I recently read what I believe to be the best analysis of our economic situation, that I have seen yet. This is a concise explanation of our present problem and an optimistic view towards its solution, written by Robert Reich, a very bright fellow who has worked for a few Presidents , written several books and is worth listening to. Please take a few minutes and gain a greater understanding of our plight.
UNJUST SPOILS
Wall Street's banditry was the proximate cause of the Great Recession, not its underlying cause. Even if the Street is better controlled in the future (and I have my doubts), the structural reason for the Great Recession still haunts America. That reason is America's surging inequality.
Consider: in 1928 the richest 1 percent of Americans received 23.9 percent of the nation's total income. After that, the share going to the richest 1 percent steadily declined. New Deal reforms, followed by World War II, the GI Bill and the Great Society expanded the circle of prosperity. By the late 1970s the top 1 percent raked in only 8 to 9 percent of America's total annual income. But after that, inequality began to widen again, and income reconcentrated at the top. By 2007 the richest 1 percent were back to where they were in 1928—with 23.5 percent of the total.
Consider: in 1928 the richest 1 percent of Americans received 23.9 percent of the nation's total income. After that, the share going to the richest 1 percent steadily declined. New Deal reforms, followed by World War II, the GI Bill and the Great Society expanded the circle of prosperity. By the late 1970s the top 1 percent raked in only 8 to 9 percent of America's total annual income. But after that, inequality began to widen again, and income reconcentrated at the top. By 2007 the richest 1 percent were back to where they were in 1928—with 23.5 percent of the total.
Each of America's two biggest economic crashes occurred in the year immediately following these twin peaks—in 1929 and 2008. This is no mere coincidence. When most of the gains from economic growth go to a small sliver of Americans at the top, the rest don't have enough purchasing power to buy what the economy is capable of producing. America's median wage, adjusted for inflation, has barely budged for decades. Between 2000 and 2007 it actually dropped. Under these circumstances the only way the middle class can boost its purchasing power is to borrow, as it did with gusto. As housing prices rose, Americans turned their homes into ATMs. But such borrowing has its limits. When the debt bubble finally burst, vast numbers of people couldn't pay their bills, and banks couldn't collect. ...click here to read more
Robert Reich is Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written twelve books, including The Work of Nations, Locked in the Cabinet, and his most recent book, Supercapitalism. His "Marketplace" commentaries can be found on publicradio.com andiTunes.
Thank you Robert, for a very insightful explanation of our situation. Eric
1 comment:
This article illustrates the technique used by the powers-that-be this past century to fool and swindle the public - Incrementalism.
By slowly deregulating, legislating and forming trade agreements over decades, these people have committed the largest robbery in history - and most people hardly noticed. Syphon all the money to the top over night and people would riot. Do it over 3 decades and they don't even blink.
History is literally repeating itself. Wait until everyone that remembers the last depression dies and what is left? A bunch of suckers that don't read history and have lived in nothing but prosperity their whole lives. Same scam, different generation.
This current economic situation is all that should be required to get government out of public education. Economics classes all over the country should be teaching what is in this article. Instead, the government will churn out another generation that knows nothing about their own money or how it is being stolen from them.
I guess I can't blame them though. I wouldn't educate someone in the method I was using to rob them either.
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