Robert Reich

A large and growing sector of the U.S. economy produces nothing of value.

Derivatives, private equity, hedge funds.

Every winner comes at the expense of a current or future loser.

The only things this “zero-sum” sector produces is more money for the wealthy.

Dec 21, 2022 at 9:53pmWeb
Show threadRobert ReichDec 21, 2022

Take corporate law: High-paid lawyers representing one corporation battle high-paid lawyers representing another.

Huge sums of money are spent on these escapades. But there are no societal gains unless you equate one corporation’s victory over another with justice.

Show threadRobert ReichDec 21, 2022

Not to mention management consulting...

In case anyone needed a reminder, advising corporations how to make more money by cutting payrolls, abandoning communities, busting unions, outsourcing abroad, and pushing more jobs into contract work doesn’t add value to the real economy.

Show threadRobert ReichDec 21, 2022
Shouldn't a rational society heavily tax zero-sum work while subsidizing work that generates social good? https://robertreich.substack.com/p/the-economys-large-and-growing-unproductive#details
The economy's large and growing unproductive sector

Listen now | It's also where you find many of the nation's ultra-rich

Robert Reich
Show threadNick Gorton, MDDec 21, 2022
@rbreich yes, but we're not rational
Show threadGo Forth In LoveDec 21, 2022
@NickGorton @rbreich I once asked my undergrad ECON 101 professor about this. “Microeconomics is built on the assumption that man is rational. What if we’re not?” He thought I was nuts. :-)
Show threadRichardOntarioDec 21, 2022
@rbreich That’s a slippery slope for anyone in charge of making the decision on who’s worthy or not
Show threadMoria VDec 22, 2022
@RADC @rbreich Big clue, did you have to keep working during initial covid lockdowns?
Show threadRichardOntarioDec 22, 2022
@MoriaV @rbreich You just proved my point
Show threadMoria VDec 22, 2022
@RADC @rbreich guess that is a no?
Show threadHeadofgiskardDec 21, 2022
@rbreich
Of course, but only the wealthiest make the rules, so they dont pay taxes
Show threadCraving WafflesDec 21, 2022
@rbreich Great article. We sorely need some taxation and leveling of the playing field. Too many of us are losing the human race.
Show threadSteve PopovichDec 21, 2022
@rbreich corpulent felines ... Lol
Show threadTylerDec 22, 2022
@rbreich maybe we should start by prosecuting politicians that acquire substantially more wealth than their pay reflects. Then work our way to the wealthy and corporations. Make lobbying illegal. Require government funding to be for the benefit of society and end government subsidies for them as well.
Show threadJohn PearceDec 24, 2022
@rbreich agreed. As long as the metrics for socially and environmentally positive impacts are all science based
Show threadDylanDec 21, 2022
@rbreich have you read Bullshit Jobs by David Graeber? He covers a lot of what you’re talking about.
Show threadbrickbatDec 22, 2022
@rbreich In any businesses I have been part of, there was never a shortage of consultant proffers to increase profits always in some way at the expense of employees.
Show threaddrewknightwvDec 22, 2022
@rbreich I'm on record as having said for years, if you come across a large mound of poo anywhere in the world and start digging, chances are good there's a McKinsey consultant at the bottom of it.
Show threadGrumbleDec 21, 2022
@rbreich What if those argumentative and litigious lawyers had no other outlet? They'd infest HOAs and school board meetings.
Show threadSusan is Surfeited on PoliticsDec 21, 2022
@grumble209 @rbreich, they already do.
Show threadDeanWDec 21, 2022
@rbreich We would like that market forces would work this out but with large corporations putting a heavy, heavy thumb on the scales as well as having regulators in their pocket, there is no unbiased/“free” market system.
Show threadex or current IDF unwelcomeDec 22, 2022
@rbreich In the UK ex prime Minister Johnson is to appear before an inter party committee to decide whether to sanction him for lying to Parliament. Johnson using tax payer money to fund lawyers to try and protect him .
Show threadharryhollaDec 22, 2022
@rbreich not to mention that these expenses are then passed on to consumers, or recouped by cutting costs internally.
Show threadAshtonDec 23, 2022
@rbreich one can only hope that the coming AI wave will commit these information peddlers to the dustbin of history
Show threadIt's Just Jenn 🏳️‍⚧️Dec 21, 2022
@rbreich Maybe we should stop asking if Crypto is a scam and instead ask if the entire financial system is a scam?
Show threadPJT NorthDec 21, 2022
@rbreich I’ve known some in those segments and they strongly resemble a zero sum.
Show threadDarwin WoodkaDec 21, 2022
@rbreich Finance used to fuel our economy, now it bleeds it dry. Sad.
Show threadContent Love KnowlesDec 21, 2022

@rbreich

And then there's the sector that ruins things of value for their intended use by repeated moneteziation. I'm speaking of course of residences, single family homes, and investors who don't live in them or use them as intended, they just flip them until their supposed value is in no way connected to their intended use.

