Al that anyone who commented on this article, can do if they please is GOOGLE, YOUTUBE THE EMPIRE "OF THE CITY" PART II....
AND if you watch the 200.minute movie, you will find out where this all started and who controls our FUTURE. EVERYBODY SHOULD KNOW THE TRUTH;

Do you own furniture? If you do, hang on to it as the Chinesse are now taking over the American furniture companies that have been having their furniture made in China. Furniture made in China by Chinese companies will be cheap,(affordable) and will be junk. The furniture industry in America was an admirable manufacturing endeavor that provided thousands of jobs for American men and women providing many areas of related manufacturing, including the textile industry. Mr. Clinton hasn't the slightest notion of the number of people who have been directly or indirectly affected by his glamorous decision to market free trade. He singlehandedly undermined the manufacturing base in this country to the point where there isn't much left to outsource, except maybe for munitions manufacturing. A nation of war mongering manufacturers supplying the world with self destruction. Hellofajob, Bill.

Or maybe it is time to revisit the Code of Hammurabi and the concept of 'Jubilee', as is recited by millions everyday in the Lord's Prayer..."forgive us our debts, as we forgive our debtors"...every 49 years there was a complete forgiveness of debt, occupied lands were given back to the original owners, slaves could bargain for their freedom, etc....it's all in Leviticus , I don't know how it would work, only that it COULD work, IF the profit motives were taken out of our existence for sometime to simplify and heal and we have to go on survival mode, in cooperation, for the sake of the planet and any future for mankind. But maybe we've run our sad and misguided ego driven course, will soon be extinct and earth will heal on it's own.

Very good comments. No one has pointed out that feral Oligarchies of inherited wealth have never, not in 6000 years, ever needed a consumer economy for them to RULE with absolute power. Never. Throughout that same period, a literate majority middle class with leisure time has been the arch enemy of every Ruling Caste that has ever existed: literate people with leisure can become informed (not to say educated), informed people with leisure wish to participate in the decisions affecting their lives and the lives of their children - CANNOT BE ALLOWED...that's the death of Oligarchy...White America decided that one 40+ yrs ago when they voted for a full on return to "Exclusion" as the standard model for American life when 49 states (87% White Majority) overwhelmingly elected RMN 2x...you will notice that American wages began to flat-line or decline back in '73...beginning of the end...and now we're here. Think ramshackle Cuba without National Health Care and millions of illiterate, hungry, white males with guns...boom boom boom...won't that be fun...

There's a corollary to Reich's article: The old approach to stimulating a recovery - go into debt to employ people at anything that will not create consumer products, because that creates demand to permit reinvestment in production at a sufficiently profitable level that the newly-acquired debt can be paid off, will be counterproductive. Why? Because if the problem is not just too little consumer wealth but too much stuff (e.g. too many expensive single-family homes), you end up in the same place as you were before. You can't create a new economy by encouraging investment in the old one - that just produces a new pile of debt to hold you down. The stimulus can be effective only to the extent that it invests in the new economy. Thus, for instance, the only part of the Obama stimulus package that will help is the "green" part. Those parts that stimulate production of what we have too much of aready, will be counteproductive, as for instance, stimulus of the market for new single-family dwellings will be counterproductive. Unfortunatey, the counterproductive parts are the only parts that the "old economy's" businesses can support. Hence the petty-much-inevitable weakness of the Obama recovery package.

Moreover, in the present situation, the new economy is in all probability going to have to be a no-growth economy - payig off debts requires a growth margin that can be used to do so, so going into debt just exacerbates the future problem. In the present situation, going into debt is what got us whre we are, and going into more debt is not going to get us out.

Nick Arguimbau

Actually, I'd prefer a XXX economy

Aw, come on. All we need is a few more of the right events to to create a succession of economic booms:

> A string of celebrity deaths followed by extended commercial memorial services will make the travel, hospitality and entertainment industries go BOOM.

> Obama's election created a big boom in the firearms and ammunition industries. We gotta keep electing dangerous minorities to keep going BOOM.

> Nothing goes boom like war. But Iraq-Nam is turning into into a big letdown & Afghanistan-Nam isn't selling well. How about we liberate Canada and Mexico from the radical Basque-Hindu conspiracy and corner a few more petro resources for Exxon-Mobile. Nothing to it: update the 9-11 script, pick a few big buildings & BOOM!

> Dismal & declining health care accelerates the death rate. Gravesite shortages are creating a black market for new plots. Where's the boom potential? Crematoria! Build them ovens, honey and don't miss the spinoff in urns. BOOM!

