Robert Reich Solves The U.S. Economy In Two Minutes (VIDEO)

Former Secretary of Labor Robert Reich knows what's wrong with the economy, and he says he can explain to viewers in less than three minutes.

Since 1980, the American economy has almost doubled in size. But adjusting for inflation, most people's wages have barely increased, a fact Reich notes in a MoveOn.org video on YouTube. Indeed, the average American worker in 2008 earned $400 less than in 1988, when adjusting for inflation.

Concentration of wealth among the richest Americans have also drained the country of its economic resources, consequently dividing the middle class and weakening demand, Reich continues.

"The only way we can have a strong economy," Reich says, "is with a strong middle class."

Watch as Reich literally connects the dots here:

Comments

[Advocate4Liberty]

04:04 PM on 07/19/2011

OK. Let's embrace theft as a governing principle!

Much better than this drivel are a couple of responses, one by Robert Murphy which can be seen at http://www.campaignforliberty.com/blog.php?view=42662 and another by William Anderson at http://lewrockwell.com/anderson/anderson320.html

[Vernie Taylor]

03:37 PM on 08/04/2011

I was not impressed with the responses to Reich's video. Income equality is only one of the many problems with our present system. I believe, if left unchecked, free-market capitalism, privatization, and human greed will destroy the civilized world.

[Pete Lorenz]

08:36 AM on 08/05/2011

"Left unchecked" implies that it isn't checked now. The regulatory state is enormous, Vernie. I don't think people realize how much oversight there IS; they only focus on how much oversight there ISN'T.

[drewmx]

12:20 PM on 07/19/2011

According to Michael Moore, the total net worth in 2009 of the Forbes 400 was $1.27 trillion. Eating the rich will only cover ONE YEARS WORTH of budget deficits. What can we do after that? Eat the poor?

[srooge]

09:46 AM on 07/18/2011

when the masses get hungry enough they will eat the rich.

[Advocate4Liberty]

04:04 PM on 07/19/2011

No, they'll eat each other - just as they're killing each other everyday right now. Those like Reich who possess enormous wealth and/or influence have more than enough cash to pay the mercs to keep out the rabble.

[TheRoosterman]

09:01 PM on 07/14/2011

No middle class, no America. Pretty simple.

[TruthHasSpoken]

04:55 AM on 07/06/2011

Actually most of that growth disparity has been related to stock market boom experienced in recent dates. There has been influx of foreign cash invested in assets here. Problem is while most of the execs compensations are tied to their stock and profitability the other employees aren't. Compensation by some of that investor cash which has been borrowed by around 0% money policies, flooding the money supply. While demand for stock and artificial revenue for products goes up, employees get constant raise which aren't close to the rate of inflation, execs get compensated even more by investors. As demand goes up, so does inflation, where the average worker isn't able to keep up but to borrow to meet their standard of living. A lot of times the average worker's compensation increases is close to company performance. Stock performance a lot of times could be tied to investor sentiment as noticed with dotcom boom, which signifies not actual performance but basic human greed. The investors finally figure they have been living in limbo then everything corrects itself especially inflated assets. Everything corrects which includes human resource, where layoffs happen and the guy at top keeps his/hers.Tax exec compensation significantly or have them increase the number of their average employees that are part of the comp. Given the way government spends I'll edge towards the later.

[James Moorer]

08:21 PM on 06/30/2011

Applause...now lets all have a nice hot bowl of common sense....

[Quinxy von Besiex]

04:23 PM on 06/26/2011

Capitalism is at times like a horrible pyramid scheme, it only works as long as everyone thinks it's working. And the people sure to make money are those who got in and out first.

[Eagleman]

02:08 PM on 07/06/2011

I agree

We should bring the great socialist values and learn from countries like Venezuela and China.

We should also nationalize banks and big companies

[Quinxy von Besiex]

02:47 PM on 07/06/2011

Exactly, because that's of course exactly what I meant, too.

