RSN Fundraising Banner
FB Share
Email This Page
add comment

Reich writes: "Yet it's almost a certainly that all the gains went to the top 10 percent, and the lion's share to the top 1 percent. Over a third of the gains went to 15,600 super-rich households in the top one-tenth of one percent."

Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)
Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)

Whose Recovery? Many Remain in Critical Condition

By Robert Reich, Robert Reich's Blog

01 April 12


uxury retailers are smiling. So are the owners of high-end restaurants, sellers of upscale cars, vacation planners, financial advisors, and personal coaches. For them and their customers and clients the recession is over. The recovery is now full speed. [Protesters rally against economic injustice. ] Protesters rally against economic injustice.

But the rest of America isn't enjoying an economic recovery. It's still sick. Many Americans remain in critical condition.

The Commerce Department reported Thursday that the economy grew at a 3 percent annual rate last quarter (far better than the measly 1.8 percent third quarter growth). Personal income also jumped. Americans raked in over $13 trillion, $3.3 billion more than previously thought.

Yet it's almost a certainly that all the gains went to the top 10 percent, and the lion's share to the top 1 percent. Over a third of the gains went to 15,600 super-rich households in the top one-tenth of one percent.

We don't know this for sure because all the data aren't in for 2011. But this is what happened in 2010, the most recent year for which we have reliable data, and there's no reason to believe the trajectory changed in 2011 or that it will change this year.

In fact, recoveries are becoming more and more lopsided.

The top 1 percent got 45 percent of Clinton-era economic growth, and 65 percent of the economic growth during the Bush era.

According to an analysis of tax returns by Emmanuel Saez and Thomas Pikkety, the top 1 percent pocketed 93 percent of the gains in 2010. 37 percent of the gains went to the top one-tenth of one percent. No one below the richest 10 percent saw any gain at all.

In fact, most of the bottom 90 percent have lost ground. Their average adjusted gross income was $29,840 in 2010. That's down $127 from 2009, and down $4,843 from 2000 (all adjusted for inflation).

Meanwhile, employer-provided benefits continue to decline among the bottom 90 percent, according to the Commerce Department. The share of people with health insurance from their employers dropped from 59.8 percent in 2007 to 55.3 percent in 2010. And the share of private-sector workers with retirement plans dropped from 42 percent in 2007 to 39.5 percent in 2010.

If you're among the richest 10 percent, a big chunk of your savings are in the stock market where you've had nice gains over the last two years. The value of financial assets held by Americans surged by $1.46 trillion in the fourth quarter of 2011.

But if you're in the bottom 90 percent, you own few if any shares of stock. Your biggest asset is your home. Home prices are down over a third from their 2006 peak, and they're still dropping. The median house price in February was 6.2 percent lower than a year ago.

Official Washington doesn't want to talk about this lopsided recovery. The Obama administration is touting the recovery, period, without mentioning how narrow it is.

Republicans would rather not talk about widening inequality to begin with. The reverse-Robin Hood budget plan just announced by Paul Ryan and House Republicans (and endorsed by Mitt Romney) would make the lopsidedness far worse - dramatically cutting taxes on the rich and slashing public services everyone else depends on.

Fed Chief Ben Bernanke - who doesn't have to face voters on Election Day - says the U.S. economy needs to grow faster if it's to produce enough jobs to bring down unemployment. But he leaves out the critical point.

We can't possibly grow faster if the vast majority of Americans, who are still losing ground, don't have the money to buy more of the things American workers produce. There's no way spending by the richest 10 percent - the only ones gaining ground - will be enough to get the economy out of first gear.

Robert Reich is Chancellor's 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 thirteen books, including "The Work of Nations," "Locked in the Cabinet," "Supercapitalism" and his latest book, "AFTERSHOCK: The Next Economy and America's Future." His 'Marketplace' commentaries can be found on and iTunes. your social media marketing partner


A note of caution regarding our comment sections:

For months a stream of media reports have warned of coordinated propaganda efforts targeting political websites based in the U.S., particularly in the run-up to the 2016 presidential election.

