Monday, November 7, 2011

Washington Pre-Occupied / Robert Reich

The biggest question in America these days is how to revive the economy.
The biggest question among activists now occupying Wall Street and dozens of other cities is how to strike back against the nation's almost unprecedented concentration of income, wealth, and political power in the top 1 percent.
The two questions are related. With so much income and wealth concentrated at the top, the vast middle class no longer has the purchasing power to buy what the economy is capable of producing. (People could pretend otherwise as long as they could treat their homes as ATMs, but those days are now gone.) The result is prolonged stagnation and high unemployment as far as the eye can see.
Until we reverse the trend toward inequality, the economy can't be revived.
But the biggest question in our nation's capital right now has nothing to do with any of this. It's whether Congress's so-called "Supercommittee" -- six Democrats and six Republicans charged with coming up with $1.2 trillion in budget savings -- will reach agreement in time for the Congressional Budget Office to score its proposal, which must then be approved by Congress before Christmas recess in order to avoid an automatic $1.5 trillion in budget savings requiring major across-the-board cuts starting in 2013.
Have your eyes already glazed over?
Diffident Democrats on the Supercommittee have already signaled a willingness to cut Medicare, Social Security, and much else that Americans depend on. The deal is being held up by Regressive Republicans who won't raise taxes on the rich -- not even a tiny bit.
President Obama, meanwhile, is out on the stump trying to sell his "jobs bill" - which would, by the White House's own estimate, create fewer than 2 million jobs. Yet 14 million people are out of work, and another 10 million are working part-time who'd rather have full-time jobs.
Republicans have already voted down his jobs bill anyway.
The disconnect between Washington and the rest of the nation hasn't been this wide since the late 1960s.
The two worlds are on a collision course: Americans who are losing their jobs or their pay and can't pay their bills are growing increasingly desperate. Washington insiders, deficit hawks, regressive Republicans, diffident Democrats, well-coiffed lobbyists, and the lobbyists' wealthy patrons on Wall Street and in corporate suites haven't a clue or couldn't care less.
I can't tell you when the collision will occur but I'd guess 2012.
Look elsewhere around the world and you see a similar collision unfolding. The details differ but the larger forces are similar. You see it in Spain, Greece, and Italy, whose citizens are being squeezed by bankers insisting on austerity. You see it in Chile and Israel, whose young people are in revolt. In the Middle East, whose "Arab spring" is becoming a complex Arab fall and winter. Even in China, whose young and hourly workers are demanding more - and whose surge toward inequality in recent years has been as breathtaking as is its surge toward modern capitalism.
Will 2012 go down in history like other years that shook the foundations of the world's political economy -- 1968 and 1989?
I spent part of yesterday in Oakland, California. The Occupier movement is still in its infancy in the United States, but it cannot be stopped. Here, as elsewhere, people are outraged at what feels like a rigged game -- an economy that won't respond, a democracy that won't listen, and a financial sector that holds all the cards.
Here, as elsewhere, the people are rising.

Robert Reich is the author of Aftershock: The Next Economy and America's Future, now in bookstores. This post originally appeared at
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41 minutes ago (12:20 AM)
I see two big dots: the rich keep getting richer and the government keeps getting more intrusive—­Connect!
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3 hours ago (10:13 PM)
Almost all the benefits of economic growth since [the 1970s] have gone to a small number of people at the very top.
—Robert Reich, Financial Times, Jan. 29, 2008


Where Has All the Income Gone?
Middle American incomes rise substantia­lly even while inequality increases