Presumably you've never seen your finances significantly increased or decreased by radical changes in the stock market, housing market, etc. independent of actual market performance but ruled instead by human factors like "confidence".

As long as everyone *believes* the stock market (of the hedge/bond/etc. markets) is doing well, it does well. New money is constantly available from both regular citizens and emerging markets like China to keep things propped and everyone happy. Until the mood changes and panic occurs and everyone begins to pull their money out and the entire thing collapses (of course, collapses within the limits it's possible with the trading controls they have in place to artificially keep it stable). That sure sounds a lot like a Ponzi scheme to me. It has many of the key elements: 1) new investors are required for the existing ones to get paid (the ROI they expect), 2) the value of whatever is being traded is inflated by false demand caused by item 1, 3) if new investors dry up or old investors pull out the entire thing collapses, 4) the ones most likely to benefit are those who got in early and got out early.

[Red Russet]

02:07 AM on 07/12/2011

A better idea would be have The GOP appoint a KING.

Then we go back to the feudal system, where there are lords in manors, and he has nobles, like barons and earls who are manager-types. Then he has knights to fight for him if required.

Then below them are the serfs, which are 99% of the rest of us. We do the actual work and get paid equally, minimum wage.

Oh and there was no SS or Medicare, so it would be a much simpler system. When we drop dead in the fields, other serfs just throw some dirt on us and keep on working.

[redscarecrow]

12:20 PM on 06/26/2011

You can fool some of the people all of the time and all of the people some of the time but you can't fool all of the people all of the time. Abraham Lincoln

[tortillaj]

09:00 PM on 06/25/2011

We are free to complain on the internet, therefore our tensions will never get high enough to revolt. That's the point of free speech.

[Peter Sharma III]

02:08 PM on 07/01/2011

"We are free to complain on the internet, therefore our tensions will never get high enough to revolt. That's the point of free speech." ~ @tortillaj

Really? I see that that safety valve worked very well for Mr. Mubarak...oh, yeah, it didn't

Revolution is a real possibility in the USA. All it takes is a large enough mass of hungry, cold, angry folks.

[theron mote]

02:43 AM on 06/25/2011

After reading the comments made here by all knowing people, I see why nothing ever gets accomplished in Washington. Opinions are like belly buttons, everybody has one........

[faultroy]

06:56 PM on 06/24/2011

One point not mentioned clearly is that we did have wage increases--for the public sector. And while it is correct that the super rich got richer, they getting richer had nothing to do with the deficit nor the fact that the public sector continued to increase as an expense while private sector pay actually declined when accounting for inflation-- and our increasing of the public sector and spending more than we took in is what caused to economy to falter. And, that has nothing to do with the wealth of the top tier. It is actually the imbalance between the earning capacity of the private/public sector that is causing the economic problems. Where wealth is concentrated has nothing to do with it.

[theobserver4]

09:32 PM on 06/25/2011

Loads of bs to sift through in this post. You don't honestly believe this do you?

[Peter Sharma III]

02:13 PM on 07/01/2011

C'mon, put your thinking cap on. We reduced revenues to an untenable point quite steadily eroding corporate and upper-class responsibility while granting gigantic public largesse to the same folks. If one cuts revenues and goes on multi-trillion dollar adventures overseas, one will break one's bank. Distribution of wealth matters tremendously.

[Principled Liberal]

05:10 PM on 07/18/2011

Peter Sharma III,

How would you go about demonstrating your claim that revenues were reduced "to an untenable point"?

I think you'll be hard-pressed to demonstrate that "the pinch" from revenue reduction has EVER been the issue. Please study federal revenues more closely.

Meanwhile, follow the spending and try to convince yourself that the problem is really a revenue stream issue...

