Reich writes: The result has been a degree of inequality this nation hasn't witnessed since the days of the robber barons of the late nineteenth century - an inequality that's harming our economy as much as it's undermining our democracy."
Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)
Inequality is Undermining Our Democracy
11 December 12
ashington has a way of focusing the nation's attention on tactical games over partisan maneuvers that are symptoms of a few really big problems. But we almost never get to debate or even discuss the big problems because the tactical games overwhelm everything else.
The debate over the fiscal cliff, for example, is really about tactical maneuvers preceding a negotiation about how best to reduce the federal budget deficit. This, in turn, is a fragment of a bigger debate over whether we should be embracing austerity economics and reducing the budget deficit in the next few years or, alternatively, using public spending and investing to grow the economy and increase the number of jobs.
Even this larger debate is just one part of what should be the central debate of our time - why median wages continue to drop and poverty to increase at the same time income and wealth are becoming ever more concentrated at the top, and what should be done to counter the trend.
With a shrinking share of total income and wealth, the middle class and poor simply don't have the purchasing power to get the economy back on solid footing. (The wealthy don't spend enough of their income or assets to make up for this shortfall, and they invest their savings wherever around the world they can get the highest return).
As a result, consumer spending - fully 70 percent of economic activity - isn't up to the task of keeping the economy going. This puts greater pressure on government to be purchaser of last resort.
The dilemma isn't just economic. It's also political. As money concentrates at the top, so does power. That concentrated power generates even more entrenched wealth at the top, and less for the middle class and the poor.
A case in point is what's now happening in Michigan. In the state where the American labor movement was born - and where, because of labor unions, the American middle class once had the bargaining power to gain a significant portion of the nation's total income - Republicans and big money are striking back.
Legislators in the Michigan state House, followed almost immediately by Republicans who dominate the state Senate, voted Thursday afternoon to eliminate basic union organizing and workplace protections for both public and private-sector workers. Michigan Republican Governor Rick Snyder says he'll sign the measure.
This anti-labor blitzkreig was launched and coordinated by "Americans for Prosperity" - a group developed and funded by the right-wing industrialists and billionaire campaign donors Charles and David Koch, to "pave the way for right to work in states across our nation."
The Koch brothers are the same ones, not incidentally, who several years ago backed a group called "Citizen's United," on its way to the Supreme Court for an opinion by the Court's Republican majority that opened the floodgates to big money corrupting our federal and state governments. (The brothers Koch have also entertained Justices Scalia and Thomas at strategy meetings they've organized of Republican donors.)
Connect the dots: As unions have withered, the middle class's share of total income and wealth has dropped. The decline of the median wage in America over the last three decades correlates exactly with the declining percentage of American workers who are unionized.
And as the super-rich have grown even wealthier, they've been able to extend their power through the Supreme Court and the Republican Party - advancing a war on the middle class.
These moneyed interests may lose a skirmish or two, particularly at the federal level when the public's attention is focused there (Michigan voters went overwhelmingly for President Obama and Democratic Senator Debbie Stabenow on November 6). But the moneyed interests are patient and relentless and, as is evident in Michigan, able to strike suddenly with extraordinary organization and precision.
They've taken on our tax system, successfully raising taxes on the middle class and the poor (Social Security payroll taxes, sales taxes, and user fees) while reducing their own top marginal tax rates. They've taken on public spending - cutting government workers and programs the poor and middle class depend on (teachers and school budgets, social workers and family support services, job training and unemployment insurance, to name only a few.)
And they've taken on the unions that once negotiated good wages on behalf of the middle class and of those who aspired to join it.
The result has been a degree of inequality this nation hasn't witnessed since the days of the robber barons of the late nineteenth century - an inequality that's harming our economy as much as it's undermining our democracy.
As Washington fiddles over the fiscal cliff, a larger battle over inequality is being waged all over America.
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The Michigan voters overwhelmingly turned down making union bargaining part of the state constitution, and ina democracy majority rules.
There may be another force at work here. Many people have seen their wages shrink over the past three years, while government workers and union members have kept their jobs and received raises. The rest may simply be jealous.
As to the jealous part, I suppose the rest of us may be jealous that they still have jobs.
What you say about the "free trade world" though is spot on. But I disagree that these changes are brought about by economic facts, as if there is no alternative.
The free trade problem is a political one, brewed up in financial and manufacturing boardrooms with the intent of crippling the union's bargaining power by creating a global free labor market. Their overall intent is to take a bigger share of the proceeds from the enterprise while allowing those who do the work to keep much less.
It is entirely reasonable to insist that this free trade propaganda has won the debate and that it's victory has beaten down the working class and is evicting workers from the middle class by the millions. Only a resurgent movement of workers ---"the Unions"---can create a political climate where this dangerous trend can be reversed.
