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The Real Lesson of Labor Day
Welcome to the worst Labor Day in the memory of most Americans. Organized labor is down to about 7 percent of the private work force. Members of non-organized labor -- most of the rest of us -- are unemployed, underemployed or underwater. The Labor Department reported on Friday that just 67,000 new private-sector jobs were created in August, which, when added to the loss of public-sector (mostly temporary Census worker jobs) resulted in a net loss of over 50,000 jobs for the month. But at least 125,000 net new jobs are needed to keep up with the growth of the potential work force.
Face it: The national economy isn't escaping the gravitational pull of the Great Recession. None of the standard booster rockets are working. Near-zero short-term interest rates from the Fed, almost record-low borrowing costs in the bond market, a giant stimulus package, along with tax credits for small businesses that hire the long-term unemployed have all failed to do enough.
That's because the real problem has to do with the structure of the economy, not the business cycle. No booster rocket can work unless consumers are able, at some point, to keep the economy moving on their own. But consumers no longer have the purchasing power to buy the goods and services they produce as workers; for some time now, their means haven't kept up with what the growing economy could and should have been able to provide them.
The Origin of the Crisis
This crisis began decades ago when a new wave of technology -- things like satellite communications, container ships, computers and eventually the Internet -- made it cheaper for American employers to use low-wage labor abroad or labor-replacing software here at home than to continue paying the typical worker a middle-class wage. Even though the American economy kept growing, hourly wages flattened. The median male worker earns less today, adjusted for inflation, than he did 30 years ago.
But for years American families kept spending as if their incomes were keeping pace with overall economic growth. And their spending fueled continued growth. How did families manage this trick? First, women streamed into the paid work force. By the late 1990s, more than 60 percent of mothers with young children worked outside the home (in 1966, only 24 percent did).
Second, everyone put in more hours. What families didn't receive in wage increases they made up for in work increases. By the mid-2000s, the typical male worker was putting in roughly 100 hours more each year than two decades before, and the typical female worker about 200 hours more.
When American families couldn't squeeze any more income out of these two coping mechanisms, they embarked on a third: going ever deeper into debt. This seemed painless -- as long as home prices were soaring. From 2002 to 2007, American households extracted $2.3 trillion from their homes.
Eventually, of course, the debt bubble burst -- and with it, the last coping mechanism. Now we're left to deal with the underlying problem that we've avoided for decades. Even if nearly everyone was employed, the vast middle class still wouldn't have enough money to buy what the economy is capable of producing.
Where have all the economic gains gone? Mostly to the top. The economists Emmanuel Saez and Thomas Piketty examined tax returns from 1913 to 2008. They discovered an interesting pattern. In the late 1970s, the richest 1 percent of American families took in about 9 percent of the nation's total income; by 2007, the top 1 percent took in 23.5 percent of total income.
It's no coincidence that the last time income was this concentrated was in 1928. I do not mean to suggest that such astonishing consolidations of income at the top directly cause sharp economic declines. The connection is more subtle.
The rich spend a much smaller proportion of their incomes than the rest of us. So when they get a disproportionate share of total income, the economy is robbed of the demand it needs to keep growing and creating jobs.
What's more, the rich don't necessarily invest their earnings and savings in the American economy; they send them anywhere around the globe where they'll summon the highest returns -- sometimes that's here, but often it's the Cayman Islands, China or elsewhere. The rich also put their money into assets most likely to attract other big investors (commodities, stocks, dot-coms or real estate), which can become wildly inflated as a result.
Meanwhile, as the economy grows, the vast majority in the middle naturally want to live better. Their consequent spending fuels continued growth and creates enough jobs for almost everyone, at least for a time. But because this situation can't be sustained, at some point -- 1929 and 2008 offer ready examples -- the bill comes due.
What We Learned and Didn't Learn From the Great Depression of the 1930s
This time around, policymakers had knowledge their counterparts didn't have in 1929; they knew they could avoid immediate financial calamity by flooding the economy with money. But, paradoxically, averting another Great Depression-like calamity removed political pressure for more fundamental reform. We're left instead with a long and seemingly endless Great Jobs Recession.
