Friday, October 18, 2013

Inequality According to Reich

Inequality for All, Robert Reich's recently released documentary detailing his views on the state of income distribution in America, is best understood when considering that its perspective comes, ironically, from a man whose diminutive physical stature is firmly rooted within a statistically rare outlier region of the normal distribution.
But before you jump to accusations of insensitivity or mean spiritedness, Reich’s height, while not the centerpiece of his movie by any means, is routinely referenced throughout the film and even used as a device to, quite dramatically, communicate his motives for standing up for the little guy and against the bullying of social inequality.

In fact, the film plays somewhat like a Keynesian policy junkies version of Al Gore’s Inconvenient Truth, in that it concerns itself more with Reich’s own character and background than the topic it is purported to address, leaving the viewer with little more than a fabricated sense of heroism for Reich and a smattering of contrived charts and statistics.

Further, while Reich does a reasonable job framing issues surrounding income inequality and, in particular, identifying globalization and the demise of a legitimate manufacturing workforce in the U.S. as being some primary instigators, many of his explanations for this major structural trend were deceitful and preposterous.

With literally no mention of the impact of the 1990s Clinton-era push for free trade (NAFTA, GATT, etc.), Reich ignores the policies of the administration he served under, only to blame the demise of union influence on the Regan-era handling of the air traffic controllers strike… a outlandish line of faulty logic only made sensible when considering Reich’s commitment to his particular ideological bent.

Make no mistake; Reich is a statist of the worst order, committed to twisting any sample of economic data, academic study or anecdotal experience into his supposedly sound reasoning for ever more “solutions” by the central government.

And therein lies a bit of a rub for this film in that Reich offers scant new “solutions” of his own, instead advancing the typical lip service themes of “investing in the people”, by providing more public funding for education, more social benefits and ultimately more redistribution of wealth.

Considering that Federal Government overspending has generated a national debt of roughly $17 trillion ( … with about $7 trillion of that racked up in just the last five years) blowing way over 100% debt-to-GDP and requiring an $85 billion monthly injection of “new” money from the Federal Reserve each and every month just to keep the ship-of-state afloat, this “under-investment” theme should fall flat for most clear thinking viewers.

Bottom line, inequality is a fact of life in a free society and short of instances of systemic illegal unfairness (nepotism, red-lining, bribery, etc.) there is no solution to the Bell Curve as it relates to economic matters.

The normal distribution is more than a statistical quirk; it’s a mathematical certainty that should argue strongly against enacting endless absurd schemes that seek to “spread the wealth” in an effort to thwart reality.

Like Reich’s own minuscule size, there are aspects of life that we all must accept, for better or worse, as luck of the draw… and while most personal economic circumstances can be naturally overcome by individual effort on one hand or temporarily ( … and artificially) mitigated by blunt state policies rife with unintended consequences on the other, there will always be winners and losers.