Would it logically follow then that the Unions are striving for an unfree market where their leadership has a monopoly on who is and who is not allowed to work?
What "free market" are you talking about? You mean the "free market" that gave the railroads in the 19th century free or low-cost land and huge financial subsidies? Are you talking about the "free market" that today gives huge subsidies to the oil industry (which itself is hardly a "free" competitive market). The free market to which you are referring is mythology and not reality. No major new industry in this country whether it is the railroads in the 19th century or Silicon Valley in the 20th (which didn't develop due to whiz kids working in their basements but rather to large defense contracts) or Big Pharma (where much of the basic research is done with gov't money) developed without sizable gov't financial assistance (whether it be in the form of tax breaks or subsidized financing)
I see your Stuck confusing the failures of socialism as if they were capitalism.
In a free market exactly how are they to get any subsidy?
A subsidy requires government to take from party A - Usually general public -and give to a special interest group say oil companies or unions.
With capitalism - specifically a free market the only money any industry gets is what customers choose to send their way.
When the government has, like now, lost its ability to protect freedom of opportunity as a result of seizure of the economy by a small but immensely wealthy gang of plutarchs able to buy the assistance of plenty of corrupt government officials and have the law modified--virtu ally rebuilt--to suit their purposes,
with the purpose of reforming the U.S. into a widely separated two-class system of economic slaves and masters, with control of government in the hands of the plutocrats,
then, clearly, there is nothing resembling a free market remaining, and too little wealth and power in the hands of the 99% to get it back.
If only I could make money selling clues to the clueless ... sigh
The easiest way to confiscate masses of wealth is to have monopoly control over the printing pre$$ . with a few turns of that magical printing press (what Ben Bernaki said the government had to save us from deflation) the wealth of millions can be obliterated or more accurately transferred to the balance book of government bureaucrats.
I bet my $50,000,000,000 ,000 on it.
In fact, i am quite clear on the failures of soviet or chinese style socialism (which is really not and never has been socialist but rather state capitalism something which was understood by democratics socialists/comm unists as far back as the 1940s e.g., the writings of C.L.R. James amongst others).
You keep referring to the capitalist "free market" when my whole point was that this is mythology and not historical or current reality. so, are you saying that the US is socialist and not capitalist because it does not have a "free market" as you define it (i.e., no gov't intervention and or support/subsidi es of any kind)? In this case there has never been a capitalist nation as capitalism and the state (i.e., gov't) have been inextricably linked and bound together since the very birth of the capitalist system going back to the Italian city states in the 15th and 16th centuries.
The phrase State capitalism is an oxymoron, Like the living dead or free slave.
Capitalism refers to a system of individual PRIVATE PROPERTY, PRIVATE PROPERTY RIGHTS.
No, state capitalism is the norm and at best a redundency. And, capitalism as an economic system refers to and is based on a system of wage-labor in which the means of production are owned and controlled by the few and the producers (for the most part...and, in fact, Marx for example was clear that small family owned businesses are not capitalist per sey)are separated from ownership.
Your point has repeatedly been that the problem is gov't intervention (regulation, subsidies, etc) in the "free market" economy to which my response is that this "free market" economy has never existed and is part of capitalist mythology and i have given you several historical examples from the enclosure laws in England to the sponsorhsip/sub sidies of the first capitalist corporations (joint stock companies, the railroads in the US, etc). you have not provided one single historical example of where this mythological "free market" capitalist system has ever existed. Now if you want to say well then we have never had capitalism that is a different argument but one which i still think reflects a complete lack of understanding about how capitalism works and the real history behind its development.
That phrase is an evasion to not use accurate words like socialism or fascism.
Capitalism is PRIVATE PROPERTY. no other system identifies private property -- an no other system requires freedom to exist.
The closest to capitalism a free market we have had was Hong Kong before the Chinese mainland got their grubby mitts on it -- a tiny little spit of land with no natural resources but freedom and human ingenuity and it had 1/8th the total economy of mainland China.
Why people are soo stupid as to worship the economic nightmare of the main land and ignore the brilliance of the mind freed astounds and disappoints me.
Too many people want to use government to force others to work for them I suppose.
How am i "destroying the meaning of capitalism" to say that capitalism is not simply a system based on private property but one based on wage labor or the sale of labor power. the problem with saying that capitalism is simply a system based on private property is that this does not explain how value is created or expands under capitalism nor explain how this differs from for example feudalism. i never said that capitalism is not also based on private property (e.g., private ownership of the means of production) but value is created in production as is economic expansion i.e., it comes from production not simply private property. in any case you still have not responded to my main point which was to challenge your notion that capitalism is a system based on this notion of a laissez faire free market which i have contended is a myth and has never existed except in the minds of extreme right wing ideologues (something Adam Smith understood since he called for gov't intervention in order to create and grow the very market he then referred to as "the invisible hand."
