CBS: The Rich to Blame For Bad Economy, Need to Pay Higher Taxes

On CBS's Sunday Morning, correspondent Martha Teichner promoted left-wing class warfare talking points from former Clinton Labor Secretary Robert Reich: "[He] in a new book points out another ominous parallel between the Great Depression and the 'Great Recession,' its cause." Reich proclaimed: "More and more of the income that was generated by the economy went to people at the top." [Audio available here]

Teichner worked to bolster Reich's argument: "In the last century, there were only two years, in 1928 just before the great crash, and then again in 2007, during which the richest 1% were taking home nearly a quarter of the entire income of the nation." Reich continued his assault on upper income earners: "Last year, when most Americans were suffering, the top 25 hedge fund managers each earned $1 billion. A billion dollars would pay the salaries of something like 20,000 teachers."

Again, Teichner made sure to back up Reich's assertions: "That wage inequality, Reich argues, is at the heart of our economic woes. And to fix things, we need to pay those teachers and the rest of the middle class more, not less, so they can spend enough to kick-start the economy. And yes, that means higher taxes for the rich."

For a brief moment, the segment featured the opposing side, in the form of Republican Senate Minority Leader Mitch Mcconnell warning that increasing taxes on the rich could further harm the economy. However, Teichner quickly dismissed such a notion, in favor of liberal economic dogma: "In the partisan battle over the future of the Bush tax cuts, Reich disagrees." Reich claimed: "We provided a huge tax cut to the rich and nothing trickled down. After 2001, median wages actually dropped."

Teichner tried to suggest that any tax increases would be modest compared with past tax rates: "The top tax rate now is 35%. If the Bush tax cuts are allowed to expire, nearly 40%. For the record, under President Eisenhower, a Republican, the top rate was 91%. Really. Middle class wages were rising and the rich actually got richer."

As NewsBusters' Brad Wilmouth earlier reported, giving commentary later in the broadcast, Syfy Channel producer Linda McGibney attacked economist and Sunday Morning contributor Ben Stein for opposing a tax increase on the wealthy. In part, she ranted: "I suppose he thinks he’s beyond sharing his good fortune with the rest of Americans who are suffering financially or he just doesn’t care about them. ... I have always understood that the have’s are greedy. This is the first time I've heard one of them express it out loud so openly."

Here is a transcript of the September 26 exchange between Teichner and Reich:

9:08AM ET

ROBERT REICH: Typically in a business cycle, we get back to the same economic path we were on. People get their old jobs back or nearly their old jobs. But this time around, very much like the Great Depression, we are not going to be able to go back on the same road.

MARTHA TEICHNER: Former Clinton Labor Secretary Robert Reich in a new book points out another ominous parallel between the Great Depression and the 'Great Recession,' its cause.

REICH: More and more of the income that was generated by the economy went to people at the top.

TEICHNER: In the last century, there were only two years, in 1928 just before the great crash, and then again in 2007, during which the richest 1% were taking home nearly a quarter of the entire income of the nation.

REICH: The typical CEO is up to 350 times the salary and benefits of the typical worker. Last year, when most Americans were suffering, the top 25 hedge fund managers each earned $1 billion. A billion dollars would pay the salaries of something like 20,000 teachers.

TEICHNER: That wage inequality, Reich argues, is at the heart of our economic woes. And to fix things, we need to pay those teachers and the rest of the middle class more, not less, so they can spend enough to kick-start the economy. And yes, that means higher taxes for the rich.

REICH: The economy depends – 70% of demand – on consumers and those consumers are essentially the middle class. People who are very rich, they spend a much smaller proportion of their income.

MITCH MCCONNELL [SEN. R-KY]: No recovery will take place if we impose new taxes on the people we need to create jobs.

TEICHNER: In the partisan battle over the future of the Bush tax cuts, Reich disagrees.

REICH: We provided a huge tax cut to the rich and nothing trickled down. After 2001, median wages actually dropped.

TEICHNER: The top tax rate now is 35%. If the Bush tax cuts are allowed to expire, nearly 40%. For the record, under President Eisenhower, a Republican, the top rate was 91%. Really. Middle class wages were rising and the rich actually got richer.

REICH: Henry Ford understood this. He paid his workers $5 a day at the Highland Park Model-T plant. That was a lot of money. That was about twice as much as the typical worker was earning. He said, you know, I'm going to make a lot of money because my workers are going to earn enough that they can turn around and buy the Model-Ts that they are making. You know something, Henry Ford was right.