We too were alarmed at the patterns we were, and still are, seeing. It is clear that the provocateurs are far more savvy, disciplined, and purposeful than anything we have ever experienced before.

It is also clear that we still have elements of the same activity in our article discussion forums at this time.

We have hosted and encouraged reader expression since the turn of the century. The comments of our readers are the most vibrant, best-used interactive feature at Reader Supported News. Accordingly, we are strongly resistant to interrupting those services.

It is, however, important to note that in all likelihood hardened operatives are attempting to shape the dialog our community seeks to engage in.

Adapt and overcome.

Marc Ash
Founder, Reader Supported News

+18 # Rick Levy 2012-04-01 19:48
Even if the 99% do manage to recover, we will all likely have a relapse when presented with the hospital bill.
+11 # forparity 2012-04-01 21:05
Unfortunately, ObamaCare did nothing to lower the hospital bill - in fact, just the opposite.

It didn't address the issues of why health care costs so much.

We have to talk about them - not just tell insurance companies to cover more and pay more for more people. That, escalates the cost, even faster than it was going up prior.
+10 # Xpat_lib 2012-04-02 01:02
Most of the AHCA doesn't kick in for another 2 years so expecting big $ savings now is wishful thinking. Calling it "ObamaCare" is your next big mistake and very telling of your political views. Have you forgotten how hard the GOP and Blue Dog Dems fought against any change in health care system? As much as he tried to compromise with them the more they fought back. Most of the changes are what the Right demanded all along. It's not perfect by any means but we were lucky to get as much as we did: no denial for preexisting conditions, children covered by their parents plan until age 26, prevents insurance companies from dropping people, thousand previously unable to afford insurance are now covered, and much more.
+20 # soularddave 2012-04-02 08:07
Insurance companies spend 60-70% on healthcare; the rest going to administrative costs like advertising, profits for shareholders, and CEO rewards. Medicare, on the other hand, operates at about a 3% overhead.

We need to get the profit motive out of health care and eliminate those "death panels" that determine which medical procedures are money losers for the corporations.

We just need health care; not profit taking insurance industry.
-13 # forparity 2012-04-02 10:38
You might recall, that Reich, himself, is one of those who promote the "death panel," concept.

This is Reich in 2007, explaining how it would work if they [politicians] simply had the courage to stand up and state what must be done:

"We're going to have to, if you're very old, we're not going to give you all that technology and all those drugs for the last couple of years of your life to keep you maybe going for another couple of months. It's too we're going to let you die."
+6 # Granny Weatherwax 2012-04-04 07:47
Please that "Death Panel" is the wrong, republican framing; the ones who say "you're going to pull the plug on Grand ma" (or Granny for that matter).

The question is very legitimate but it should be seen as a "quality of life pannel": what would a six million bionic arm do for me if I have a bad back and am likely not to survive the operation?
The point is not to decide wheather to kill someone as the repugnant imply, but what treatment makes sense IN CONTEXT.
-9 # forparity 2012-04-02 10:54
Actually the numbers for the insurance co's was more around 83% - in 2009. the HC bill pushes them into the high 80's. Medicare has more fraud in it than, 3%. And, medicare is not comprehensive coverage, like most private health insurance.

One must note, that it is ins co's that negotiate the price of health care, including prescription drugs with health care providers.

It is the cost of health care services - the over-utilizatio n - the waste and fraud - the immense development of cutting edge technology and expensive drugs (which the rest of the world benefits from - at our expense) that has driven health care costs up so rapidly.

Reforming how coverage is received by all - is an entirely different animal - though there is some overlap, obviously.

The profit issue. Tell your typical anesthesiologis ts that earning $450K is too much money, then. So far, only the insurance companies (and Medicare) are negotiating lower rates for patients.