The Great Depression and its aftermath demonstrate that there is only one way back to full recovery: through more widely shared prosperity. In the 1930s, the American economy was completely restructured. New Deal measures -- Social Security, a 40-hour work week with time-and-a-half overtime, unemployment insurance, the right to form unions and bargain collectively, the minimum wage -- leveled the playing field.
In the decades after World War II, legislation like the G.I. Bill, a vast expansion of public higher education and civil rights and voting rights laws further reduced economic inequality. Much of this was paid for with a 70 percent to 90 percent marginal income tax on the highest incomes. And as America's middle class shared more of the economy's gains, it was able to buy more of the goods and services the economy could provide. The result: rapid growth and more jobs.
By contrast, little has been done since 2008 to widen the circle of prosperity. Health-care reform is an important step forward but it's not nearly enough.
What Else Should Be Done
What else could be done to raise wages and thereby spur the economy? I don't pretend to have all the answers but some initiatives seem worthwhile.
[Pause for a commercial announcement. These points, and others, are developed at length in my upcoming book, Aftershock: The Next Economy and America's Future, out in two weeks from Alfred Knopf.]
We might consider, for example, extending the earned income tax credit all the way up through the middle class, and paying for it with a tax on carbon. The carbon tax would raise the prices of goods and services especially dependent on carbon-based fuels, which is appropriate given that the social costs of carbon-based fuels should be included in their prices. Consider how much our society now spends on such things as foreign wars designed to secure our sources of oil, as well as oil cleanups. But the wage subsidies would more than make up for these price rises, at least for most Americans in the middle and below.
Another step would be to exempt the first $20,000 of income from payroll taxes and paying for it with a payroll tax on incomes over $250,000. This, too, seems reasonable, given that under current law only the first $106,000 of income is subject to the Social Security portion of the payroll tax - a particularly regressive system. Most higher-income people, who get good medical care, live longer and collect far more in Social Security benefits, than do lower-income people.
In the longer term, Americans must be better prepared to succeed in the global, high-tech economy. Early childhood education should be more widely available, paid for by a small 0.5 percent fee on all financial transactions. Public universities should be free; in return, graduates would then be required to pay back 10 percent of their first 10 years of full-time income.
Another step: workers who lose their jobs and have to settle for positions that pay less could qualify for "earnings insurance" that would pay half the salary difference for two years; such a program would probably prove less expensive than extended unemployment benefits.
These measures would not enlarge the budget deficit because they would be paid for. In fact, such moves would help reduce the long-term deficits by getting more Americans back to work and the economy growing again.
Here's the point. Policies that generate more widely shared prosperity lead to stronger and more sustainable economic growth -- and that's good for everyone.
The rich are better off with a smaller percentage of a fast-growing economy than a larger share of an economy that's barely moving. That's the Labor Day lesson we learned decades ago; until we remember it again, we'll be stuck in the Great Recession.
44 Comments so far
Show AllReforms? Really? Why were the original reforms repealed? The system is fundamentally rotten. No reforms will save it. Carbon tax, government tax subsidies. They are confined within the same dystopic system. Typical liberal "progressive" propaganda.
Typical liberal "progressive" propaganda.
Thats right, I love Fox news, and how the right wing fake Christian captilist lunatics think America should run.
If liberals are socialists,
Then rigth right wing capitalsts are Fascist war mongering greedy blood sucking bastards from hell.
Fully concur.
Thanks Robert Reich for a good summary.
I would like to say though that it's all about Keynesian economics, the opposite of neoliberal economics, which is a fraud and a lie perpetrated by the rich. It has been relentless class warfare since Saint Raygun.
There is a real moral lesson with this as well. During these thirty years, the gutless middle class and the phony Christians (sure there has been exceptions) have turned their backs on the struggling poor in America. Just think of the paltry minimum wage. Now the greedy capitalists are destroying the middle class as well. As my favorite preacher Rev Jeremiah Wright would say; "the chickens have come home to roost".
Here's a good summary for ya.
It's exactly like the game "Monopoly". If you love playing the game you have to make sure there are always players. If you're on top, make sure the others have enough that they want to keep playing.
