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Bush's "Magic" Economic Formula: The Rich Get Richer; Regular People Lose Ground

By Larry Beinhart, AlterNet. Posted June 4, 2007.


The economy keeps growing, as does the enormous largesse of the wealthy, while the average person makes less than they did when Bush took Office. This is Bush's magic economic formula.

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Supposedly we are in a sustained economic recovery and have been since 2002.

Part of this is Bush hot air and the Republican Noise Machine, which the media quotes verbatim.

By a certain measure, however, it's real.

The economy has grown. Corporate profits are at an all-time high. Average income is up. There's lots of money around.

But the recovery has some really strange features. Oddities never before seen in a recovery.

Jobs: During Bush's first term the US actually lost private-sector jobs.

It finally improved in 2005, and now job creation is almost keeping pace with the increase in population. Still, over all, it's the worst record since Hoover, the fellow who presided over the onset of the Great Depression.

How do you have a recovery without creating jobs?

Income: Yes, average income is up during the tenure of the current administration.

The joke about average income is: Bill Gates walks into a bar. The average income of every person in the room immediately goes up 10,000 percent.

But median income, the amount that people in the middle of the group earn, barely budges. So let's look at that figure. Median income is down. The average person makes less now than when Bush came into office.

Not only that, the downward pressure on wages is no longer just a blue-collar issue, it's moved up to white-collar workers, the educated classes, even doctors.

How do you have a recovery when people are making less than before the recovery?

Cost of living: Key factors of the cost of living are much higher than they were six years ago.

In particular, fuel is up 100 percent, higher education costs are up about 44 percent, health care premiums are up 80 percent, and affordable housing is scarce.

Normally, when the cost of living goes up, we have inflation. But we've had low inflation during the Bush years.

How can the cost of living go up while the cost of money stays low?

Here's the most peculiar statistic of all: the Dow Jones index

You may have been hearing that the Dow Jones Index is at an all-time high. It's true. However, it is only 16 percent higher than the day George Bush came into office. By comparison, when Clinton left office the Dow was 320 percent higher than when he came into office.

It's a very rough measure of course, and there are many others. But by that measure, during the Clinton years investment in America's leading business had grown more than three times over. Under Bush it's only grown 16 percent in six years. Since the consumer price index is up 18 percent over the same period, when the new all-time high is adjusted for inflation, growth is effectively below zero.

How can there be a "recovery" in which not even businesses grow?

When a government wants an economy to grow, it throws money at it.

The administration did that with spending on pharmaceuticals, homeland security, and a couple of wars. But their most important weapon of choice was tax cuts for the rich, especially on unearned income, capital gains, inheritance, dividends, and interest.

This was sold, and accepted, on the myth that the rich -- the investing class -- are the most creative and daring members of our society. Just unleash them and they will march off into the wilderness -- actual, urban, or cyber -- with sacks of cash over their shoulders and they will build things!

Factories! Airlines! Housing! Toys! Computers! Undreamed wonders! Entire new civilizations! With jobs! jobs! jobs! Like an Ayn Rand novel!

But that's not what happened.

Because a shortage of cash was not the problem. The country, the world, is awash with cash.

The good, old, risk for rewards version of capitalism -- the burghers invest in a daring sea captain sailing to the Indies -- still exists. In recent years, it's given us FedEx, Wal-Mart, Apple, Microsoft, and Google.

But alongside it, over the last 50 years, the economy of credit has grown up.

In vastly oversimplified terms the credit economy works like this:

You own a house. It's worth $100,000.

Someone buys the house, no money down. They borrow that money. Let's say it's a straight-line 8 percent, 30-year mortgage. Forget closing costs, points, and any other complications -- that's a $220,000 debt. It goes on the bank's books as an asset.

Now you have $100,000. The bank has $220,000 (on paper). The buyer has a house worth $100,000. The bank has a lien on it, but the buyer will be gaining equity, plus he can get a second mortgage and home-improvement and other loans on it.

Again, this is a vast oversimplification, but that transaction has "created" something like $420,000 that is now "in play," as part of the economy.