Also one must note on that last point - if providers (Doctors, nurses, tech's, hospitals, etc.) were suddenly only to receive the Medicare reimbursement rate - the entire health care industry would collapse. It's the larger private sector that keeps Medicare afloat (cost shifting).

FTR - the last number I saw - is that the average cost/member for Medicare is over $1,100/mo., and Medicare is not comprehensive coverage.
+3 # jwb110 2012-04-02 09:18
Quoting forparity:
Unfortunately, ObamaCare did nothing to lower the hospital bill - in fact, just the opposite.

It didn't address the issues of why health care costs so much.

We have to talk about them - not just tell insurance companies to cover more and pay more for more people. That, escalates the cost, even faster than it was going up prior.

I think the reasoning by the Heritage Foundation for forcing the "must have health insurance" part of the Bill was that the pool would be so large that the Insurance COmpanies would bring pressure to bear in bringing down overall health care. Do I think it would work? I am dubious of it because market forces don't work in a corporate cartel economy. That said, when the fox has the key to the hen house what are the average Americans options?
+5 # Virginia 2012-04-01 23:12
Let's get realistic about the recovery. MBS caused the collapse. Trillion$ were lost due to Wall Street fraud. Nothing is being done to stop the foreclosures and evictions which are happening even to people who are paying their mortgages because the Ponzi scheme is falling apart. If the government wants to stabilize the economy it would STOP the foreclosures and evictions and have the states reconstruct the loans with the homeowners and collect the monies they so desperately need because they gambled away the state pension and retirement funds investing in fraudulent securities.

HAMP, HUMP, HARP, whatever, are smoke screens and unrealistic. They are tools to make the banks look credible when they never intended to help the homeowner. Face it folks - your property is the new commodity and as long as Wall Street can continue to sell your debt you have no shot at peace. If you miss a beat, and even if you don't, you'll end up in foreclosure - BECAUSE THIS THE BANKS' PATENTED BUSINESS MODEL.

And if you think you still have a pension and retirement fund and it is not under your complete control and in your hands, under your mattress... Think again - it's likely GONE. State settlement deal or no deal.
+8 # John Locke 2012-04-02 08:16
Rick: No worry there, many of the 99% are on life support, and the likelihood of a recovery form intensive care in this case is nil... when the 99% fully wake up and see that both parties are controlled by this money and are a part of the problem, they will begin to realize they are really in control, that they hold the power to make the changes by openly rebelling, and boycotting, and refusing to work for the interests of the 10%, or to buy their products, like those from Koch industries, and to refuse to fight in their wars, for resources, their wars, or refuse to work in the high end restaurants where they eat, and engender a real tax revolt to stop supporting this brazen corruption of democracy. Things will change.

Remember, we are in a class war, and we outnumber them! This was exactly what occurred in France in 1798 poverty and decadence, and they found the solution!
-17 # Cascadian 2012-04-01 21:28
Only by breaking up global "free" trade and re-industrializ ing this country will we see jobs or anything approaching a "recovery" occur. Controlling our markets is the only was to prosperity. For starters lets ditch the Fed. Dump Obama and elect Ron Paul.
+3 # Granny Weatherwax 2012-04-04 07:48
Stop it, I can't breathe!
You are soooo funny!
+20 # Patrice Ayme 2012-04-01 22:14
Obama, the objective ally of the health care plutocracy was careful to NOT set-up a public health insurance system to compete with the private health care lords.

If Obama had set-up a tax to force everybody to pay for Medicare, that would have been constitutional: a tax, from the public, to the public. Not a tribute, from the serfs, to their lords.

Last, and not least: why are so many so called self declared “liberals” goose stepping behind the ultra right wing plutocratic Heritage Foundation? Do they have only a spinal cord? Or is that a spinal choir?
+30 # Patrice Ayme 2012-04-01 22:16
The capital gain tax should be progressive, like the tax on income. How come nobody ever suggest this? So the non wealthy would pay (say) basically zero capital gains on long term investments, and the rich would pay 50%...