But there are people who just want to win - and the sooner the better. They have all the money, all the property but no-one to play with. Game Over.
But you decide that you still want to play. How do you do that?
Divvy up the money and roll the dice...
Eat the rich.
KROKUS! Right?
Maybe. But Reich's short history of how we got here in the first place is spot on.I haven't seen a "radical" program that stands a chance of working and is pc at the same time. I don't want a nickle, I'm just gonna ride my motor-sickle.
The two-income racket that made people think they were more prosperous than they were, as Elizabeth Warren so eloquently wrote about in "The Two-Income Trap." Nobody talks about this much, or it's effect on the family. Why do single mothers often suffer so much? Their incomes are generally lower than men and our society is no longer geared for being able to raise a family, without a major struggle, on one moderate income.
Someday I hope someone writes about what is really damaging the family -- it sure as heck is not same-sex marriage.
Samalabear: I remember seeing Elizabeth Warren interviewed about the book, The Two-Income Trap. It was a revelation to her as she compiled her research and the data. I thought the book was very important and also timely. More people should read the book.
For anyone who might be interested -- Robert Reich is speaking at the Barnes & Noble, here in NYC, located at 150 East 86th Street, between 3rd Avenue and Lexington Avenue. He is speaking at 7 PM on September 21, 2010.
Robert Reich might still be a "good Democrat" but he does speak out -- and he, along with Simon Johnson, are trying to offer some alternative solutions. Both voices have become a little more desperate, as well as unbelieving of the handling of the economy by the Obama administration and his appointed flunkies -- as time continues to tick by...
Of course, like so many other readers and writers on this site, I would like to see some of these people break, completely, with the Democratic party -- and the DLC -- but, I don't see that happening anytime soon, if at all. Still, I plan to go here what he has to say, and if I get the chance, I'll ask a question.
This is America, land of opportunity, and stazi brown shirts of warrant less surveillance,
Don't you remember George " silver spoon fed Bush " skull and bones elitist telling a woman working three jobs to pay her bills,
" isn't it great that you can work those three low wage jobs, that it was uniquely American to have that experience"
I miss George, and Dick, and your neocon clan of greedy pricks,
If have nothing to laugh at anymore, except when I go to grocery store , hit the gas pumps, or check my mail box for the next months bills.
I take Reich's last paragraph to heart. But then I have already learned the lesson and I am not rich. Who are the "we" who have learned the lesson? Certainly it is not the rich. They did not learn it then in the past depression, they have not learned it now and they will not learn it by reading Mr. Reich's forthcoming book. The "we" who have learned the lesson will have to enlighten the rich again by presenting the lesson to them in a very forceful and deliberate manner. Let unemployment reach 20% and there will plenty of teachers and we will make our arguments convincing enough that the rich will have to listen.
More of the same old bull.. The black swans are here.. and" The Great Depression and its aftermath demonstrate that there is only one way back to full recovery: through more widely shared prosperity."BULL
In reality what pulled the great USA out of the depression was a little thing called world war 2.
My self thinks that it must get much worse before it gets better. The middle class does not have the right to prosperity it must take it from the rich..ruling class.
I have stopped consuming , just a little thing but I feel better for it.
Typical liberal "progressive" propaganda.
Thats right, I love Fox news, and how the right wing fake Christian captilist lunatics think America should be run, they are always right, they know whats best,
they are the ones that take all the risk and create the jobs,
but without us takiing those jobs , there is no need for risk taking,is there,
when did the horse become less important then the cart,
when horses become plentityful,
all the rest of us should bow down and be greatful for a shrinking job market due to good old capitalism,
Americans who built this country and these captilists are no longer needed,
we can and have been replaced by free trade, outsourcing, corporate tax incentives to move manufacturing to low wage countrys,
they dont care if we cant buy anyithing, find jobs,
they are after the world market,more business for people who buy stuff,
they have used us up, and they are done with us.
Being American does not mean you have unlimited opurtunitys , its means you are now replacable , you are lucky to have a job.
Thank Washington coporate fascist sellouts.
If liberals are socialists,
Then rigth right wing capitalsts are Fascist war mongering greedy blood sucking bastards from hell.