No "thing" has been created -- no new business, no product, no jobs, no idea, no intellectual property, no entertainment.

But money has been created.

If you buy a dress on your Visa card or organize a consortium to buy a company, the same thing happens -- debt creates money. In every transaction, there's profit to be taken off the top.

A perfect example of the transformation of our society into a credit economy is the change in the way we finance higher education. States, and even cities, used to be in the business of building universities that were free, or nearly so. These were financed, up front, with tax money as an investment in our human infrastructure. Then, in 1965, the student loan program was invented. This changed the higher education business into a debt creation business and created a whole new creditor class, college graduates, who, were handed, along with their diploma, debts of ten to fifty thousand dollars or more.


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Larry Beinhart is the author of Fog Facts: Searching for Truth in the Land of Spin.

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RE: "The economy keeps growing..." YES IT IS
Posted by: kbest on Jun 4, 2007 5:29 PM   
Current rating: 2    [1 = poor; 5 = excellent]
The Dow just recently went over 13,000 for the 1st time ever. Unemployment at 4.4%
Lower than it ever was under Clinton. .06 % growth adds to the fact that it has grown over 15 straight quarters now.

My 401(k) is doing great. My income is doing just as well. I made more money this year than last, and more last year than the year before. I'm just a typical middle class worker and I think the economy is riding high. So quit yer bitchin' and get a job.

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» Opportunity Posted by: slydad
RE: Wonderful...another propogandist argument brought to you by AlterNet!
Posted by: EagleMB on Jun 4, 2007 8:27 PM   
Current rating: 1    [1 = poor; 5 = excellent]
You own a house. It's worth $100,000.

Someone buys the house, no money down. They borrow that money. Let's say it's a straight-line 8 percent, 30-year mortgage. Forget closing costs, points, and any other complications -- that's a $220,000 debt. It goes on the bank's books as an asset.

Now you have $100,000. The bank has $220,000 (on paper). The buyer has a house worth $100,000. The bank has a lien on it, but the buyer will be gaining equity, plus he can get a second mortgage and home-improvement and other loans on it.

Again, this is a vast oversimplification, but that transaction has "created" something like $420,000 that is now "in play," as part of the economy.


Really? Was anything actually created? Or is this just propaganda? Let’s look at the truth:

Before any money is borrowed or lent we have a house worth $100k, we have a bank lending $100k, and a debtor with an incremental income (i.e. salary).

After money is lent, we have a house worth $100k, we have a bank with a $100k encumbrance and an asset of $100k + interest, and we have a debtor with $100k + an incremental income.

Is an incremental income created money? No, it is transferred money. The debtor’s employer sells widgets which cause the buyers currency to decrease and the seller’s currency to increase. Part of that currency is transferred to the debtor as income on an incremental basis. The debtor pays part of that money to the bank as interest. Thus, nothing created nor destroyed.

The $420k of “created” value was actually in play form the start. However, one of the author’s fallacies is to combine liquid assets with non-liquid assets. The only currency in play was currency that was transferred from one party to another. Nothing was created or destroyed.

The author wants you to believe that whenever a bank loans money it gains an asset worth the value of the loan + interest, but loses nothing. The reality is the bank does gain an asset worth the value of the loan plus interest, but it loses the money it pays to the seller. Again, even the interest is not “created” money because it is just transferred money between the debtor, the debtor’s employer, and the employer’s customers.

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» tailfeathers Posted by: fanny666
Blaa blaa blaah...
Posted by: Temporary on Jun 4, 2007 1:12 AM   
Current rating: 2    [1 = poor; 5 = excellent]
Just start the damn trade war with China and get it over with! Stop buying there toothpaste, t-shirts and dog gfood and see what happens!

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» RE: Blaa blaa blaah... Posted by: paulaH
» Be Careful.... Posted by: Sparks56
» RE: Be Careful.... Posted by: Iconoclast421
Reaganomics
Posted by: Tom Degan on Jun 4, 2007 1:45 AM   
Current rating: 5    [1 = poor; 5 = excellent]
In a speech to some clueless audience of right wing hacks the other day, the First Fool was forced to admit that the disparity in income between the rich and the not-so-rich has been growing "for over twenty-five years now". Right. He might have been honest and said, "twenty-six years"; which how long ago it was that this country stupidly sent a feeble minded, failed "B" movie actor by the name of Ronald Reagan to the White House. The beginning of the decline of the middle class in this once-great country can be pin pointed to the day, January 20, 1981.