Amusingly, all over the West, when one suggests to tax the hyper rich as they used to be under communist (?) presidents Roosevelt, Truman, Eisenhower, Kennedy, all the way to Reagan, a great scream arise, saying that the hyper rich would leave, and go somewhere else. Where? China? Mars?

A way to fix a lot of problems now would
be by further (after Greece) organized default, where the people refuses to pay rent to the plutocrats, and, instead, charge them with hefty taxes, at it uses to be. That's the only way to reduce the debt load on individuals paralyzing the economy.
+6 # John Locke 2012-04-02 08:26
Patrice: I like your comments especially about the rich and the psuedo threat they will leave, they are now! They are not Americans by interest so they don't belong here anyway. This is our country, not there's! and if there is a class war, which by all indications exists, we have the nimbers to win.
0 # Patrice Ayme 2012-04-04 10:43
John: Thanks for liking my comment. And indeed, they are already gone. Last time I visited the Riviera, years ago, I noticed all the sumptuous yachts were registered in tax heavens, mostly in the Caribbean, but also Isle of M, Jersey, etc... The lower class, the 99%, should re-appropriate their own country for themselves. This is true in Europe, as in North America... The hyper rich can go settle Antarctica, I hear grass is growing there...
+3 # CharlesH2011 2012-04-02 01:17
Reich is right. But where was he when the Tea Party were objecting to publicly financed bailouts for the top 1%?

Let's face it, the Left has sold out. Obama, having been elected with big chunks of money from GE to Goldman Sachs, has been their perfect man in office: Blame the Republicans while setting up sweetheart deals with the wealthy and powerful.

If this economic recovery is only benefiting the top 1%, what is Obama's campaign slogan going to be? "The other guys would be even worse?"

It's really sad when the guy who ran on "hope and change" turned out to be way more of the same.

And it isn't going to stop so long as there are tremendous concentrations of power being shared by government and business.
+6 # underwater 2012-04-02 06:49
I'd like to see what the long-term trend vectors look like. We have identified that those in the "have" sector continue to prosper, and those in the "don't have so much" sector continue to founder. Where will we be in another 10 years if these trends continue? How much more wealth and opportunity will be pushed up and be removed from below? Yet they use our roads and infrastructure to build their fortunes and object vehemently to contributing to its well being. Pure selfishness.

We are also in a state of defined political bullying. It's not just for children anymore! Dr. Olweus' definition is spot on to describe today's political/socia l climate - make fun, don't contribute, castigate, discredit and victimize anyone attempting to fix out national issues. Since they have no strategy to counter common sense tangible solutions, they fight tactically and in very cowardly ways, mostly seen as moving the goalposts when they know they're losing.

When we call them out, they claim foul and play the abused victim. Classic!

