The biggest question in America these days is how to revive the economy.
The biggest question among activists now occupying Wall Street and dozens of other cities is how to strike back against the nation’s almost unprecedented concentration of income, wealth, and political power in the top 1 percent.
The two questions are related. With so much income and wealth concentrated at the top, the vast middle class no longer has the purchasing power to buy what the economy is capable of producing. (People could pretend otherwise as long as they could treat their homes as ATMs, but those days are now gone.) The result is prolonged stagnation and high unemployment as far as the eye can see.
Until we reverse the trend toward inequality, the economy can’t be revived.
But the biggest question in our nation’s capital right now has nothing to do with any of this. It’s whether Congress’s so-called “Supercommittee” – six Democrats and six Republicans charged with coming up with $1.2 trillion in budget savings — will reach agreement in time for the Congressional Budget Office to score its proposal, which must then be approved by Congress before Christmas recess in order to avoid an automatic $1.5 trillion in budget savings requiring major across-the-board cuts starting in 2013.
Have your eyes already glazed over?
Diffident Democrats on the Supercommittee have already signaled a willingness to cut Medicare, Social Security, and much else that Americans depend on. The deal is being held up by Regressive Republicans who won’t raise taxes on the rich – not even a tiny bit.
President Obama, meanwhile, is out on the stump trying to sell his “jobs bill” – which would, by the White House’s own estimate, create fewer than 2 million jobs. Yet 14 million people are out of work, and another 10 million are working part-time who’d rather have full-time jobs.
Republicans have already voted down his jobs bill anyway.
The disconnect between Washington and the rest of the nation hasn’t been this wide since the late 1960s.
The two worlds are on a collision course: Americans who are losing their jobs or their pay and can’t pay their bills are growing increasingly desperate. Washington insiders, deficit hawks, regressive Republicans, diffident Democrats, well-coiffed lobbyists, and the lobbyists’ wealthy patrons on Wall Street and in corporate suites haven’t a clue or couldn’t care less.
I can’t tell you when the collision will occur but I’d guess 2012.
Look elsewhere around the world and you see a similar collision unfolding. The details differ but the larger forces are similar. You see it in Spain, Greece, and Italy, whose citizens are being squeezed by bankers insisting on austerity. You see it in Chile and Israel, whose young people are in revolt. In the Middle East, whose “Arab spring” is becoming a complex Arab fall and winter. Even in China, whose young and hourly workers are demanding more – and whose surge toward inequality in recent years has been as breathtaking as is its surge toward modern capitalism.
Will 2012 go down in history like other years that shook the foundations of the world’s political economy – 1968 and 1989?
I spent part of yesterday in Oakland, California. The Occupier movement is still in its infancy in the United States, but it cannot be stopped. Here, as elsewhere, people are outraged at what feels like a rigged game – an economy that won’t respond, a democracy that won’t listen, and a financial sector that holds all the cards.
Here, as elsewhere, the people are rising.
This post originally appeared at Robert Reich’s Blog and is reproduced with permission.
25 Responses to “Washington Pre-Occupied”
Washington Pre-Occupied | vccafe.net • November 4th, 2011 at 11:19 am
[...] more: Economonitior] Tags: Economy, Robert Reich, [...]
Brent Temby • November 5th, 2011 at 3:01 pm
I admire the time and effort you put into your blog. I wish I had the same drive.
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Keshia Degeest • November 6th, 2011 at 10:33 am
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RMFarhi • November 8th, 2011 at 12:25 am
Robert Reich books and ideas are "MUST READ" for President Obama and any Occupier of Wall Street or whatever!
The problem is that Democrats and Obama don't have a vision and they just look at the next election and how to balance between the campaign donors and the idea that they represent, kind of the American middle class.
May be it is a time for 3d political party in US? Party based on vision and ideology for redistribution of the wealth created by all Americans, not only the 1%!
dmbentley • November 8th, 2011 at 11:19 am
Mr. Reich's description of the growing frustration, and reasons for it, in the "99%" is apt, but focus on the "1%" only serves to perpetuate the fallacy of the discredited "finite pie theory".
Obsessing over the extraordinary wealth of one group of people does nothing to solve the underlying problem of greater economic opportunities for the rest of us. In fact, the class-envy rhetoric distracts from the real problem, which is a system of excess and mis-directed regulations that favor and promote an oligarchical system under the guise of "creating fairness", "protecting the environment" or "punishing the plunderers".
The "elite", be they super-rich or politically connected, use regulatory hurdles and burdens to control markets and wealth. After all, the impact of a few more permits, fees, taxes, laws or fines on a billion-dollar corporation is negligible, yet for a small business man or new business start-up, those burdens virtually ensure failure. Government is effectively a co-conspirator in creating an unfair system that benefits the "1%" and punishes the other 99%.
By removing the excess impediments created by government under the guise of "fairness" or "protections", we allow for greater economic freedoms and promote individual liberties, as intended by our Founders. Ultimately, we need to recognize that the more government does under the guise of "helping", the more it helps the wealthy get richer while preventing the "little guy" from getting ahead.
Substantially reducing government and radically reforming the regulatory scheme, especially the tax code and so-called environmental regulations, in ways that truly liberate the economy and individuals, is the most effective way to reduce the gap between "rich" and "poor".
rpw_10987 • November 8th, 2011 at 12:17 pm
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Both the Tea Party & Occupy Wall Street should focus on the nexus of many of our nation's problems —> K-STREET
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