Show thread𝐿𝒶𝓃𝒶  Dec 21, 2022

@rbreich

"Produces nothing of value"

This is a dangerous, and quite malicious way to frame the problem. By some definitions, poets, musicians, authors, painters, dancers, and artists of all varieties "produce nothing of value". The problem isn't the lack of "value" in what they do.

The problem is that the economic system we have built values their mere existence within it. Any profits made from it are then privatized, while any losses from it are socialized.

Show threadSusan is Surfeited on PoliticsDec 21, 2022
@LadyDragonfly @rbreich “Malicious”? No. Art is, by definition, something that enriches culture. Management consulting, by contrast, just enriches the bank accounts of the rich. You seem to be going out of your way to misunderstand his point.
Show thread𝐿𝒶𝓃𝒶  Dec 21, 2022

@suavebones @rbreich please place an exact monetary value on "enrichment".

You can't.

That's the point.

Show threadSusan is Surfeited on PoliticsDec 22, 2022
@LadyDragonfly @rbreich I’m afraid your point is lost on me. Art is considered valuable to culture at every dollar level. Big law is valuable to nobody under an eight-digit income. Not sure what you’re arguing with.
Show thread𝐿𝒶𝓃𝒶  Dec 22, 2022

@suavebones @rbreich

"Art is considered valuable on every dollar level"

Ok. I'll accept that if you can provide evidence to support it. Name a dollar amount for art. Any amount will be fine.

Show threadSusan is Surfeited on PoliticsDec 22, 2022
@LadyDragonfly @rbreich, I do not understand your point. I am expressly saying that art is inherently valuable, whether or not it is or can monetized.
Show thread𝐿𝒶𝓃𝒶  Dec 22, 2022
@suavebones @rbreich and I am not arguing whether or not it has other kinds of value (sentimental, religious, cultural, etc). Only whether or not it has inherent monetary value. This is the point you have been studiously ignoring.
Show threadSusan is Surfeited on PoliticsDec 22, 2022
@LadyDragonfly @rbreich, what you are studiously ignoring is that Reich was speaking about the commercial world that provides hard cash for our food, shelter and acquisitions. Art can and often is part of that world, but need not be and frequently isn’t. It is you who are trying to squeeze all art into the commercial context so that you can be offended because people value art differently from, say, Cheerios.
Show thread𝐿𝒶𝓃𝒶  Dec 22, 2022

@suavebones @rbreich

Wow, it's amazing how you can just lie about what I said like that. Have a nice day.

Show threadSusan is Surfeited on PoliticsDec 22, 2022
@LadyDragonfly @rbreich i do not lie. I have told you consistently that I do not understand your point. Rather than explain yourself, you keep demanding answers from me. I am equally done with you, and hope your holiday season and mood are considerably better than this exchange has been.
Show thread𝐿𝒶𝓃𝒶  Dec 22, 2022
@suavebones @rbreich the internet debate over whether I said the thing I just said 20 seconds ago, or whether, as you claim, I said the exact opposite, is not a debate that interests me, or that I'm particularly invested in. Reading is fundamental.
Show threadNutriamixDec 21, 2022
@rbreich
I think it's fair to say that corporate executives and their middle managers below them produce nothing of value.
Show threadSusan is Surfeited on PoliticsDec 21, 2022
@nutriamix @rbreich Definitely fair, and I have been (briefly) one of them. Corporate leaders live for their overblown bonuses and perks, not for the welfare of the companies they lead or the customers or communities they serve.
Show threadFrancisDec 21, 2022
@rbreich
The business of America is business, Calvin Coolidge
Show threadVHaschDec 21, 2022

@rbreich

From art to NFTs to crypto..it all seems designed to make money laundering easier and quasi-legal.

Show threadThe BEST WordsDec 21, 2022
@rbreich And then, adding insult, those proceeds are taxed at close to half what I as a teacher pay.
Show threadDarthdzlDec 21, 2022
@rbreich About 80 to 90% of the entire worldwide financial industry does nothing except turn people's hard-earned savings or retirement into profits for the already-rich.
Show threadTokyo Jim Gottlieb 東京持夢Dec 22, 2022
@rbreich When I was young, the best and brightest went into medicine. Now they just go to firms that move money around (and take a cut).
Show threadknowitalltwiceDec 22, 2022
@rbreich Not sure on what data you base this naive? opinion on. Yes they dont produce widgets but without the capital/money to buy a widget machine noone does. Now that they got an earned interest tax loophole thats a gigantic scandal. That they exist is not.
Show threaddrewknightwvDec 22, 2022

@rbreich Sincere question, Professor: don't some private equity funds provide capital to new or growing businesses that don't have access to public markets?

Right there with you on non-productive ventures.

Show threadJayDec 24, 2022
@rbreich I feel like a certain German alcoholic wrote a whole book on this topic
Show threadAmish Super ModelMay 5, 2023

@rbreich

And the man in the suit has just bought a new car…
From the profit he's made on your dreams.

Show threadSystem IV, Building KMay 5, 2023
@AmishSuperModel @rbreich Rebop Kwaku Baah. ‘nuff said.