And America has the best of the best of self-righteous, self-serving ,greedy , capitalists,
and they have over run Washington, and want to rule the world using our blood and treasure while working us to death for low wages.
Happy Labor Day, do you think next year will be better?
RR's history of how we got here is accurate. Going forward, its going to be tough for the working class to make up ground because they will have to compete with lower paid workers in other countries for jobs and resources.
The only way we get back to full employment is:
1) Let wages drop and become a third world country or
2) increase redistribution and government provided jobs (infrastructure, health care, etc.)
The political center will take half measures which will keep dissatisfaction with government and unemployment high. To keep people distracted, maybe some more wars to boot.
I'm afraid things will have to get worse before they get better.
"The Johnny Rico Culture"... In "Key Largo" the bad guy, Johnny Rico (Ed G. Robinson), is holding Bogart and Bacall at gunpoint. Bogart asks, "what is it you want, Johnny?" Rico, "Ehh, I don't know what I want." Bogart, "I'll tell ya what you want... You want MORE". "Yeah", says Rico, "that's what I want... MORE!" "And you'll never be satisfied, will you?" "Nah! I'll always want more!" Welcome to the Johnny Rico Culture.
rudyspeaks: Great Reference! Thanks!
The character's name is actually Johnny Rocco and it's Lionel Barrymore who answers "He wants more."
Reich,
You can say what you want, but you and your buddies sitting with you on the Sunday morning talk shows and the mainstream politicians you support are the obstacles to change as long as you think you just need to tweak policy and fix things with a corrupt two party system. You may as well be complaining about the weather.
RR is more of a liberal believing that we just throw something at the problem than a progressive who would be hell bent on fixing it once and for all. I thought he was a joke as Labor Secretary. He would never answer why his boss continued the worst of the Reagan policies to a much worse degree than even Reagan would allow. All he can do is throw in a carbon tax as if that will solve anything in an economy dependent on carbon emissions. He might as well devise strategies on making elephants and donkeys fly !
"Welcome to the worst Labor Day in the memory of most Americans. Organized labor is down to about 7 percent of the private work force. Members of non-organized labor -- most of the rest of us -- Welcome to the worst Labor Day in the memory of most Americans. Organized labor is down to about 7 percent of the private work force. Members of non-organized labor -- most of the rest of us -- are unemployed, underemployed or underwater."
Really, Mr. Reich. Enough is enough. You, yourself, are most definitely not "unemployed, underemployed or underwater". I'm sure the nice fat pension you get for being a flunky for Bill Clinton is keeping the wolf from your door. Once again, ladies and gentlemen, Herr Reich tells us that the Democrats care about your well being and your future, as well at that of your children. His heart bleeds; his anger rises at the multiple injustices afflicting so many Americans. Stay with the program, ladies and gentlemen, as we breathlessly await that Great and Glorious Day when Bareass Oilbomber slays the evil bankers and defeats the forces of Fanatical Islam. ANY DAY NOW!
"I'm Rahm Emanuel and I approved this message."
When all you have is a hammer everything looks like a nail. In the case of Robert Reich (whom I admire) the hammer is economics. Get your economic ducks in a row and, voila, we are off and running again.
But we've done this BEFORE and RUN, and look what happened two years ago! Its the AGAIN part that is key. It's different this time, Robert.
Average Americans have seen their democracy and their wealth STOLEN in the last 30 years and they/we have absolutely no faith left in either the U.S. political or economic systems.
Jobs in the 1950s, 1960s, 1970s were seen as career paths, had benefits and a modicum of job security if you were a reliable hard worker. All this was mooted in the last 30 years and is never going to return, even with =full employment=. The whole thing is an illusion, smoke and mirrors, but for the last two years we have had our faces rubbed in the revolting truths of both capitalism and democracy. Democracy cannot control capitalism. The only control for computer-assisted capitalism is the keen sound of dropping guillotine blades, and heads rolling in the street to be used as kick balls.
The most important maxim in human history is: "Power corrupts - and absolute power corrupts absolutely". In her early work with chimps, Jan Goodall showed us that power corrupts great apes at a biological level, not merely a cognitive or belief level.
