Why the Economy can't get out of First Gear - Robert Reich
http://www.nationofchange.org/why-economy-can-t-get-out-first-gear-1339597353The major reason this recovery has been so anemic is not Europe’s debt crisis. It’s not Japan’s tsumami. It’s not Wall Street’s continuing excesses. It’s not, as right-wing economists tell us, because taxes are too high on corporations and the rich, and safety nets are too generous to the needy. It’s not even, as some liberals contend, because the Obama administration hasn’t spent enough on a temporary Keynesian stimulus.
The answer is in front of our faces. It’s because American consumers, whose spending is 70 percent of economic activity, don’t have the dough to buy enough to boost the economy – and they can no longer borrow like they could before the crash of 2008.
If you have any doubt, just take a look at the Survey of Consumer Finances, released Monday by the Federal Reserve. Median family income was $49,600 in 2007. By 2010 it was $45,800 – a drop of 7.7%.
All of the gains from economic growth have been going to the richest 1 percent – who, because they’re so rich, spend no more than half what they take in.
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pipoman
(16,038 posts)Because Robert Reich threw blue collar under the bus and ran over them...repeatedly..during a time when he could have defended them...he's a corporate sell out.
Bill USA
(6,436 posts)too much is going to the top 1%?
from the OP:
If you have any doubt, just take a look at the Survey of Consumer Finances, released Monday by the Federal Reserve. Median family income was $49,600 in 2007. By 2010 it was $45,800 – a drop of 7.7%.
All of the gains from economic growth have been going to the richest 1 percent – who, because they’re so rich, spend no more than half what they take in."
pipoman
(16,038 posts)those 1%ers used to pay wages in the US or other nations with worker protections back when there were tariffs in place to balance the benefits of using slave labor.
He knows full well that his beloved trade deals are the primary cause which he feigns to seek..he is an enemy of US labor
Bill USA
(6,436 posts)what caused the Housing bubble, and the Fed's easy money policy, and Bush's two wars funded by public debt had nothing to do with the Trickle Down disaster. Oh, and Reich pushed for the deregulation of trade in Credit Default Swaps (not Phil Gramm and the Republican party) as secretary of labor.
Right, Robert Reich did all that AFTER HE WAS NO LONGER IN GOVERNMENT.
pipoman
(16,038 posts)the "housing bubble" was/is exacerbated by people not being able to pay their mortgages because he exported their job. He is an enemy of US labor.
Bill USA
(6,436 posts)Reich lead the effort - of the Bush administration - to fight 50 States' Attorneys General, in court, to stop them from reining in predatory lenders in their respective states? (see Predatory Lenders Partner in Crime) LOL.
Reich was behind the GOP's century long adamant opposition to regulation of any business activities. Reich was involved in the slipping the Commodities Futures Modernization Act 2000 in as a rider to the Omnibus Spending bill 2000 (see: Who Wrecked the Economy: Foreclosure Phil) - after he was no longer in Government and was not a member of the Bush administration. LOL!!
Bill USA
(6,436 posts)AnotherMcIntosh
(11,064 posts)pipoman
(16,038 posts)and MFTS for China and free trade without US worker protections from labor policies of other nations which have no worker protections and saying stupid shit like 'American workers can compete with any other workers in the world'.
Bill USA
(6,436 posts)Last edited Wed Jun 13, 2012, 08:33 PM - Edit history (2)
THE TRICKLE DOWN DISASER? YEAH RIGHT!
Robert Reich caused the Housing bubble, and the Fed's easy money policy, and Bush's two wars funded by public debt which produced the Trickle Down Deregulaton disaster. Oh, and Reich pushed for the deregulation of trade in Credit Default Swaps (not Phil Gramm and the Republican party) as secretary of labor. And Reich made the Bush administration pass tax cuts which went mainly to the wealthiest earners.... yeah, and he wasn't even a member of the Bush administration. Man, that guy has got powers beyond comprehension!
Right, Robert Reich did all that AFTER HE WAS NO LONGER IN GOVERNMENT.
pipoman
(16,038 posts)is firmly on the shoulders of the rethugs...and the Dems.
In a nut shell..The Republicans had asked for, many times, deregulation of financial institutions and to raise the lending limits for banks. The Clinton administration/Democrats wanted to reduce lower statutory lending guidelines to give people in lower income brackets the ability to qualify for mortgages. So the compromise was to do all three things..They set the bomb and it ticked along for 15+ years, then it exploded.