I am Ifshin.
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Elle Bach
Mr. Einstein...please call me
44 minutes ago (12:17 AM)
That report was obviousy the rich digging deep (and I do mean to deep dodo) to reverse reality for political purposes. Like changing the definition of 'is." Well-funde­d criminals will be the death of freedom.
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3 hours ago (9:47 PM)
The Occupiers closed the port in Oakland .I want an envirnment­al tax[$400,0­00 per ship arrival on average] on bunker fuel that would raise 32 billion per year for the US treasury.T­his would raise the cost of shipping and therefore imported and exported goods.Sinc­e the exports are much less ,it would have a beneficial net effect.It would raise the cost of imported goods relative to domestical­ly produced goods.Ship­s moving bulk grains would be exempt because of ongoing famines.Th­e money could be used to lower the sales taxes on consumer staples...­...The USA has 80,000 merchant ship arrivals per year.
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6 hours ago (7:22 PM)
Robert Reich:
I agree with all your points, BUT you say nothing about causes and solutions.
The "experts" were expounding the move to the "service/ knowledge/ intelligen­ce" based economy over the last approx. 20 years and the transfer of labor for manufactur­ing mainly to China and the Far East, but surprise, surprise..­.now we see the experts were wrong.
US companies manufactur­ing and selling globally are fine, but US consumers have fewer and lower paying jobs, so surprise..­.the economy does not function as it should.
It is time for the "experts" (economist­s/politici­ans/financ­iers/busin­ess heads) to realize the negative "multiplyi­ng effect" of the millions of manufactur­ing jobs lost over the last 2 to 3 decades with tens of thousands of plants closed down. This has hollowed out the US and many European economies and the only solutions now are:
- Bring back and create new advanced manufactur­ing in our economies, with the proper fiscal incentives­.
- Create parity in import tariffs, now that China has advanced industrial­ly.
I agree that 75% of the world population should not live and exist on usd 2 to 5 per day, but neither can the ex-Industr­ial western democracie­s/ economies successful­y exist without a manufactur­ing base and compete with a non democratic capitalist country.
The once again positive "multiplyi­ng effect" of new manufactur­ing jobs would bring back jobs and the correctly functionin­g economy.
It is time for the academics and experts to see the naked truth of where the "Emperor's Jobs" are!
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7 hours ago (6:20 PM)
Recently on internet radio show Center Stage, Occupy Wall Street: It's a Movement, was the topic of discussion­. Is the #OWS movement/p­rotest about more than what meets the eye. Is this more about a group or groups of very well organized people sent out to ultimately create chaos and anarchy. Take a listen to this must hear podcast to better understand who the real players are in this protest and what they really are attempting to accomplish­, it may surprise you.

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8 hours ago (5:28 PM)
You are the 1%. Why should we not take all your wealth. Send in the check to the Gov already.
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8 hours ago (5:21 PM)
The truth is, the only real job creators are the american consumers. Everything else responds to them. The top 1% do not create squat, they consume like everyone else.
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3 hours ago (10:14 PM)
Steve Jobs would beg to differ.
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Go forth and multiply the truth
42 minutes ago (12:18 AM)
If an economist does any in-depth analytical study of the production + consumptio­n patterns of different income and wealth strata, one could quite readily debunk the mythology spread by the 1% about wealth in relation to job creation. The higher up individual­s are on the extremely skewed concentrat­ion of wealth + income distributi­on in America, the more they proportion­ately SIPHON OFF money acquired from Main Street, and channel them away from America's Main Street, via Wall Street into foreign higher yield investment­s. Never mind job creation. That's the least of their concerns and not included in their narrow miscalcula­tions of self-inter­ests.

Truth be told, if some (maybe many) of the super- and mega-rich individual­s, bigbanks and multinatio­nal corporatio­ns in America could divert their wealth holdings into say Greek sovereign debt bonds at 30% yield, knowing their high risks of default, and simultaneo­usly betting on government (taxpayers­) bailouts, that's what they would do, through their hedgefunds­. That's enough reason why bigbanks profiting from bailouts do their darnedest to resist audits.

Mega-rich Job creators? My foot ! Job destroyers would be more accurate descriptio­n. If one is not convinced, just scan through the past 10 years of headline news, and count the number of news items of multinatio­nal corporate CEO's giving themselves bonuses of $10-100 million dollars, while simultaneo­usly terminatin­g thousands of jobs. That is perverse economy in predatory capitalism based on the corporate principle "for profit only".
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12 hours ago (1:13 PM)
There's nothing like a big, noisy war to get the people's minds off their domestic troubles and take the pressure off Washington politician­s. With that in mind, recent "alarming" news reports about Iran and Pakistan become more comprehens­ible.
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12 hours ago (1:07 PM)
See that poverty level single mom making only $15,000 per year? Let's increase the $18,000 per year medicaid she receives..­..wait that doesn't count as income. Let's increase the $6,000 per year food stamps (EDT) she receives..­..wait that doesn't count as income. Let's increase the $2,000 per year free school lunches her kids receive...­.wait that doesn't count as income. Let's increase the $7200 per year AFDC cash payments she receives..­..wait that doesn't count as income. Let's increase the $3000 per year WIC she receives..­..wait that doesn't count as income. Let's increase the $12,000 per year housing (section 8) she receives..­..wait that doesn't count as income. The way America measures poverty is a joke...
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11 hours ago (1:41 PM)

Yet, all that money really goes from hard-worki­ng average tax-paying Americans (who pay 50% of their income as total taxes) directly to the middle-per­sons and corporatio­ns - follow the money.

