What will happen to the US economy in 2011? If you're referring to profits of big corporations and Wall Street, next year is likely to be a good one. But if you're referring to average American workers, far from good.
The two American economies -- the Big Money economy and the Average Working Family economy -- will continue to diverge. Corporate profits will continue to rise, as will the stock market. But typical wages will go nowhere, joblessness will remain high, the ranks of the long-term unemployed will continue to rise, the housing recovery will remain stalled, and consumer confidence will sag.
The big disconnect between corporate profits and jobs is likely to continue because America's big businesses are depending less and less on U.S. sales and U.S. workers. Their big profits are coming from two sources: (1) growing sales in China, India, and other fast-growing countries, and (2) slimmed-down US payrolls.
In a typical recovery, profits lead to more hiring. That's because in a typical recovery, American consumers head back to the malls -- and their buying justifies more hires. Not this time. All the hype about Christmas sales over the last few weeks masked the fact that American consumers demanded bargain-basement prices. And the price-cutting dramatically reduced sellers' margins. In short, profits aren't coming from American consumers -- and profits won't be coming from American consumers in 2011.
Most Americans don't have the dough. They're still deep in debt, can't borrow against their homes, and have to start saving for retirement.
The Dow Jones Industrial Average is rising because of foreign sales. General Motors is now making more cars in China than in the US, and two-thirds of its total sales are coming from abroad. When it went public last month it boasted that soon almost half its cars will be made around the world where labor is less than $15 an hour.
Walmart isn't doing especially well in America but Walmart International is booming. And Walmart is hiring like mad outside the US.
General Electric is keeping its payrolls down in the US but plans to invest half a billion dollars in Brazil and hire 1,000 Brazilians, and invest $2 billion in China.
Corporate America is in a V-shaped recovery. That's great news for investors and everyone whose savings are mainly in stocks and bonds. It's also great news for executives and Wall Street traders, whose pay is linked to stock prices. All can expect a banner 2011.
But most American workers are trapped in an L-shaped recovery. That's bad news for the Main Streets and small businesses in 2011. It's also a bad omen for home prices and sales, and everyone whose savings are mainly in their homes.
Home prices in major metropolitan areas sank last month, the third straight month-to-month drop. I expect home price declines to continue next year. We're in a double-dip housing market, largely because unemployment remains so bad that millions of Americans can't pay their mortgages.
None of this bodes well for US employment next year. I expect the official unemployment rate to remain around 9 percent.
In other words, whether 2011 is a great year economically depends which economy you're in - the one that's rising with the profits of big business and Wall Street, or the one that will continue to struggle with few jobs and lousy wages.
Sadly, the next Congress is unlikely to do much to reverse any of this. Most Republicans and too many Democrats are dependent on corporate America and Wall Street. Their version of tax reform is to cut taxes on the wealthy and on big corporations, and either raise them on everyone else (sale and property taxes are already on the rise) or cut spending on programs working families depend on.
At some point, perhaps, the disconnect between America's two economies will become so big and so obvious it can no longer be ignored. Progressives, enlightened Tea Partiers, Independents, organized labor, minorities, and the young form a new progressive movement designed to reconnect America.
One can always hope.
Robert Reich is the author of Aftershock: The Next Economy and America's Future, now in bookstores. This post originally appeared at RobertReich.org.
ie... "This seems like a reasonable request of those who wish to participate in our free market. "
or in other words, "if you want to participate in OUR free market, you have to sign up for us to control your taxes in a way to coerce you to hire workers and expand manufacturing in this country.
or ... ah, you don't see that, do you.... never mind...
sadly, vote them in and vote them out - matters very little - what we have is a bipartisan cesspool of corruption. DEMs/GOP two sides of the same corporate coin.
As long as our elected officials are willingly and happily controlled by corporate bribes - aka campaign contributions - we will never see this scenario change - just look at Obama - all those wonderful promises and yet, when the chips were down he supported multinationals, Big Pharma and Big Business - his message was clearly - Americans and America be damned...
and so goes the self serving agendas off all elected officials...
last week Jon Kyle said he couldn't vote for the 9/11 responders bill because it was dependent on a tax on Multinationals - he could just imagine next year - sticking his greedy little paws out for a fat bribe and hahving the MNCs say sorry, you voted to tax us...
and then Joe Barton - apologizing to Bp's CEO, he wanted the little people to be taxed to pay for the gulf clean-up - not his Big Oil Companies that give him millions to see to it their economic arses are always covered...
just last night a Congressman from Florida was giving a "heartfelt" speech that private companies could do a better job and should replace Governmnet TSA agents at airports - why was he so concerned??? Turns out the private company is in his own state and giving him fat bribes to have sush "heartfelt" suggestions...
on and on it goes...it's our government system based on self serving bribes that is flawed - it's not divided on party lines...