In the 1980's if you wanted to buy a home and had good credit, you could buy a home if you had 10% down(20% for fair credit and 5% for stellar credit), could not be borrowed or gifted unless the money was in the borrower's account for a year. The payment (PITI) could not exceed 25% (IIRC) (and the PITI and all other debt could not exceed 35%) of your gross income.
People would reduce their debt and save up, they would buy a fixer-upper keep it for 5 years, take their equity and buy up.
Fast forward to the 2000's...HGTV has a show about first time home buyers called "Property Virgins". It was all about kids who just graduated with their teaching certificate, driving new cars, who go out and buy new homes valued at 3 times their salary with no money down and 110% financing so at closing they didn't pay a dime and they actually received a check for enough to buy wall-to-wall new furniture. "I just can't live without a bidet and a chef's kitchen.." they would cry! A train wreck I would tell my wife..It's like watching a train wreck..
Again, greatly exacerbated by the exportation of jobs to countries with no worker protections and no intention of implementing them. Wages falling, etc.
Understand I have never said Reich caused everything, I say Reich betrayed US labor..the very labor he was the secretary of..he was wrong about the effect and 85% of the population at the time was right. Now he feigns surprise and inability to understand the effect of his very own failure. Ever noticed how most of these Reich threads fail to get posts beyond double digits? My theory is that many, many Democrats like myself resent his actions and it really doesn't matter what he says or how brilliant his statements, he is a traitor to labor..at least until he owns up to the disastrous effect of his policy...but alas..he instead likes to stand there saying 'I don't understand'..
Bill USA
(6,436 posts)Last edited Wed Jun 13, 2012, 08:35 PM - Edit history (1)
THE TRICKLE DOWN DISASER? YEAH RIGHT!
Robert Reich caused the Housing bubble, and the Fed's easy money policy, and Bush's two wars funded by public debt had nothing to do with the Trickle Down disaster. Oh, and Reich pushed for the deregulation of trade in Credit Default Swaps (not Phil Gramm and the Republican party) as secretary of labor.
Right, Robert Reich did all that AFTER HE WAS NO LONGER IN GOVERNMENT.
AnotherMcIntosh
(11,064 posts)workers under the bus"? That his enthusiastic support of NAFTA as Clinton's Secretary of Labor did not undermine blue collar workers? That whatever he did in supporting NAFTA is excused by subsequent events after he left the government? That NAFTA was not harmful to blue collar workers?
I fail to see how pointing to another wrong, or a series of other wrongs, justifies the first wrong.
Sorry, I just don't understand your logic at all.
Bill USA
(6,436 posts)The Trickle Down Disaster was caused by
.... Republican's funding two wars with debt..
..... Republicans slipping in the Commodities Futures Modernization act in as a rider to the Omnibus Funding bill, 2000. THis was the legislation which made trading in Credit Default Swaps legal AND UNREGULATED.
..... the Bush administration passing two tax cuts which was the largest isingle contributor tothe deficit we now have.
.... the Bush administration fighting and preventing 50 states' Attorney's General from reining in predatory lenders who were writing liar Loans and Alt mortgages (negative amortization mortgages, balloon payment mortgages).
saying Reich's support for a bill which would have passed with or without his suppport (he made sure there were provisions against slave labor, guaranteed the right to organize, and had environmental standards for employers in there..that was his impact on the legislation. He could have gone balistic about the law and it would not have made any difference.
at any rate the manifold machinations of the Bush administration are what caused the Trickle Down Disaster. Anything that Reich did (note,as I said his support for or lack of support for it wouldn't have made a bit of difference .. the law would have passed without him) or did not do.... was trivial compared to the nefarious undertakings committed by the bush administration which were pursuant to long standing Republican preferences for deregulation and the twisting of the tax code to favor wealth concentration in the hands of fewer and fewer people.
AnotherMcIntosh
(11,064 posts)Bill USA
(6,436 posts)If you have any doubt, just take a look at the Survey of Consumer Finances, released Monday by the Federal Reserve. Median family income was $49,600 in 2007. By 2010 it was $45,800 – a drop of 7.7%.
All of the gains from economic growth have been going to the richest 1 percent – who, because they’re so rich, spend no more than half what they take in."
If anybody cares to argue against Reich's assertion that the largest part of the gains in income since the onset of the Trickle Down disaster (2008) have gone to the top income groups and that the average person's income has come down and that is why the recovery is moving so slowly... I would love to hear it.
