Robert Reich's Attack on Billionaires -- and Capitalism
Robert Reich, writing for the left-wing website AlterNet, made the argument last week that no one in America has become a billionaire through any legitimate activity. This is taking attacks on the wealthy into new territory. It’s being done, no doubt, in service of advancing two of progressives’ most cherished policy initiatives – a wealth tax and Medicare for All.
If progressives can destroy the idea that honest capitalism has anything to do with someone becoming wealthy – that significant wealth creation is exclusively the product of graft, fraud, and manipulation – then confiscating 6% of that wealth each year to pay for a complete overhaul of our health care system can be more easily justified. Argue the point effectively enough and “confiscate it all” will seamlessly become their rallying cry.
Reich has been a stalwart of the liberal left but has not always been so intellectually dishonest in his arguments. His book “Aftershock” anticipated the rise of Donald Trump as the natural result of a system that has left far too many of our citizens behind. He’s a well-regarded professor at a top-tier university and a former Cabinet secretary. However, his cherry-picked and misleading criticism of billionaires not only undermines his credibility but is dangerous to the very people – working Americans – he professes to care about.
To be clear, I believe the incentives in our health care system are aligned all wrong. It’s not a properly functioning marketplace. There is no price discovery, consumers are often uninformed and apprehensive, demand is inelastic, and the industry is being manipulated by for-profit health care, pharmaceutical, and insurance companies that care more about the bottom line than they do about keeping people healthy.
Health care is consuming more of our nation’s resources and is one of the principle reasons wages have been stagnant for almost 20 years. It is ripe for significant structural reform. Likewise, our tax system that allows some very wealthy Americans to pay lower tax rates is lopsided and wrongly suggests that investing is more valuable than working. We absolutely need to address this unfair construct.
Coupled with meaningful structural reforms in public K-12 schools and higher education, tax and health care reform are the two most important levers we can pull to make the American Dream real again for everyone who is willing to work to achieve it.
Gratuitously attacking success, however, is the wrong way to achieve that goal. Reich assails various billionaires in his article, trying to make a point. But like so many other selective attacks that manipulate facts to answer a preconceived agenda, he conveniently leaves out billionaires like Sara Blakely, the founder of Spanx, who spent her savings from working as a copy machine salesperson to design and eventually sell her undergarments to millions of women. Or how about Oprah Winfrey, the media mogul and personality, who picked Blakely’s product as her “favorite thing” in 2000, catapulting its sales. Does Reich really believe Oprah came to her wealth through trust funds or market manipulation? Or how about Steven Spielberg, who parlayed an unpaid internship at Universal Studios into a seven-year directing contract that launched his career. Who did he steal from? Or Johnny Morris, founder of Bass Pro Shops, who started his business selling fishing equipment out of the back of his father’s liquor store. Or Dick Schulze, who turned a “tornado sale” at one of his Sound of Music record stores into the launching pad for the electronics retailer Best Buy.
Like the billionaires highlighted above, many thousands of Americans who are considered wealthy today earned their money by taking risks, working hard, and putting themselves in the position to be successful. Instead of vilifying the “one percent” for having so much wealth, it would be more prudent for the progressive left to examine the traits that helped them become successful. Viewing success through a jaundiced lens – assuming everyone who is wealthy cut corners, knew the right people, or cheated – makes it too easy to justify one’s state in life as being predetermined. It becomes an excuse for failure and complacency instead of a blueprint for success.
I believe Bob Reich genuinely cares about his fellow Americans, but his attacks on billionaires is doing working people a disservice. His message to them is clear: Grit doesn’t matter. Hard work is over-rated. Education is valueless. Risk-taking is a myth. The only way you get ahead in this country is by being a crook or the offspring of a crook.