Reich Is Wrong Again

(Don Boudreaux)

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Here’s a letter to Bloomberg:

Editor:

More notable than Robert Reich and Elon Musk calling each other names is the revelation of Mr. Reich’s bizarre understanding of commercial transactions (“Elon Musk Trades Insults With Robert Reich Over Tesla Pay Cuts, Sept. 9). In criticizing the enormously wealthy Mr. Musk for Tesla’s decision to temporarily cut its workers’ pay, Mr. Reich presumes that commercial transactions should be governed by the standards used to judge philanthropic donations.

This presumption is mistaken. But Mr. Reich can prove the sincerity of his belief in it: With his net worth of $4 million being nearly six times higher than is the average net worth of an American ($692,100), Mr. Reich should insist on paying – for each good and service that he buys – a price six times higher than the posted price. If he has his shoes shined at a price of $10, he should hand the shoe-shiner $60. If he orders a dish of mahi-mahi priced at $20, he should pay the restaurant $120. If he buys a new Toyota Prius with a sticker price of $24,500, the check that he writes to the dealership should be in the amount of $147,000.

Let Mr. Reich lead by example.

Sincerely,

Donald J. Boudreaux

Professor of Economics

and

Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center

George Mason University

Fairfax, VA 22030