Bob Herbert a couple of days ago:
We can keep wishing and hoping for a powerful economic recovery to pull
the U.S. out of its doldrums, but I wouldn’t count on it. Ordinary
American families no longer have the purchasing power to build a strong
recovery and keep it going.
The seeds of our current economic malaise started about 32 years ago with the election of Ronald Reagan and his war on the middle class. It was the successful war on the middle class that made economic recovery all but impossible. It was the absurdity of trickle down economics that did nothing but take money from the middle class and give it to the wealthy oligarchs that guaranteed the failure of the US economy. It’s customers who have money that create demand and that demand creates jobs. The wealthy are lousy customers – if there is no demand they don’t create jobs they save. That’s what we are seeing today. No jobs are being created because the majority of potential customers have little or no money so there is no demand. The United States became an economic powerhouse in the 50s and 60s when the unions were powerful and the middle class was growing – a lot of customers – a lot of demand.
Herbert:
The middle class is finally on its knees. Jobs are scarce and good jobs
even scarcer. Government and corporate policies have been whacking
working Americans every which way for the past three or four decades.
While globalization and technological wizardry were wreaking employment
havoc, the movers and shakers in government and in the board rooms of
the great corporations were embracing privatization and deregulation
with the fervor of fanatics. The safety net was shredded, unions were
brutally attacked and demonized, employment training and jobs programs
were eliminated, higher education costs skyrocketed, and the nation’s
infrastructure, a key to long-term industrial and economic health,
deteriorated.It’s a wonder matters aren’t worse.
But things will only get worse. The argument over the Bush tax cuts would be comical if the situation were not so dire. The original tax cuts created no jobs, at least in the United States. There was a smoke and mirrors recovery but that was not the result of the tax cuts. It should be called the Greenspan bubble. He pumped the economy up with cheap easy to get credit. People used there houses as ATMs and bought houses they couldn’t afford. It was of course an unsustainable bubble and it burst but Greenspan’s objective was realized – Bush managed to get reelected in 2004.
There little the government can do now – Greenspan used the last magic bullet. The only thing that will prevent a slow steady decline is a shock that will result in a sudden collapse.
Herbert:
With so much of the middle class and the rest of working America tapped
out, there is not enough consumer demand for the goods and services that
the U.S. economy is capable of producing. Without that demand, there
are precious few prospects for a robust recovery.If matters stay the same, with working people perpetually struggling in
an environment of ever-increasing economic insecurity and inequality,
the very stability of the society will be undermined.The U.S. economy needs to be rebalanced so that the benefits are shared
more widely, more equitably. There are many ways to do this, but what is
most important right now is to recognize this central fact, to focus on
it and to begin seriously considering the most constructive options.
Sorry Bob Herbert, I fear it’s too late. Those who like things just the way they are control the political process. The Wall Street Banksters are upset with Obama because they only got most of what they wanted, not everything. Even if Obama wanted to fix the problem he couldn’t.
Cross posted at Newshoggers