Money Matters

Robert Reich was this nation's 22nd Secretary of Labor and is now a professor at the University of California at Berkeley. I met him once at The Tonight Show when he was a guest and I was loitering in the halls…a very nice man. Also a very short man but that's not relevant to anything I want to write about here. I've followed his writing and generally find that he states clearly the left-of-center viewpoint…or as they call it on Fox News, Radical Socialism and America-hating.

Today, I was reading this item on his blog. I came across this sentence and I found myself staring at it for quite some time…

The truth is that while the proximate cause of America's economic plunge was Wall Street's excesses leading up to the crash of 2008, its underlying cause — and the reason the economy continues to be lousy for most Americans — is so much income and wealth have been going to the very top that the vast majority no longer has the purchasing power to lift the economy out of its doldrums.

That seems so simple and obvious that it makes me suspicious. But I also can't figure out what could possibly be wrong about it.

Not long ago, I bought a new car and traded in my old one at the dealership. A mechanic there mentioned to me that he was going to try to purchase my trade-in because even though it had a lot of things wrong with it, it was in pretty good shape. He could fix the flaws on his own time and have a pretty good vehicle. The dealership, he said, gave its employees first shot at buying trade-ins for a decent price.

I asked him if he got any sort of employee discount towards a new car and he laughed. He said, "No one who works here in the service department will ever be able to afford to buy a new car here." That surprised me. I mean, I guess it shouldn't have but it did. Didn't Henry Ford once say something about how he wanted to pay his employees well so they'd turn around and buy the Fords they were making?

I posted some charts here recently that showed the Income Inbalance in this country…how increasingly, the rich are getting richer and the poor are getting poorer. One Conservative friend wrote me that there's nothing wrong with that, morally. The American Way, he says, is that people should be able to get as wealthy as they possibly can. I'm not sure that's so but even if it is, there's a separate question as to whether that's even good for the rich. The way things are going, I guess we'll find out soon enough.