Dean Baker: The Whiners' Recession

[marmar]

from Truthout:



TUESDAY 9 SEPTEMBER 2008


Truthout Original

The Whiners' Recession
Monday 08 September 2008

by: Dean Baker, t r u t h o u t | Perspective


Senator McCain and his friends no doubt still believe that the economy's fundamentals are strong, but Friday's jobs numbers clearly show how bad things have gotten. The 6.1 percent unemployment rate reported for August is almost as high as the worst levels from the last recession. A broader measure of labor market weakness, that includes people who can only find part-time work or who have given up looking for jobs, is higher than at any point in the last recession.

When the labor market weakens, workers have less bargaining power with their employers. As a result, wages are trailing more than 2 percentage points behind inflation over the last year.

Wages are virtually the entire income for most workers. If the purchasing power of their wages falls by 2 percent, this is the equivalent of a 2 percentage point increase in their tax rate.

This is worth thinking about. Most workers in the country have just seen the equivalent of a 2 percentage point increase in their tax rate, and it has gotten almost no attention. By contrast, Senator McCain is claiming that the economy will collapse if we increase the tax rate by 3.6 percentage points for people who can't remember how many homes they own.

It is easy to understand how a typical family experiences real hardship when their wages don't keep up with the price of food, gas, and heating oil. It's a bit harder to understand how the folks who can't keep track of their homes will suffer by restoring tax rates to the Clinton-era levels.

This brings us to the other important point about the Friday jobs numbers. The economy is in bad shape and getting worse. This disaster is happening while we are experimenting with the tax policies advocated by Senator McCain. We have an economy that is now shedding jobs at the rate of almost 100,000 a month. There is no prospect of turnaround in sight. We could have half a million fewer jobs by the time the next president is sworn into office than we do today. ......(more)

The complete piece is at: http://www.truthout.org/article/the-whiners-recession

[Warpy]

1. What defeated Hoover was his callousness and obliviousness to

the plight of his fellow countrymen. His party had always focused on institutions, not individuals, and this is why they always get defeated when their idiotic policies come to fruition and individuals suffer.

They think the economy is fine because all but a few institutions are fine.

They are blind to the fact that this country is made up of people, not edifices run by boards of directors.

Sad to say, the country isn't hurting bad enough for meaningful reforms. Whether it's hurting enough to turn the GOP out of office for the next decade remains to be seen. Hoover was elected after a full decade of misery for the largest segment of the population at that time, the farmers. Only when the misery spread to the bankers and doctors and skilled factory workers did he get turned out of office and his party kept out.