Robert Reich -We're in a Recession Because the Rich Are Raking in an Absurd Portion of Wealth

ECONOMY
The Nation / By Robert Reich

We're in a Recession Because the Rich Are Raking in an Absurd Portion of Wealth
Our economy can't thrive when the richest 1% get an ever larger share of the nation's income and wealth, and everyone else's share shrinks.
July 7, 2010 |


Wall Street's banditry was the proximate cause of the Great Recession, not its underlying cause. Even if the Street is better controlled in the future (and I have my doubts), the structural reason for the Great Recession still haunts America. That reason is America's surging inequality.

.................

If nothing more is done, America's three-decade-long lurch toward widening inequality is an open invitation to a future demagogue who misconnects the dots, blaming immigrants, the poor, government, foreign nations, "socialists" or "intellectual elites" for the growing frustrations of the middle class. The major fault line in American politics will no longer be between Democrats and Republicans, liberals and conservatives. It will be between the "establishment" and an increasingly mad-as-hell populace determined to "take back America" from them. When they understand where this is heading, powerful interests that have so far resisted reform may come to see that the alternative is far worse.

A virtual pendulum underlies the American political economy. We swing from eras in which the benefits of economic growth concentrate in fewer hands to those in which the gains are more broadly shared, and then back again. We are approaching the end of one such cycle and the start of the next. The question is not whether the pendulum will swing back but how it will swing—whether with reforms that widen the circle of prosperity or with demagoguery that turns America away from the rest of the world, shrinks the economy and sets Americans against one another.

None of us can thrive in a nation divided between a small number of people receiving an ever larger share of the nation's income and wealth, and everyone else receiving a declining share. The lopsidedness not only diminishes economic growth but also tears at the social fabric of our society. The most fortunate among us who have reached the pinnacles of economic power and success depend on a stable economic and political system. That stability rests on the public's trust that the system operates in the interest of us all. Any loss of such trust threatens the well-being of everyone. We will choose reform, I believe, because we are a sensible nation, and reform is the only sensible option we have.

more:
http://www.alternet.org/economy/147469/we%27re_in_a_recession_because_the_rich_are_raking_in_an_absurd_portion_of_wealth/

of the thugs he surrounds himself with.

of "bipartisanship." It's so painfully obvious by now that Neocons are not
capable of meeting another person half way - at least, not voluntarily. These
people respect two things only: 1. Profit. 2. Fear of Punishment.

He had the mandate to Nationalize the Telecommunication Industry if he wanted to, but he capitulated to there threats.

Sorry, but your bipartisanship spin doesn't fly in my neck of the woods, simply because it weakend his mandate to the point that Obama is a Lame Duck in the first year of his administration. Whith everyone thrown under the bus so far, it's pretty darn clear that he is a Corporatist flunky.

Where is Flunky the Clown when you need him?

of "bipartisanship." It's so painfully obvious by now that Neocons are not
capable of meeting another person half way - at least, not voluntarily. These
people respect two things only: 1. Profit. 2. Fear of Punishment.

He never was the person he presented himself to be;
He was paid off; or
It was demonstrated to him that his daughters were not safe even in the hands of the Secret Service.

The missed opportunities have been painful to witness.

But, they were the first signs of his gravitation towards the dark side..

The dark force entities are scrambling for cover right now, simply because they all are not in the 1% of the wealthy. They are failing like the rest of America, and they are getting desperate. I predict a lot of "Not Guilty due to Insanity" pleas in the next few years, as the Ponzi schemes unwind, and the lesser positioned player become exposed and isolated by their own peers.

