Robert Reich Issues Economic Warning

Over the years I have grown to respect Robert Reich’s opinions. He is one of those rare experts who has superior understanding of his subject and also the ability to speak about it in an accessible way. He makes lesser economists look like hacks.

So when Reich issues a warning about a “day of reckoning” for the U.S. economy, as he did in a recent speech, it’s fair cause for concern.

While the country is recovering from a recession in 2001 with decent overall economic growth and a return of information technology business, there are three storm clouds on the horizon in the next year or two, he said. They are high oil prices, a $400 billion U.S. budget deficit, and record high levels of consumer spending and record low levels of consumer savings.

Reich also says that Medicare is a “huge” problem but Social Security is not. And it’s nice to hear someone who gets it on outsourcing instead of blowing steam (cough, Lou Dobbs, cough):

Concerns about the threat from globalization are overblown, he said. The key to countering outsourcing is to create jobs in which workers add value to products that make them more competitive. "Globalization works to our advantage if we see the opportunities," he said.

[CNET…]