Fascism is not "collectivism." It's the ultimate government-corp orate partnership.
Unions are certainly not above criticism when their leadership becomes corrupt, they engage in feather bedding or wholly resist technological changes in factory production. They ARE however a vital part of the system of checks and balances between management and labor. In my lifetime (near 60 now) I've seen the pendulum swing too severely towards management with the corp. media ignoring incompetent management, focusing instead on scapegoating unions at every turn. It started with Reagan's firing of the aircraft controllers and the AFL-CIO's total failure to stand up for them with a nationwide strike. It's well past time for a nationwide shutdown of the economy in retaliation for greedy corporate overreach, but quite difficult to do without union organization and numbers behind such a move.
The big promise of automation was that it would produce at the same or a higher level with less man hours required, resulting in a shorter work week for the same pay.
Instead, of course, by dint of who owns the factories and the technology, it has resulted in the same man hours per worker but fewer workers. Thus technology has benefitted only the shareholders, who do no work.
Short of socialism, there is no force to oppose this except unions. But rather than oppose the technology or resort to featherbedding, they should be fighting for their share of the benefits from technology: keeping the same number of workers, at a shorter work week for the same pay.
That requires believing in the fiction that the capital the investors are putting at risk is of not cost to them
-- That does fit the mind set of a government bureaucrat who always has a gun and jail to get the money he wants -- unlike the capitalist who must earn their money by way of customer choice.
Even funnier: Thinking that capitalists "earn" their money. Value comes from labor, not from sitting around collecting dividends.
Every serious investor and businessperson is aware of these simple truths.
Are you serious? Im afraid you are. Ok
I spend many years on a real estate property - I paint the outside and insides, replace the roof/windows/fu rnace upgrade electrical baths kitches etc. tenents have a nice place to stay and after a decade or so I sell and recoup my time and effort and make a profit when I sell -- lets say $10,000
I invest $10,000 into a pet rock opportunity -- every one must have one how can I miss. Well a few weeks after the joke gets stale that $10,000 representing years of toil and effort are wiped out. That is called Risk - the down side of risk is you can lose some or all of it.
Value comes from if some one wants "it" or not - that "it" could be labor, it could be gold, it could be a home, it could be ... an antique car ... what some one values.
That is lame and illogical.
Many high and mighty have been wiped out never to recover.
Those who seem to avoid the consequences of their failures typically are closely tied to the government tit like the banksters ( is Jamie Dimon one of these?) that we are forced to bail out involuntarily. Even if we don't pay a dime in income taxes the inflation tax that jacks up the prices we all are paying for everything to re-inflate those bozos is unconscionable.
An that multi-trillion bail out mentality is only possible with a socialist/fasci st government that thinks they know best how to deal with the little peoples money.
As for bailouts being "socialist/fasc ist"...first, you need to do a bit more reading about the nature of both socialism and fascism (and capitalism as well for that matter) because you confuse/conflat e them all into being essentially the same thing. capitalism has always bailed out, supported, provided subsidies (financing as well as tax breaks) to capitalist industries so by your definition there has never ever been capitalism at all (name me one historical example where capitalism has developed with the kind of laissez faire "free market" you think existed at some point in history...it has never been).
While it may make for a cool line in a movie - in reality that requires the false premise that wealth is neither created nor destroyed it is only redistributed.
That is a win-lose. A win for a requires an equal lose for b in the zero sum game. The zero sum game mentality totally ignores the reality of win-win and loose-loose.
But the Zero sum game sells very will to those of greedy and petty minds who want blame some one else for their problems, and more importantly make some one else pay for them.
No, not at all. Real wealth is absolutely destroyed and not simply redistributed. When capitalism suffers from low profitability this means at least in part that there is an excess of capital as a whole and it is often only through the destruction of capital (or wealth) that the system can then return to profitability. so, i am not in any way saying that under capitalism wealth is not destroyed. A huge amount of wealth was in fact destroyed in the current economic crisis but i would argue that this was insufficient to restore the system (overall and on a global basis) to return the system to the level of profitablility (again, i'm talking about the rate of profit not simply how many gazillions is any particular company making) it needs to overcome its own crisis.
This attempt to gain sympathy for all those "suffering millionaires" is a low, even for you.
