Quite right, Ed. I was only thinking about how media frames these
issues, which rarely exposes any other side but the one convenient to
deliver to the public.
I do foresee the demise of Wall Street, but I'm certain there will be
countless alternative investment/gambling engines in place for the top
economic manipulators to play with. I suspect the game plan will have to
shift so rapidly in future, not only to keep ahead of tightening
legislation, but also to avoid hackers' revenge, that even wealth
concentration will have difficulty doing what it does best. Resources
are finite, jobs are ever more scarce, and a better informed,
disenfranchised public is growing impatient.
Natalia
On 2/22/2011 6:38 AM, Ed Weick wrote:
There are more than two economies in the US, Natalia. The first, and
most durable, is the economy of the super-rich. While, as Reich says,
the top 10% of Americans hold 90% of all financial assets, the top 1%
receives more than 20% of national income. Well below the topmost,
the middle class struggles. It depends on having jobs, and many of
its jobs have been exported to Asia, where labour is cheaper. And
many of its jobs have been cut by governments that are trying to
reduce their debt loads or that have fallen into teaparty dogma that
government has no business in the lives of citizens.
The official unemployment rate in the US, the rate that applies to the
struggling middle class, is about 10%, but the real rate may be as
high as 30%. Many to whom this rate applies are young potential
workers between the ages of 16 and 24 who are no longer putting much
effort into getting a job or who have stopped trying altogether. As
Paul Krugman pointed out, every year that goes by with extremely high
unemployment increases the chance that many of the long-term
unemployed will never come back to the work force. They could become
a permanent underclass.
Underclass? Maybe, but perhaps many of them will create a class of
their own. Perhaps they have already done so by finding jobs in drugs
or other illicit markets. Look for a substantial increase in the
underground economy in the next decade.
As for the top ten percent, and especially the top one percent, there
are quite likely no worries. They have connections. They get
politicians elected and the politicians know they have to work with
them. The financial assets they hold are not only American assets,
they go where the money is by investing globally. As well, the tax
cuts that George W. Bush initiated early in the past decade have
now been extended to 2012. I'd be willing to bet that they'll be
extended beyond that and perhaps become permanent.
Not a very nice prospect for the ordinary guy, is it?
Ed
----- Original Message -----
*From:* D and N <mailto:[email protected]>
*To:* RE-DESIGNING WORK, INCOME DISTRIBUTION,EDUCATION
<mailto:[email protected]>
*Sent:* Monday, February 21, 2011 6:21 PM
*Subject:* [Futurework] US has 2 economies
I think the first economy, rather than being in a state of
recovery, is more accurately in a state of unrecognized
near-extinction. Tax payers won't bail them out again, and it is
with their funds that they resumed gambling. I'd like to say Wall
Street's demise is just around the corner, but because they own
the government and the media, it will take years more for the
realization that an illusion of financial success won't possibly
restore the government treasury.
Natalia
***America's two economies: one in recovery, one in
depression
<http://www.huffingtonpost.com/robert-reich/post_1687_b_818991.html>
***
***Robert Reich, Huffington Post *- We have two economies. The
first is in recovery. The second remains in a continuous
depression.The first is a professional, college-educated,
high-wage economy centered in New York and Washington, that's
living well off of global corporate profits. Corporations continue
to make money by selling abroad from their foreign operations
while cutting costs (especially labor) here at home. Wall Street
is making money by taking the Fed's free money and speculating
with it. The richest 10 percent of Americans, holding 90 percent
of all financial assets, are riding the wave. And their upscale
spending has given high-end retailers and producers a bounce.
The second is most of the rest of America, and it's still
struggling with a mountain of debt, declining home prices, and job
losses. In coming months most Americans will also be contending
with sharply rising prices of food and fuel. Our representatives
in Washington see and hear mostly the first economy. The business
press reports mainly on the first economy. Corporate and Wall
Street economists are concerned largely with the first economy.
But the second economy will determine our politics in 2012 and
beyond. And not even the first can be sustained permanently on its
own. Corporate profits cannot continue to rise on the basis of
foreign sales (which are slowing as Europe adopts austerity and
China raises interest rates), the purchases of the richest 10
percent of Americans (which are dependent on a rising stock
market), and cost-cutting measures at home (which are necessarily
limited). Without a strong and broadly-based middle-class
recovery, America's big money economy will fall in on itself. A
major stock market "correction" is a certainty.
**
------------------------------------------------------------------------
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