See, all we need is less of Robert Reich running around telling the truth and more of the positive, uplifting P. T. Barnum approach. Rush is on board.

Our financial system is cancerous and greed never self-polices. Our politicians are corporate or religious prostitutes. Our citizen's civic IQ is low and further dampened by the escape drugs of pop culture/entertainment and pro-sports. Our governments' revenue-generating mechanisms rob nearly every worker and consumer on nearly every action and ignore something that is co-created by nearly every citizen -- the unimproved value of land.

It looks like most of us reading Reich's post get it. The time isn't right yet, but this kind of awareness probably needs to incubate into local leadership because we are going to need civility, trust and operative bartering systems at the local level. If we can't maintain local law and order through self-reliance and participation....

There Is No Alternative

"To what?"

"Our rising up en masse."

"And then what sort of world?"

"It'll be up to us."

"Otherwise?"

"Doomsday."

"Based on?"

"Perpetual war + global warming + economic collapse."

Recovery???
"Abandon all hope, ye who enter here".
The U.S. Government has crafted a distortion of reality. They have found a way to cover up 85% of the nation's actual debt!
The Feds essentially keep two sets of books that make up America's debt portfolio. The first set of books is the widely publicized "National Public Debt." The National Public Debt is currently over $11 trillion and is climbing at a rate of almost $4 billion per day. This is the figure that's quoted in the evening news and on the famous U.S. National Debt Clock in Manhattan. In the past century, this debt has skyrocketed nearly 400,000%.
But the National Public Debt doesn't even come close to telling half of the story.
The U.S. Government Is Another $60 Trillion in the Hole!
The U.S. government doesn't classify future financial responsibilities such as social security, government-sponsored health care, and other contractual obligations as "public debt." With this simple act of reclassification the Feds have been able to shield the American public from the truth about the country's actual debt position. Nevertheless, these financial obligations will cost the American taxpayers roughly $60 trillion!

This debt is no secret among Washington insiders, nor is the fact that the government is trying to hide it. In fact, David Walker, the former U.S. Comptroller General and the nation's top accountant between 1998 and 2008 said, "As the federal official who signs the audit report on the government's financial statements, it is apparent that our government's financial condition is far worse than advertised."
Walker has also said, "Current federal financial reporting and budgeting provides policymakers and the public with an incomplete and even misleading picture."
Add it all up, and the United States government is on the line for almost $70 trillion in total financial obligations, including public debt.
This is today’s scenario. Lets look at what’s coming:
The U.S. Government Accountability Office released a new report a few weeks ago called "The Federal Government's Financial Health." In this report, the GAO reported an expected increase in National Public Debt of over 500% within the next several decades! And this is the U.S. government's own estimates!!!
A similar move in the nation's actual debt — that's the National Public Debt plus all other fiscal responsibilities — would result in a total financial obligation of over $550 trillion! That's over $1.8 million that would be owed by every American citizen!
But back to the present: America's current $70 trillion debt works out to about $500,000 per working American or to put it differently, every American child is born into debt owing nearly a quarter million dollars! The interest on that debt alone is going to cost almost twice as much as educating the child!
And here is the most interesting bit: the blame for this swindle cannot be attributed to one party, Democrats or Republicans, but is rooted in the whole system.
Democracy, in it’s current form, is the tyranny of a few cunning circles with controlling and omnipotent lobbies and mass media propaganda, that use the ignorant majority ‘mandate’ of the voting masses for their treacherous agenda. The two-party oligarchy manages the profit and wealth flow for a relatively small elite. Most pivotal parts of this machine are tightly interwoven and are made out of the elite’s cronies and benefactors of this abominable theft and fraud. Their lobby established a two-flavored (Dems and Reps) system that plays ping-pong with citizens’ votes, draining all chance for a desperately needed radical change of ways (And if you deny that a radical change of ways is desperately needed, you are ignorant or part of this morose parasitic machine).
This system has been able to keep the voting masses in a state of acquiescence and convenient ambivalence. Common lifestyle was provided by loan, education is geared around producing useful subjects rather than freethinking individuals, the masses were kept occupied with inane entertainment, silenced by welfare payments and war games, manipulated by corporate controlled mass media, and preoccupied by hope-inducing wishful hogwash that we have a choice under this system.
The system is unsustainable for various reasons and will undergo drastic change. The severity and direction of change depends on the severity of lifestyle destruction, economic depression and public mood.