Do some wealthy investors "lose"; sure but that is because the nature of the capitalist system is to protect the interests of the system as a whole rather than individual capitalists and some some will always lose and be destroyed as the system as a whole tries to maintain and maximize its rate of profit. But, the fact that some wealthy investors go under does not speak to the inherent unfairness and exploitative nature of the capitalist system as a whole nor that it is organized to protect the interests of the capitalist class as a whole (or more precisely the expansion of capital as a whole)which means necessarily that not all individual capitalists always win (and here one also has to look at the specific class forces/relation s existing and the state of class struggle -- an example here would be the recently published "The Rich Don't Always Wind" by Sam Pizzigati which shows how the only reason we got a middle class in this country was because people organized and fought for it).
Most wealth is acquired by shrewd investment in the secondary securities market. True entrepreneurs are a tiny number of the rich.
The existence of wealth itself is evidence of the overstatement of so-called risk.
Grat point Fiona, i would add that what even most capitalist economics at least officially don't understand or recognize is that the more they introduce technology that replaces human laborers the lower their rate of profit and so new technology does not solve one of the system's basic contradictions or tendencies which is for the rate of profit to fall which is ultimately what causes the system to go into crisis until profitability can be restored (usually through a tremendous destruction of "value" whether through busineeses going bankrupt or the physical destruction of excess capital in war for example).
On "our side"...we need to tie the increase in productivity produced by new technology with demands to shorten the work week...this is one way to put everyone back to work as well as capture some of the increased profits resulting from increased productivity which so far has been going almost exclusively to the 1%.
Unfortunately, we are now working more hours instead of less (particularly in the US...at least for those still lucky enough to have jobs at all). The real answer, i think, is to renew the calls for a cut in the work week with no cut in pay (which was historically always a central part of the demands of the working class throughout the world). More work for all, yes, but more leisure time too!
Unions are being killed at a prodigious rate during the Age of Industrial Enslavement in which we live. Some of you will live to see the shorter work week, made possible by technology, revert to the endless work week for low pay, and enormous unemployment. That IS the Gilded Age, and it is returning pretty rapidly.
Early in the discussion of outsourcing jobs, when the crippling effect was just beginning to be seen, corporate leaders were asked what changes would have to happen in order for them to return jobs to the U.S. and they said, unequivocally, "As soon as Americans decide to work for what we pay the Chinese workers."
Good luck with your fantasy free-market opportunities and "demands" of employers, guys. To the people in control, you ain't sh*t.
http://front.moveon.org/hollywood-legend-ed-asner-has-outraged-republicans-over-this-animated-short/#.UMdv_7fCIi4.facebook
PASS IT ON!!!
Oh and you don't think NAFTA and the exporting of auto production was NOT the result of an already weakened union movement?
Yes, you are right. In a democracy the majority rules EXCEPT when the majority is literally bought off with millions of dollars of right wing influence peddling, corruption and other forms of graft.
Midwest Tom, you need to awaken and smell the crap. It's been spread all over the great state of Michigan by the Brothers Koch and other crooks.
We are not that smart. We hear the users bashing unions and union workers, and we follow right along like the fools we are, helping break the economy that we need to be strong to support us and our families.
you are trying to make it sound like the creation of "a free trade world" was simply "natural" and just happened all by itself instead of understanding that this was a conscious policy designed to at least in part export capital and jobs to countries (and internally within the US to states) that pay lower wages and have fewer regulations including those related to working conditions and the environment. Hard to believe you don't know better.
I am curious about your statement, who do you believe? Does having any money preclude someone being astute about what is going on economically? How much money does Reich have anyway that clouds his judgement? Then I have to ask, does having money, or not, cloud your judgement?
Alluding that Reich is part of the 1% is like alluding to the Right of being a part of the 99%
If you can't understand ideas for their own sake, regardless of who says them, you have nothing to offer here.
for some reason Lenny Bruce comes to mind.
on the backs of the poor. Periodically, the serfs rise and kill their masters. All this has happened many times througout history.
Several months ago, Washington Blog posed the question: When will the peasants go medieval? luvdoc
The Fed RAISES interest rates to cut off WAGE INFLATION!!
They do not want your incomes to move up!!!
Then the idiot in the White House wants the Tax Rate to raise on the wealthy.
You can raise it to 100% and Warren Buffet won't pay much more than he does now... most of his money is not ordinary income! Obama is scamming us!
Yes, the guy that owns the corner store will pay more but not Buffet and Romney.
absolutely true.
//The Fed RAISES interest rates to cut off WAGE INFLATION!!
They do not want your incomes to move up!!!//
They don't care about your income - stop thinking like they give a flying fig about you. It is about the free use of money they create and then they send us the bill for their spending/borrow ing .
PAY DOWN THE DEBT! CLIFF! DEFICIT! THEY NATION IS IMPLODING! In fact, this is one place we could afford to listen to our opponents on the right, but only during their own administrations ,those who suck up the wealth and hate to share: "Deficits don't matter." Direct quote from R. Reagan, R. Cheney.