And yet so many members of the American lower and middle economic classes - the ones who are getting screwed the most by this disgusting administration - will cheerfully, stupidly continue to vote with the GOP. It's hard to feel a molecule of sympathy for some half-witted bastard with a wife and three children who lost his home in late October of 2004 and voted for George W. Bush the following week. Talk about criminally stupid!

Like Pavlov's dogs, they've been trained by the corporate News Radio Lie Factory to blaim all of their troubles on the least fortunate of aout society - the blacks, immigrants, etc....Is it any wonder that we're the laughing stock of the planet earth? When are these foolish Americans going to wake up?

Tom Degan
Goshen, NY
"The Rant" by Tom Degan

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» RE: eaganomics Posted by: willymack
» RE: eaganomics Posted by: paschn
» RE: eaganomics Posted by: outlander55
» RE: eaganomics Posted by: surfreality
» Franchised America Posted by: Sushi
» RE: eaganomics Posted by: Joseph4408
» RE: Hey Joseph Barnes! Posted by: Tom Degan
» Supply-Side Economic Theory Posted by: fanny666
The Bush dynasty is a (powerful) remnant of "English" rule
Posted by: Suzon on Jun 4, 2007 3:40 AM   
Current rating: 4    [1 = poor; 5 = excellent]
Perhaps one-third of the colonists in America did not agree with the egalitarian philosophy of natural rights promoted by Tom Paine. Did these advantage seekers just fade away or did they continue to apply the royal strategies of secrecy and deception disguised as Christian charity and benevolence which was their modus operandi.

Brings to mind the image of George W in white tie joking about his people, "the haves and the have-mores".

I wrote "English" in scare quotes in the title because there is almost nothing English about the British monarchy and aristocracy. The real king of the UK, if you go by descent, is some bloke living in Australia.

Self-rewarding advantage seekers should be made accountable. Anyone know of a good district attorney?

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When will the IMPEACHMENT Proceedings begin?
Posted by: thinkverybig on Jun 4, 2007 3:42 AM   
Current rating: 5    [1 = poor; 5 = excellent]
It's way overdue..... and if BUSH is not impeached, this would be the second greatest crime in American history, next to Slavery. Everything BUSH stands for, a majority of Americans don't. This selfish, arrogant prick should be impeached and sent to jail for the rest of his life. And it is past time that we Americans stood up and expressed our will. Let your congressmen know of your displeasure about all of the issues important to you. It's time for a change, it's time for a revolution and that time is now.

I need volunteers for "WeMustChange.org"

I can be reached at david@wemustchange.org

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» House Resolution 333 Posted by: fanny666
The US economy is not growing
Posted by: robchapman on Jun 4, 2007 3:59 AM   
Current rating: 5    [1 = poor; 5 = excellent]
The US economy is not growing.

If I sell my great aunt Tizzy's antique ironing board on e-bay for $ 50, I have increased the GDP by that amount, but I have not added an iota of value to the economy, and in fact with the cost of fuel for powering my computer and shipping the ironing board, I have added to our trade imbalance.

The GDP grows in this manner, but it is unreflective of the value of goods and services exchanged.

Our economy is becoming less and less a marketplace for exchange of valuable transactions and more and more a monopoly game.

Until and unless the government and industry start enterprises that add value we are merely exchanging toys and using money to keep score.

Bush and the GOP with their emphasis on protecting the value of existing equities rather than developing productive enterprises are singularly unsuited to successfully governing in this period of globalization and increasing competition.