(second part below due to the 1000 word limit)

A new economy demands a new politics, which means dumping representative democracy and going for the real thing, namely, direct or do it ourselves democracy, rendered feasible now by way of the Internet. How are we going to bring it about? We rise up en masse, that's how. Otherwise? Doomsday, based on perpetual war + global warming + economic collapse.

Geeze if we ousource all our jobs, can it be that people will have no money to buy anything? Those on Wall Street are still doing OK--feel better now?

Eisenhour was not permitted to say "The Military Industrial Congressional Complex" He may have been the last patriotic Republican.

Damn right there will never be a recovery, because there is no more cheap oil, the world is grossly overpopulated, democracy (a rather dubious concept) has been replaced by corporate rule. Corruption in the norm in government. The majority of the American people are fat stupid ignorant lazy greedy unreliable and irrational. The country is ruled by and *owned by* sociopaths, where lying cheating stealing and killing (?) are standard business procedures.

And gw bush *was* as close to fascism as we have gotten so far!

"God damn you, god damn you all!" Charleton Heston "Planet of the Apes

G Evans

The rich are getting richer and the poor are getting poorer. If that not recovery I don't know what it is.

Fred54 wrote:
.....Mr. Reich is correct, the economy cannot recover because it is not sustainable as it was.....

Correct.

Fred54 wrote:
.....Military will intervene. The American people will then see what the Patriot Act is really all about.....

Yep.

Reich is dead-on, sad to say.

I am looking forward to his next installment.

Let's demonstrate! Hit the streets! Fight the man! People Power! ...just as soon as we finish here...

Mr. Reich is correct, the economy cannot recover because it is not sustainable as it was. There is a way to repair this mess bloodlessly but the people who actually run the government will not allow it because it impacts them financially. 4 steps; abolish the Fed returning the issuance of credit to the people, end foreign imperial wars and reduce military spending by 70 or 80% , reduce the size of government and pass a constitutional amendment prohibiting government from borrowing. It MUST live within it's means. Finally, replace the income tax with a national VAT or consumption tax. Unfortunately these things won't happen so the following things will. The US dollar is going to be destroyed and along with it pretty much all accumulated wealth denominated in US dollars. We are in the initial deflation period right now but that will become an inflationary spiral within the next few years. As the spiral takes hold there will be a worldwide run on the dollar. In an instant all sorts of products we take for granted will no longer be available. The media will no longer be able to project the illusion that all is well. There will be a spark somewhere in the form of some civil disobedience. The
Military will intervene. The American people will then see what the Patriot act is really all about. They will then realize how badly they have been betrayed by their government. The government will try to distract and confuse and deflect but the cold hard facts of what has been done to Amerika by these criminals will be inescapable. What happens next will be critical. Rebellion will begin. What the military does will determine the next phase. If the military turns it's guns on the people there will be a long and protracted civil war. If the military sides with the people there will be a short revolution. The civil war will probably leave the US broken up into 4 or 5 pieces. The revolution will likely restore the constitutional republic.. Lets hope for the latter.. In the mean time recommend long positions in canned goods, gold and ammunition.

A book called 'The Long Emergency' by James Howard Kunstler described what we are going through and it was written many years ago. It is excellent reading. Basically he says that we will be thrown into recession by rising prices for oil and that the recession would then cause oil prices to drop. Obviously he got that part right. But every time the world starts to climb out of recession the price of oil will rise again throwing us back into another recession. And as oil is more and more depleted the recessions will in fact get worse. He even comes up with the absurd idea that people who are in desperate straights will again resort to piracy on the high seas!

All you people who have been programmed to believe that we must compete in the Global economy have been drinking to much of
George H W Bush Kool-aid..
It was Bill aka Bubba Clinton who gave us Nafta and outsourced
our industrial base to China and other countries. It is Bubba Clinton
who is raking in millions of Dollars from Foreign countries
for his nest in Arkansas...
Until the people wise-up to the Clintons and the Bush family
who are responsible for this Depression that we are in, we
will dig in deeper in the depression..never to return.
We must re-build our industrial base and restore our economy.
The Clintons should be investigated for what they have done
to this country, and the Bush Family sent into exile..

I fear that Mr. Reich is far too optimistic about economic recovery. The US government is approaching $15T in debt, has promised as much as $75T for what is hard to call anything other than "public largesse", added to which is an economy leveraged ten times greater than the national debt. Literally more than $150T in leveraged debt. This is unconscionable, inconceivable and unsustainable.

Traditionally, the Democratic party adjusted problems in this post-WWII easy credit economic experiment with government growth and inflation. The Republican party adjustment was with tax cuts and ever increasing growth in "productivity". But neither of these tools will function any more. The ability to create money with leverage out of thin air cannot continue. Thus, either these nonsensical promises must end, or the money offered for them will be hyperinflated and worthless.

