What you are saying Keith is that you guys were all serfs 200 years ago or royalty. Do you really believe such a comparison is acceptable today? I believe you would have a communist revolution if the average person was faced with Royalty or Communism. There has to be a third way that includes everyone including the rest of the life on the planet. When we lose species and suffer extinctions the entire system is endangered. It's time for the west to discover more than just a little responsibility in the world. They've had a 500 year party and that is quite long enough.
REH From: [email protected] [mailto:[email protected]] On Behalf Of Keith Hudson Sent: Sunday, September 05, 2010 2:53 PM To: RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION Subject: Re: [Futurework] FW: [TriumphOfContent] How to End the Great Recession (Robert Reich - The NY Times) It's all very well for Robert Reich to say that America (and the rest of us) need policies that generate more widely shared prosperity but the relatively modest ones that he proposes could only produce some effect over many years. Furthermore, they are going to need substantial public funding in the interim. And where's the money for that going to come from? More quantitative easing? If so, how are there any guarantees that it's not going to end up where all the previous QE ended up -- trapped in the banks while the property collaterals that their debtors gave them slowly get back to normal. The income and wealth disparity today -- even though growing in recent years -- is still nowhere near as great as that which obtained before the industrial-consumer revolution got going 200 years ago. It was the revolution itself and the vast chain of consumer goods that motivated the masses and enabled economic growth to get going, a bodily uplift of all classes and a relative decrease in the wealth gap. That was starting to peter out by about the 1970s. Governments then tried to increase consumer spending by inflation and, when that began to be dangerous, had to rein it back. Then, by about the 1990s, American and Western governments tried the other tack of allowing banks to create credit off their own bat -- that is, to exceed all previous traditional banking experience and to create credit at something like a 30:1 or 40:1 credit:reserve ratio, instead of something more like 12:1 or 10:1. Keith At 06:02 05/09/2010 -0700, you wrote: A very clear eyed analysis I think... M -----Original Message----- From: [email protected] [mailto:[email protected]] On Behalf Of Steven Brant Sent: Sunday, September 05, 2010 12:02 AM To: Steven Brant Subject: [TriumphOfContent] How to End the Great Recession (Robert Reich - The NY Times) http://www.nytimes.com/2010/09/03/opinion/03reich.html The New York Times OP-ED CONTRIBUTOR How to End the Great Recession By ROBERT B. REICH Published: September 2, 2010 Berkeley, Calif. Enlarge <http://www.nytimes.com/2010/09/03/opinion/03reich.html?ref=general&src=me&p agewanted=all> This Image <http://www.nytimes.com/2010/09/03/opinion/03reich.html?ref=general&src=me&p agewanted=all> 3885259.jpg Alain Pilon THIS promises to be the worst Labor Day in the memory of most Americans. Organized labor is down to about 7 percent of the private work force. Members of non-organized labor most of the rest of us are unemployed, underemployed or underwater. The Labor Department reported on Friday that just 67,000 new private-sector jobs were created in August, while at least 125,000 are needed to keep up with the growth of the potential work force. The national economy isnt escaping the gravitational pull of the Great Recession. None of the standard booster rockets are working: near-zero short-term interest rates from the Fed, almost record-low borrowing costs in the bond market, a giant stimulus package and tax credits for small businesses that hire the long-term unemployed have all failed to do enough. Thats because the real problem has to do with the structure of the economy, not the business cycle. No booster rocket can work unless consumers are able, at some point, to keep the economy moving on their own. But consumers no longer have the purchasing power to buy the goods and services they produce as workers; for some time now, their means havent kept up with what the growing economy could and should have been able to provide them. This crisis began decades ago when a new wave of technology things like satellite communications, container ships, computers and eventually the Internet made it cheaper for American employers to use low-wage labor abroad or labor-replacing software here at home than to continue paying the typical worker a middle-class wage. Even though the American economy kept growing, hourly wages flattened. The median male worker earns less today, adjusted for inflation, than he did 30 years ago. But for years American families kept spending as if their incomes were keeping pace with overall economic growth. And their spending fueled continued growth. How did families manage this trick? First, women streamed into the paid work force. By the late 1990s, more than 60 percent of mothers with young children worked outside the home (in 1966, only 24 percent did). Second, everyone put in more hours. What families didnt receive in wage increases they made up for in work increases. By the mid-2000s, the typical male worker was putting in roughly 100 hours more each year than two decades before, and the typical female worker about 200 hours more. When American families couldnt squeeze any more income out of these two coping mechanisms, they embarked on a third: going ever deeper into debt. This