Whatever their intent, the GOP policies are stifling innovation and value adding economic activity in favor of protecting the exchanges.
Robert Chapman
Lansing, NY

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» RE: The US economy is not growing Posted by: Mamarianne
Promises, Promises...
Posted by: Michael Boldin on Jun 4, 2007 4:41 AM   
Current rating: 5    [1 = poor; 5 = excellent]
that's what these people keep giving us. "The economy will get better." "You'll be safe and secure." "We'll make sure gas prices don't go up anymore." "We'll stop the terrorists."

The promises never seem to end. But the results from these politicians always seem to be far different. The Bush administration and our current realty in this country is just further verification that politicians just can't be trusted to deliver anything but more corporate profits.

I guess that's the nature of politics - grandstanding to get support from the people, while never really doing anything substantive....well, except for their corporate backers!

Some further reading on this if you're interested:

"Overlooking the Obvious" - click here

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The poor are stealing from us!
Posted by: Poe on Jun 4, 2007 4:57 AM   
Current rating: 1    [1 = poor; 5 = excellent]
The poor are stealing from us! That's right.....and I'm sick of it!!! Actually.....the people that pretend that they're poor are stealing from us!
Drive thru any poor neighborhood. Go ahead. I do it everyday for work. Take a stroll. I do....and what I see just pisses me off! 60 plus hours a week I work and here is where a certain portion of my tax dollars go.

Saw the car pulling out of a McDonald's......throwing trash out the window. Nice. No respect for your neighborhood....but the blight of that neighborhood is blamed on the rest of society. Since when do you have to be middle class or wealthy to learn how to deal with your own trash. People in my neighborhood pick up after their dogs....but the poorer neighborhoods....you get a pass.

The woman holding a baby.....gaudy jewelry.....large hoop earings.....and long blue nails. I know how much those nails cost.....if you can spend 60 dollars on nails.....you can't be poor. Maybe we're paying for those nails.

House after house with a satellite dish attached to it. Every ear pressed to a cell phone...who's paying for those calls.....120 dollar sneakers......cars with rims and tires that cost as much as a gold brick......air conditioners sticking out of windows in the summer, and in the winter, the thermostats turned up past 75, no doubt. Don't worry....Heap will pay for your gas bill.....while many of us keep our common sense...and keep our thermostat and our bills low. We deal with the winter chill with an extra layer of clothing.

The cars!! Yikes! Suv's and Caddies.....We should all be that poor!!

Yeah....the problem in this country is that people don't know how to live within their means.
Even people making very good money....spend more than what they can handle.

The crime, is that there are people that truly need the help of society.....and there's less for them because of the irresponsible lifestyle of so many.

Poe

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» I'm going to guess... Posted by: JoshuaLudd
» RE: I'm going to guess... Posted by: JoshuaLudd
» RE: I'm going to guess... Posted by: aussidawg
» RE: The poor are stealing from us! Posted by: Fat Man at the Buffet Line
» RE: The ghost of Reagan speaks!! Posted by: JoshuaLudd
» RE: The poor are stealing from us! Posted by: Lincoln fan
» RE: The poor are stealing from us! Posted by: Lincoln fan
» RE: The poor are stealing from us! Posted by: Logic's Edge
» Redneck Suckers for the Rich Posted by: sofla100
» Hard to Keep Scraping Posted by: DataDoc
» How do you know? Posted by: launcher
An Interesting Twist on Old Economic Theory...
Posted by: yellow on Jun 4, 2007 5:29 AM   
Current rating: 4    [1 = poor; 5 = excellent]
comes into play at the very end. In fact we have two economies which is exactly why inflation is low despite high debt and high deficits. Inflation would result in severe pressures to raise interest rates which would kill off the entire Bush strategy by suppressing spending, hurting the stock market, and especially killing off the booming housing bubble upon which the credit generation component in largely based. Thus, we suppress income gains for the vast majority of the population, about 80% of them, and allow the income of the top 20%, of which only the top 1% really gains annually in any meaningful way at a rate of nearly 10%, to carry domestic growth through spending. Expensive cars, lofts and expensive urban condos and gated communities, jewelery, limousine transportation, vacation packages, gourmet resturants, and other luxuries for the rich with cheap Chinese imports from Walmart for all the rest. Walmart helps the spiral downward for the bottom 20% as it holds wages down and threatens those with union jobs through impossible price competition. Inflation is held down essentially by giving most people very little in the first place. Less to take back through a FEDERAL RESERVE BANK orchestrated recessions later on at crunch time.

