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May 21, 2013
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Ignoring Our Economic Achilles’ HeelPosted on Jan 22, 2008By Marie Cocco WASHINGTON—Whatever concoction President Bush and the Democratic-led Congress now cook up to minister to the ailing economy is likely to have a chicken-soup effect. Many people will feel better, and things might perk up. Still, the temporary boost will not cure an underlying disease that has been spreading for decades and which should be treated as a full-blown emergency. Depending on when—and if—a recession officially is declared, economic history seems as though it is about to be rewritten: The official start of a contraction will likely mark the end of an economic “recovery” during which the incomes of Americans in the middle never recovered from the last recession. In the typical ups and downs of the American business cycle, median household income falls during recessions, then in recovery climbs back up at least to where it was before the downturn. This has been the pattern since the government began publishing data on median household income in 1967, according to John Irons, research and policy director of the Economic Policy Institute. But since the current recovery began after the 2001 recession, wages and salaries have been largely stagnant, and so have overall household incomes. “With this recovery, we’re not going to make it back to where we were before the last recession,” Irons says. EPI analyst Jared Bernstein has noted that a typical family’s income in 2006, the last full year for which data are available, remained 1.7 percent below its 2000 peak. Wages and salaries, adjusted for inflation, fell in 2007, though the broader measure of household income won’t be available until August. Still, it hardly seems realistic to believe that incomes will suddenly spurt up now that unemployment is rising and businesses are retrenching. The current downturn may have been touched off by the mortgage crisis or the energy-price crisis or the resulting crisis in consumer confidence. So the political system will do what it typically does—respond to these most visible crises with treatments that are most visible to voters. Advertisement For one thing, we have to give up the prevailing political aversion to stating the obvious: Unfettered trade in its current form hasn’t just hurt factory workers. It seems to be depressing incomes more broadly. Among economists, at least, “there’s a growing realization that trade hurts people who are not laid off,” Irons says. “That textile worker is going to look for work as a nurse’s aide, and then nursing wages are going to be depressed.” The old solution of retraining workers in import-battered industries, still crucial in hard-hit manufacturing towns, won’t work as a bigger economic strategy. The mantra that education or technology skills somehow would shield white-collar Americans from the fate of blue-collar manufacturing workers is equally shopworn. Just ask one of the thousands of telecommunications and information technology workers who’ve been laid off since 2000—or, for that matter, any of the thousands soon to be given their pink slips at Sprint. It’s too glib to argue that for all the jobs destroyed during a slump or a longer period of economic change, new ones eventually emerge. This may be true in the abstract. But what if the new jobs don’t pay as much as the old? In the 1980s, the political class kept assuring the working class that we were not going to become a nation of “hamburger-flippers.” We haven’t. But something else has flipped. It’s the bargain under which most workers could once rely on skills, education, experience and diligence to get ahead financially. Six or more years of stagnating incomes can’t be called an aberration. It’s a trend, all the more abhorrent because the political system has for so long refused to even acknowledge it. We look again and again at the same discrete parts of the problem—staggering health care costs imposed on business and workers alike, for example—and overlook the fullness of the crisis. A short-term economic stimulus package is necessary to fill some empty pockets. But it can’t fill the void created by so many years of ignoring reality. Marie Cocco’s e-mail address is mariecocco(at)washpost.com. © 2008, Washington Post Writers Group New and Improved CommentsIf you have trouble leaving a comment, review this help page. Still having problems? Let us know. If you find yourself moderated, take a moment to review our comment policy. |
By tiredofitall, January 25, 2008 at 11:04 am Link to this comment
(Unregistered commenter)
“The USA is not only still around, but is doing just fine thank you.”
Obviously someone in the top 3 percent of income here….
“No such thing as permanent prosperity.”
I don’t think anyone is expecting permanent prosperity except those who profit the most by it…sound familiar?
“...hopefully theyll be smarter about it next time, just as business has to learn from its mistakes.”
Uh huh, just as those huge mega-corporations ‘learned’ from their mistakes. Also, maybe those people were just doing what the elite told them to. Maybe they were fed lines of crap and misinformation by these same businesses so people would not stop buying. Maybe they finally decided that the only way to save those HUGE incomes were to subvert the political process to their own ends. Maybe the were very successful at it, because the people were too busy spying on each other and worrying about pedophiles and terrorists, and these same items were inflamed and exaggerated by the media at the behest of these same lobbyists who control them and their political puppets with the promise of power and money. Enron is just one example of that ‘learning’ you mention. That hierarchy KNEW they were screwing their employees and investors….those same ‘people’ you mentioned before who should ‘learn’ from their mistakes.