Americans have finally comprehended that national elections are a Shell Game and all that one does is cast a vote for a SHELL under which is benefit or horror perhaps just short of death. The entire exercise is controlled by those whom power has corrupted into offering a protection racket rather than social progress towards goals both humanitarian and egalitarian; an end to war?.
Efforts are being made in various places to define and measure the construct =happiness= and charge government with achieving the most happiness for the greatest number of people. But if your concept of happiness means the return of all privacy and being left alone, anything short of that is simply being bought off.
Would =Being Bought Off= be a good subtitle for your latest book, perhaps?
Trylon
Reich and his usual box of economic band-aids to the rescue.
Its over Rob. O-va.
Many of the commenters here seem to forget that in the 1930s FDR was pushed by popular movements from below. Reich's policy suggestions seem eminently reasonable, but the "left" needs to be pushing Obama to act. Perhaps the October 2 rally in DC will provide such an opportunity. "Don't mourn,organize!"
But there's a difference. FDR listened to the left. Obama's ignoring liberals, conservatives, and everyone in between unless any of them are money baggers. Congress was always resistant to change but not as much then as they are today. Even Ronnie threw a bone or two to the working class. This administration and Congress won't even through you a crumb unless you can threaten with cash.
Maybe Rahm will even let the pwogs out of the Veal Pen to get some exercise!
No offense, Brad, but maybe you've forgotten, or haven't considered, why the "left" had traction during the FDR era that doesn't exist today.
The Amerikan "Haves", including FDR, had living memory of the Bolshevik Revolution and its ripple effects. Labor unions in the US were finding their legs, and had not yet been undermined by association with Organized Crime in and out of government, i.e. become discredited or co-opted. They were hated, feared, and violently resisted by the owner-class, but respected in a way that has long since evaporated.
A legion of abused and victimized WWI veterans had to be removed by military force from the center of government. There was great apprehension over the potential for wide-spread, large-scale social upheaval if the unprivileged masses were not afforded economic opportunity and relief from a crushing subsistence existence.
It's still questionable whether FDR really advised civil libertarians and left-leaning advocacy groups to raise enough hell to "make him" institute reforms which he covertly supported. But if FDR did say it, or effectively took that position, he did so with a modicum of good faith nowhere to be found in Team Obama.
Obama is a mockery of FDR; he doesn't even bother to salt his administration with a "friend of the little guy" here and there. The closest he's come is Hilda Solis, and that's about as pure an example of "tokenism" as... well, Obama himself.
Agreed. FDR had to contend with a pre-existing left movement, whether he liked it or not. Also his beautiful wife probably made life uncomfortable for him on a daily basis.
I am still going to Oct. 2. Hope you all are too. Get on the bus, Gus. Signs need not be polite. Songs need not be tame. Bring drums. Bring young people. Burn your credit card statements. We need some visible expression of our discontent.
Joe
We need to organize, be it to protest our situation or to take back the Dem Party. Starting at the grass roots level and attend a Dem Party meeting. You will be surprised how easy it can be for you and a few friend to take control and support local progressives. We have to start somewhere!
We need the humility to abandon "faith-based" solutions when facts show they don't work. Supply side economics is a faith-based belief that doesn't work. Lowering taxes on the wealthiest doesn't spur job growth. Teaching "abstinence only" doesn't control unwanted teen pregnancies. Global weather is changing, as expected from rising CO2 levels we create. After what we've been through, it's astonishing that anyone is even considering keeping the sunsetting Bush tax cuts for the wealthy. The childish arrogance of humans to presume we can look in our own heart, or up our own ass, to know the truth about the universe even when it contradicts the facts, will destroy us.
Robert Reich writes…
"In the longer term, Americans must be better prepared to succeed in the global, high-tech economy."
Sound familiar?
As jobs were being sent overseas after the passing of NAFTA, GATT, and the WTO, economists like Reich talked of the brave new world, and endless opportunities in the global economy. How, the workers who were losing their "outdated" manufacturing jobs, could retrain and a shiny new world of tech jobs would be available to them.
