon matters economic. Even though, as Paul Krugman gleefully pointed out three decades ago, he doesn’t actually know much about the subject.
An example being this that the Guardian, for some reason, saw fit to print. Come on guys, even your arts graduates must be able to see the logical hole in this:
The GOP’s tortured logic is that the unemployment benefits in the American Rescue Plan have caused workers to stay home rather than seek employment, resulting in labor shortages that have forced employers like Chipotle to increase wages, which has required them to raise their prices.
Hence, Chipotle’s more expensive burrito.
This isn’t just loony economics. It’s dangerously loony economics because it might be believed, leading to all sorts of stupid public policies.
Start with the notion that $300 per week in federal unemployment benefits is keeping Americans from working.
Since fewer than 30% of jobless workers qualify for state unemployment benefits, the claim is that legions of workers have chosen to become couch potatoes and collect $15,000 a year rather than get a job.
I challenge one Republican lawmaker to live on $15,000 a year.
In fact, evidence suggests that workers who are holding back from re-entering the job market don’t have childcare or are still concerned about their health during the pandemic.
Besides, if employers want additional workers, they can do what they necessarily do for anything they want more of but can’t obtain at its current price – pay more.
It’s called capitalism. Republicans should bone up on it.
No, it’s not called capitalism, it’s called markets. The distinction being important in that a worker owned company – that is, not a capitalist one – would face the same problem.
But look at his explanation. It’s “tortured”, “loony”, economics to think that the way to find extra labour is to pay more for it and thus have to raise output prices. But it’s also the simple solution to trying to find extra labour, to pay more for it and finance that somehow – maybe by raising prices.
But here’s where the true slime and warts comes in. Not satisfied with using logic my three year old granddaughter can see through he misrepresents on fact as well.
No one is actually saying that the $300 Federal benefits is solely responsible for keeping people out of work – or, in technical terms, raising the reservation wage. What people are saying is that the Federal $300, when added to the state unemployment benefits that folks also get, is raising that reservation wage and keeping folks out of work.
But then, you know, this is Robert Reich.