So, I hope they do learn. I hope they learn well. I hope they learn to stop giving money to people that are little more than money-sucking pondscum. I hope they stop allowing the military/industrial complex to run things. I hope they learn that people are the best investment in a society, since those people create ‘society’. I hope they learn to stop believing the sensationalist, hyped media that fuels their knee-jerk, emotionally charged reactions, reactions that were planned from the beginning to keep us at each others throats and not paying attention to the greedy, money loving scavengers that have been put on a pedestal as examples of how our country should operate as well as elected to our political processes, and are even now destroying our government and our country from the inside. I hope they learn to listen to the rhetoric so they can see crap for what it is. I hope they use their brains to evaluate the issues and come to a decision based on logic and facts, not emotions and bull hockey. I hope they see that their efforts, which create the massive wealth they are not allowed to get any but the tiniest fraction of, are wasted since they will never get to a point where they can stop making someone else rich and start trying to create their own ‘place in the sun’ I hope they learn that ‘We The People’ means ‘all of us’, not just the few who have enough money to flaunt their lifestyles and their greed in the face of the people who created it for them. (yes, FOR THEM..I have never met anyone who I would describe as wealthy who got to that point ENTIRELY by themselves. Nor is there such a person. Unless you created the building materials, cleared and prepped the land your business sits on, created the metals and the electronics you use in your vehicles, designed and built them….I can go on, but I hope you get the picture)
I hope they do learn. But I am not holding my breath, since your comments prove that there are still people out there who are falling hook, line, and sinker for the crap spewing out of our politicians throats…crap fed them by their masters who want you to sit there and feel superior while the nation we had is subverted by greed and pompous self-importance.
Report thisBy Mark, January 24, 2008 at 11:20 am Link to this comment
(Unregistered commenter)
As all of the economic measuring and reporting entities are basically controlled by the political machinery, what incentive is there to report anything but good news. After all, bad news does not get anyone (re)elected. Much of the reporting in the MSM is just a re-hash of government generated happy news.
Report thisPresident Bush points to indicators that show how much better things are while Democratic Legislators point to how bad things are, but when the D’s are in power, they only report the good.
There is a need for an independent body to report of real economic information. If we only design our measurments to tell us good news, (for example the unemployment rate does not include millions of people that have just given up the hope of getting a job) then we will never have an accurate measurment of the state of the economy.
By Marshall, January 24, 2008 at 12:00 am Link to this comment
Can you define the “middle class”? No one else can.
Report thisBy Marshall, January 23, 2008 at 11:59 pm Link to this comment
Well, except that the 2nd half of your statement doesn’t make any sense. The USSR is no longer around. The USA is not only still around, but is doing just fine thank you. We have our economic ups and downs because that’s how economies work. No such thing as permanent prosperity. After all, our economy includes the people. And the people don’t always do the right thing. Maybe they use their homes as bank accounts. Maybe they overspend and rack up debt. Maybe they splurge on oversized cars and luxury items. And maybe now some will wish they hadn’t. And hopefully they’ll be smarter about it next time, just as business has to learn from its mistakes.
Report thisBy jbart, January 23, 2008 at 7:01 pm Link to this comment
(Unregistered commenter)
Perhaps we “decide” to buy anything we need from foreign-owned companies. Based on the “consumerism” economy of Americans, witholding revenues from American companies, might get them to realize that WE ARE the reason that they are where they are, economically speaking. What the saying again? He who giveth can also taketh away? (As an atheist, I inserted “he” for “God” call it poetic license).
Report thisThey need to take notice and we, as Americans, need to make them do just thet.
By Blackspeare, January 23, 2008 at 1:26 pm Link to this comment
Well now let’s see, the USSR proved that total public ownership does not work, the USA has proved that total private ownership does not work so what’s the answer. It seems that a balance between capitalism and socialism offers the best opportunity all around. Combining Keynesian and Friedmanian economic aspects will serve the most the best. Remember, a good government will always do the most good for the most people. Neither straight socialism nor capitalism can achieve that.