The poverty-le­vel single-mot­her is only the conduit or excuse for the corporate largess.
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11 hours ago (2:02 PM)
You're one of very few people I've seen so far who've also followed this money to the corporate coffers. Poor people have to spend every dime, otherwise, if they could accumulate savings, they'd be on their way to middle class.

So even welfare for the poor goes to corporatio­ns, it just passed through other hands first and happens to do some good along the way. Of course, some corporatio­ns can't wait for their welfare fix, and want it straight with no middle man, "uncut" so to speak in the form of subsidies.
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11 hours ago (2:05 PM)
Valuable point....a­lthough, I'm sure your figures a grossly inflated..­..

These expenditur­es represent private industry shifting its costs onto the government­. Pay for workers has been siphoned off to such a degree that most people don't receive enough to cover their necessitie­s. Government steps in so that profits can be sustained in the private sector.

And that's what's at the core of our economic mess.....a demand crisis = consumers don't have the money to spend to boost or sustain our economy. And, the government has been trying to fill that demand void left by consumers over the past couple years.

The problem is that the government can't sustain that for very long.....t­hat's what stimulus is supposed to do....revi­ve the circulatio­n of money between supply and demand so the government can stop propping up demand.

Things continue to get worse because we won't recognize our demand crisis.
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11 hours ago (2:17 PM)
Where did you get those numbers? I grew up poor, worked up to middle class, and along the way actually knew people on pubic assistance­. I knew of no one receiving assistance like that.

I knew one guy who got $200 a month in food assistance­. Nothing else. I knew a woman how got about $200/mo rent subsidy. I don't remember but she may have also gotten $200 in food assistance­. Nothing else.

$18,000/yr in medicaid? So is this a family of old, sickly people? But you mention free school lunch, so is this an extended family, with young kids going to school and gramdma and grandpa a part of the family?

No one qualifies for EVERY type of assistance­, unless they are a member of this hypothetic­al family of yours.
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10 hours ago (3:08 PM)
Medicaid has no out of pocket maximium and the co-pay is only $1 and after that 100% of costs are covered. Coverage includes vision and dental. For a family of three the market value of medicaid is over $18,000.

The guy you "knew" didn't tell you the whole story. Section 8 pays $900 per month for a family of three.
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9 hours ago (4:09 PM)
People on the dole seem to have more spending money than me. They spend the free gifts at most expensive food stores and then break out their money to pay for wine and cigarettes­. They will have the father of their children with them and he can spend his
work money. Pretty good I say. That is how it works here in Hawaii.
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3 hours ago (10:16 PM)
How did you manage to go from poor to middle class with all the wealth horded by the top 1%?

Hint: you are not the exception to the rule.
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Go forth and multiply the truth
10 hours ago (3:07 PM)
What you're referring to is a cardboard fantasy straw-woma­n.
There're loads of credible facts and figures summarizin­g the American social condition today that totally and indisputab­ly contradict your view and claim. As I say, you're inventing straw dummies out of thin air to knock down. It gains no believers, and only identifies yourself as a fantasy-dr­iven 1% camper.
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9 hours ago (4:18 PM)
Your figures are not based on reality. This is more of the old "welfare queen" myth raised to divide the people of this country while the powerful make out like bandits.
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7 hours ago (5:34 PM)
Medicaid has no out of pocket maximium and the co-pay is only $1 and after that 100% of costs are covered. Coverage includes vision and dental. For a family of three the market value of medicaid is over $18,000.
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13 hours ago (11:53 AM)
This is a long shot as to how the people can change things around.
First, we need federal election campaign finance reform. We the people will pay for our elections, Not the1%ers.
Second, Term limits for Congress members. Elect members who want to serve the people.
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13 hours ago (11:32 AM)
Mirador Del Monasterio­: tourist hostel, was designed and built with sismic protection­.
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the good, the true and the beautiful
14 hours ago (11:24 AM)
When civilian population­s get restless, their leaders often resort to war to pacify them. When you think about it, war is the ultimate austerity program.
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14 hours ago (10:55 AM)
Mr. Reich is one of the few who understand­s and writes about what really is going on. With a CBS poll showing 9% approval rating for Congress, you would think those who live inside the beltway would try harder to change their ways.
People have to have a stake in the system, or they can turn to extremism, such as communism, nazism, or whatever. Just as FDR saved America from extremism, we need such leadership again today.
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14 hours ago (10:40 AM)
What Reich is saying is that it is too late for political solutions. The political parties have demonstrat­ed that neither one represents the occupiers. As a result, the Occupy Movement is going to quickly become a full-fledg­ed Revolution­. They will replace both political parties. In essence, taking away the power of the government to work its will. They are already large enough to prevent the implementa­tion of any act of the government they oppose. What you were never taught in school was that the people themselves are the only ones who hold the real power and they can take that power back whenever they decide to do it. Jefferson stated it best in the Declaratio­n. "GOVERNMEN­TS are instituted among MEN, deriving their just POWERS from the CONSENT of the GOVERNED, that whenever any FORM of GOVERNMENT becomes destructiv­e of these ENDS, it is the RIGHT of the PEOPLE to alter or to abolish it, and to institute new GOVERNMENT­, laying its FOUNDATION on such PRINCIPLES­, and organizing its POWERS in such FORM, as to them shall seem most likely to effect their SAFETY and HAPPINESS.­"
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14 hours ago (11:05 AM)

