Tax Deal Reveals Underlying World-view

Robert Reich Fmr. Secretary of Labor; Professor at Berkeley; Author, Aftershock: ‘The Next Economy and America’s Future’ 

Posted: December 8, 2010 09:12 PM

Apart from its extraordinary cost and regressive tilt, the tax deal negotiated between the president and the Republicans has another fatal flaw:  It confirms the Republican worldview.

Americans want to know what happened to the economy and how to fix it. At least Republicans have a story — the same one they’ve been flogging for thirty years. The bad economy is big government’s fault and the solution is to shrink government.

Here’s the real story. For three decades, an increasing share of the benefits of economic growth have gone to the top 1 percent. Thirty years ago, the top got 9 percent of total income. Now they take in almost a quarter. Meanwhile, the earnings of the typical worker have barely budged.

The vast middle class no longer has the purchasing power to keep the economy going. (The rich spend a much lower portion of their incomes.) The crisis was averted before now only because middle-class families found ways to keep spending more than they took in — by women going into paid work, by working longer hours, and finally by using their homes as collateral to borrow. But when the housing bubble burst, the game was up.

Read More…

 

Advertisements

About carlos

I'm a curious person, of reasonable intellect, "on the beach" (retired) and enjoying my interest in anthropology, language, civil rights, and a few other areas. I've been a hippie/student/aerospace tech writer in the '60s, a witness to the Portuguese revolution in the ‘70s, a defense test engineer and witness to the Guatemalan genocide in the '80s, and a network engineer for an ISP in the '90s. Now I’m a student and commentator until my time is up. I've spent time under the spell of the Mesoamerican pyramids and the sweet sound of the Portuguese language. I've lived in Europe, traveled in Brazil, Central America, Iceland, New Zealand, and other places. My preferred mode of travel is with a backpack and I eat (almost) anything local. Somehow, many of the countries I have been to have had civil unrest (for which I was not responsible). I'm open to correspond with anyone who might share my liberal, humanist interests. I live in San Buenaventura, California.
This entry was posted in Poli/Econ and tagged , , , . Bookmark the permalink.