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Wednesday, July 28, 2010

Stumbling Toward a Bleak Horizon

“The 400 richest families in America, who saw their wealth increase by some $400 billion during the Bush years, have now accumulated $1.27 trillion in wealth. Four hundred families!
In recent speeches, President Barack Obama warns that the Republicans, if they take over Congress in November, will support policies that will usher in a new recession, as if the current recession is over.
“They are the same policies,” Obama said, “that led us into this recession. They will take us backward at a time when we need to keep America moving forward.”
Obama wants to push “distractions” like the Shirley Sherrod affair and the BP oil spill out of media so we can all get back to focusing on the economy. Wake me up when reality intrudes into a “debate” that is flawed on all sides.
The “recovery,” so breathlessly trumpeted by Obama and other politicians who want it to be true, is not generating the new jobs we need. The resumption of unemployment benefits will help those who were cut off but not all who need them. Foreclosures are rising, and government programs to stop them are not working.
It is unlikely that the current policies can remedy any of this and it is certain that the Republican demand for extending George W. Bush’s tax cuts for the rich will not create jobs.
There is no jobs bill about to be enacted. Many of the industries where blue-collar workers toiled are going or gone. Bailed-out General Motors just spent $3.5 billion to buy a new lending company to get those subprime loans restarted to move cars off the lot. Is this moving “backwards” or not?
Unemployment is worse than we know. The Daily Finance site reports that the firm TechnoMetrica which monitors the stats is finding the real figures shocking.
“The June poll turned up 27.8% of households with at least one member who's unemployed and looking for a job, while the latest poll conducted in the second week of July showed 28.6% in that situation. That translates to an unemployment rate of over 22%, says Mayur, who has started questioning the accuracy of the Labor Department's jobless numbers.”
The site adds, “For years, many economists have pointed to evidence that the government data undercounts the unemployed. Economist Helen Ginsburg, co-founder of advocacy group National Jobs For All Coalition, and John Williams of the newsletter Shadow Government Statistics have been questioning these numbers for years.
“In fact, Austan Goolsbee, who is now part of the White House Council of Economic Advisers, wrote in a 2003 New York Times piece titled ‘The Unemployment Myth,’ that the government had ‘cooked the books’ by not correctly counting all the people it should, thereby keeping the unemployment rate artificially low.”
Those books are apparently still being cooked. The Obama administration now admits there will no movement in the rate until 2012.
What may be more serious is the erosion of the middle class that is well underway. Business insider cites these statistics:
--83 percent of all U.S. stocks are in the hands of 1 percent of the people.
--61 percent of Americans "always or usually" live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007.
--66 percent of the income growth between 2001 and 2007 went to the top 1 percent of all Americans.
--36 percent of Americans say that they don't contribute anything to retirement savings.
--A staggering 43 percent of Americans have less than $10,000 saved up for retirement.
--24 percent of American workers say that they have postponed their planned retirement age in the past year.
--Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008.
--Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975
While the middle class is shrinking, their wealth is being transferred to the rich. Sen. Bernie Sanders, I-Vermont, has been livid in denouncing this:
“The 400 richest families in America, who saw their wealth increase by some $400 billion during the Bush years, have now accumulated $1.27 trillion in wealth. Four hundred families!
“During the last 15 years, while these enormously rich people became much richer their effective tax rates were slashed almost in half. While the highest paid 400 Americans had an average income of $345 million in 2007, as a result of Bush tax policy, they now pay an effective tax rate of 16.6 percent, the lowest on record.
“Last year, the top 25 hedge fund managers made a combined $25 billion but because of tax policy their lobbyists helped write, they pay a lower effective tax rate than many teachers, nurses, and police officers.”
The words of Shirley Sherrod (the Agriculture Department official who was forced out of her job because of a right-wing activist’s deceptively edited video portraying her as a black racist) are worth repeating regarding the growing economic inequality facing Americans.
Sherrod’s fuller comments included this insight LinkHere


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