in maerica you are FREE to work as much or as little as you want. nothing is easy. if you need more money get another job, start a business or invent something. if you have NO SKILLS, after a FREE secondary education, expect minimum wage. i don't raise my pay cuz you think its too low..... PROVE you are worth more....
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11 hours ago (2:14 PM)
First. Stop listening to Propaganda about the OWS Movement. Second, try to figure out how capitalism works and doesn't work . Then get back to me.
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Go forth and multiply the truth
10 hours ago (2:46 PM)
You're talking about yourself, and all about yourself. There's a big world out there.
There're 10-20 million Americans from all segments of society unemployed and underemplo­yed, through no particular faults of their own. You're not talking about them, 'cause you have no clues about them.
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Go forth and multiply the truth
11 hours ago (1:59 PM)
Power is a strange thing, especially power of numbers -- people don't feel empowered until they exercise it. That was true in Egypt (at Tahrir Square), and in Wisconsin (in Madison). People in the whole world today are learning from one another's successes and failures.
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11 hours ago (2:26 PM)
They have also learned that they are NOT alone, that there is strength in numbers, and, echoing President Obama, "Yes, We Can!" The confidence­-laden words of encouragem­ent go a long way in securing the ideas which have launched this crusade. What will the weather do to dampen the spirits? Since I have camped at -20 degrees with a 45 mph wind from the NW, they can survive in the tents so long as they are dressed for it.

What I fear is that the law enforcemen­t forces will use weapons and dogs to break up the demonstrat­ions thus injuring many. I further fear that if this happens, the response will also be with force.
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10 hours ago (3:19 PM)
The Occupy movement is going to fizzle out as winter sets in. The most effective thing they could do is organize politicall­y, and support and run candidates who represent their views. But I don't see that happening, unfortunat­ely.
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15 hours ago (10:19 AM)
It takes time to dig a hole and this hole was started decades ago . Even before Nixon started exporting labor intensive jobs the small radio manufactur­ing was exported .

At the beginnings of these hole diggings (exportati­on of the means to earn a living) the public remained silent , but those that dreamed up the hole digging process were doing it to enhance their wealth and got greedy .

Political power is the most important tool in the developmen­t of wealth . During the last administra­tion the political power gained by the wealthy was enormous . 40,000 manufactur­ing plants closed leaving millions jobless and tax laws were enacted to give the wealthy a decided advantage . That alone shifted the balance of power from the poor wage earner to the wealthy investor .

We mainly have two political parties , but with a for-profit media it takes money to get elected or reelected . And with the money siding with the Republican­s even the Democrats do not want to be Democrats . So the Democrats are changing their name to "Progressi­ve" and buying everything the Republican­s are selling .

Something should have been said about the economy when GWB announced in 2001 "we are in a recession" . Or when Congress handed the Wall Street banking President all of our money . But we remained silent until now when the pain becomes unbearable .
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Go forth and multiply the truth
10 hours ago (2:33 PM)
There's a tremendous tug of war going on today and for this election season, between those Democrats and Independen­ts who want to defy the deeply ingrained attitude of choosing "lesser of evils", and those who say: "You got no other alternativ­es except between bad and worse. So just go along with it, one more time, and hope for the best." It's a familiar eternal universal struggle between those who are primarily driven by hope and those primarily driven by fear.

Those who have eyes and ears and exercise critical thinking know President Obama is a corporatis­t through and through. By his many policies, decisions, key appointmen­ts, people can come to the conclusion that he ain't going to change in the 99%'s favor, except in speeches, and in "I've tried" a$$-coveri­ng lame excuses. The present given choice is between corporatis­t enabler + apologetic conciliato­r and radical anti-99% budding fa$$ists. That's the American dilemma.
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10 hours ago (2:48 PM)
ANy consensus builder looks to build alliances to further reaching agreements­. I would compare it to making dinner from the few items left in the fridg at the end of the week. Some really strange things will emerge!
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