(Jewel Samad/AFP/Getty Images)

Hitting in the final week of a presidential campaign, Hurricane Sandy stirred up the debate on an already divisive topic: the proper size and purpose of government. Mitt Romney and President Obama offer distinct and divergent visions for the role of government. We’ll contemplate their competing worldviews with former Labor Secretary Robert Reich, and Stephen Moore of the Wall Street Journal editorial page.

Guests:
Stephen Moore, senior economics writer for the Wall Street Journal editorial page, founder and former president of the Club for Growth, and author of "Who's The Fairest of Them All? The Truth about Opportunity, Taxes, and Wealth in America"
Robert Reich, chancellor's professor of public policy at the Goldman School of Public Policy at U.C. Berkeley, former labor secretary under President Bill Clinton; his best-selling eBook "Beyond Outrage" is now available in paperback

  • Fred

    Even the more hard-core but sane libertarians like Ron Paul know that government has to be around to protect people… from foreign armies, from hurricanes.

    It is only the corporatists (i.e. fascists) like Romney and Obama who dare to contemplate that everything should be privatized and the government which is supposed to serve the people should be carved up and given to their 1% cronies, who will then provide little or nothing to taxpayers. Hitler and Mussolini may have lost but their legacy is ideology of the 1% klepto-parasitic class, not just in the USA but globally.

    It is the corporatists who want to turn the USA into a slave state and the Earth into a prison planet, with everyone paying rent merely to be allowed to breathe the air, and then branded terrorists if they dare to protest any mistreatment.

    • theymightbegiants

      I ask myself daily how free- thinking Americans refuse to acknowledge the common sense rational Fred offers in his comment. God help us on our headlong dive into hell.

  • wandagb

    Either the government is bringing millions of foreign workers, immigrants, into an economy that condemns them to high levels of poverty or they are displacing American workers for the few jobs being created.

    The question is, why is the government importing millions of foreign workers into a Depression economy?

    P.S. Bonus points if your guests could answer without uttering the requisite “we are a nation of immigrants”.

    See further…cis.org/who-got-jobs-during-obama-presidency

  • Patsy

    Government should follow Gaby’s Four-Part Law. 1. Everybody knows what they’re doing;2.Everybody is on schedule;3.All objectives are being met both effectively and efficiently; and 4. Every attempt to improve the process makes things better and better.
    I followed this through my career at SF Redevelopment for 30 years and it works. Patsyoz

  • Chemist150

    I have a problem with people thinking government needs to do
    something. First, a business is going to
    maximize profits, so when the government says we’ll guarantee risky loans and
    you just have to fill out the paper work, it’s logical that they’ll make those
    risky loans and sell the securities with the backing of the government. It’s good business sense to make a profit. Fannie Mae and the government backing is at
    fault. They caused the housing market.

    Second, it’s bad to assume the bailout was worth it. Looking at the financial institutions that
    they bailed out due to the “fact” that they were “too connected” and comparing
    them to institutions that later collapsed with the exact same “connections”,
    the later companies that received no bailout did not collapse the system. The real scenario probably includes the right
    politicians having their money tied up at the failing institution and used tax
    payer money to save their own fortunes.

    Third, the assumption that cutting military spending will
    wreck the economy is a poor assumption.
    The example that we have in the US is after WWII when the military
    spending was drastically cut and in the following year (1946) there was, in
    fact, an economic boom. The money
    re-entered the private sector and peoples appetite to consume took over with
    the money back in their pockets.

    Create jobs by not taking all their money away for
    inefficient programs and sending more and more cash overseas. It’s that easy.

    • You may enjoy this… see page 16+. it may help improve your understanding of your first point. http://www.fhfa.gov/webfiles/1159/mme2005.pdf

      When more than 50% of the secondary mortgage market is made up of private sector money it is hard to place the blame for our current situation squarely on the back of the GSE.. However it is important to understand that while the GSEs were developed to subsidize an otherwise very narrow secondary market, The management of the GSEs should have scaled back their operation once the private sector took over. Jumping back in once private sector interest receded.. Instead the GSEs justified their increase in funding by noting that their overall share had gone down. We should not let that happen again.

  • dl

    Leave aside fairness and focus on practicality. Isn’t it consumer spending that powers the economy? My understanding is that there is a lot of cash sitting idle in the economy, waiting for demand to guarantee the need for hiring. Reducing taxes, cutting spending (eliminating more jobs), may make business leaders feel more confident, but it won’t increase demand.

  • James Ivey

    Supply side economics is a lie. I find “job creators” and “small business owners” as synonyms for the wealthy to be offensive.

    I’m am a small business owner. I’m not one of the 10% of small business owners that make 70% of all small business income. I’m one of the 90% of small business owners that make only 30% of all small business income. 90% of small business owners are middle class.