In national terms, this means an end to Social Security, Medicare and Medicaid, a reduction in the Defense budget of 50% as well as the recall of the majority of foreign deployed military, an equally large reduction in the size of the federal government, and a return to the individual States a balance of power with the federal government. It also means defaulting on the national debt, close to an end of international trade for decades, an involuntary balanced surplus, and the rebuilding of American industry.

And only in the last are the seeds of recovery to be found. Importantly, any and all of the above will not be voluntary, but forced by progressively more vicious economic collapses. The best the federal government can do will be to try and mitigate human suffering. At the end of this mess, credit will again require nearly 100% carefully assessed collateral, at all levels.

Comparisons to the Great Depression are partially flawed in this case, so further study should be made of the Panic of 1837, and the Panic of 1893, both of which have common elements with our current dilemma.

Roosevelt went down the wrong path a couple times when he took over during the great depression. Obama should get it eventually. The list in the post by cygnus near the top has a lot of good points.

We need to turn the initiatives of Waxman-Markey into a green economy, freeing us from imported energy and slowing climate change. We need to bring manufacturing industries back to this country, even if the WTO has a beef. Call them tariffs or border adjustments, whatever, we need some protection. If the US goes Green in manufacturing, we shouldn't be purchasing from polluting and high GHG manufacturers (even if American names are on the labels and American stockholders get a return).

We don't have to overdo it. Just balance. An economy that runs enormous deficits with its trading partners and resulting chronic high unemployment amd underemployment can't afford real estate, health care, highways, stocks, insurance and all that pencil pusher stuff.

There are already elements in the stimulus pkg and Waxman that point to the future. The administration needs to close the loop and help bring sustainable manufacturing of textiles, clothes, shoes, electronics... home. If Obama and successors fail, the Repubs will return and finish turning us into a 1950s banana republic.

Ubrew12:::Emphatically seconding what Cee Miracles wrote above, when you and others read Matt Taibbi's "The Great American Bubble Machine" essay, then an understanding is gained that the sharks? vultures? at Goldman Sachs stack and rig the game from start to finish, ensuring that little or no luck is needed. They loot the economic system and thereby us all. As Taibbi points out in his discussion of the burst in commodities speculation last spring/summer. It produced $4 a gallon gas in the US and left 100 million or more poor people worldwide in even greater desperation as basic grain and food prices soared beyond reach. The firm was at the center of the housing bubble NINJA (no income, no job, no assets) mortage and derivatives disaster which has produced a global economic meltdown. And their people have long been placed in key positions of Treasury and other economic policy spots in Dem or Repug administrations. Including now in the big O administration: Geitner, Summers, and many others described in Taibbi's essay.

Here's hoping all CD posters will reference Taibbi's essay to their own personal networks: email, church, work, family, colleagues, etc. Taibbi is the boy clearly pointing out that the emperor (Goldman Sachs) has no clothes.

Project Mayhem anyone? There's never been a better time or reason.

The current economy can't "recover" - that's a "change" I can believe in. Heckuva job, greedsters!

"a recovery can't be built on replacements"

Yes, a recovery CAN be built on replacements. But you must ignore reality and instead listen to the propaganda dispensed by the "former labor secretary". He has your own personal better interests at heart. The Statue of Liberty symbolizes his compassion and caring for all humanity. So please do not challenge what this astute accomplished Citizen Reich has to say.

When we all understand through our direct personal experience in our family life, community life, that an economy can be sustained only on replacing what gets worn out, we must ignore our direct personal experience, and the many observations written/published recently that a replacement economy is good for people/planet, and crucial to save people/planet from imminent destruction.

We MUST drink the koolaid if Citizen Reich is to succeed in his quest to get the casino royale high rollers rolling again on our backs, the backs of all the people/planet.

Actually Bob, we need to somehow get back to an economy based precisely on "replacement". If our economy is based on debt-based consumption of things we do not need, then we're done...

Oh yeah, it is based on that... I guess we are done.

I favor capitalism, with the proper (and properly enforced) regulation to keep the big fish from scr*wing the little fish. What capitalism does is it rewards people for risking their investment, time, or labor. The size of the reward depends on two factors:
1. The quantity and quality of the investment (is a person hard-working, a prudent decisionmaker, etc).
2. Luck

I actually believe that, on average, HALF of the money made off a successful investment is due to luck. Simply put, rich people are lucky. And, in America, so are their kids, and their kids, and (if you're the JP Morgan family) so on ad infinitum. Lets be clear: I don't believe for a second that JP Morgans Great Great Grandkids deserve to be multi-millionaires. But, in an odd way, I join the millions of Americans who celebrate their being so.