The more you Fox, the less you know.
+9 # MidwestTom 2012-04-02 07:09
Unless we breakup the power structure and change the tax code we will continue to slowly become slaves. We must at a minimum breakup the big banks, gain control of, if not eliminate the Fed, outlaw any one person being on more than two board of directors of public companies; make the board of directors accountable for the action of a company; and change the top tax rate to 50% for those making over $2 million per year. To control expenses we need to first close our borders, then cut some military expenses by getting out of Afghanistan. To control political expenses, limit the number of minutes any one candidate is allowed to advertise on television and radio, no matter how much money he has. This would result in more debates.
+1 # cordleycoit 2012-04-02 07:20
Obama identifies with the very rich not with the people. of course it was the same for FDR except FDR surrounded himself with very good minds. Obama surrounds himself with hacks. His strategy of being the lessor of evils is worn but will more than likely be reelected and then will have to kowtow to the Republican nihilists and have to give Israel their war with Iran.
+4 # Starheart 2012-04-02 09:35
ITS NOT GOING TO GET BETTER -- The people and corporations controlling the government are the same people rigging the elections through the voting machines and programming, as well as manipulating the people posing as candidates in both political parties, as well as embedding people in opposition parties and activist groups. The mass media, dominating major TV networks and the advertising industry, has too much control over the most of the unenlightened population in this country.
+4 # reiverpacific 2012-04-02 10:13
One aspect of the continuing depression I've never heard discussed and i'fact seems to be avoided by pundits from both sides of the socio-political spectrum is the corrupt, incompetent and fraudulent CREDIT BUREAUS, which by the way are NOT government entities but are entirely private and funded by big banks.
Yet their every utterance is taken as a holy grail of the path to more indebtedness, without which one is made to feel pretty powerless and worthless and to which we are constantly urged to go to and get "Free" credit scores -just one of the scams set up to keep 'em fat and funded.
So how the Hell are the millions still out of work and rapidly losing hope, even if they eventually find some menially-tasked and minimally compensated slave-status work, supposed to get their lives back even close to being on track when their "Credit" has already been ruined by -in most cases (in spite of the "bootstraps" mentality by the ignorant and reactionary) circumstances not of their own making?
The 1% don't need C.B.'s so are not beholden to them for funds, yet they flourish on the backs of gullible would-be consumers with an entrenched and all-powerful omnipresence, causing another layer of fear for an already-fearful populace.
I think that they, like the big banks, should be broken up into regional and accessible, accountable bureaus with a certain amount of Government oversight.
Just putting it out there.
+4 # Timetrvlr 2012-04-02 10:34
I can so easily feel what the populace felt in the late 1800's. Industry and the few own it all could care less about what happens to the rest of the people. The repugnicans have certainly gutted education enough that too many can't reason and fall prey to the propaganda. The government just decides to NOT enforce the 'Fairness Doctrine' because of an obscure court case decided BEFORE the mass consolidation of the media and then try to tell us that we are NOT being propagandized by that same media. Perhaps if we force our 'representative s' (and I use the term loosely) to force the justice department(agai n loosely used term)to enforce the laws we could stop the likes of Fox News from propagandizing the ignorants and other stations from idealizing our government interference by way of the military and our police through fear mongering.
0 # BradFromSalem 2012-04-02 11:49
Understanding the recovery and understanding the wingers is one and the same. Reviewing the Venn diagram where the two intersect is extremely informative.

First the wingers claim that there is no recovery. This seems odd on the face of it since demonstrably a portion of our economy has recovered. Even stranger, the part that the wingers believe (or so they claim) is critical to the entire economy recovering is the one that is recovering.

So, why aren't they dancing in the streets? Why don't they stand tall and shout "Our obstructionist policies have succeeded, and now the economy is ready to take off! Give us back the reins of government and prosperity for all is around the corner!!"

The fact is they truly believe that the Progressives think the way they do. They really believe it is to their benefit to claim counter to their own economic philosophy, that the economy has failed totally. They truly believe that Progressives have a problem with the Economic divide only so as to regain power. Because that is how they think.

Not recognizing that the thief is the one that accuses everyone else of trying to steal is the great weakness of Progressives. The louder the Progressive message gets, the more people understand it; but we have to keep in mind that the other guys really do not believe in our sincerity, because they themselves are insincere. Otherwise, they would have an actual plan.
+1 # John Steinsvold 2012-04-02 12:13
An Alternative to Capitalism (if the people knew about it, they would demand it)

Several decades ago, Margaret Thatcher claimed: "There is no alternative". She was referring to capitalism. Today, this negative attitude still persists.

