The Root of Economic Fragility and Political Anger - R. Reich

[Donnachaidh]

http://www.truth-out.org/the-root-economic-fragility-and-political-anger61305

Missing from almost all discussion of America’s dizzying rate of unemployment is the brute fact that hourly wages of people with jobs have been dropping, adjusted for inflation. Average weekly earnings rose a bit this spring only because the typical worker put in more hours, but June’s decline in average hours pushed weekly paychecks down at an annualized rate of 4.5 percent.

In other words, Americans are keeping their jobs or finding new ones only by accepting lower wages.

Meanwhile, a much smaller group of Americans’ earnings are back in the stratosphere: Wall Street traders and executives, hedge-fund and private-equity fund managers, and top corporate executives. As hiring has picked up on the Street, fat salaries are reappearing. Richard Stein, president of Global Sage, an executive search firm, tells the New York Times corporate clients have offered compensation packages of more than $1 million annually to a dozen candidates in just the last few weeks.

We’re back to the same ominous trend as before the Great Recession: a larger and larger share of total income going to the very top while the vast middle class continues to lose ground.

And as long as this trend continues, we can’t get out of the shadow of the Great Recession. When most of the gains from economic growth go to a small sliver of Americans at the top, the rest don’t have enough purchasing power to buy what the economy is capable of producing.

More at the link ---

[lib2DaBone]

1. China stands close to passing US as the largest manufacturer....

.. Yet our CONgress continues to funnel jobs to China?

No country in the history of the world can be a super-power without the ability to manufacture.

Wonder why we have a depression?

[TheKentuckian]

2. Once again Reich is right and the boo birds are working hard to cover up the truth

What the hell is here to unrec? How the hell many little toadies for the economic royalists do we have? Cheerleading for wealth disparity, high unemployment, and wage erosion are Democratic values now or what?

[izquierdista]

4. I think the counter starts at -2

Just to get the first few readers incensed. Half an hour after posting, my +1 brings it up to +7.

[elleng]

3. 'What we get from widening inequaity

is not only a more fragile economy but also an angrier politics. When virtually all the gains from growth go to a small minority at the top — and the broad middle class can no longer pretend it’s richer than it is by using homes as collateral for deepening indebtedness — the result is deep-seated anxiety and frustration. This is an open invitation to demagogues who misconnect the dots and direct the anger toward immigrants, the poor, foreign nations, big government, “socialists,” “intellectual elites,” or even big business and Wall Street. The major fault line in American politics is no longer between Democrats and Republicans, liberals and conservatives, but between the “establishment” and an increasingly mad-as-hell populace determined to “take back America” from it.

When they understand where this is heading, powerful interests that have so far resisted fundamental reform may come to see that the alternative is far worse.'

[FBI_Un_Sub]

5. Once again

Reich calls it right

[nashville_brook]

6. this is a must read

[blindpig]

7. The rise and detrimental effects of Finance Capital was noted...

by Marx 150 years ago. It is an inevitable result of overproduction which causes profits to shrink, leading capital to seek more profitable venues.

Come on Bob, get with the program.