    If I get a huge tax break, I’m likely to keep the money or pay down debt as long as my capacity can meet my demand — exactly what all businesses do. I will hire when my demand out-paces my capacity. Saying that having extra cash on hand will cause me, or any business, to hire is a plain, unadulterated lie. Why would any business increase supply without an increase in demand to drive prices of their goods and services down? Anyone who has studied economics and states otherwise must be lying.

    • Chemist150

      I have to say that the politicians, political analysts and writers all seem to have a definition of small business. Many of those definitions seem to be that “small” is on the scale of what is publicly traded on the stock market. i.e. “small cap” and they are not paying attention to the guy that owns the corner market or franchised a pizza shop.

  • Guest

    It is a problem when Government tries to pick winners and losers. We spent 60 billion dollars to bail out GM that has been mismanaged for over 40 years while all other auto makers were forced to live through the recession. Now that Government motors is unable to meet the fuel economy rules, they are being given an exemption while others are being forced to follow them. It all looks a bit unfair.

  • dl

    To bring fairness into it the argument, one way to look at this is to consider the benefit we each get from society. Isn’t it true that the more well off have been able to benefit more from the infrastructure, rule and processes that we have put into place? For example, a hedge fund manager cannot make his own food, or generate their own power, or build their own roads. Since they take inordinate advantage of these things, shouldn’t they pay more for them?

  • Guest

    The problem with stimulus and Government in general is trying to please too many folks and not being focused like a business. For example, Green energy programs that a take a long time to pay back and infrastructure projects that provide immediate returns were all mixed up. I am sure this was done to please the environmentalists.

  • Genady Vargassnicht

    Businesses can make profits without workers, but not without buyers: Stephen Moore has not answered the basic question of demand. There is no reason to up production if there are no customers. More to the point–he looks at our competitors (India, China, Europe) without noting the massive subsidies and benefits that their government provides. The Chinese are very good at picking winners and losers.

  • Chemist150

    “trickle down” does not exist with a massive trade in-balance or a huge debt & deficit. Therefore, “trickle down” economics has not existed in since Reagan. Anyone using that argument is showing their ignorance.

    It’s trickling out. Business people do business where the money is, if the money leaves their business leaves and they get richer while the workers get poorer because they depend on the money staying here.

  • chrisco

    Regarding the caller who says that 250K is not rich in Silicon Valley and other expensive areas: Robert Reich is right that the proposed tax increase is very insignificant for those in the 250-300K range. It is only as the salary gets significantly above that where the bite comes in.

    And as Robert Reich says, half the people in the country make under 50K. So to sew a sob story about how you can barely get by on your 250K is not going to get much sympathy here, although I take the point that it is not as much as it seems. But it is a pretty darn small group that makes in that range.

  • dl

    Back to fairness, if a household is earning over $250k in a high cost of living area they must also be in an area of better infrastructure, schools and higher property values. That’s a benefit that others in areas with lower cost of living do not have. Is it wrong to ask those in the high cost of living areas that are earning over that threshold to pay a bit more?

  • chrisco

    Love Robert Reich’s cogent, excellent commentary. I disagree with Moore mostly but respect him as mostly putting out smart and honest commentary, although it seems he has some more spin than usual but we are days away from an election.

  • Danielle Dowers

    I am indeed outraged by the Republicans and Tea Partiers who cry “Government is the problem”, and in the same breath say “Don’t touch my Medicare, corporate subsidies, public safety, defense, and pothole repair”. There is a clear disconnect of the synapses here.
    Trickle down is a myth.
    Tax the Rich.

  • chrisco

    The caller talks of the extreme polarization as the 2 men represent different worlds and he represents common sense. Then he pretty much says these common sense things and they are exactly what Robert Reich was saying!!!

  • Once again….

    the problem we’re having is with this interview itself, it keeps to the same theme of standard economics (Robert Reich) versus supply-side economics (Stephen Moore)

    By continuing to put these two into the same discussion as if they have somehow equal weight is to give the generational lie of the extremes of supply-side economics

    It’s not one side or the other, not between these two!

    A better discussion would be symmetrical, two sides with equally justifiable and well substantiated results or at least basis in valid research

    Leave the voodoo chicanery where it belongs, in the boardrooms of consultants to super wealthy and large corporations to pull the wool over the eyes of the ‘simple’ people

    Please, please, let’s put this where it belongs and get on to a real discussion

  • reich.jonathan

    I can’t believe the BS I’m hearing from Stephen Moore.
    He’s repeating lie after lie just like the Republican political machine.
    Everybody should know that he and the people like him have destroyed the middle class in this country.
    And the Republicans are trying to repress the facts that prove it.
    The NYTimes report Thursday that Senate Republicans pressured the NON Partisan Congressional Research Service to withdraw an economic report that found no correlation between top tax rates and economic growth, a central tenet of conservative economic theory. Heres’ the link:
    http://www.nytimes.com/2012/11/02/business/questions-raised-on-withdrawal-of-congressional-research-services-report-on-tax-rates.html?ref=business&_r=2&
    Furthermore, the share of wealth in this country held by the rich has been increasing for decades and the gap between rich and poor has been growing. It’s a structural problem exacerbated by globalism, free market myths such as trickle down economics, and the rich not paying their fair share of taxes. Check out the following:
    http://www.guardian.co.uk/news/datablog/video/2011/nov/16/99-v-1-occupy-data-animation?fb=native

    It’s particularly galling to hear Moore talk s___t about Obama since the problems began long ago, 4 years is not enough time to fix it, and the Republicans and people like Moore have been fighting Obama every step of the way while promoting their own selfish interest and not the interest of the USA. They’ve also unleashed a vile, hate-filled, and dangerous campaign of truth twisting and lies since the McCain campaign.
    One has to have been asleep the last 5 years to not have seen this.

