People Who Reich Never Knew He Never Knew

A column by Robert Reich, apparently from the last day or two, opens with

I finally found a Trump supporter—this morning when I went to buy coffee. (I noticed a Trump bumper sticker on his car.)

What Reich doesn’t realize is that this is telling us a lot more about Robert Reich than it is about Trump or the Trump supporter he met. We all live in our own narrow little worlds, of course, but here we see that Reich’s world is so narrow that he had never met a Trump supporter until now. Given that many polls indicate that Trump and Clinton are within margins of error of each other, Reich’s degree of cloistering is remarkable. And his ability to write this without realizing how he looks is even more remarkable.

I don’t know whether Reich’s analysis of Trump’s business acumen is accurate or not, but here Reich is epitomizing the alarming polarization we have been seeing in the U.S. in recent years. The extra irony, of course, is that Reich’s economic views are probably closer to Trump than to Clinton.

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15 thoughts on “People Who Reich Never Knew He Never Knew

  1. I had some doubts about Reich’s statement that Trump could have turned his $200 million in 1976 into $12 billion now if he had just put that $200 million into an index fund and reinvested the dividends. However, the calculator at https://dqydj.com/sp-500-return-calculator/ shows that he’s right.

    Of course, the support of California voters for one Presidential candidate or the other really only matters in the sense of how we can effect the election in battleground states. Hillary will win in California and, due to our electoral winner-take-all system, the results for California are pre-ordained. We only need to have something close to a normal voter turnout. In any event, there’s an interesting article on the winner-take-all electoral system at http://www.fairvote.org/how-the-electoral-college-became-winner-take-all . It seems that the system is not mandated by the Constitution but “was the product of partisan pragmatism, as state leaders wanted to maximize support for their preferred candidate. Once some states made this calculation, others had to follow, to avoid hurting their side.”

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    • Except Trump didn’t get 200 million in 1976. He supposedly only got 1 million from his father to start his business. Somebody said he got a lof of money in 1999 when his dad died but that isn’t where he made his money. His first deal was on a dilapidated hotel when NYC was nearly bankrupt. He got tax deferrals from the city and used them to get loans. NYC recovered and he rode the wave up.

      You also have to remember that the calculator left our the take the fund gets for expenses – small but not insignificant plus the amount you have to pay in capital gains taxes when a position is closed out. The fund keeps the money and buys stock in the new company being listed in the average but the individual gets a part of the capital gain and would have to pay taxes by cashing out some of their fund or pulling it out of their own pocket.

      Warren Buffet and Carl Icahn make their money because they make deals with the Boards of Directors of companies that you or I can’t get as well as just buying stock in a company.

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      • > Except Trump didn’t get 200 million in 1976. He supposedly only got 1 million from his father to start his business.

        From what I read online, the $200 million figure was quoted by Rubio in a February 25th debate and the $1 million was quoted by Trump. The consensus seems to be that the $200 million figure is likely too high but that Trump did receive far more help from his father than the $1 million figure that he quotes. The following is from https://www.washingtonpost.com/news/fact-checker/wp/2016/03/03/trumps-false-claim-he-built-his-empire-with-a-small-loan-from-his-father/ :

        >>> Trump protests too much when he says that Rubio’s $200-million figure is “wrong by a factor of hundreds.” Trump likely did not inherit $200 million by himself, though perhaps that was the size of the father’s estate, before taxes.

        >>> Moreover, Trump’s claim that he built a real-estate fortune out of a “small” $1 million loan is simply not credible. He benefited from numerous loans and loan guarantees, as well as his father’s connections, to make the move into Manhattan. His father also set up lucrative trusts to provide steady income. When Donald Trump became overextended in the casino business, his father bailed him out with a shady casino-chip loan—and Trump also borrowed $9 million against his future inheritance. While Trump asserts “it has not been easy for me,” he glosses over the fact that his father paved the way for his success — and that his father bailed him out when he got into trouble.

        > You also have to remember that the calculator left our the take the fund gets for expenses – small but not insignificant plus the amount you have to pay in capital gains taxes when a position is closed out.

        Agreed. In fact, I think that due to the unique benefits that Trump enjoyed due to his father, it’s not really possible to conclude from his wealth whether or not he is a good businessman. Or more precisely, it’s impossible to know if he would have been a success without those benefits. The one point of Reich’s comparison that does hold is that one cannot simply compare $1 million or $200 million to Trump’s current wealth of over $4 billion and conclude that the growth means that Trump is a great businessman. One does have to consider the length of time (40 years) from 1976 until now, the value of money over that time in alternate investments, and the benefits that Trump received via his birth.

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    • Except Trump didn’t get 200 million in 1976. He supposedly only got 1 million from his father to start his business. Somebody said he got a lof of money in 1999 when his dad died but that isn’t where he made his money. His first deal was on a dilapidated hotel when NYC was nearly bankrupt. He got tax deferrals from the city and used them to get loans. NYC recovered and he rode the wave up.

      You also have to remember that the calculator left our the take the fund gets for expenses – small but not insignificant plus the amount you have to pay in capital gains taxes when a position is closed out. The fund keeps the money and buys stock in the new company being listed in the average but the individual gets a part of the capital gain and would have to pay taxes by cashing out some of their fund or pulling it out of their own pocket.

      Warren Buffet and Carl Icahn make their money because they make deals with the Boards of Directors of companies that you or I can’t get as well as just buying stock in a company.

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    • Hey, me too!! I found his UC-Berkeley address, and tried to engage him on H-1Bs. He’s never said Word 1 about them. He was so wrong about work visas that he no longer will address the issue.

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  2. Typical economist’s answer. Reich steers the discussion into a comparison of numbers and then pulls out one that he thinks clinches the argument. But the Trump supporter is talking about experience in managing thousands of people, building infrastructure and dealing with powerful interests.

    Reich arrogantly presumes the silence means assent, when it probably means something entirely different.

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  3. There is a reason most Trump Supporters won’t put bumper stickers on their cars. They don’t want them keyed by the kind of people who protest at Trump rallies.

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  4. Reich is the person who told us that “manufacturing doesn’t matter. We will become the ‘symbolic analysts’. We will do the planning, computing and other intellectual work, while the manufacturing is done elsewhere”.

    Under his incompetent leadership, the Department of Labor allowed the H-1B, L-1, J-1, F-1, B-1, O-1, and OPT visas to become the juggernauts they are today. Where the symbolic analysts are increasingly scabs from India and China.

    So his basic ability to plan and predict are really pretty crappy. And he is cloistered.

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    • The outsourcing industry did a very clever job of representing that advanced technology jobs were “commodity” jobs and thus it was OK to outsource them. This played to the prejudices of people like Reich, most politicians and business managers who often resent the power of their technical staff.

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  5. I didn’t really follow Brexit except for the English media and politicians claiming it was a Putin plot. But it was apparent the European punditry did not have a clue and would engage in the same type of attack on it much like Reich is doing. Yah to the laid off deplorable factory worker waiting with me in line for a six dollar cup of coffee, Index Funds buddy–there I devastated your argument–now go put your money into one–tell ’em Bob sent you. Make mine breve, extra shot.

    And this from a Bernie supporter who ran against Wall Street appealing to the travails of the poor and working classes and stressed out ever falling middle classes. This from a guy who is supposed to be a wise pundit–and all he can offer is basically snotty elitism and jabber about Index Funds.

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