Blog

Finally, Washington has turned its attention back to jobs.

With President Barack Obama’s demand that Congress pass his American Jobs Act and his call on the supercommittee to push hard on 10-year deficit reduction, a battle has begun that won’t be resolved until the 2012 election. If then.

But the haunting reality is that neither side of the debate comes close to addressing the scope of our nation’s economic challenge. Washington is fighting over who has the better sand castle — while ignoring the tidal wave that is coming our way.

The jobs we’ve been shedding by the millions are solid, middle-class positions — the kind that could support a family and send children to college. The hard reality is that the relatively few jobs being created are service-related — disproportionately low-wage and low-skill. The broad middle class — the triumph and strength of America’s democracy — is sinking. Unless we change course dramatically, we will become even more a nation of haves and have-nots. (more…)

Today, over a thousand demonstrators began protests as a part of a campaign they are calling “Occupy Wall Street.” The protesters intend to engage in long-term civil disobedience to draw attention to Wall Street’s misdeeds and call for structural economic reforms. RT America covered the start of the campaign. Watch it: (more…)

The 5 percent of Americans with the highest incomes now account for 37 percent of all consumer purchases, according to the latest research from Moody’s Analytics. That should come as no surprise. Our society has become more and more unequal.

When so much income goes to the top, the middle class doesn’t have enough purchasing power to keep the economy going without sinking ever more deeply into debt — which, as we’ve seen, ends badly. An economy so dependent on the spending of a few is also prone to great booms and busts. The rich splurge and speculate when their savings are doing well. But when the values of their assets tumble, they pull back. That can lead to wild gyrations. Sound familiar?

The economy won’t really bounce back until America’s surge toward inequality is reversed. Even if by some miracle President Obama gets support for a second big stimulus while Ben S. Bernanke’s Fed keeps interest rates near zero, neither will do the trick without a middle class capable of spending. Pump-priming works only when a well contains enough water.

Look back over the last hundred years and you’ll see the pattern. During periods when the very rich took home a much smaller proportion of total income — as in the Great Prosperity between 1947 and 1977 — the nation as a whole grew faster and median wages surged. We created a virtuous cycle in which an ever growing middle class had the ability to consume more goods and services, which created more and better jobs, thereby stoking demand. The rising tide did in fact lift all boats. (more…)

Last Thursday, President Obama suggested that voters give Congress an earful on the horrible state of the economy. He was right to do that. There is plenty that Congress can do to spur private sector job creation that would not swell our federal budget deficit.

Taken together, these steps would provide a significant boost to the productive sector of the American economy. Creating one manufacturing job will support four or five other jobs in the economy, which is why it makes sense to adopt a coordinated manufacturing policy which would include the following steps:

• Establish a national infrastructure bank to leverage capital for large-scale transportation and energy projects.

• Reshape the tax code in a revenue neutral way to provide incentives for job creation and inward investment. (more…)

John Boehner said Tuesday the Republicans got “90 percent of what we wanted” from the budget deal. So presumably he and his colleagues are willing to take responsibility for some 450 points of Thursday’s mammoth 513-point drop in the Dow Jones Industrial Average.

I’m being a bit facetious — but only a bit. It’s always dangerous to read too much into one day’s move in the stock market.

Yet the stock sell-off — not just today’s, but that of the last days — cannot be easily dismissed. It marks Wall Street’s largest losing streak since 2008.

Republicans repeatedly assured the nation that once the debt-limit deal was done — capping spending, cutting the budget deficit, and getting “90 percent” of what they wanted — the economy would bounce back.

(more…)

A $2.5 trillion deficit-reduction deal brokered by Senate Minority Leader Mitch McConnell, House Speaker John Boehner, and President Barack Obama is grotesquely unfair. It also is bad economic policy. In the midst of a terrible recession, it will cost hundreds of thousands of jobs.

At a time when the wealthiest people in this country are doing extremely well, and when their effective tax rate is the lowest in decades, the rich won’t contribute one penny more for deficit reduction. When corporate profits are soaring and many giant corporations avoid federal income taxes because of obscene loopholes in the tax code, corporate America will not be asked to contribute one penny more for deficit reduction. On the other hand, working families, children, the sick and the elderly — many of whom are already suffering because of the recession — will shoulder the entire burden.

The corporate media — which, by and large, covered this debate as if it were a baseball game with political “winners and losers” — mostly glossed over the real-life implications of $917 billion in cuts over the next 10 years. Nobody can predict exactly what programs will fall under the knife or say how much they will be cut. Those decisions will be made over the coming months and years by the appropriations committees. But here’s what’s at stake:

• At a time when there are long waiting lists for affordable childcare and Head Start, it is likely that these programs will be cut significantly. (more…)

Some things just drive you nuts.

Take Mitt Romney. Yesterday, July 28, the GOP’s presidential wannabe toured Screen Machine, a factory in Pataskala, Ohio, just outside Columbus. The plant makes heavy construction equipment, rock crushers to be exact.

Romney and the owners, Doug and Steve Cohen, staged a typical photo-op. Mitt took the occasion to blast both Obama and ‘government’ as ‘bad for business.’

Really? What did Mitt have in mind? A wimpy stimulus package? A failure to build more infrastructure? In that case, he might have a point.

But no, the real problems are environmental regulation, labor safety codes and health care. In other words, with more pollution, less safe working conditions and no employee health care costs, business could surge ahead.

(more…)

Jim Hightower
National Radio Commentator, Writer,
and Author of Thieves In High Places

Reaping extravagant profits from $4-a-gallon gasoline, Big Oil has been pumping out the company line in an effort to deflect public anger from itself: “We don’t set prices at the pump,” the executives lecture to us. “The price of gasoline is determined by the cost of crude oil, and that price is set by the free market.”

Wrong, wrong, and wrong. (more…)

Robert Reich
Chancellor’s Professor of Public Policy,
University of California at Berkeley; Author, ‘Aftershock’

Finally, it seems, the economic burdens of America’s vast middle class may be catching up with the Street. The Dow lost 2.22 percent Wednesday; the Standard & Poor’s 500-stock index was down 2.28 percent. Both marked their worst declines since August 11, 2010. The Nasdaq composite index fell 2.33 percent.

We’re coming full circle: The stock market is dropping because corporate earnings are slowing. Corporate earnings are slowing because consumers are pulling back. Consumers are pulling back because they don’t have enough jobs or adequate wages. (more…)