And, of course, they don't. They are far from our consciousness during GOP administrations --never mentioned, never asked about. Two wars and an impossible drug deal with Big Pharma, all on the card? Not a problem; deficits don't count.
The hysteria during Dem administrations isn't about debt or deficit; it's about crippling the Dems from realizing the goals of their agenda by sending them on a wild goose chase after debt and deficit. Clinton worked for eight years to leave a surplus at the end; it was blown away in three months, and that was even before 9/11. Next time somebody says "debt and deficit" to you in a high-pitched, panicky voice, just tell him, "Do it yourself when you get into office; we have more important business."
next bubble indeed...
Is it possible even likely for the government to flood the market with digital dollars even if the interest rate is negative. Why? How?
With Quantitative easing III the treasury is buying the notes it is printing with more fresh digital dollars... nice.
IT is like they keep printing and spending and there is no need to send us the bill since the inflation tax is built into the transaction....
So why are we $16.3 trillion in the hole again?
Why? 1) The deficits run up during Reagan to pay for a huge military build-up; 2) The wars started during the Bush Administration (plus the tons now spent on "homeland security"); 3) the Bush tax cuts. This represents the bulk of our deficit.
Lastly, the debt is due to the fact that the US borrows money at interest from others rather than "borrowing from itself" (i.e., printing "digital dollars") at no interest (not to mention that this money is then paid back to ourselves instead of to someone else). The US gov't does not have to and in fact should never borrow from anyone else at interest. Eliminate the interest payments and you've gone along way to solving our current deficit problem as well.
just a tad of info that you can verify your self -- since Nixon the federal debt has never decreased , its rate of increase has slowed down from time to time -- the best and most recent slow down was during Clinton's "surplus" years yet the federal debt grew during that time from 5.5 to 5.8 trillion
Sounds nice -- just don't test that model.
with zero percent interest and monopoly control over the money it is incredibly easy for government to print money to buy things - devaluing/infla ting the currency and ripping off the public. Governments have done this over and over and every time it fails in debasement and national bankruptcy.
Its the Spending Stupid!
Modest inflation will not seriously affect consumers, and a slight devaluation of the dollar will increase exports, giving a stimulus to the economy, which means new jobs.
No, by the way, it is NOT the spending. It is the lack of spending.
Since the Federal Reserve existed during the 1950s and 1960s when corporate tax rates were also much higher, wages continued to rise, the middle class continued to grow and corporations continued to hire so the notion that the main cause of the decline of the middle class in the US is due either to the FED or to high corporate tax rates simply does not stand up to historical scrutiny.
FED THINKING at its finest!!!
Yes, it worked back then because AMERICA was the World economy!!
They used to say if America caught a cold the rest of the World got Pneumonia!
Japan beat Detroit in cars and China has taken over manufacturing.
The US can no longer dictate to the World.
China will be the 800 pound gorilla soon if it isn't already.
The Fed still thinks that what happens here dictates to the World, but those days are gone.
China uses so much coal and oil that if the US slows down the price of energy barely twitches.
The Fed needs to find a new toolbox, because those tools of the 1950's have gone the way of the dodo bird!!
your argument seems to be that it is due to the new global economy and the place of the US in it. I think there are elements of truth here but this needs to be fleshed out much more than simply saying that the US is no longer the world economy...one of the biggest changes has been the success of those calling for the international free-flow of capital so that there are no longer any real barriers for capital to go anywhere it wants (and use this threat) and where it will garnish the greatest rate of profit. It is the state (and not the FED) that has the power to restrict this and or create the conditions where it is more costly for US capital to move abroad rather than reinvest domestically. It is also the state and not the FED that has the power to create jobs when the private sector will not (for whatever reason).
There are too many advocates of the carrot -- reward corporations for not sending jobs away. That only increases profits with no real net gain to the economy. What's needed is the stick -- penalize those that do. If it's less profitable to use foreign labor, corporations will always do what's needed to maximize profits.
our factories were the only ones not wiped out during WW II so the world was our uncontested market place -- by time the 70's rolled around we were competing with the rest of the world and their new factories with our old ones.
The point is not simply that our own industrial capacity/infras tructure emerged from world war II intact but rather or at the same time that there had been a sufficient destruction of capital overall to enable those left standing to invest again and expand and see the rate of profit that they need to continue to make this investment worthwhile. So, again, it is about the rate of profit for capital and this return to profitability was accomplished by a huge destruction of capital/wealth (both in the US during the depression and then world wide due to the war) which then the US was the first to be able to take full advantage of given the position of the US coming out of the war
oh my.
