The former U.S. labor secretary discussed the nation’s economic outlook
Minutes after President Obama finished delivering a speech on the state of the United States economy earlier this month, former Beltway insider Robert Reich treated Drake University students, faculty and the Des Moines community to a riveting lecture.
Reich, who served as secretary of labor during President Clinton’s first term in office, watched Obama’s address on Drake President David Maxwell’s basement television set.
Then, to a standing-room-only audience packed into Sheslow Auditorium, Reich shared his reaction to Obama’s speech and his expert opinion on the country’s economic outlook.
In the lecture, Reich focused almost exclusively on Obama’s American Jobs Act and the nation’s employment creation prospects. He suggested potential fixes, repeatedly stating that the president’s proposal must be big and bold in order to make a difference.
Reich also emphasized that legislators must view the country’s economic problems as a demand-side issue, rather than one of supply.
Noting that consumer spending accounts for roughly 70 percent of the nation’s GDP, he advocated for solutions that would drive consumers to buy goods and services. Part of the problem, Reich said, is that the shrinking middle class is not able to participate in the economy at the level necessary to spur significant improvement.
Reich, who teaches public policy at the University of California, Berkeley, also argued against cutting business taxes as a job creation tactic due to the fact that corporate cash holdings have never been higher.
A video recording of the lecture is available online.