The high rates of GDP growth over the past few years is increasingly earned abroad through Transnational Corporate output and cheap foreign labor. More globalization. Though it is interesting to note that more and more offshoring is shrinking domestic demand and slowing the economy to less than one percent average annual growtn over the past six quarters or so. Also, there is more manufacturing taking place in the US than was thought. It isn't just globalization and a whole new global division of labor created by capital retrenchment. It's also a matter of lean production. In 2006, according to a special report in the Economist, over $4.5 trillion dollars in manufacturing took place in the US. About $3 trillion of it was by US subsidiaries of foreign owned transnational companies like Toyota which is building more plants in the US all the time and expanding domestic production even as Ford is offshoring more jobs abroad. The point is, according to a spokesman for the National Association of Manufacturers, that wages have been a shrinking portion of total domestic US manufacturing since the end of WWII standing currently at about 11%, a very big drop over time. Right at the end of the war Manufacturing was a third of the work force and the same proportion of GDP. Today it is 12% of the US GDP with scarcely 8% of the workforce. In the OECD countries manufacturing output has more than doubled in the post WWII era with a drop in more than 25% of the total workforce involved in the manufacturing sector. Technology is the key.

So global retrenchment and efficiency has created vast amounts of wealth produced by fewer people to be consumed by even fewer people. We don't have a jobless future as some have predicted just one with lower paying less secure jobs without benefits. This along with privatization and a shredded social safety net means the growing numbers of working poor must increasingly fend for themselves for basic needs. This can only skew the distribution of wealth. The harder people have to work to get basic needs the more they produce for the rich and spend what little gains they've made on the high priced goods and services offered by those same rich. And Al Capone was said to be a racketeer.

The middle class, if it is restored at all, will be restored directly through political struggle not through the trickle down dynamic of economic growth which will only bring more and more maldistribution of wealth. The '08 election is part of that stuggle but by no means the core of it or even the most important aspect of what must be done.

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The Markup on Money
Posted by: thornwolf on Jun 4, 2007 5:46 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
The profit margin in lending is -- in a significant part -- the difference between the rate of the loan and the rate of inflation.

While I agree with the overall thrust of this article, the above statement is simply not true.

The profit margin in lending money is, like everything else, the difference between the cost and the selling price. If a Bank pays 2% on deposits and lends the money at 8% the markup is 400%. The rate of inflation does not play into this calculation and to claim it does is disingenuous.

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» RE: The Markup on Money Posted by: yellow
» RE: The Markup on Money Posted by: in Upstate NY
» RE: The Markup on Money Posted by: yellow
» RE: The Markup on Money Posted by: in Upstate NY
» RE: The Markup on Money Posted by: yellow
» RE: The Markup on Money Posted by: yellow
» RE: The Markup on Money Posted by: in Upstate NY
» RE: The Markup on Money Posted by: yellow
» RE: The Markup on Money Posted by: in Upstate NY
» Ah, but Money Flows Uphill Posted by: thornwolf
EJ
Posted by: EJW on Jun 4, 2007 5:59 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
Right on Larry!

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The Corporate Oligarchy
Posted by: rac on Jun 4, 2007 6:08 AM   
Current rating: 5    [1 = poor; 5 = excellent]
“I’ve got to do for me and mine.”
~ Wash Hogwallop
O Brother, Where Art Thou?

Our representatives have abdicated their stewardship of democracy for all. Congressman Hogwallop has betrayed us. We don’t ask more in taxes from the rich simply because they hold most of the wealth. They also hold a greater responsibility to keep our democratic system well oiled and running smoothly. The rich and powerful, be they in government or private enterprise, have their hands on the wheel of America’s prosperity. When they act irresponsibly and selfishly, they drive the rest of us into a ditch. It is a purposeful and calculated act against the well being of us all. I say to those who are starting to understand this: We can no longer just boo the rascals from the bleachers. The officiating is all corrupt. The players are on steroids, the hotdogs are carcinogenic, and skyboxes overshadow everything. It’s time to get in the game!

