After years of data accumulation and analysis, top U.S. economist Robert Genetski found that progressive or socialist policies are destructive and can only bring America away from prosperity. He also said the Biden administration’s economic policies are “absolutely” progressive or socialist.
Genetski is “one of the nation’s premier interest rate forecasters,” according to the Heartland Institute. He’s a consultant, teacher, author, and speaker, and recently has become a contributor to The Epoch Times.
“The classical free-market policies were far more effective and powerful than I ever imagined, and the movement away from them, in terms of progressive economics and socialism, were far more destructive,” Genetski told The Epoch Times. “I would never have guessed that for 52 years we would have no increase in the real take-home pay of the average worker.”
Genetski said he wanted to compare the effects of progressive policies and free-market policies, and that after years of research, the results surprised him.
“So I wanted to find out the answer, and the first thing I found out is we did not have good data going back continuously,” Genetski said.
Genetski said we have data on Gross Domestic Product (GDP) year by year for over a century, but that’s not necessarily a good indicator. For example, the GDP would explode during wartime, but people were suffering.
“I wanted to dig down into the data, and it took me several years to reconstruct data for the U.S. that showed not just GDP, but how much people were buying, how much they were earning, what their incomes were in real terms, and, therefore, how much they were really prospering,” Genetski said. “I spent a good deal of time creating the data.”
Genetski spent four years doing the research, the findings of which were reflected in his book “Rich Nation, Poor Nation.”
After gathering all the data for incomes and real wages, the second thing Genetski did was to look at U.S. economic policies each year from 1900 on.
“What was happening to our taxes? What was happening to our government spending? Was it growing faster or slower than spending in the rest of the economy? What were we doing with regulations? Were we putting them on or taking them off? Were we interfering with markets, or were we freeing up markets after we had interfered? So, year by year, I went through what our policies have been for over a century.”
Genetski found that almost all of the increase in the average worker’s real take-home pay was achieved in the 50 years when the policies followed classic free-market principles.
“There were only 50 years in that period from 1900 to 2015, when we were moving clearly to cutting taxes, lowering government spending, reducing regulations, not interfering in markets, or taking restraints off of markets. And in that 50 years, I found that we produced 87 percent of the gains over the 115 year period.”
The rest of the gains all came from 1940 to 1953, when policies moved back and forth because of World War II and the Korean War, said Genetski.
“And then what I did—and this was the biggest shock to me of all—is I looked at the periods when we were moving in the direction of these so-called progressive policies—in the direction of socialism—and I found that there were five clear periods when we moved in that direction,” said Genetski. “In that entire 52 years, we had zero gains in the average worker’s real income.”
Genetski said when he first saw the results, he couldn’t believe it, so he went back and redid the numbers “again and again.”
“My first reaction was, ‘Oh my gosh’—and this is a very naive reaction—’this is so persuasive. We now know how to do away with poverty, abject poverty, in the world,’” said Genetski.
Genetski explained he not only analyzed data in the United States, but 40 countries throughout the world. During his research, he used the economic freedom measures for each country by the Fraser Institute, a world-renowned think tank located in Canada.
Even a poor, small African country surrounded by other poor countries in the sub-Sahara area demonstrated the effectiveness of classic free-market principles, said Genetski.
Botswana “ended up with measures of economic freedom above the middle of the world average,” said Genetski. “And 10 years later, their incomes went above the middle of the world average.”
So are the Nordic countries and other European countries.
“You can’t just look at a country and say, ‘This is socialist, and this is free market’—you have to look over time at what the policies are that they’re pursuing, and what have been the effects of those policies. And, again, when I look at those countries, when they move in the direction of free-market, classical principles, they do very well. And when they move away, they do very poorly, very much as the United States has done in our history.”
Biden’s Economic Policies are ‘Absolutely’ Progressive, Socialist
Genetski said the current Biden administration’s economic policies are “absolutely” progressive or even socialist.
He said the difference between progressive and socialist is only “a question of degree,” and what matters is the direction.
“Any movement in the direction of giving government more power, more control over the economy, more control over people, more control over markets, is definitely a move toward socialism,” Genetski said. “The only question is how dramatic the move is.”
The Biden administration has so far made some of the biggest moves away from classical free-market principles in the nation’s history, said Genetski.
Genetski said previously there were two major moves of this kind in American history. One was from 1913 to 1920 under President Woodrow Wilson.
“President Wilson was the first progressive. He basically said he didn’t agree with the principles that the United States was founded upon. He thought we could do much better if the government were to take more control over the economic process, more control over making people’s incomes more equitable, and he said we would be so much better and so much more efficient,” Genetski said.
“And the economy just got destroyed in those years. In 1920, we had an election, and the public just kicked out all the politicians who had moved us in what turned out to be a terrible direction, in terms of the living standards.”
The second-largest “progressive” move came from 1965 to 1981.
“At the end of the period, it was under President [Jimmy] Carter, which was the most dramatic move—they tried to control oil prices. And what happened? We had gas lines went around the block, people were waiting for gas, you could only get so many gallons of gas. They increased government spending dramatically. They created a lot of new money in the economy, which, incidentally, is what we’re doing today. And the results again were so bad that in 1981 they got kicked out of office.”
Genetski said that with a little bit of government excess spending, the economy takes away a little bit of our freedom. With just a little bit of control over markets, like the minimum wage law, the government normally causes much more damage than it would have if it had just let markets adjust. The wage should be set by natural economic forces, not by the government.