Report thisBy nickelthrower, January 23, 2008 at 1:02 pm Link to this comment
My advice to everyone would be to come up with a good escape plan. I do not know why anyone would ever believe that we are somehow immune to disasters. We can easily have a Depression, Famine or all out Class War. I dare anyone to give me a reason why we can’t?
First, arm yourself.
Second, buy extra ammunition - it will be the currency of the future.
Third, you’ll need to be able to drink from our polluted water supplies - this looks like a great solution. http://www.lifestraw.com/en/low/low.asp
Fourth, stock up on freeze dried food. You’ll need at least a 6 month supply.
Those suggestions might make me out to be a aluminum-hat wearing nut case but does it really? I don’t know how to make food appear should the grocery store not have any so it seems to me to be a good idea to have some extra sitting about. Also, those that didn’t think things out might want to come and get my food so having the means to defend it might come in handy.
It is time to move past the blame game, accept the mess were in and prepare for what will come next.
Report thisBy ocjim, January 23, 2008 at 9:29 am Link to this comment
Be afraid. We still have this so-called executive leader who can only relate to “vulture capitalists.” That is why the middle class is tanking under Bush.
This means that any economic rescue plan he comes up with will benefit his rich buddies first and trickle down to the rest (more like a drizzle). Bush doesn’t know what an economic plan is; he only knows political or crony plans.
Past experience indicates that Democrats will cave, in order to pass a rescue measure of some kind. I would rather have no plan than settle for the usual Bush-help-the-rich plan.
Report thisBy brahma, January 23, 2008 at 8:59 am Link to this comment
the whole talk about slowing down of economy seems to suggest the middle-class was having a nice time post 2002. It wasn’t. Its just that the money banks have lost need to come in now, from somewhere. Rebate checks make an errand boy of the working people. If Edwards wins, it will be good(for him), same with everything else.
Report thisBy G.Anderson, January 23, 2008 at 12:02 am Link to this comment
We’re just crickets squeaking in the parking lot to them. When was the last time you stopped to chat with a cricket? Would you really care about what it said?
Yes, they’ve taken, taken taken from us until now we don’t have anything to give, so why give a rebate back when we’re just going to have to give it back soon anyway, April 15 is just around the corner.
When we go down, they go down because they get their wealth from us.
They were warned about the bankrupcy law, the credit card reform act, the new overtime laws, The Student loan laws, exporting jobs overseas.
They didn’t listen, and no rebate is going to change the economic conditions that they created.
But that’s not going to stop them giving out millions of dollars in bonuses, they’ll just keep it quiet.
Report thisBy cyrena, January 22, 2008 at 11:56 pm Link to this comment
Humm…I’m still in the LAST recession. Most of the folks I know are.
That’s the point of the piece I think. Anything they might even consider now, is 7 years too late.
And, even 7 years ago, a one time rebate wouldn’t have done anything anyway.
Report thisBy laura anderson, January 22, 2008 at 10:41 pm Link to this comment
(Unregistered commenter)
Fabulous. thank you from the bottom of my heart. Bush
Report thisBy bg1, January 22, 2008 at 7:08 pm Link to this comment
(Unregistered commenter)
The people who have the power to change things, are the ones benefiting from the way things are going now. They want worker pay to be lower, so they themselves can have more.
Report thisBy jackpine savage, January 22, 2008 at 11:54 am Link to this comment
Maybe our economic achilles heel is that we’ve decided that debt is actually wealth; which fits perfectly with the idea that war is peace…
Report thisBy Sang Ze, January 22, 2008 at 6:40 am Link to this comment
(Unregistered commenter)
In other circles, the token tax rebate would be called a bribe. The Republicans have given us war and made us poor. Gee, thanks a lot.
Report thisBy Dr. Knowitall, PhD, PhD, January 22, 2008 at 5:20 am Link to this comment
We of the middle class may only be chopped liver, but it does look like we have the power to bring down world economies.
When you’re chopped liver, you understand that. It’s the butchers that don’t have a clue.
Report thisBy Expat, January 22, 2008 at 3:49 am Link to this comment
Boy, this should be good. Bushies and demies to the rescue. So, how much will they give? $500, $800, $1200, $2500? Once! Hows that going to help when the recession we are in will likely last for at least a year or more. What maroons. (Bugs Bunny) Boy will the people be pissed!!!!
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