The problem with capitalism is that no people, especially the rich, believe they are lucky. All people believe that they are personally or providentially destined to their fates. Indeed, this is as much a problem for the poor as the rich. The poor ACT OUT THEIR POVERTY as if they did it to themselves and, of course, in acting out, DO it to themselves. It seems, we don't REALLY want to be rich OR poor, just IN CONTROL of our fate.

Leave it to the theologians. From the point of view of capitalism, its absurd in the extreme to sequester tons and tons of potential investment capital with people who were, basically, lucky. Tons of investment capital, but NOT tons and tons of it. And that is where progressive taxation comes in. After the horrid experience with 'no-holds-barred' capitalism of the 1920s led to the Great Depression, FDR etal, taxed the HOLY BEJESUS out of the wealthy, and those taxes were kept high for the next 50 years. What a surprise: those 50 years coincided with the very best of American society, a time when we were tops in EVERYTHING and unbeatable. The destruction of that progressive taxation, most notably by Reagan, spelled the DOOM of American-style capitalism. American-style capitalism rewarded risk-takers with profits, but understood that often what distinguished those risk-takers who made money from those who didn't was pure, dumb LUCK.

The Ayn Rand philosophy that luck had nothing to do with it, that it was all individual fortitude and moxie, is hopefully seen today as the cr*p it is. The purpose of progressive taxation is to celebrate the lucky winners in our casino capitalism by MAKING them donate a substantial fraction of their winnings to the rest of us. And the degree to which we've fallen away from that is the degree to which the unlucky have suffered HORRIBLY in this country for the benefit of the lucky.

Its luck folks. Take their damned money and use it to benefit all of us. (OK, not all of it, but an amount that would have made FDR proud). The record of the 'Greatest Generation' of Americans (who were screaming socialists by todays definition) compels us to revisit our tax scales, and get rid of those horribly unfair loopholes.

This is a new tune for Reich who was touting the big bank bailout just a few months ago. You know, taxpayers buying up sham financial instruments like mortgage derivatives and credit default swaps, just as was Klugman and Stiglitz, all polishing Geitner's shoes and fawning over Goldman Sachs. Then, thinking that 30 years of "trickle-down", tax breaks for the rich and de-regulation, welfare reform and privatization was some kind of aberration on the political landscape- that Democrats represented some "other" point of view, fondly expected the President ( whose hollow proclaimations of "change" led them down the primrose path) and Congress would "chip in" sufficient to get the beleaguered and enslaved American worker back behind his bluff and pretensiously dimensioned shopping card.

Sorry boys, you're nights at Club 21 are over. Off into the sunset for you guys.

author edit.

Ooooh, oooh, how quick can we re-start the "growth" party? We can certainly grow forever! There are plenty of resources for an ever doubling population. You know, it's all just a matter of confidence. There are no limits to the ability of the environment to provide for humans, the chosen ones.

We don't make anything any more. Merkins disdain education. Thank "god" for all our arable land. My grandchildren can be peons for the Indians and Chinese, who do make things and value education highly.

Why does economy have to depend on people spending unnecessarily?
Sorry I am not expert in economics or theories on Capitalism.

But isn't it strange that I have to depend upon people spending relentlessly so that I can afford to live decently or I can afford my Kids education or my retirement.

Why can't there be a economical model which is sustainable so that people can live easily and can afford basic needs.

Current crash has taken away jobs and money, healthcare from people. Why because people stopped spending?
As Robert Reich explained, economy won't be recovering just by spending on necessary things. He is implying that we have to spend on unwanted things.
That means key to our happiness is with the fools who want to spend foolishly. Hmm. I am on wrong planet.

When is Br-a-a-a-ck (excuse me for belching) Obama going to replace Summers, Geithner, et al, with Robert Reich? With Obama's polls sliding because of employment, it's only a matter of time. You can't save the dollar by continuing to pump money into the investment companies, the Chinese and Russians are reaching the breaking point on U.S. Government investments. Indeed, the catalyst for dumping the dollar may well be when the Israelis attack Iran, with Jumpin' Joe Biden in the thick o' things, swingin' away for the repricin' of oil in non-dollars. Go Joe! So, give it up Br-a-a-a-ck (I really can't stomach this), and hurry up and dump the Summers-Geithner gang. You're going to do it anyway--unless you're a complete fool--so just hurry up get it over with.