[faultroy]

06:43 PM on 06/24/2011

I enjoy reading Dr. Reich and have much respect for him. But it is a little too late. Furthermore, it is interesting that Dr. Reich--since he is a resident of CA--has not been able to get the CA state legislature to act on his theories. For example we have Jerry Brown a Dem Governor. We have the CA legislature dominated by Dems and we have Dr. Reich's considerable talents at Berkeley. Unfortunately with CA being the 8th largest economy in the world, it also has 7 of the 10 USA cities with the highest unemployment. Why don't we conduct a little experiment: let Dr. Reich--fix CA and then come back to the rest of Nation and tell us how successful he was?

[carhac66]

11:13 PM on 06/24/2011

CA has the problem of being a state with high average income. this means that they are paying for red states with anti-union laws. these states with the anti-union laws then beg the federal gov for $$$, which is given from taxes taken from states like CA, IL, NY etc..,

That is the real problem with CA

http://www.usatoday.com/news/nation/2011-03-23-state-income-table_N.htm

[therage]

01:00 AM on 06/26/2011

I totalily agree. South Carolina is the most anti-union state in the nation YET has depended on federal handouts going back to Reconstruction. Up with the highest in UNEMPLOYMENT, illegitimacy, stds, alchohol and drug abuse, obesity, heart disease, etc, illiteracy and poor SAT scores, domestic crime, and animal cruelty YET the lowest in wages, elder and overall health care, legal rights of any kind, and environmental awareness. It gave 150 million in tax dollars to BOEING as a corporate bailout, ignored 100 million dollars "misplaced" by the University of SC and yet calls those struggling to get unemployment "lazy drug abusers" unwilling to take the jobs offered..YEA, minimum wage, Wally-World gigs at 20 hours per week. That way, you make just enough NOT to qualify for any bsnefits of any kind..Mentioning their colleges, both USC and Clemson which account for 1/6th of their entire annual state budget (6 billion) train thousands of Chinese Nationals to go back home and beat our brains out on the world marketplace. (While having the most unaffordable state tuition in the South for in-state residents).

Your real enemy are scab states like South Carolina. Labor should single-out and target them for a mass campaign to organize them at every level. That way, idiot Tea Party Puppets like Nicky Haily will quit trying to STEAL the food off your families table!

T

[Emilio Ruiz]

01:04 PM on 06/24/2011

To annonce how the colaps ocurred is not menning to solve it.

As part of the problem the explanetions given by Mr.Robert Reich are correct.

THE PROBLEM FOR TO BE SOLVE NEEDS DEPEST ANAYLYS.

LIKE:

A.- Is the economy used certainly ECONOMY OR ECONOMETRY..
B.- The metodology used by WORLD BANK and FM where the adecuated for the whole wide wold economy or its works only on behalf of USA Economy or Econometry.
C..- What was good 300 millons people IS GOOD for 6 billons people economy ?
AND MANY OTHERS POLITICAL,SOCIAL,DEMOGRAFIC reasons..

REGARDS.

EMILIO FLORES

[Caze Oliveira]

08:20 AM on 06/24/2011

Very interesting article. that's explain why no reform (any kind) has been made so far, because that would affect the ones that just refuse or accept any change on such great account, but, until when they can be stable secure and happy with the "fast growing unhappy?" hum?

[Scott Zwartz]

12:50 AM on 06/24/2011

Obama is a Republikan, which is why he hired Geithner and all those Goldman Sachs guys.

The solution was rather simple, especially in Jan 2009. The goal of Koch Bros et alia is to weaken the government to the point which it cannot regulate any business. If they do not raise the debt ceiling, that's fine with them. Obama is such a sell out, he will give them massive spending cuts which will also push us towards a depression. Never before was an administration so inept that it put itself in this situation.

If you see a driver intentionally steer his car into a brick wall, you pretty much have to conclude that he did it on purpose.

[Caze Oliveira]

08:24 AM on 06/24/2011

Obama has his hands tied up... he can't get rid of all the rats that created such system. Worst will be replace him with someone full of plans (for himself) to spend another term blaming on another people and having nothing accomplished as usual. Let the man work but guiding him to what really needs to be done.

[faultroy]

06:45 PM on 06/24/2011

Correction--Obama is part of the system and helped create the system.