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What do you really expect???
Posted by: JoshuaLudd on Jun 4, 2007 6:17 AM   
Current rating: 5    [1 = poor; 5 = excellent]
When all the numbers for economic prosperity that get reported or considered have to do with the prosperity of corporations and the wealthy????

We are being taken out of the equation completely... so that the picture will continue to look rosy for those who matter even after globalization has made us all into indentured servants.

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» Try realistic. nm Posted by: JoshuaLudd
This is not news
Posted by: AsteroidMiner on Jun 4, 2007 6:21 AM   
Current rating: 4    [1 = poor; 5 = excellent]
We are still chimpanzees and the males are still divided into
Alpha, Betas and Charlies. The alpha male gets all of the
women, the beta males get some of the women each, and the
charlies get none. But the charlies instinctively vote for
republican "morality" anyway.

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» RE: This is not news Posted by: David V
Rich get richer because the federal reserve is owned by the rich
Posted by: freedom on Jun 4, 2007 6:45 AM   
Current rating: 5    [1 = poor; 5 = excellent]
“The question is, does the way government spends and invests create a sounder and healthier society?”

Good question, but how does a government living on credit itself do this? After all, the Federal Reserve is not really under government control, but by corporations who loan and collect interest on the money they loan the government.

Robert Lightfoot

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Rising income inequality and High Immigration
Posted by: DrGeneNelson on Jun 4, 2007 6:58 AM   
Current rating: 4    [1 = poor; 5 = excellent]
Great article, albeit with some economic simplification. I strongly agree with the economic problems caused by the substitution of Chinese slave labor for the American middle class.

Here's a link to an article that I wrote a few years ago that shows the rise in income inequality in the U.S. as measured by the GINI Ratio, a measure compiled by the U.S. Census Bureau. The graph shows that the GINI ratio has been rising since 1968. Huge revisions in U.S. immigration policy were unleashed by Sen. Ed Kennedy in 1965 that have resulted in a tidal wave of immigration into the U.S.

Dr. Nelson's 2005 article

High levels of immigration are a double - pronged means to increase income inequality. First, labor gluts drive down the wages that are paid. Second, people gluts drive up the cost of the necessaries of life. Those increased costs tend to end up in the pockets of the economic elite, just like the higher corporate profits that result from labor gluts. In our history, there have been "robber barons" that have promoted these open borders policies. Eventually, the middle class gets wise and demands reforms.

William Gates, III of Microsoft Corporation has aggressively promoted an obscure special visa program that imports technical professionals from India and China. His father retained a lawyer - lobbyist named Jack Abramoff. Abramoff and "Team Abramoff" helped to procure beneficial changes to the H-1B visa program in 1996, 1998, and 2000. That is the reason that this author has renamed the controversial program the "Abramoff Visa." Is it a coincidence that William Gates, III became the world's wealthiest man in 1995, a title that he has held ever since?

To learn more, please google on the phrase "Abramoff Visa."

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Great economy--if you're an employer
Posted by: zooeyhall on Jun 4, 2007 7:17 AM   
Current rating: 5    [1 = poor; 5 = excellent]
If you employ people, man you never had it so good! Advertise a professional job and get swamped with resumes. Are your computer and IT people grumbling? Just start leaving some of those flyers you got from that Indian tech outsourcing firm lying around the office--they'll get the message in a hurry.

Production-line people getting pissy? Just start talking about the wonders of moving production to Bangladesh--people who are dying to earn .25 cents/hour and zero benefits. And no OSHA or EPA to fuss-around with.

Threaten to leave and watch the local community leaders fall-over themselves to give you tax breaks and other perks if you stay.

For that matter, why even threaten to leave or go overseas for cheap labor? You can hire tons of illegal aliens right here in the U S of A. Just do what the local meat packing plants in my area did in the '80s. They took jobs that paid a good middle-class wage of $20/hour, cut it to $9/hour. Increase the line from 60 animals/hr to 200/hr. Then claim you "can't get enough local workers". Setup hiring offices along the Mexican border and bus your new eager employees up to Nebraska.