seemed painless as long as home prices were soaring. From 2002 to 2007, American households extracted $2.3 trillion from their homes. Eventually, of course, the debt bubble burst and with it, the last coping mechanism. Now were left to deal with the underlying problem that weve avoided for decades. Even if nearly everyone was employed, the vast middle class still wouldnt have enough money to buy what the economy is capable of producing. Where have all the economic gains gone? Mostly to the top. The economists Emmanuel Saez and Thomas Piketty examined <http://www.nber.org/papers/w8467.pdf> tax returns from 1913 to 2008. They discovered an interesting pattern. In the late 1970s, the richest 1 percent of American families took in about 9 percent of the nations total income; by 2007, the top 1 percent took <http://www.cbpp.org/cms/index.cfm?id=2908&fa=view> in 23.5 percent of total income. Its no coincidence that the last time income was this concentrated was in 1928. I do not mean to suggest that such astonishing consolidations of income at the top directly cause sharp economic declines. The connection is more subtle. The rich spend a much smaller proportion of their incomes than the rest of us. So when they get a disproportionate share of total income, the economy is robbed of the demand it needs to keep growing and creating jobs. Whats more, the rich dont necessarily invest their earnings and savings in the American economy; they send them anywhere around the globe where theyll summon the highest returns sometimes thats here, but often its the Cayman Islands, China or elsewhere. The rich also put their money into assets most likely to attract other big investors (commodities, stocks, dot-coms or real estate), which can become wildly inflated as a result. Meanwhile, as the economy grows, the vast majority in the middle naturally want to live better. Their consequent spending fuels continued growth and creates enough jobs for almost everyone, at least for a time. But because this situation cant be sustained, at some point 1929 and 2008 offer ready examples the bill comes due. This time around, policymakers had knowledge their counterparts didnt have in 1929; they knew they could avoid immediate financial calamity by flooding the economy with money. But, paradoxically, averting another Great Depression-like calamity removed political pressure for more fundamental reform. Were left instead with a long and seemingly endless Great Jobs Recession. THE Great Depression and its aftermath demonstrate that there is only one way back to full recovery: through more widely shared prosperity. In the 1930s, the American economy was completely restructured. New Deal measures Social Security, a 40-hour work week with time-and-a-half overtime, unemployment insurance, the right to form unions and bargain collectively, the minimum wage leveled the playing field. In the decades after World War II, legislation like the G.I. Bill, a vast expansion of public higher education and civil rights and voting rights laws further reduced economic inequality. Much of this was paid for with a 70 percent to 90 percent marginal income tax on the highest incomes. And as Americas middle class shared more of the economys gains, it was able to buy more of the goods and services the economy could provide. The result: rapid growth and more jobs. By contrast, little has been done since 2008 to widen the circle of prosperity. Health-care reform is an important step forward but its not nearly enough. What else could be done to raise wages and thereby spur the economy? We might consider, for example, extending the earned income tax credit all the way up through the middle class, and paying for it with a tax on carbon. Or exempting the first $20,000 of income from payroll taxes and paying for it with a payroll tax on incomes over $250,000. In the longer term, Americans must be better prepared to succeed in the global, high-tech economy. Early childhood education should be more widely available, paid for by a small 0.5 percent fee on all financial transactions. Public universities should be free; in return, graduates would then be required to pay back 10 percent of their first 10 years of full-time income. Another step: workers who lose their jobs and have to settle for positions that pay less could qualify for earnings insurancethat would pay half the salary difference for two years; such a program would probably prove less expensive than extended unemployment benefits. These measures would not enlarge the budget deficit because they would be paid for. In fact, such moves would help reduce the long-term deficits by getting more Americans back to work and the economy growing again. Policies that generate more widely shared prosperity lead to stronger and more sustainable economic growth and thats good for everyone. The rich are better off with a smaller percentage of a fast-growing economy than a larger share of an economy thats barely moving. Thats the Labor Day lesson we learned decades ago; until we remember it again, well be stuck in the Great Recession. Robert B. Reich, a secretary of labor in the Clinton administration, is a professor of public policy at the University of California, Berkeley, and the author of the forthcoming Aftershock: The Next Economy and Americas Future. Note: This piece has been updated to reflect today's news. !DSPAM:2676,4c8340a1177555417175460! _______________________________________________ Futurework mailing list [email protected] https://lists.uwaterloo.ca/mailman/listinfo/futurework Keith Hudson, Saltford, England
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