It has become so ridiculous, even people from Russia, prefer there to have medical procedures. It is way too expensive here and we rank very low (third world nation status) in our ability to adequately administer health care. Translation: if you are not wealthy or have very good medical insurance, you are considered trash and therefore disposable. Until Ronnie Reagan, America was a nation at the top. This was because we progressively taxed our citizens according to their ability to pay.
Since Reagan, (Clinton and Obama have gone along with it), our top tax bracket is currently, $250,000, that is unconscionable, even to many wealthy (clear thinking) citizens. Of course millionaires and billionaires should pay a much higher percentage of taxes than a person who earns $250,000. When I was physically allowed to work, as a Union carpenter, I made very good money (in my view), I paid almost 35% in taxes. I did not mind. I do however know that in the 60's, the highest earners paid 75%-90% income taxes. They were still very wealthy and it allowed the wealth to be distributed throughout the population. This helped our economy and it's citizens. This is common fucking sense.
From Reagan onward, the taxes for the wealthy have become almost non-existent as has our manufacturing base.
We have "slipped" (by design) into 3rd world status in everything except military power. Our citizens suffer and our elites have become obscene (most of them).
Of course the Whitehouse knows this. My God it is not rocket science. Unfortunately, we were "sold" a false bill of goods when it comes to the promises of this administration (that I worked soo hard to help get elected). Almost all of "our" representatives actually represent the wealthy, not the majority.
Our Election system is not verifiable.
America has become a "banana republic."
The only hope for America (that I see) is that if we ALL take to the streets and non-violently demand specific reforms.
I say we should stage "Constitutional Conventions" in maybe 6-7 districts, where, through paper ballot voting, we can elect citizens (not wealthy) to represent us at each convention. Similar to the ones held in Philadelphia, by our Founding Fathers, at these "conventions", we can list our grievances and demands. We can create a "Platform" of our principles.
Then, nation-wide, have peaceful demonstrations and strikes, until our platform is adopted or "they" make it clear we can go fuck ourselves.
The times and unfair laws affecting ordinary Americans demand that we rise up as a majority and determine our future. For the last 30 years we have been heading towards feudalism. Only WE can stop it.

it seems like there is no shortage of economists out there willing to defend "trickle-down" and that the concentration of wealth at the top is the most beneficial financial situation to be had. I guess there's no such thing as an unbiased economist.

(or almost no such thing) who puts the interests of the people first, theirs and their crony's self interests last, and who work honestly to better the overall nation for the people, and not for the elitists or political Party.

"It is difficult to get a man to understand something, when his salary depends upon his not understanding it!"

The '08 primary (the real Presidential election) was the clearest indication of how things in America really works.

I see it repeated here ad nauseum, but does anyone know where the Trickle Down theory originated>?

View this link and see where it came from...

http://en.wikipedia.org/wiki/MONIAC

See it in action in this great documentary by Adam Curtis.

http://video.google.com/videoplay?docid=-3272903211813223143# (it is shown 5:00 minutes in..)

So there is the trickle down theory for all of you. Of course, it's all based on Physics, the mass of water, and flow rates.. It's a fricking machine, that doesn't account for Fear, the inherent survival instinct, of maybe a fraudluent hole drilled into the side of the machine to drain water (Money) from the system, or the effect of the machine springing a leak, or a hole becoming plugged up by greed. Personally, it looks like a pretty loose system to me.

Of course, if you ignore the flow capacity of the machine, you could dump more waters into it and it would overflow and eventually make it to the parts below, which is exactly what the debt economy and two wars are doing.

"We advise you little people to keep listening faithfully to Rush DraftDodger Limbaugh and our overpaid Chickenhawk propaganda pimps on Fox (smirk) news. They will keep telling you what to think about this (smirk). It is all the fault, of course, of the lib-ruls (smirk)."

- RepubliCorporate Fat Cats (R)

......Hell, I admit I was fooled or better yet let myself get fooled. I believe that now it is past the point of no return and we will have to go through what most of Europe did before, during and after WWII. After the war most of Europe saw what needed to be done and started with social democratic reforms that represented the majority of their citizens. The US didn't and hence the situation we find ourselves in today. There is now so much wrong with this country it is hard to know where to start. We don't need a Robin Hood, we need a fucking miracle.

how many DUers have turned against Obama. He is not God and doesn't pretend to be. It took FDR years and years to get us out of the Republican mess in 1932. That is the year I was born and have seen so much during my lifetime that I take things with a grain of salt. The many problems he is dealing with are not of his making. Sure, I wish it could be dealt with overnight but I don't hold my breath. But I can state that I think society has become less polite, less honest and certainly less caring about those who are in trouble. Rudeness has become the rule of the day. You do not have to like Obama, just consider he is our President and you can definitely disagre with him. I find no fault with you because you do. You have a right to be angry. I get angry. I believe Obamaa wants the very best for his country. If he makes mistakes that is natural, but I also believe he will try his best to get us out of purgatory.

AFTER much of it tried fascism and Nazism first.

I'm quite afraid that we're doomed to live out Sinclair Lewis' It Can't Happen Here before we get to a progressive democracy.

(Down here in Europe ;-) I've recently attended a number of lectures on exactly how fast we're going to hell in a handbasket, by various young PhDs in economy, sociology and philosophy. There was a clear consensus among the lecturers that the policies of social "safety net" and welfare state were adopted basically to preempt any further spreading of communism. The reasoning was, either you give workers some dignity, security and economic comfort, OR they will eventually revolt. Hence the inclusion of certain socialist principles into technically still capitalist economies. Hence the growth of the middle class.