Whether NAFTA played a part or how big of a part in the Trickle Down Disaster is NOT what this thread is about...(anyone can start such a thread if they like)
Nevertheless I will give you some data to ponder.
IF you look at data on real U.S. incomes over the last decade or so (to go back before NAFTA)
http://en.wikipedia.org/wiki/Household_income_in_the_United_States
If you go to the table identified as: "The following table shows US household income in 2009 constant (CPI-U-RS adjusted) dollars"
the table shows the median income for 1991 was: $46,269
the table shows the median income for 2006 was: $51,278 .... notice that $51,278 is larger than the median income for 1991 ($46,269)
the table shows the median income for 2009 was: $49,777 ..... note that this figure is larger than the median income figure for 1991 but LOWER than the median (household income) for 2006.
NOw, since these are median household income figures this leaves the question of how many households were two income housholds in 1991 vs 2009, or for 2006.
... NAFTA was a dumb-fucking idea. It cost us many higher paid industrial jobs. But it did not play much of a part in the Trickle Down Disaster. If NAFTA had NOT gone into effect we STILL WOULD HAVE HAD THE TRICKLE DOWN DISASTER. And the converse is true - if we did have NAFTA and we did NOT have the 2 wars financed with debt, easy money policy to prop up a weakening economy which helped fuel the Housing bubble, and (very important) we also did not get Deregulation of the banking industry - (making gambling in Credit Default Swaps legal AND UNREGULATED) ... we would not have had the TRICKLE DOWN DEREGULATON DISASTER.
AnotherMcIntosh
(11,064 posts)Bill USA
(6,436 posts)Bill USA
(6,436 posts)the Economic Policy Institute estimated the net job loss due to NAFTA was 682,900 (that's taking into account the jobs gained to meet increased exports due to NAFTA).
go to http://www.census.gov/prod/2011pubs/12statab/labor.pdf and look at Table 586 - Civilian Population - Employment Status 1970 - 2010. to get number of people employed. I used 139,064,000 from 2010.
go to http://en.wikipedia.org/wiki/Household_income_in_the_United_States to get annual income for the 50th percentile for 2000 & 2003. average those to get a figure for average annual income to represent the period 1994 - 2010. That figure is $51,410. This comes to an hourly rate of $24.72 (using 2,080 paid hours per yr).
[font color="white"].....[/font]assume a very high hourly rate of $35 for jobs lost due to NAFTA....
[font color="white"]....[/font]Jobs lost due to NAFTA: 682,900[font color="white"]....[/font] $35.00[font color="white"]....[/font] $23,901,500
[font color="white"]..........................................................................[/font] total
[font color="white"]..........................................................................[/font] employed[font color="white"].................[/font]weighted hrly wage
[font color="white"]....[/font]average hrly wage w/o jobs lost to NAFTA:[font color="white"]......[/font] 139,064,000 [font color="white"]....[/font] $24.72[font color="white"]....[/font] $3,437,153,962
[font color="white"]....[/font] add back jobs lost to NAFTA:[font color="white"]....[/font] [font color="white"]..........................[/font] 682,900[font color="white"]......[/font]$35.00 [font color="white"]........[/font] $23,901,500
[font color="white"].....[/font]average hrly wage with lost jobs added back:[font color="white"]..[/font] 139,746,900 [font color="white"]...[/font] $24.77 [font color="white"]....[/font] $3,461,055,462
The avg hourly wage if the jobs lost to NAFTA had NOT been lost is: $24.77 . THe avg hourly wage with jobs lost to NAFTA is $24.72.
[font color="white"]....[/font]compute % reduction in avg hrly wage:[font color="white"].....[/font] $24.72 / $24.77 - 1 =[font color="white"]...[/font] -0.20%
If you look at average annual income of $51,410 (for 1994 - 2009) that .2% reduction would amount to $104, lowering the annual income to $51,306. That amounts to about $8.69 less pay per month. This change would have a minuscule impact on demand. Certainly, not enough to demand the attention of the Fed.
RBInMaine
(13,570 posts)
philly_bob
(2,419 posts)Maybe Reich was involved in some trade/tariff policies under Clinton that, in retrospect, didn't turn out so well. Okay.
On the other hand, he's been a superb commentator and explainer since he left government. I wish he was back in government...
Sirveri
(4,517 posts)He is capable of change, he is saying the right things now. He wants to do the right thing, he wants to be a friend to labor. I can forgive, apparently there are some here who can't, and that's sad that we might lose a useful ally because of that.
Zoeisright
(8,339 posts)REPUKES.
