Question

• What does Robert Reich suggest would be a solution to the slow recovery of the economy? What is his view of debt? What are his recommendations for reform for the financial sector? Do you agree or disagree? What is Thomas Piketty's view of the causes of unequal income distribution? What policies do you suggest for the economy? Why?

Answer 1

Robert Reich suggested few measures to recover from a slow economy. First, women to be encouraged to move into paid jobs. Second, everyone to work longer hours. Third, increasing the consumption, drawing down the savings. Fourth, Govt. must increase money supply through low interest credits and increase its spending as well. Fifth, cushion the citizen from sudden economic shocks and lessen the inequality gap.
Robert Reich believe that there is no patriotism in being thriftful and no heroism in exposing one’s family to financial stress. The govt. can show market patriotism by stopping profitable companies from laying off employees during a slowdown.
Thomas Piketty is of the view that when the rate of return from capital is more than the rate of economic ptoductivity, there is concentration of wealthy. This inequality reasons social and economic unrest in the society. He also highlighted that the world is moving towards patrimonial capitalism i.e. economy dominated by inherent wealth.
Policies that can help the economy comprise proactive governance that focus on job creation and reduction in income inequality. At the same time, the wealth can be taxed higher and the poor can be offered subsidies.