THE ECONOMIC FANTASIES OF ROBERT REICH: At the Hoover Institute, Richard Epstein writes:

There is a large point that comes out of Reich’s social agenda. Notwithstanding his long service in government, he seems to have no understanding of the enormous slip that takes place between an ambitious program for social reform and its successful implementation. I have spent most of my academic life in the weeds, looking at the specific operations of government action as it applies to pharmaceuticals, to the environment, to housing, to securities, to education, to employment, banking, insurance, and other social institutions.

In all of these areas, I have come to the conclusion that the modern progressive state has wrought untold damage for two very simple reasons. First, it has no sense as to when government should intervene and when it should stay its hand. The regulation of competitive labor markets is almost always a loser, and the ever-heavy hand of government in this area does much to explain the decline in working class incomes.

Second, the government has no sense of which means work and which do not. If the risk is monopoly, control it with an antitrust law that is limited to monopoly. But don’t wreck competitive industries, and by all means don’t use government power to prop up monopolies, as in labor markets.

But Reich is blind to all this. There is not a single proposal for deregulation in his disjointed book. Unfortunately Saving Capitalism won’t help the many as it promises to. If its policies are implemented, it will wreak economic and social mayhem on everyone.

The keyword there is “monopoly.” Or perhaps “Monopoly,” as Reich imagines himself surrounded by various iterations of Rich Uncle Pennybags, the monocled fat cat in striped pants, top hat and spats on the board game’s boxtop, as Jonathan Rauch wrote in his devastating 1997 Slate article titled “Robert Reich, Quote Doctor.”

Rauch compared the quotes in Reich’s then-new book Locked in the Cabinet with transcripts, and in some cases actual C-Span videos of events that Reich described, and then simply pointed out the disparity:

Or, perhaps most striking of all, consider a set piece in which Reich speaks to the National Association of Manufacturers. He describes himself as being ambushed by cigar-chomping capitalists who hiss at him so loudly that he has to yell to be heard. “They plan to carve me up into small pieces,” he writes. “There isn’t a lady in the room. All men, in dark suits. They’ve finished lunch. Some are smoking cigars. Others are quietly smirking, ready for the kill.” His speech over, Reich is lambasted by a “John,” and Reich’s answer elicits an eruption of “Wrong!” “Bullshit!” and “Go back to Harvard!” As Reich speaks, the audience hisses so loudly “that I’m not sure anyone can hear me.” The cigar smoke, he says, “is making my eyes water. I feel dizzy.” He says, “We’re in a boxing arena, John’s the champ, and the crowd is loving every minute.” Finally, the meeting over, he races “out the back exit before they can pummel me.”

As it happens, the meeting was a breakfast, not a lunch. The NAM says the attendance list shows that a third or more of the people present were women (including the NAM representative with whom I spoke). If anyone actually was inclined to light up a cigar after breakfast, he would have been breaking the NAM’s no-smoking rule, according to an association representative (who, like another witness I talked to, saw no cigars). Most important, a transcript of the meeting shows a respectful Q and A session, in which none of the comments attributed to “John”–nor any like them–were actually made.

One would hardly expect a roomful of corporate reps to hiss, boo, and shout “bullshit” at a sitting U.S. labor secretary. Sure enough, the transcript shows nothing nastier than sprinkled applause and laughter. I asked Richard Boyd, the professional court reporter who transcribed the session, whether his transcript might have omitted hisses, boos, and imprecations. “I never witnessed anything like that with Robert Reich or anybody else at a NAM meeting,” he said. “I’m absolutely certain I would remember it.” Reich portrays himself as the little guy standing up to a roomful of abusive capitalists–pure Hollywood. Again, don’t take my word for it; click here.

I asked Reich what was going on in each of these cases. In reply, he pointed to his Note to the Reader: “I claim no higher truth than my own perceptions. This is how I lived it.” He said that his notes accurately reflected how he felt and what he perceived. In the three cases cited above, he felt varying degrees of hostility. “I am not representing the book to be anything other than it is, which is my account of my experiences, my perceptions, what I saw and heard around me,” he said. “That’s all I can say.”

In effect, Reich is saying that he’s not writing journalism or history. He’s writing … well, what? He elides the very distinction between history and myth, memoir and novel, reality and perception. The problem is that those are real people he misquotes, real history he rewrites.

And as Epstein writes today, real-world economics he distorts.