This has radically changed though. First, there is no communism to keep at bay anymore, and no other system has emerged to beguile the people. Second, from the POV of the corporations, most hired workforce can go f*ck itself, since there's plenty of cheap labor in Asia, and when that dries up, there's Africa. I.e., there's no economic reason to maintain the pretenses any longer.

Everyone I've heard on the subject sees the welfare state and the strong middle class as an historical "aberration" (of the good kind, but still an aberration). From here it's all down the hill.

Hence (and this is my own opinion), the relentlessly growing restrictions on liberties, privacy, free speech, freedom of assembly - it's happening all across Europe. The money being spent on surveillance technologies and crowd control weapons - someone, somewhere thinks they'll be needed.

One of the instinctual reactions to fear in mammals is an opening of the eyes. Someone is spending a shit load on crowd control weapon development. If we follow the money we will get to who and who will lead us to why.

But I think we can all guess which class and what kind of person is funding crowd control weapons.

and don't run. And remember the importance of Not Being Seen.

seems more likely.

........I think the ONE thing most people can agree on when describing fascism, is that it is corporate "control" of government. I think we can "check" that one as having been accomplished.

Huckabee in riding boots and gold braid would be the cherry on the sundae.

balls/ovaries.

Being sensible is not "pragmatic" at this time Robert, we're hoping you'll support the team as we take the voyage to the bottom of the sea.

House, Congress and the courts, they run the game.
I believe Obama knows this. Until there is overwhelming popular support for serious reform AND fair elections (NO EVM!), we're just going to get more of the same.

-Laelth

Everyone thinks that things naturally flow back to places they've been before.

The New Deal didn't come out of positive feelings, it came out of blood and suffering...and I'm wondering now if it was the right idea anyway? All it did was reset capitalism in order to have it do exactly the same thing later.

were planning the overthrow of FDR and the government as was demanded by law...It is they who came back to haunt us and who have been haunting us ever since. If the lot of them had been executed, much of the evil in our country and in our government would not exist, including the Bushes and friends and the Banking cartels, JP Morgan et al.

It tried to regulate it. And it didn't flow from nothing, it flowed from very real suffering (as you say). It was the systematic desruction of regulation that is to blame, not the new deal policies which were and are sound governance.

This is natural capitalism in action. The New Deal as you say, was not at fault, except in its essence. FDR even admitted he was saving capitalism and that the people who were screaming for his head were ultimately the biggest benefactors of what he was doing.

I'm wondering now if that wasn't a huge mistake, and how many times we need to "save" capitalism before we bury it in the dustbin of history as a relic born of feudalism.

I do not think Reich was touting the best of a bad situation, nor painting a rosy picture...nor was he speaking of silver linings. He was speaking the truth about the dire situation in which we find ourselves; The direct opposite of Pollyannaish

I still think if there were no illegal immigrants and all jobs were regulated by labor department standards our wages would go up. Aren't wages a function of demand and supply of labor?

that we are oversupplied with self serving CEO's that have for far too long screwed over labor, through a variety of means, in order to keep wages down while making absolutely certain that their salaries go up and up and up and up.

Poor getting poorer and the middle class drops into poverty.

And poverty equals apathy towards politics because the poor feel powerless. The elite and politicians love it when that happens. It is a natural progression of things unless we the people expend huge amount of energy to oppose it. We must also maintain our right to bear arms.

The historic American way from our founding has been to fight internal oppression by the elitists. The real importance of having unions (as much as they can be corrupt and self serving) is that they have political power to fight off the pillaging by corporate CEOs and banksters. When unions had power there weren't billionaire CEOs and the bankers didn't control the Democratic Party.

When a store or company or factory is unionized then the company just closes it and moves operations.

Either unions have to become global (again) or we need to recognize in the US that we control access to the market that companies want and MAKE them play by the rules. And it might be too late for that too.

The USA was the most lucrative market in the world for generations and we allowed our corrupt politicians to give it away so the banksters and CEOs could globalize and personally benefit, while most Americans lost.

The only possible leverage we have left is the retail sector. They can't outsource that. If public unions were given more ability to organize their employees it might help incrementally and politically.

But what can be done when you have those with boundless and limitless greed such as the billionaire founder of HD, Bernie Marcus and Richard Berman throw their big money around to prevent unions and average Americans from ever gaining any traction from Obama and Democrats. Yet they do ensure continuation of the creed that every American must continue to fund Israel with American blood and treasure. http://crooksandliars.com/john-amato/bail-out-money-being-used-corporations-

http://www.youtube.com/watch?v=acLW1vFO-2Q

Mexico and other oligarchies are exporting their people instead of changing to make a more just society.