"All the talk about improving education is just that, talk. It ain't gonna happen! The owners of this country want people just educated enough to run their machines and do basic, simple paperwork." - George Carlin
Evidently, the Congress MultiMillionaires Club has quite a sense of humor.
the usa is in a very difficult spot. while it is still the largest economy in the world much of what is counted as gdp is on the expense(liability) side of the ledger. an economy cannot grow or sustain itself without value added industry. reserve currency seignourage as an economic model is the road to bankruptcy.
i am trying to convince my kids to move overseas for a life and work. the leadership of the usa will follow the path of all the other failed empires. it will happen fast and in the near future.
We are as a deer frozen in its tracks as an alien truck bears down on it going 80 miles an hour. Soon all assets and economic activity will be concentrated under the command of a few corporations and foreign entities. They will pay few taxes and their profits will be exported. We will export our raw materials and import finished produscts that only our affluent can afford. The massive humanity of unemployed will threaten rebellion. Children will go to bed hungry and cold.
Cap & Trade will set up a new trillion dollar private business of trading "credits" - it's quite a scam and will even as Obama admitted (though still pushing it) will send energy prices skyrocketing.
Cap & Trade will do very little to clean up the polluters - but will make some businemen vast fortunes - and they are licking their chops - it'll make the banking swindle look like childs play.
Of course government has corruption - the government is run by people and people can be greedy and corrupt. The difference is "we" are the government, and as such, can hold those we have hired to run "our" government (elected official or bureaucrat), who make and enforce "our" laws, accountable.
The fact that people believe the government "has more power to do harm than any other entity" is misplaced in that, "we" have chosen the government we have. So "we" are responsible for the unneeded wars it starts, the torture it conducts, the decisions it renders allowing international corporations to buy our elections and every other aspect of the government.
If you don't like the government we have - work to change it. But, let us not suggest unfettered business is any solution to our problems.
And the additional rub to 'big' businesses - at least the smaller ones are run by individuals who (may) have morals, a conscience, and a mind AND who are directly accessible to those to whom they provide goods or services.
This is EXACLY why Businesses need to be regulation AND why Businesses should not have full human legal rights under law with actual human beings.
"Koch Industries, the "nation's largest privately held energy company, with annual revenues of more than $25 billion. ... Koch Industries is now the second largest family-owned business in the U.S., with annual sales of over $20 billion.""
http://www.sourcewatch.org/index.php?title=Koch_Family_Foundations
Waiting for another Bill Gate (without the monopoly CASH) to create one JOB for public service is INSANE. IT DOES NOT or WILL NOT HAPPEN. Businesses are in business for profit or they are out of business
So what if we must pay a higher price for our goods while we make adjustments to American-made.
We will benefit over the long haul by getting our economy rolling again and employing our own citizens.
Our infrastructure is in drastic need of labor and repair and vision for a more workable transit, rail, bridges, power lines, and highway system.
Corporations are making more money in the stock market and trading commodities.
Jobs will return if the USA builds the Roads and Bridges back like IKE did building them. As Obama promised. Otherwise learn Chinese and work for 10 Cents or become an Owner or cut your consumption to 0
They have a moral obligation to participate in the rebuilding. Otherwise, we have no obligation to extend them the tax breaks they receive.
And it will take more than infrastructure to turn this around...
Cohen told Journal’s readers that “the fact is that for every job outsourced to Bangalore, nearly two jobs are created in American cities.” I bet other American cities” would like to know where these jobs are. Maybe Cohen, and the Chamber of Commerce can tell them.
I was in St. Louis and was struck by block after block of deserted and boarded up homes, deserted factories and office buildings,
Detroit is trying to shrink itself by 40 square miles. 60 Minutes had a program on unemployment in Silicon Valley, where high-earning professionals have been out of work for two years and today cannot even find part-time $9 an hour jobs at Target.
The claim that jobs offshoring by US corporations increases domestic employment in US is one of greatest hoaxes ever perpetrated. As I demonstrated in my syndicated column at the time How The Economy Was Lost , Slaughter reached his erroneous conclusion by counting growth in multinational jobs in U.S. without adjusting data to reflect acquisition of existing firms by multinationals and for existing firms turning themselves into multinationals by establishing foreign operations for first time. There was no new multinational employment in U.S. Existing employment simply moved into multinational category from a change in the status of firms to multinational.
http://www.counterpunch.org/roberts10282010.html
there are plenty of descent americans on both left, right, middle, ignorant ones too, statistically
more importantly they all share one common enemyy, who own wall street who own washington
unfortunately the good people are being played for suckerrs for decades on, to fight each other
what happens next is becoming less less predictable;
who knows american people may wake up and rise up...