Robert Reich - For years, conservatives have been telling us that a healthy business-friendly economy depends on low taxes, few regulations, and low wages. Are they right?
We’ve had an experiment going on here in the United States that provides an answer.
At the one end of the scale are Kansas and Texas, with among the nation’s lowest taxes, least regulations, and lowest wages.
At the other end is California, featuring among the nation’s highest taxes, especially on the wealthy; lots of regulations, particularly when it comes to the environment; and high wages.
So according to conservative doctrine, Kansas and Texas ought to be booming, and California ought to be in the pits.
Actually, it’s just the opposite. For years now, Kansas’s rate of economic growth has been the worst in the nation. Last year its economy actually shrank. Texas hasn’t been doing all that much better. Its rate of job growth has been below the national average. Retail sales are way down. The value of Texas exports has been dropping.
But what about so-called over-taxed, over-regulated, high-wage California? California leads the nation in the rate of economic growth — more than twice the national average. In other words, conservatives have it exactly backwards.