Have ya ever noticed that the followers of the broken window fallacy never break their own windows to increase their wealth.
After WWII, the Marshall Plan resulted in massive U.S. government investment in private industry in Europe.
This was an effective government stimulus with a vengeance, which rebuilt whole economies.
If many are desperate/needi ng a product or service that is low in supply, the seller has the temptation to raise prices, causing inflation, thus reducing buying power. This scenario has been played out, i.e., taking advantage of peoples' needs. Selling? Fine. Gauging one's prices? Fine. Selling out, thus, raising inflation? Not fine.
Perhaps you are not an American are are ignorant as the the roll of the Fed, since you never heard of wage inflation!
TRY GOOGLE: wage inflation
When an economy heats up the "workers" demand raises. The Fed does not like like that inflation and so to tamp down demand they raise interest rates making companies less profitable.
When companies are less profitable they won't give raises and may reduce the workforce.
Businesses are still profitable, e.g, a supermarket will always have customers for obvious reasons. Consumers have more buying power when prices are reasonable, in turn, businesses have a chance to sell more. (And hopefully without the temptation to raise prices too high and create inflation.) If inflation occurs, consumers lose buying power. Less business. Then a lowering of interest rates gives the chance for increased buying. More business. But businesses are not less profitable because of rising interest rates. It's because the economy is overheating, then the threat of a recession is possible. And 2008 was quite an example that "greed is good." The financial sector went all out, hook or crook, meaning peoples' money was virtually gambled away or lost from corrupt practices by executives, investment banks, Hedge funds, etc. who wanted a perpetual "money tree" regardless. With less and less governmental regulations, more and more greed. So, if you're worried about the profitability of businesses, don't blame workers for, example. They are not 1%ers. Blame greed that's within the nature of this economic system. Big business, e.g., laid off many workers not because of less profit, but for upper management to get more.
They do it all of the time depending on business conditions!
Demand for products does not mean they have profits!
General Motors and Chrysler sold millions of cars in 2007 but still went bankrupt!!!
The word "profit" is thrown around as if that's an indication of viability. A business can be solvent without being profitable. Profits are only the "extra" above the break-even that's paid to the shareholders.
YOU HAVE IT BACKWARD!!!
They raise interest rates to slow down the economy and lower rates to rev it up!
They RAISED rates repeatedly in 2000 to slow down the Internet Bubble economy and crashed the Nasdaq market!
They raised rates in 2007-2008 to slow down the housing bubble and crashed the whole damn system!
Raising rates almost always precedes a crash and then they drop the rates to near zero to get it going again...
No one has suggested raising the TMR A LITTLE (like 50%) will fix it. You need a SIGNIFICANT TMR - as Ike recognized- to overcome loopholes you can't afford to fight. But you also need price controls to keep business from simply passing it on, and SIZE controls on business (as Sweden and Norway realized) so it can't overwhelm the People's democratic government.. otherwise it's not a Republic, it's a Plutarchy (financial subset of Oligarchy.) Any "-archy" at all is the antithesis of a Repubilic - by definition.
There are many times that the taking of private property is a public necessity. In that sense Eminent Domain and the authority to tax are very similar. The Court, unfortunately, about 5 years ago, ruled that Eminent Domain can be exercised so to benefit a private interest. That ruling when paired with Citizen's United, has altered the nation; and not for the better.
Without an argument of divisive class warfare, an unearned greed for what others have -- what is left for the collectivist like the unions?
As I understand the MI right to work bill - it simply makes union dues voluntary.
If a union can't voluntarily earn a workers membership dollar what breach of reason makes it rational to believe that forcing union dues will make the leadership more accountable to the members when the guaranteed dues encourages and rewards unaccountable behavior.
A "fair" return would be based on the value an employee added to the product. In all other countries, CEOs are paid more than workers, but never a multiple of more than 2 digits. The shocking disparity in the U.S. is 400:1--unearned compensation for the greedy at the expense of everyone else.
For comparison: When the bank crash of the Great Depression hit, CEOs were earning 163x worker salaries. When the Bush Great Recession hit, CEOs were earning 163x worker salaries (cute coincidence, huh?). Now CEOs are earning 400x worker salaries, they are not just winning the class war but burying us so deeply we will never get out.
Worse by far: They are removing much of their wealth from the country. So it doesn't circulate back in our economy, where it would create wealth which would improve the nation and all the people and services. Whenever they take money out, it exacerbates the recession.
Ok, right wingers out there, pay attention. Europe has been inflicting full bore austerity on the areas of the economy that are weakest and the result is conclusive. Austerity makes everyone broke, it bankrupts people and governments. Whatever is left over gets transferred to the Money Lenders.