I don't think the U.S. is a sensible nation, and that lack of sensibility will be its undoing.

whatever sense Americans may have had.

:toast:

One pie..8 people.If one person eats 7 slices, the other 7 have to share one piece or maybe beat the crap out of the glutton & demand that he buy a new pie:)

Thanks for the thread, kpete.

there are college educated "twentysomethings" out there with service industry jobs who are discussing going to jail to get their teeth fixed! Democratic president, Democratic congress and our kids think about going to jail for the "dental plan!"

..........said to me the other day that he didn't give a shit about getting busted for driving w/o insurance (dropped it last month) or anything that may be illegal because he would at least have "three hots and a cot" AND better medical care that being out in the street. Oh, he's one that's been cut off on unemployment too. I went through the 80's recession and it wasn't pretty for a then 38 yo married man so I know of where he speaks. We are truly fucked.

I'm not a kid and getting my teeth or eyeglasses fixed seems pretty good to me.

This problem needs to be seriously addressed. K&R.

....facist b**ch.

WAY too much credit. She doesn't have the brains to do anything without people holding her hand the whole way. She is an uneducated puppet. The worst thing Obama has done was take away Governor Napolitano.

If anyone but us was actually listening to them.

"If nothing more is done, America's three-decade-long lurch toward widening inequality is an open invitation to a future demagogue who misconnects the dots, blaming immigrants, the poor, government, foreign nations, "socialists" or "intellectual elites" for the growing frustrations of the middle class."

Oh ... you mean like in Arizona with SB1070?

All HAIL the Giant Invisible Hand!
The Giant Invisible Hand will Save us ALL!
We MUST sacrifice America's Working Class to please the Giant Invisible Hand!
All Hail the Giant Invisible Hand!
.
.
.
And people say the Democrats are Anti-Religion!
"Free Markets" IS a fundamentalist RELIGION that DEMANDS fealty to an invisible god.



There is NO such thing as a "Free Market".
There is NO such thing as "Free Trade".
There is NO Giant Invisible Hand.
The RICH Corporate Owners MADE THAT SHIT UP and used smooth talking politicians to SELL it to a gullible America.

If you Work for a Livivng, do NOT trust ANY politician who professes a belief in the "Free Market".
He/She is NOT your friend.





This "Free Market" scam is the best one yet!
Hahahahahahahahahahahaha!

The concept of citizens acceding to governmental authority for the common good rests upon their self-interest in doing so.

It tell you many of the 1-3 million unemployed who are not receiving any government assistance in the form of unemployment checks must feel they soon or already have lost everything of value. And their numbers are increasing by the day.

They have expanded the playing field and all the rich have other countries, estates, islands, etc to flee to if things get bad. In the meantime they are profiting by having govenrnments invest in the devolopment and purchase of crowd control weapons.

They are preparing for the coups and will leave the middle class to deal with the newly poor. If a few proles die, they don't give a fuck.

I'm afraid you're right.

Please check out www.electexperts.webs.com We need to find people to represent us who are not a part of the current powerstructure and who know what they are doing. We need people who are experts in scientific studies which are relevant to governing the country.

this week? I found her report from a wealthy Kabul neighborhood especially interesting.
With 5.5 billion war dollars flowing in a week corrupt local officials are building multi-million
dollar homes with our tax dollars. It was enough to make you retch. The streets are in rubbles
but row after row of palaces with twenty-five plus bedrooms.

Then you have the Wall Street execs in NY that are now buying up multi-million dollar apartments
because for them, the recovery is here.

I don't suggest to have the answers, but we have got to do something radical SOON.

I have been arguing this point incessantly....you have to look where the money is...

the reason there is a recession is because there is no money to spend after the Elite Oligarchy skims all the cream off and licks the bowl.. mom said during the Great Depression that there was work, but no one had a dime to pay wages.. the GOP under Bu$h43 repealed all the laws set up after the Depression to prevent it from happening again...


http://sociology.ucsc.edu/whorulesamerica/power/wealth....

Financial Wealth
Top..1%........Next 19%.......Bottom 80 percent
---------------------------------------------------------
1983 42.9%......... 48.4% ...........8.7%
1989 46.9% .........46.5% ...........6.6%
1992 45.6% .........46.7% ...........7.7%
1995 47.2% .........45.9% ...........7.0%
1998 47.3% .........43.6% ...........9.1%
2001 39.7% .........51.5% ...........8.7%
2004 42.2% .........50.3% ...........7.5%
2007 42.7% .........50.3% ...........7.0%

WE ARE BE'n SCREWN.....

