Robert Reich
1. Has American manufacturing has disappeared? Mankiw says no, and he’s half correct. American manufacturing is alive and well. But American manufacturing jobs have all but disappeared, replaced by computer-controlled machine tools and other technologies.
2. Are trade deals what ails the economy? Mankiw says no, and he’s half correct here, too. The economy suffers from chronic lack of aggregate demand — largely because too little of the economy’s total income is going into the hands of the poor and the middle class, who’d spend it, and too much into the hands of the wealthy, who don’t. Trade deals aren’t the whole reason for this widening inequality by any stretch (see #4 below), but recent research shows that trade with China in particular has been a major cause of the loss of good-paying manufacturing jobs.
3. Is the economy rigged? Mankiw says no. He’s wrong. It’s been rigged by big corporations, Wall Street, and very wealthy individuals who have bought (through their lobbying, campaign contributions, and purchase of “expert” opinion) changes in laws and regulations that benefit them and hurt average working people. (If you want detailed examples and analysis, see my “Saving Capitalism.”)
4. Do the rich pay their fair share of taxes? Mankiw says yes. He’s wrong. When you consider the total tax burden — including Social Security payroll taxes, state and local sales taxes, local property taxes, and other taxes and fees — the rich pay a smaller share of their incomes in taxes than do typical workers.
5. Will tax cuts unleash stupendous growth? Mankiw says no. He’s correct. They won’t.
6. Can the next president quickly fix all the problems of the economy? Mankiw says no. He’s correct about this, too.