Why do you think it will magically work here? The only reason that we are not in a recession is that President Obama and the Democrats have resisted falling for your insane, ravings.
Why are you so terrified to just say, OK Dems, you won, you get your way. And when the economy tanks, the Republicans can have the House, the Senate, and the White House.
The reason is simple. You know you are wrong. And therefore, you don't really give a rats ass about the American people, they are secondary in the Right Wing world.
People First.
VOTE PROGRESSIVES ONLY IN 2014.
CLOSE, but no cigar!
Greece and other welfare countries are a victim of the Euro!
Since they can't devalue their currency they keep falling behind and the richer industrial countries like Germany get the advantage.
If they got out of the Euro then the Greek currency would drop and their products would be cheaper to buy. Germany's currency would rise making their products more expensive.
That would create more demand in Greece and less in Germany and would even out the playing field.
Your solution will allow Greece to drop the enforced austerity and resolve their problems by allowing a form of deficit spending. Devaluing a currency is just another way to make more money available for investment that will increase demand.
So you want less demand!
WOW!
I was pointing out that your solution was inconsistent with an austerity plan. And that decoupling Greece from the Euro and devaluing their currency from its current Euro based value would have the same effect as deficit spending. In other words, as I said it will increase demand. Increased demand is a good thing.
LOL!
Every one puts on their shoes and sox -- but not in that order.
They went Broke so now they have to face austerity.
First -- look at Iceland and how they solved their problem (hint : they did NOT bail out the banks)
What the Koch's and their finks like Rove want is nothing less than everything, a barely-educated enough to march in lockstep slave population and a one-party system that can be sugar-coated in a fair cloak like "Americans for Prosperity (for a very few).
They are closer than you think.
I'd like to hear some possible solutions from Dr. Reich rather than just spelling out a well-known fact, even to those who seemingly envy and criticize his alleged wealth (open to question) for doing what I find a generally useful job in clearing up the deliberately obtuse language of eco-speak for the rest of us and thereby worthy of a certain level of reward, instead of the much higher paid owner-media's elected and predictable pundits who exercise corporate-self- aggrandizement speak on the network channels and Fox-fantasy.
I thoroughly recommend Dr. Richard Wolff's "Capitalism Hits the Fan" for in-depth clarification and some solutions for the grassroots. He is a kind of economist's Bernie Sanders.
Good luck with that..
Look around you.
Many reforms have been tried that have had benefit, or not able to pass. But those reforms could be (have been) perpetually threatened with elimination because of a greed is good mindset.
The essential problem: "It's the ideology, stupid."
NAFTA is part of it but so is the drug culture and the keeping up with the Jones syndrome and the use of the best trained psychologists in the world to get people to buy what they don't need. It is about the educational system being so overwhelmed with mandates and demands that the youth aren't being educated. It is about how greed is good was sold to us and about how Congress is bought and paid for by special interests. It is about unhealthy addictive food causing both low brain power and high medical costs. It is about how profit has so invaded the medical costs that our mediocre health care costs roughly twice what better health care costs in the rest of the world. It is about how Banksters can do what ever they want and get away with it... It is about a for profit news corp who will sell you their agenda and make you think it is the real truth.
It isn't just about the demise of unions. It is about the demise of American standards and morals. It is about America stuck on Stupid.
We are not a democracy. as the founders were quite aware of history that democracies always commit suicide by the majority voting them selves largess from the public treasury soon bankruptcy follows and a dictator arises to save the stupid people from them selves.
We are a republic by design. It is not just empty words.
BTW, why don't you credit the source for the above quote?
and I suggest you not invent for me what I allegedly know or do not know... to wit://You ignore that any system can break down, for one reason or another. //
If you actually understood the founders then you would know that they were certain that people intended to break the system to their own advantage.
They had just cast off a tyrant and were not interested in replacing him with another.
That is why the founders created three branches each with the power to stop the others. And that they explicitly tried to guarantee the rights of the individual not the rights of the government , but the rights of the individual via Bill of Rights.
Well, you do ignore that about systems, as you make it sound like democracy has a monopoly on "breaking down." All systems aren't perfect because of human imperfection.
Quoting: "...you would know that they [U.S. founders] were certain that people intended to break the system to their own advantage." Certain or not, it was inevitable, especially when you say "All men are created equal" and have slaves. If they were certain, they got what they didn't support: A form of democracy.
I'd say that this guarantees rights for the government.
The Bill of Rights mainly enumerates specific things that the government cannot do, but it does not limit the government's right to do other things.
Elie Yarden
Green-Rainbow Party
The false premise that for one person to get rich others have to be made poor is a destructive lie promoted by greedy people who lust for power over others and accepted by unthinking fools or greedy swine who want to get an unearned piece of some one elses pie.
