Reich Spins French Socialist's Win on CBS: No 'Dramatic Effect' on Economy
Monday's CBS This Morning brought on former Clinton Labor Secretary
Robert Reich to brush off the effect of French socialist Francois
Hollande's election on the world economy, despite the immediate decline
in global stock markets: "I don't think there's really much danger."
Anchor Erica Hill had asked the pundit if there was "a danger in
throwing off the French economy and the ripple effect that could have."
Charlie Rose identified Reich as merely a "former labor secretary"
and omitted mentioning his former Clinton administration role, along
with his left-of-center ideology. The morning show also let the
economist appear solo, without bringing on a conservative to appear
opposite him during the segment.
After acknowledging his former Cabinet role, Rose noted that his guest was "has a new e-book. It is called, 'Beyond Outrage: What has gone wrong with our economy and our democracy, and how to fix them
[it]." The anchor also highlighted that "outrage has something to say
about the voters in Europe as they turn out one government after
another." He then pointed out that "Sarkozy had a good relationship with
[German] Chancellor Merkel...on the European debt crisis. You have
Francois Hollande coming in with different ideas and a different kind of
a relationship with her."
The liberal economist replied that "Hollande...is saying, we
are not going to embrace austerity economics- that is, cutting budget
deficits, cutting safety nets, as a means of restoring so-called
confidence in the business sector. We are not going to sacrifice our
economy for the sake of the bond traders." He added that "as a
practical matter, they've got to do some of that. I mean, it's just
going to slow down the deficit cuts in France."
Co-anchor Erica Hill continued by asking her question about the
possible "ripple effect" on the international economy. After downplaying
the risk, Reich played up that "under the surface, the bureaucrats in
the ministries of the finance; the IMF- the International Monetary Fund-
they are all negotiating carefully."
Rose actually pushed back a bit towards the end of the interview as Reich continued his spin about Hollande's election:
ROSE: And what impact will it have on the U.S. economy?
REICH: Not a dramatic impact, Charlie- American firms- big American
firms- are going to find Europe is drifting into recession. There is
going to be some nervousness about- the bond traders, the bond
community- and that may slosh over into the stock market. But Europe is
not going to go down the tubes. It's not- I don't think the Euro is
going to come apart.
ROSE: Why are you so sure?
[CBS News Graphic: "Euro Zone By The Numbers: Euro at 3-month low; Unemployment at 15-year high"]
REICH: Because so many people there- every power that be- has a stake
in making sure that the Euro, as a common currency, continues.
ROSE: But they've had that stake for a while.
REICH: Yes, and nothing-
ROSE: They've just kicked it down the-
REICH: They just kick it, and they kick it down. Well, they are the masters of kicking the can down the road.
The former Clinton administration official ended the segment by minimizing the serious issue of the national debt of the U.S.:
REICH: Here in the United States, I think the debate in Europe has a little bit of resonance because here, obviously, there are those who say the deficit has got to be cut, the first thing, and there are others who say we have to have growth and we've got to get unemployment down, the first thing. But here, our deficit's not nearly as drastic as the European deficit, as a percentage of the total economy.
Back in November 2011, CBS touted Reich as a proponent of higher taxes as they spotlighted a millionaire's own call for a tax hike. The left-leaning pundit hyped how "the 400 richest Americans now own more of America than the bottom 150 million Americans" and that the "fundamental problem is that we are losing equal opportunity in America."
The full transcript of Charlie Rose and Erica Hill's interview of Robert Reich, which began 11 minutes into the 7 am Eastern hour of Monday's CBS This Morning:
CHARLIE ROSE: Stocks are falling across Europe and Asia this morning
after the French election, and after voters in Greece put that nation's
bailout deal in doubt.
Let's look at Europe's economic issues and how they might affect the
United States with former Labor Secretary Robert Reich. He has a new
e-book. It is called, 'Beyond Outrage: What has gone wrong with our
economy and our democracy, and how to fix them' [sic]. Welcome.
ROBERT REICH, AUTHOR, BEYOND OUTRAGE: Good morning, Charlie.
[CBS News Graphic: "European Dis-Union: Euro Drops After French, Greek Elections"]
ROSE: Outrage has something to say about the voters in Europe as they turn out one government after another.
ROBERT REICH: They have been outraged by the cuts in social services,
in safety nets, particularly, given their high unemployment.
ROSE: So here you have a man who- President [Nicholas] Sarkozy- had a
good relationship with [German] Chancellor Merkel- had been working on
the European debt crisis. You have [French President-elect] Francois
Hollande coming in with different ideas and a different kind of a
relationship with her.
REICH: Hollande, basically, is saying, we are not going to embrace
austerity economics- that is, cutting budget deficits, cutting safety
nets, as a means of restoring so-called confidence in the business
sector. We are not going to sacrifice our economy for the sake of the
bond traders. But, as a practical matter, they've got to do some of
that. I mean, it's just going to slow down the deficit cuts in France.
ERICA HILL: 'The Economist' actually referred to him- I guess a week, a
week and a half ago- as a rather dangerous man for some of the things
that he was proposing. Is there a danger in throwing off the French
economy and the ripple effect that could have, because, as you
mentioned, some of these things need to stay in place?
[CBS News Graphic: "World Market Reactions: France: (down) 0.7%;
Germany: (down) 1.1%; Greece: (down) 6.9%; Hong Kong: (down) 2.6%"]
REICH: I don't think there's really much danger, Erica, you know? And
Europe is a place where there's, kind of, a political level; there's a
lot of drama; and people are constantly making positions, and people are
storming this way and that way. But, under the surface, the bureaucrats
in the ministries of the finance; the IMF- the International Monetary
Fund- they are all negotiating carefully. What all this means, both in
France and in Greece and elsewhere- the Dutch government fell- is that
the process of mending the balance sheets of European governments is
probably going to be slower than it otherwise would be.
ROSE: And what impact will it have on the U.S. economy?
REICH: Not a dramatic impact, Charlie- American firms- big American
firms- are going to find Europe is drifting into recession. There is
going to be some nervousness about- the bond traders, the bond
community- and that may slosh over into the stock market. But Europe is
not going to go down the tubes. It's not- I don't think the Euro is
going to come apart.
ROSE: Why are you so sure?
[CBS News Graphic: "Euro Zone By The Numbers: Euro at 3-month low; Unemployment at 15-year high"]
REICH: Because so many people there- every power that be- has a stake
in making sure that the Euro, as a common currency, continues.
ROSE: But they've had that stake for a while.
REICH: Yes, and nothing-
ROSE: They've just kicked it down the-
REICH: They just kick it, and they kick it down. Well, they are the
masters of kicking the can down the road. Here in the United States, I
think the debate in Europe has a little bit of resonance because here,
obviously, there are those who say the deficit has got to be cut, the
first thing, and there are others who say we have to have growth and
we've got to get unemployment down, the first thing. But here, our
deficit's not nearly as drastic as the European deficit, as a percentage
of the total economy.
ROSE: Good to see you. Thank you.
REICH: Good to see you.