Then, the tech jobs were exported as well, and in fact, the Oilbomber Administration through USAID, has a program to train foreign IT workers, so American companies can hire those workers at much lower wages than Americans. If you missed that little tid bit of two faced governance by the Consummate Con Man, check out the following link.
http://www.huffingtonpost.com/david-sirota/report-obama-program-to-h_b_671766.html
Mr Reich doesn't mention the heavy impact of NAFTA, GATT, and the WTO on the middle class, because ultimately he is a Thomas Friedmanesque, neoliberal corporate suck up.
Also, I found this paragraph, how casually it is mentioned, downright creepy…
"Consider how much our society now spends on such things as foreign wars designed to secure our sources of oil, as well as oil cleanups. But the wage subsidies would more than make up for these price rises, at least for most Americans in the middle and below."
Since obviously Mr. Reich knows that Iraq and Afghanistan wars are really resource wars, why don't I recall him pointing that out, to focus on the absolute deceptions to get Americans behind those wars in the first place?
And, knowing that Mr. Reich, what do you think about the official conspiracy theory of 9/11, that paved the propaganda highway leading to those resource wars?
C'mon, you don't want him to lose his Sunday morning political roundtable slot, do you? lol
Another UC Berkeley ex.-Clintonista lecture. Robert I hope your book sells to somebody cause the rest of us can't afford it.
The Demon from Berkeley, Robert Reich first tells you what you want to hear: The truth about the elite status quo of plunder/enslavement thereby gaining your faith/trust.
After which the demon EXPLOITS said faith/trust by offering suggestions that are of/by/for the very elite establishment that created the massive train wreck, and destruction upon the people.
Elites simply can't resist engaging in this famous racket, as the Demon from Berkeley demonstrates.
Thanks to CD for re-publishing Reich's crapola for us to critique.
The real solution totally excludes the elites and their rackets.
We don't need the global economy. So we're getting it go. Bye bye global exploitation/plunder. We're shifting our exchange/association to our local communities, small farmers, craftsmen and merchants. We're taking ownership of production. And along with that, we're GIVING ownership of the people's very own market demands, desires and needs BACK TO THE PEOPLE where it belongs.
Reich has nothing to say about this or he would have said it in his article/book, in response to the people's demands over the past decade. Reich doesn't want the people to build their own economy! Reich wants the people to continue as clients of the elite destruction enterprise. Notice his diabolical ploy to keep the people enslaved and helpless.
Well said. The social conventions and arrangements and foundations need to be changed for a more just, fair society to occur.
There's nothing wrong with a global economy. We can't, and shouldn't try to put the genie back in the bottle. "Notice his diabolical ploy to keep the people enslaved and helpless." Nor are we "clients of the elite destruction enterprise." We are commodities that will continue to be exploited.
The global economy is falling down like Humpty Dumpty so there won't be a need to put the genie back in the bottle when the genie will be running for cover.
anyone want to hazard a guess how many will be named as guilty, in his shiny new book, for GRAND THEFT COUNTRY?
"some initiatives seem worthwhile"....oh? how 'bout a soupcon of justice???? you know, a little somthin/somthin for your kind readers, the ones who still believe in words...
The REAL LESSON of LABOR DAY - 2010 was this.
It is time for as many Americans as possible to locate and READ a copy of the book: =The Other America - Poverty in the United States=. This famous work is copyright 1962 by Michael Harrington (1928-1989), and is still available on Amazon.com with used copies at a price poor people can afford.
I spent a few hours Monday reexamining my copy of this work, which was assigned reading for a college course in Social Work that I took in 1964-1965. As I read, I was moved by the poignant indictment of American society some FIFTY years ago. I was further forced to review and consider the pitiful progress this nation has made made by the optimistic and economically-modeled social programs we passed into law and tried to run for the benefit of this society. And I want to immerse and hold the head of Alan Simpson in the bowl of a filthy toilet.
In my mind, I imagine that - 20 years after his death - Michael Harrington is shaking his head in utter disbelief and deep emotional pain. And I envision him looking directly down at Robert Reich.
