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Robert Reich
NationofChange / Op-Ed
Published: Saturday 31 March 2012
The Commerce Department reported Thursday that the economy grew at a 3 percent annual rate last quarter, far better than the measly 1.8 percent third quarter growth.

Whose Recovery?

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Luxury retailers are smiling. So are the owners of high-end restaurants, sellers of upscale cars, vacation planners, financial advisors, and personal coaches. For them and their customers and clients the recession is over. The recovery is now full speed.

But the rest of America isn’t enjoying an economic recovery. It’s still sick. Many Americans remain in critical condition.

The Commerce Department reported Thursday that the economy grew at a 3 percent annual rate last quarter (far better than the measly 1.8 percent third quarter growth). Personal income also jumped. Americans raked in over $13 trillion, $3.3 billion more than previously thought.

Yet it’s almost a certainly that all the gains went to the top 10 percent, and the lion’s share to the top 1 percent. Over a third of the gains went to 15,600 super-rich households in the top one-tenth of one percent.

We don’t know this for sure because all the data aren’t in for 2011. But this is what happened in 2010, the most recent year for which we have reliable data, and there’s no reason to believe the trajectory changed in 2011 or that it will change this year.

In fact, recoveries are becoming more and more lopsided.

The top 1 percent got 45 percent of Clinton-era economic growth, and 65 percent of the economic growth during the Bush era.

According to an analysis of tax returns by Emmanuel Saez and Thomas Pikkety, the top 1 percent pocketed 93 percent of the gains in 2010. 37 percent of the gains went to the top one-tenth of one percent. No one below the richest 10 percent saw any gain at all.

In fact, most of the bottom 90 percent have lost ground. Their average adjusted gross income was $29,840 in 2010. That’s down $127 from 2009, and down $4,843 from 2000 (all adjusted for inflation).

Meanwhile, employer-provided benefits continue to decline among the bottom 90 percent, according to the Commerce Department. The share of people with health insurance from their employers dropped from 59.8 percent in 2007 to 55.3 percent in 2010. And the share of private-sector workers with retirement plans dropped from 42 percent in 2007 to 39.5 percent in 2010.

If you’re among the richest 10 percent, a big chunk of your savings are in the stock market where you’ve had nice gains over the last two years. The value of financial assets held by Americans surged by $1.46 trillion in the fourth quarter of 2011.

But if you’re in the bottom 90 percent, you own few if any shares of stock. Your biggest asset is your home. Home prices are down over a third from their 2006 peak, and they’re still dropping. The median house price in February was 6.2 percent lower than a year ago.

Official Washington doesn’t want to talk about this lopsided recovery. The Obama administration is touting the recovery, period, without mentioning how narrow it is.

Republicans would rather not talk about widening inequality to begin with. The reverse-Robin Hood budget plan just announced by Paul Ryan and House Republicans (and endorsed by Mitt Romney) would make the lopsidedness far worse – dramatically cutting taxes on the rich and slashing public services everyone else depends on.

Fed Chief Ben Bernanke – who doesn’t have to face voters on Election Day – says the U.S. economy needs to grow faster if it’s to produce enough jobs to bring down unemployment. But he leaves out the critical point.

We can’t possibly grow faster if the vast majority of Americans, who are still losing ground, don’t have the money to buy more of the things American workers produce. There’s no way spending by the richest 10 percent – the only ones gaining ground – will be enough to get the economy out of first gear.

This article was originally posted on Robert Reich's blog.



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ABOUT Robert Reich

 

ROBERT B. REICH, one of the nation’s leading experts on work and the economy, is Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. Time Magazine has named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including his latest best-seller, “Aftershock: The Next Economy and America’s Future;” “The Work of Nations,” which has been translated into 22 languages; and his newest, an e-book, “Beyond Outrage.” His syndicated columns, television appearances, and public radio commentaries reach millions of people each week. He is also a founding editor of the American Prospect magazine, and Chairman of the citizen’s group Common Cause. His widely-read blog can be found at www.robertreich.org. Robert Reich's new film, "Inequality for All" is available on DVD
and blu-ray, and on Netflix in February.

They are the ones that our

They are the ones that our government represents! All laws are to protect those 15,600 homes. The best government money can buy!

Excellent comments IN BOLD!

Excellent comments IN BOLD!

Excellent comments IN BOLD!

Excellent comments IN BOLD!

The question that must be

The question that must be asked is WHY has there not been any improvement for the masses? And to understand that you have to go back to the horrific damage Clinton did to America when he passed NAFTA, GATT and established the new WTO; and to also understand why H1B Visas have not been stopped; and why the E-Verify program has not been implemented to stop Illegal Aliens.

Lack of good paying jobs is why there has not been any improvement for average Americans as millions and millions of jobs have deliberately been shipped offshore and more eliminated by bringing in foreign workers. It is the government who did this, not industry, although clearly they followed along.

And what has Obama done to stop this and protect America? NOTHING, for he is truly the ‘emperor without any clothes’.

Beware Agenda 21 and what they really mean by ‘Sustainable Development’.

If trickle down really

If trickle down really worked, with all of the Bush tax cuts for eight years, then we would not have had the crash. The reality is that no one has paid for two wars and the collapse of the banks because of repeal of Glass Segal. He didn't know what to do either and the advice he received was not the best. And here we are three years later in a situation where the big guys don't want to pay their fair share. Go ahead and vote for Romney and he will continue to take care of the 1 percent.

Curiously, the uppermost

Curiously, the uppermost percentile of wealth is associated with the movements to eliminate/privatize (same thing) our nation's social safety net and public educational infrastructure, and to deny human causality in climate change, loss of natural habitats, and species. They also seem to generally support American Exceptionalist doctrine and NRA goals for private gun ownership and wearing of concealed firearms. Such a savage and sorry world they would prepare for their descendants!

Republicans and Tea-Party

Republicans and Tea-Party members you all must admit that the plan and ideology that you have been pushing in the Congress of the United states of America has not and will not work.

CONSERVATIVES, REPUBLICANS AND TEA-PARTY MEMBERS constantly and continuously argue that if the Rich and Powerful do better than the whole Economy will grow and prosper. Well the proof of your FAILURE is in what has happened and continues to happen under your past budgets and the planned budget.

The Plan that CONSERVATIVES, REPUBLICANS and TEA PARTY members are pushing to pass in congress will ony continue the trend that they have put in place to help the "RICH AND POWERFUL" with all of their Tax Breaks.

CONSERVATIVES, REPUBLICANS and TEA PARTY members would rather not talk about widening inequality to begin with. The reverse-Robin Hood budget plan just announced by Paul Ryan and House Republicans (and endorsed by Mitt Romney) would make the lopsidedness far worse – dramatically cutting taxes on the rich and slashing public services everyone else depends on.

WE THE PEOPLE that are being SCREWED by the CONSERVATIVES, REPUBLICANS and TEA PARTY members must united and RECALL every CONSERVATIVES, REPUBLICANS and TEA PARTY member that is in Congress and we MUST DEFEAT everyone of them that are running for Elect4ed Office. If we don't we may as well curl up and DIE because their Policies will starve us to DEATH.

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