The most troubling economic trend facing America this Labor Day weekend is the increasing concentration of income, wealth, and political power at the very top -- among a handful of extraordinarily wealthy people -- and the steady decline of the great American middle class.
Inequality in America is at record levels. The 400 richest Americans now have more wealth than the bottom 150 million of us put together.
Republicans claim the rich are job creators. Nothing could be further from the truth. In order to create jobs, businesses need customers. But the rich spend only a small fraction of what they earn. They park most of it wherever around the world they can get the highest return.
The real job creators are the vast middle class, whose spending drives the economy and creates jobs.
But as the middle class's share of total income continues to drop, it cannot spend as much as before. Nor can most Americans borrow as they did before the crash of 2008 -- borrowing that temporarily masked their declining purchasing power.
As a result, businesses are reluctant to hire. This is the main reason why the recovery has been so anemic.
As wealth and income rise to the top, moreover, so does political power. The rich are able to entrench themselves by lowering their taxes, gaining special tax breaks (such as the "carried interest" loophole allowing private equity and hedge fund managers to treat their incomes as capital gains), and ensuring a steady flow of corporate welfare to their businesses (special breaks for oil and gas, big agriculture, big insurance, Big Pharma, and, of course, Wall Street).
All of this squeezes public budgets, corrupts government, and undermines our democracy. The issue isn't the size of our government; it's who our government is for. It has become less responsive to the needs of most citizens and more to the demands of a comparative few.
The Republican response -- as we saw dramatically articulated this past week in Tampa -- is to further reduce taxes on the rich, defund programs for the poor, fight unions, allow the median wage to continue to fall, and oppose any limits on campaign contributions or spending.
It does not take a great deal of brainpower to understand this strategy will lead to an even more lopsided economy, more entrenched wealth, and more corrupt democracy.
The question of the moment is whether next week President Obama will make a bold and powerful rejoinder. If he and the Democratic Party stand for anything, it must be to reverse this disastrous trend.
ROBERT B. REICH, Chancellor's Professor of Public Policy at the University of California at Berkeley, was Secretary of Labor in the Clinton administration. Time Magazine named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including the best sellers "Aftershock" and "The Work of Nations." His latest is an e-book, "Beyond Outrage." He is also a founding editor of the American Prospect magazine and chairman of Common Cause.
Follow Robert Reich on Twitter: www.twitter.com/RBReich
Zero babies born with HIV by 2014 initiative, All american soldier home by 2014, and other positive plans could be expected to be revealed in the presidential debate. What could Mitt do that hasn't already been done. What plans does he wish to cut?
Growth is ahead of us, why should we trust the republicans? Shame on us, if we hand over the ball to them again.
I'm tired of hearing from the republican party; sorry it not personal, its business. Thanks to the devastation of the republican party, Jobs, homes, pension plans & 401k became deflated of value.
President Obama curved the financial problems by first creating new banking laws, then restructuring & updating SEC regulations, bailing out large corporations that are no longer in the red, but producing more net worth than before, providing jobs and finally a little bit more stability.
Americans want to move forward, and will with the democratic party! President Obama's professional executive staff has giving us the The Patient Protection and Affordable Care Act (www.healthcareandyou.org). ObamaCare will require all corporations with over 200 employees to pay for their full time worker's health insurance starting in 2014. Health insurance premium, policies,and co-pay will be carefully monitored and regulated to ensure fairness for the american people.
No Congratulations are in order, like my author friend has addressed towards those squirming by in overpopulated cities hoping to go both unnoticed as well as identified as some sort of powerful and lustty entrepreneur. Some cities survive trends and some cities are notorious for having these lame wannabe big wigs on the interior of these discussions.
I won't comment any further because the liquid band aid and bald metamorphosis thermometer and lemon people may be trying to commune and concern themselves with emotional sarcasm in the meantime.
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For that reason Obama needs to seize the banks, grab their assets, get the Federal Reserve to flood the economy with cheap credit, and provide a direct investment of 25K for all families of four earning less than 20K. Financed by a National Speculation Fee of 2.5% on all stock, bond, and real estate transactions and a National Sales Tax of 1.5% on everything other than rent, food,clothing, medications, and education-related expenses
These will be the most direct and the most long-lasting short-term fixes imaginable. Small business gains and large corporate America does as well.
Its your body. Pity no abortion. Prostitution is a choice! Vote Now.
Mebbe if we could somehow get the Fox Nation types to stop voting against their own best interests.
Enough of this "job-creator" chestnut. It is insulting and dishonest. There is only the bottom line.
How will that million dollars be spent?
If the 1% gets it, the money will be spent on feeding 3-5 people (on average), clothing them with high-end clothing, buying a few expensive cars and other luxury items (champagne, cohibas, etc.) and "investing," which generally means parking the money overseas.
If the 99%-ers get the million it will be spent on feeding 100-200 people, clothing them with clothes made by more people and sold by mores stores than the 1%-ers' clothing, on middle-and low-end cars (made by more people and sold by more people), necessities (again, purchased through a much wider section of the population) and a few low-cost luxuries (op. cit.).
The simple fact is that a million dollars in the hands of the 99% is better -- far better -- for the American economy than a million dollars in the hands of the 1%. Money in the hands of the poor and middle classes means more jobs, better jobs and more prosperity than money in the hands of the rich.
I think it's very important to remember, Mitt Romney made money from OTHER
My grandpa was an iron-worker and when he started out he made less than a $.50/hour. On the job training. Now that wage is considered inhumane and it's illegal. But you can borrow tons of money to get the same training -- you just have spend it on the educational-industrial complex we've built.
But first those in the middle class need jobs....Seems to me a lot like what came first the Chicken or the egg.