Trylon
Forget Reich! Economists load up the cart with gold and then place it in front of the horse and wonder why the cart won't go. Just put the horse before the cart and feed it. Begezzus economists are dumbshitz.
I think the turning point for the middle class was when August of 1971 Nixon in a televised broadcast, announced to the nation that his administration was taken us off the gold standard.
That drove a stake through the heart of the Bretton Woods agreement. All through not perfect,it had worked to bring a more equal share of the wealth to the people.
By placing restrictions on capital flow it allowed governments to raise wages and with it standards of living without fearing that the wealthy would gather together, and move their capital, to places where cheaper labor exists.
I remember hearing someone remark, when Clinton signed the NAFTA agreement, that it was a race to the bottom.
Cicero: "Freedom is participation in power."
Reich's ideas aren't bad but add up to only about half of what is needed. As usual, he talks around the "free trade" regime, citing technologically generated class inequities but omitting that the "free trade" treaties catalyzed & rapidly spread those inequities globally. This kicked out the domestic manufacturing base's support legs from under the real economy faster than it could adapt. That made the overall economy over-dependent on false equity from the decade long housing bubble. Now with the bubble popped we see the true aftermath of 16 years of "free trade" and (insanely) ongoing government-protected tax-payer subsidies for corporations to offshore workforces and manufacturing plants. That combined with Bush II's historically unprecedented tax cuts for the super-rich when he had multiple bogus oil/pipeline wars to pay for, and deregulation of banks & derivatives followed by fraudulent bank bailouts have all combined to create the present long-term slow motion collapse--whose bottom is only economic guesswork for contemporary neo-liberal, pro-"free trade" Milton Friedmanites (Team Obama and the GOP) and pro-"free trade" Keynesians (Paul Krugman, Robert Reich and a dwindling number of other media wonks).
The carbon tax is a good idea ecologically, but not when the economy is clenching up with anti-demand lock-jaw. Only when there is concerted effort behind an environmentally and economically sustainable economic policy that has led to ACTUAL RECOVERY would the system be able to withstand that kind of initially demand-killing shock. Carbon taxes in the present situation would rain down too hard upon those who are already struggling the most.
Restoring 75% to 90% income tax rates on those making over $250,000 a year for 15 to 20 years is a start. Doing a slowly phased in, industrial & agricultural sector-by-sector moratorium on the "free trade" treaties over a 7 to 15 year period is another good idea and it should be complemented with generous and widespread government subsidies for recreating green manufacturing inside the U.S. Updating and unifying the national electricity grid to existing German standards to allow for efficient and (initially at least) government-subsidized medium & small private landowner sales of wind, solar and geo-thermal surplus energy sales back into the grid is another good idea. Subsidizing the construction of a nationwide system of wind-powered electric vehicle refueling stations (such as are now being constructed in Denmark) is another good idea. Devising a food growing and distribution system that puts more emphasis on medium and small family owned farms and locally or regionally sourced food and restricts high-carbon footprint global and transnational food imports is another.
But stripping American corporations of the horrific, now globalized fiction of "legal personhood" and returning them to citizen elected direct oversight over their operating licenses is the best idea of all.
Obama lacks the creativity and ambition to think of and implement these types of policies. He also lacks the ability to prioritize which is the Republicans will take control of the house again in Nov and will take the presidency in 2012. Healthcare and everything else should've taken a back seat to the economy...now he's clamoring to implement as many "quick fixes" as he can before the Nov primaries. Whoops!! A day late and a trillion dollars short. Obama presidency = FAIL
All this hand-wringing is depressing. If voting changed anything, it would not be allowed. Stalin is credited with saying, It's not who votes that counts, it's who counts the votes.
What is to be done? ORGANIZE! Form rank and file controlled unions. Do not waste time with politicians. What has the government ever done FOR the labor movement? Even after unions dump thousands of dollars into political campaigns. Use the money saved for organizing drives to help the union grow.
Organize on the basic principles of:
Solidarity. An injury to one is an injury to all.
Direct Action. Do it yourself. Don't wait for 'authorities' to fix the problem.
Self-Management. Self-explanatory.
There's a Class War on, and THEY are winning. Organize and fight back.