I would like to offer an alternative to capitalism for the American people to consider. Please click on the following link. It will take you to an essay titled: "Home of the Brave?" which was published by the Athenaeum Library of Philosophy:

John Steinsvold

“Insanity is doing the same thing over and over and expecting a different result."
~ Albert Einstein
+1 # John Locke 2012-04-02 17:38
John S: I read your article, It has been tried, that is the theory of Communism, to provide "according to their need" it didn't work because there was NO incentive to excell... What would work is a barter system but not on a one on one, more like there exists today and which I am a member of, we use trading script, when I want a hair cut i trade my services for it and when I want my auto repaired I trade my services for it. But the amount of credit I have is available by the company. and the trading is done on line. when I sell my services I receive a credit, when I buy it is deducted. I do understand that you, like all of us are seeking answers. don't forget money has been around since the beginning of civilization in one form of another, from cowrie shells to coined gold, I must admit though that the cowrie shells had more value then the Federal Reserve Note!
0 # Starheart 2012-04-02 12:15
MOST OF US ARE ONLY ONE OR TWO PEOPLE affected by the activist control/surveil lance project targeting individuals, from the Psuedo "Patriot ACT". ACTIVITIES IN MY LIFE HAVE BEEN ESCALATED NOW TO BURGLARY OF AND PROBABLY OTHER TARGETED ACTIVISTS ALSO.
I have requested my FBI files a couple times with always denial response.
I have experienced ongoing problems from being followed, and kept under surveillance, harassed, and now burglarized by people, who I believe have some connection or contact to people in the Federal Government. For at least the last 11 years the places I have lived have been invaded, searched, monitored and bugged by individuals performing unconstitutiona l, illegal, and covert / non-forced locksmith type entries, and surveillance operations of the places I have lived. Now the invasions of my living quarters has evolved to burglary and theft of personal property.
The last entry involved several thousands of dollars of personal property which was stolen.
There were 2 cassette tapes (that did not belong in the residence) left on top of a video tape labeled "Unlawful Entry". These people involved appear to be flaunting the fact that they can get away with anything, including burglary. There were also other items of my own which were moved around on the premises. Police don’t even help.
+1 # cruella 2012-04-03 15:57
Virginia you almost have it down.
After reading all the comments, we still don't known or understand what's really happening here. You listen to everyone on both sides, but not hearing what they are actually saying. We are hearing the same BS over & over again. All this useless noise is from the same elected officials for the past 11 years!!!! WE the voters will have to go to war and clean out the trash. How? Vote everyone out. Change the laws. Get agenda's on ballots. Start taking about the costs of entitlements and double dipping of elected officials & their healthcare. About the billions of wasted tax dollars going to Iraq & Afghanistan governments, to the private companies working (stealing) there, about our rights disapearing under the Patriot Act. About why the taxpaye having a vote on where & how the money is spent. As for the Banks...take your money out, sell your stocks, stop paying those credit cards. To hell with credit reports and Fico scores that the banks put into play. Stop patronizing big companies, and support small & local business'. Start hording your money. Without it, they would be nothing. Time to take action. Why should we follow the rules? They don't.
+1 # John Steinsvold 2012-04-04 11:49
John Locke,

As I envision a way of of life without money, we will gain economic freedom in addition to and without infringement on our present freedoms. The ONLY common denominator between a way of life without money and communism is economic equality which, in my opinion, we desperately need here in the USA. Economic equality will eliminate poverty. It will also eliminate materialism which warps our sense of value and corrupts our system. It will also reduce crime dramatically. Otherwise, our government will remain the same. The Democrats will still do battle with the Republicans. Our free enterprise system will still exist as it does today.

The best way to motivate people is to allow them to do the work they love to do. One of the goals of a way of life without money is to provide everyone with the opportunity to find a match between their abilities and the opportunity to serve society. If training is necessary, a free education is provided. Every effort will be made for each individual to find the work they love doing. There will be no pressure. I believe everyone has an ability or talent they want to use for the benefit of society.

John Steinsvold

The true business of people should be to go back to school and think about whatever it was they were thinking about before somebody came along and told them they had to earn a living.
~Elizabeth Barlow

THE NEW STREAMLINED RSN LOGIN PROCESS: Register once, then login and you are ready to comment. All you need is a Username and a Password of your choosing and you are free to comment whenever you like! Welcome to the Reader Supported News community.