Wednesday, March 2, 2011

Why is the economy a disaster?

From Robert Reich:
The truth is that while the proximate cause of America’s economic plunge was Wall Street’s excesses leading up to the crash of 2008, its underlying cause — and the reason the economy continues to be lousy for most Americans — is so much income and wealth have been going to the very top that the vast majority no longer has the purchasing power to lift the economy out of its doldrums....

The truth is if the super-rich paid their fair share of taxes, government wouldn’t be broke. If Governor Scott Walker hadn’t handed out tax breaks to corporations and the well-off, Wisconsin wouldn’t be in a budget crisis. If Washington hadn’t extended the Bush tax cuts for the rich, eviscerated the estate tax, and created loopholes for private-equity and hedge-fund managers, the federal budget wouldn’t look nearly as bad.

...The final truth is as income and wealth have risen to the top, so has political power. The reason all of this is proving so difficult to get across is the super-rich, such as the Koch brothers, have been using their billions to corrupt politics, hoodwink the public, and enlarge and entrench their outsized fortunes. They’re bankrolling Republicans who are mounting showdowns and threatening shutdowns, and who want the public to believe government spending is the problem.

From Forbes (yes, FORBES, a pro-business magazine; my emphasis):
When measuring for income inequality, the U.S. now falls within the ranks of Uruguay and Cameroon, according to the CIA World Factbook. Evidence from the Levy report suggests that middle class incomes have stagnated and as a result, households are increasingly relying on debt to finance normal consumption expenditures. The middle class may be in for yet another pinch. As my colleague Robert Lenzner writes here, rising inflation is expected to put a further strain on indebted and unemployed households. “It’s only a matter of time before a political figure decides to exploit this. Why Obama hasn’t, I’ll never know,” says Gladwell. Social stability is threatened when a society becomes too stratified. “If we want to continue to grow, we have to equalize a little bit,” he says.

Meanwhile...check this out. Speaks for itself, doesn't it?


JCF said...

Looks likes Forbes is touting the (FDR-ish) line that "If we don't have Reform, we'll have Revolution." (I hope they're right---one way or another!)

wv, "binge": what the GOP has been on, for 30 years now...

Counterlight said...

The USA is turning into Brazil of 50 years ago.