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A Recovery’s Long Odds
By BOB HERBERT
Americans are not being honest with themselves about the structural changes in the economy that have bestowed fabulous wealth on a tiny sliver at the top, while undermining the living standards of the middle class and absolutely crushing the poor. Neither the Democrats nor the Republicans have a viable strategy for reversing this dreadful state of affairs. (There is no evidence the G.O.P. even wants to.)
Robert Reich, in his new book, “Aftershock,” gives us one of the clearest explanations to date of what has happened — how the
He gives the Obama administration and the Federal Reserve credit for moving quickly in terms of fiscal and monetary policies to prevent the economic crash of 2008 from driving the
The middle class is finally on its knees. Jobs are scarce and good jobs even scarcer. Government and corporate policies have been whacking working Americans every which way for the past three or four decades. While globalization and technological wizardry were wreaking employment havoc, the movers and shakers in government and in the board rooms of the great corporations were embracing privatization and deregulation with the fervor of fanatics. The safety net was shredded, unions were brutally attacked and demonized, employment training and jobs programs were eliminated, higher education costs skyrocketed, and the nation’s infrastructure, a key to long-term industrial and economic health, deteriorated.
It’s a wonder matters aren’t worse.
While all this was happening, working people, including those in the vast middle class, coped as best they could. Women went into the paid work force in droves. Many workers increased their hours or took on second and third jobs. Savings were drained and debt of every imaginable kind — from credit cards to mortgages to student loans — exploded.
With those coping mechanisms now exhausted, it’s painfully obvious that the economy has failed working Americans.
There was plenty of growth, but the economic benefits went overwhelmingly — and unfairly — to those already at the top. Mr. Reich cites the work of analysts who have tracked the increasing share of national income that has gone to the top 1 percent of earners since the 1970s, when their share was 8 percent to 9 percent. In the 1980s, it rose to 10 percent to 14 percent. In the late-’90s, it was 15 percent to 19 percent. In 2005, it passed 21 percent. By 2007, the last year for which complete data are available, the richest 1 percent were taking more than 23 percent of all income.
The richest one-tenth of 1 percent, representing just 13,000 households, took in more than 11 percent of total income in 2007.
That does not leave enough spending power with the rest of the population to sustain a flourishing economy. This is a point emphasized in “Aftershock.” Mr. Reich, a former labor secretary in the Clinton administration, writes: “The wages of the typical American hardly increased in the three decades leading up to the Crash of 2008, considering inflation. In the 2000s, they actually dropped.”
A male worker earning the median wage in 2007 earned less than the median wage, adjusted for inflation, of a male worker 30 years earlier. A typical son, in other words, is earning less than his dad did at the same age.
This is what has happened with ordinary workers as the wealth at the top has soared into the stratosphere.
With so much of the middle class and the rest of working
If matters stay the same, with working people perpetually struggling in an environment of ever-increasing economic insecurity and inequality, the very stability of the society will be undermined.
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"The master class has always declared the wars; the subject class has always fought the battles. The master class has had all to gain and nothing to lose, while the subject class has had nothing to gain and everything to lose--especially their lives." Eugene Victor Debs