  • commonsense1234

    Investors don’t make investment decisions base on marginal tax rates. They make investments based on the perceived future increase of that particular asset class. In 2013, the housing market will recover which is a huge driver in the economy. Half of the unemployment is in construction – solve housing and your federal deficits become greatly reduced.

  • MelFC

    Stephen Moore lies like Mephistopheles. He spews half-truths, distortions, and complete fabrications with machine-gun speed. Why do we allow these outrageous statements to go unchallenged, simply because the format of the debate is an hour, or 90 minutes, in the case of the presidential debates? Slow down these discussions to debate every single point thoroughly. All the presidential debates were too short. So what if a presidential debate takes three hours? The French do it. This Moore-Reich debate should have been over two hours of Forum, not one.

  • commonsense1234

    Steven Moore does not know what he is talking about. The growth of govt has been pretty much flat since 2008. Federal revenues have fallen off because of the economy. If Medicare was allowed negotiate with drug companies you would have much lower drug costs. As Robert Reich pointed out – if you simply remove the cap on Social Security, then you don’t have a solvency issue. Currently, if you make more than $110K, you don’t pay Social Security on anything over that amount.

    A question for Steven Moore: Imagine McCain became president in 2008, do you think that his policies (tax cuts & fiscal austerity) would have done better to stimulate the economy? Clearly if you look at Europe you have your answer – we would have entered into another Great Depression.

  • geraldfnord

    All property above what a small-holder might create and accumulate on her own is to some extent a social creation, and so answerable to the just needs of that society. Many forms of State-enforced property help to impoverish some even as they enrich others, creating just needs…..

  • I have been working in the mortgage industry for over 15 years. I have
    looked at thousands and thousands of tax returns many of which were from
    proprietors of “small business” These people represent their income to
    the IRS on forms Schedule C and Schedule E (when filing a 1120s).

    it is so rare to find people who file a Schedule C or an 1120s
    (s-corp) reporting any where near $250,000, that it is almost
    non-existent. The idea that small business will suffer due to hire tax
    rates on people making over 250k is just silly.

    In-fact I would be comfortable saying that the ONLY people who do
    are “non-producers”… ie. realtors, money managers and mortgage
    brokers, etc…

  • Ellis

    Steven Moore is taking an ideological
    view of economics – not solving the problem!

    We know that counter-cyclical
    spending by government is how a country gets out of deep and
    systemic economic downturns.

    The ticket is high wages and high
    taxes.

    We are actually seeing a “Capital
    Strike” by the investor class. This money should be clawed back by
    government, it these folks won’t invest in the US Economy

    President Obama’s stimulus was way
    too small. He was told that it needed to be 1.8 Trillion and his was
    800 Billion.

    The unstated industrial policy of
    the United States is to offshore our civilian industrial base to
    China and other low-wage economies. This will not change until our
    government changes the incentives for this behavior to change.
    NAFTA, TPP goes in the wrong direction.

    Bailing out the big banks was a
    mistake. These institutions should have been put to bankruptcy and
    made much smaller. This would have removed the enormous derivative
    drag on our economy

    Lastly, allowing individuals to
    accumulate more than $1 Billion grossly distorts our political
    process. They only make mischief with this untaxed wealth, IE. The
    Koch Brothers.

  • I have been working in the mortgage industry for over 15 years. I have
    looked at thousands and thousands of tax returns many of which were from
    proprietors of “small business” These people represent their income to
    the IRS on forms Schedule C and Schedule E (when filing a 1120s).

    it is so rare to find people who file a Schedule C or an 1120s
    (s-corp) reporting any where near $250,000, that it is almost
    non-existent. The idea that small business will suffer due to hire tax
    rates on people making over 250k is just silly.

    In-fact I would be comfortable saying that the ONLY people who do make more then 250k and file one of those to forms
    are “non-producers”… ie. realtors, money managers, mortgage
    brokers, etc…

  • Good show, but you left the best part unsaid. On 60 minutes, Grover Norquist said that he would like to lower the tax rate to single digits. http://www.youtube.com/watch?v=wHKoCw1xSKM And when pressed on what that would cover, he said defense. The rest of the government spending is unnecessary, including Medicare. This is what the prophet of the far right sees as the proper role of government.

Sponsored by

Become a KQED sponsor