Most large wealth is unearned by the recipients, taken from the profits of those who do the actual labor.
I bet a $50,000,000,000 ,000 Zimbabwe note on that fact.
History shows that when government has a monopoly over printing money it inevitably becomes worthless.
There's nothing "inevitable" about history. There is only the need to learn lessons from it and not make the same mistakes. Germany in the 1920s was practically bankrupt from war reparations.
In contrast, the United States possesses more wealth than any other country in the world. The doom-and-gloom paranoia of the right is a sick joke. It would take an enormous catastrophic blunder for the U.S. to print enough more money to actually get in trouble.
This is not a theory - its a FACT, provable positively and negatively by historical data, just as the need for a 90% pLUS TMR is also proven.
Being clueless is one thing, refusing to get knowledgeable is another.
I assume you believe in the Scrooge McDuck philosophy of economics where he hoards all his wealth a vault and never spends it.
I suggest looking up the concept of the velocity of money
-- and try try try to grasp the concept (most do not) that paper money is not wealth - only a pointer to wealth, an exchange medium to convert/trade item x for item y or time and labor of item x.
Justify the concepts of pure market speculation and hedging (selling off risk) with that THEORY.
I say THEORY, because (for instance) even the concept once thought an absolute LAW, of "Supply and Demand;" has been completely obviated by hoarding, closing profitable, successful refineries, PR lying about unjustified shutdowns, and other apparent supply manipulation. (That's from Bloomberg - not myself.)
Do not confuse the pseudoscience of economics with reality. And yes, I had to study it. Like much of "science" (cf: Heisenberg, and I'm a degreed engineer,) it refuses to admit its ineffectiveness , and was thus worthy of instant discard from memory.
At least Psychology admitted it was not a science.
Economics needs to do the same - or (much like capitalism) have such a radical update it needs a new name.
The FACT to which -I- referred was that it always comes from someone else. When the Rich got richer -the poor got poorer. Statistical FACT.
And yes, at the levels of higher finance, hoarding -through offshoring and elimination of personal risk-- is so rampant it's a given base characteristic of the wealthy. That's because we don't punish (OK, "CAP") it, as do more enlightened countries who have learned the lesson we STILL choose to ignore. Government cannot and must not be, in ANY way or degree, "Pro Business." (Mussolini had a word for that..)
Patriotism, humanity, and job creation -even morality and ethics- are NOT goals, or even recognized quantities, of business. They are the purview of GOVERNMENT - which creates it as inherently and properly ANTI-BUSINESS.
Ours needs to admit that as it once did-back when America was far more prosperous for it.
Hoarding and supply manipulation for profit, and even for long-term strategic political goals; take place.
Such conclusions and statements about the economy still cling to the radically outmoded assumption that at least our laws (antitrust, bribery, corruption;) are obeyed - or even enforced. They are neither.
2008 collapse and bail out was because of regulations.
Politicians guaranteed to back fill losses so 'risky' behavior was no longer risky and the politicians did back fill to cover the losses -- thieving swine.
You still didn't give the author credit for the quote.
It does. Ive known it would since Reagan was allowed to kill PATCO. History WILL repeat - with modern weapons and scale.
I know people on the political right adhere to authority and dominance (makes them feel secure?), but this is just irrational.
behind the curtain. It's the Koch's etal using the Beck's, Limbaugh's and other repug pundits to distort the cause of the 99%'s diminishing prosperity from the robber baron class and blame the victim.
If one worships money and equates it with self esteem, then those who have achieved great wealth by theft are adulated and the victims are easily duped into believing their enemies are of their own class. It's the same principle with sports "heroes". How many people have howled in fury when the worshiped ones fell in disgrace...not because they were caught doping or shielding pedophiles, but because they were outed and the myth exposed.
Reality is not a bumper sticker.
What IS true however is what can be proven by historical data.
We've TRIED "trickle down" and we've TRIED allowing robber barons to suppress unions, and we;ve TRIED allowing the rich to cut taxes repeatedly. We've TRIED capitalism, which is based on INFINITE GROWTH and INFINITE RESOURCES.
It did not work.
In no acceptable nor creditable definition is this distinction true.
You can have democracy in a republic.
We have in fact a representative democratic republic.
The definition of "republic" extends no farther than, that it is the absence of a monarch - or ANY "-arch," any system where a SELF-appointed few (or one) dictate to the many.Literally it means: "a thing of the (entire) people, or population."
A "Plutarchy," (ruled by the richest)which we have unintentionally become, is actually ONE possible antithesis of a "Republic."
Incidentally and also, tautologically as well as functionally, there is NO SUCH THING as "the tyranny of the majority."
Words have meanings.
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