“What I found when I did all my research was that [when] you get a little bit of a movement away from freedom and free markets, then you get a little bit of deterioration in your living standards. And the greater the movement toward socialism, the greater the damage.”
Last September, 17 Nobel Prize winners in Economics wrote an open letter supporting President Joe Biden’s Build Back Better agenda.
“Just because we have a degree in some subject, or that we’ve attained some sort of expertise in an area, doesn’t mean that we all of a sudden know something about socialism or communism,” Genetski said. “And yes, there are lots of economists who believe in this progressive economic system.”
“My response to them is look at the evidence, look at the data. If I’ve done this wrong, tell me about it.”
Genetski said time and again after he criticized progressives and provided his evidence, they never came back to argue about the evidence.
“They prefer to just ignore it and claim that what they say is correct. And to me, that’s not the way you should try and discover the truth and discover what works and what doesn’t work.”
Equity vs Prosperity
Since taking office, the Biden administration has pursued a comprehensive approach to advancing “equity.” However, seeking equity doesn’t result in prosperity, said Genetski.
“It doesn’t work out because of the reality of human nature and because of the evidence,” Genetski told The Epoch Times. “We have a great deal of evidence.”
He noted the Fraser Institute, which has studied economic freedom throughout the world, “looked at equity, equity in terms of who controls most of the income in the world. Is it the bottom 10 percent? Is it the middle? Is it the upper 10 percent? And what they find, very clearly, is that equity is pretty much the same, whether you are in a country where the government has a great deal of control, or whether you’re in a country where you have more freedom and more movement in the direction of these classical economic policies.”
Genetski said no country in the world, via socialism, has attained more equity, where the poor have as much as the rich.
“Even in the poorest countries, what you find is the poor have very, very low levels of income. And those people who are in control—the ones who are running the government and making the rules for everyone—they do very well. And the people who are close to them do very well,” Genetski said.
“So you really don’t get the equity that has been promised [by socialists] in the real world. The only way you get it is in the theoretical world, where people imagine that this is going to happen,” said Genetski.
“Adam Smith wrote about this over 200 years ago. He said human nature is such that if I can get something for nothing, and stay in bed and just rest and do whatever I want, maybe paint for the rest of the day. People have a natural, human nature, instinct, to do that. They don’t have an instinct to get up early in the morning, to work very hard, to try and improve themselves,” Genetski said.
Adam Smith, the famous Scottish economist and philosopher, was known as “the Father of Economics.”
“So should we really hope for a situation where everyone gets the same? My answer to that is no,” said Genetski. “I don’t think that makes any sense. We have to take human nature into account. That’s one thing I believe the socialists, so-called progressives—the people who want to control everything—really miss out on.”
“And that’s one of the reasons why when government takes control of things, we don’t have prosperity. We have difficulty in creating the sort of wealth that people would really like to have.”
Why More Youth Favor Socialism
Genetski said schools have played a prominent role in students’ misunderstanding of socialism.
In June, an Axios/Momentive poll showed that 51 percent of 18–24-year-olds view socialism in a positive light, while 54 percent of this age group view capitalism in a negative light.
“It’s what they were taught in school,” Genetski said. “Unfortunately, the schools have not been teaching people how to think. They’ve not been teaching critical thought processes. What they’ve been teaching people is what the teachers believe they should know. It’s more indoctrination than anything else.”
Genetski said he saw it firsthand in his own family. His grandchildren, he said, haven’t been taught to go and look for the evidence to see if what the teacher told them is true.
“The worst thing is these teachers who are teaching them that have no background in understanding socialism,” Genetski said. “They don’t go through the history of it. They don’t go through countries that have adopted government policies that are suppressing people. They simply accept that this is fair, this is equitable, this is something that it’s going to be better for you and for everyone else.”
“These kids, fortunately, do care about other people. But when they think that socialism is good for everyone, that it’s going to benefit everyone—make everyone more equal, make everyone have more things—they just buy this. And it’s frustrating to me, frustrating to people who have looked at the evidence.”
Genetski said it’s a “real crime” that schools only teach one-sided theories.
“I have no problem with teaching the progressive economic principles and the move towards socialism. That should be taught. People should have exposure to that,” Genetski said. “But make sure people are aware of both positions and let them think for themselves, which one seems to make more sense: the one that seems to work all the time, or the one that fails all the time?”
“The answer to me is obvious. But again, let people evaluate if they don’t like the data that I’ve come out with. Criticize it. Tell me what’s wrong. Do your own analysis. And then let’s evaluate.”
Genetski still has hope for the future of America.
“Is there any hope? Yes. When people’s incomes are hurt, when the stock market is not doing well, when they don’t have jobs they are not able to earn with—and this has happened each time we’ve had progressive policies—people lose faith in the future. They lose faith. ‘The economy is not going to recover. This is terrible.’”
But when people lose faith, they seek change.
“I’m hopeful that people will become very frustrated. They don’t necessarily have to understand the economics, but they see what it does to their incomes, and they don’t care about the economics. They just want to change and hope that something will get better.”
“For example, we have elections coming up in November. If there is a huge switch to getting rid of people who believe that the government should control more, and we put other people in, that will slow the trend and maybe stop it for the next two years until the presidential election,” said Genetski.
“It’s a process that goes on. No one knows how it’s going to turn out. But the history suggests that when you move too dramatically in one direction, and you see the damage, and people realize that, there is an automatic tendency through elections to shift policies back in the other direction.”