And the ultra-rich are NOT redistrubuiting that money, they are HOARDING that money and the poor suffer as the economy crashes for THEM. The ultra-rich OTOH are doing better then before the crash!

They have created a fire sale and are now buying up everything we worked for with their horded and stolen money. For every foreclosure and dropped value in property you will find a rich asshole purchasing it at pennies on the dollar.

Just thinking about it makes me ill. Poor victims, had a rough day and had to go buy a MANSION to make things more cheerful. Nasty little people demanding Congress 'do something' about it! :sarcasm:

What is a billionaire to do? Buy stuff cheap, sell high.

tax cuts created in this country. It has created a super wealthy class here, and the rest of us are barely eeking out a living.
The Reagan tax cuts for the wealthy need to be taken away. Where the hell is Obama?

An oligarchy (from Greek ὀλιγαρχία, oligarkhía<1>) is a form of government in which power effectively rests with a small segment of society distinguished by royalty, wealth, family ties, military control, or religious hegemony.

government and the public besides!!

Someone in the Hartmann spot today was saying at the lowest we used to get 40% of all

taxes from corporations -- today that's down to 5% --

But still, tax cuts are legitimate if immoral --

and they're still not satisfied and still stealing as much as they can!!

It takes an article to literally put this in black and white to shake people up out of the collective denial. Why are we, myself included, so asleep at the wheel? We KNOW it's true.

Unamimous agreement on anything is pretty unusual for DU.

When these rich greedy cckskrs move towards deleting the Second Amendment to the Bill of Rights (and they will) and your right to keep and bear arms, be assured it will not be intended to protect the masses from themselves.

It will happen when they have finally taken it all and they know society has nothing else to steal or lose, and when one person one vote has become a fantasy concept as the voting machines are fully configurable and controllable black boxes.

I could never understand the movement by some liberals for gun control. But as we all know money in the media can buy and form any belief, propaganda and make any opinion.

They've taken it all and told us to eat dirt and WE'RE LETTING THEM GET AWAY WITH IT!

Here's an entertaining and good use of 11 mins. of any one's time:

http://davidharvey.org/

Excellent presentation.

The Tea Party lovefest is the corporate media's attempt to distract attention from the tsunami of inequality. They want to promote the idea that the problem isn't stagnant and falling incomes- it's costly government programs and high taxes...

How do we counter it?

I know namecalling attacks don't work. Conveying info is how..but ???

when I moved to Argentina in Jan. 2005, with the situation here after years of military dictatorships, the 2001 financial collapse, and social inequality and marginalization with villas (shantytowns) walled off in a sort of economic apartheid and people digging through the trash for recyclables (not like homeless people trying to buy booze, but like a business, carrying what may be dozens of pounds of trash per day on foot) along with massive unemployment and nearly universal undercompensation for the employed, I soon realized that this is what the future will look like in the U.S.

I don't think it's so obvious that reform will be what comes of this. First off, we can get a lot lower and sustain a broken system for decades more. And after that, rather than reform, it may be full-blown, naked fascism/feudalism.

We'll see. Let's make the truth known and choose reform.

I'm curious what you think would help.

More here: http://www.alternet.org/story/145705/the_richest_1%25_have_captured_america's_wealth_--_what's_it_going_to_take_to_get_it_back/?page=entire

The Richest 1% Have Captured America's Wealth -- What's It Going to Take to Get It Back?
The U.S. already had the highest inequality of wealth in the industrialized world prior to the financial crisis -- and it's gotten even worse.

with Obama as president, and our Democratic Congress in control. Not only is the WH doing their bank-loving part to water down policy, but Conservadems are causing delays in Congress.

We are at a breaking point as a country - I know wayyyyyy too many people suffering, out of work, lost their home, losing their home, - who view each day as a struggle. I don't know WHAT is gonna happen in November, but it could go either way, or split solely based on the candidates in each race, instead of a full on victory by the progressive or GOPigs. I fear for our country's calmness if the GOPigs get control of anything and prevent what good things this president has accomplished from coming to full fruition.


Come on Progressives - we gotta win this November!!!

I'm passing this on to acquaintances, intimate and otherwise. Many of them will love it. Some won't. The truth hurts.

"There’s class warfare — but it’s my class, the rich class, that’s making war, and we’re winning."

ETA: and Exxon Mobil, General Electric and many other corps paid ZERO in taxes in 2009 (despite making billions in profit).