Hell--you can even be pious about it! After all, you got even the Lexus-liberal sites like Alternet on your side, with their beating the drum for illegal immigration.

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» RE: What's even worse.... Posted by: CatDad
Grammar Patrol
Posted by: biochemurgic on Jun 4, 2007 7:19 AM   
Current rating: 1    [1 = poor; 5 = excellent]
From the first paragraph of the article:

"...while the average person makes less than they did when Bush took Office."

Come on. Singular-plural agreement is not that difficult to attain, but I see phrases like this in political commentary repeatedly. Make it "...while average PEOPLE make less than they did...

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» Shaddap Posted by: fanny666
» RE: Grammar Patrol Posted by: Logic's Edge
So quit griping and do something - buy American when you can.
Posted by: Gypsi on Jun 4, 2007 7:25 AM   
Current rating: 5    [1 = poor; 5 = excellent]
Unhappy about the balance of trade - refuse to buy from Wal-Mart. I manage to find just about everything I need somewhere else. Read the country of origin on every product you buy and if it doesn't give country of origin, call the mfgr when you get home from the supermarket. Particularly tools and pet products, non perishable stuff, a lot of it is being made elsewhere. If mfgrs get enough phone calls AND declining sales, they may reopen a few American plants. I quit buying Levis the day they closed their last US plant. But I don't have enough money to make much impact. Together, who knows????

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WHY BUSH'S ECONOMY WORKS
Posted by: VZEQICVA on Jun 4, 2007 7:49 AM   
Current rating: 5    [1 = poor; 5 = excellent]
Because nobody does anything to change it. We whine incessantly, but Chinese goods still flood the market. We settle in so many areas. We get bogged down in political BS that is meaningless. Bank's thrive on fees alone, lending practices are criminal. Newsflash - it wasn't always like this. Nobody ever gave things away but business practices were ethical. Being ripped off was not part of life. Debt was not a given. Turn off the TV and look around. Thanks, ANNA

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» Free Market Fantasies Posted by: fanny666
» Well, Greed was... Posted by: JoshuaLudd
» RE: Well, Greed was... Posted by: fanny666
» Personally... I think... Posted by: JoshuaLudd
We are in recession, we just don't know it.
Posted by: SteveO on Jun 4, 2007 7:50 AM   
Current rating: 5    [1 = poor; 5 = excellent]
Glad to see some of you are smelling the coffee.

Unfortunately you can't blame all this on Chimpy (as bad as we all want to).

The CPI has been cooked from at least the Johnson administration, although Clinton and Bu$h have truly mastered the art. See this site for more.

The unemployment statistics have also been cooked. The so called "Birth-Death" model has magically created jobs for years when there is no evidence to prove these jobs actually exist more info on birth death model

The reality of the economy is that we never came out of the 2002 recession, but the advertised numbers are so "Enronned" that the MSM believes everything is great.

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LARGESSE?
Posted by: pzzp on Jun 4, 2007 8:22 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
Nice article, but I chastise you for the egregious and inexcusable semantic blunder with the use of the word "largesse".

American Heritage Dictionary:
lar·gess also lar·gesse (lär-zhěs', -jěs', lär'jěs') n.
1a. Liberality in bestowing gifts, especially in a lofty or condescending manner.
1b. Money or gifts bestowed.
2. Generosity of spirit or attitude.

I'm certain this is not what you meant to say.

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Inequality.org
Posted by: fanny666 on Jun 4, 2007 8:34 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
Inequality.org

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You left out the part about offshore tax shelters...
Posted by: mgloraine on Jun 4, 2007 8:48 AM   
Current rating: 5    [1 = poor; 5 = excellent]
Good observations and salient comments. But you left out the section regarding money-laundering and tax-sheltering by individuals and corporations via offshore investment companies in the Caymans, or Dubai, etc. This is a scam the Bush Crime Family has been championing since the 1920s and '30s when they were helping Fritz Thyssen build the Nazi war machine using exactly the same tools. This tactic removes the capital completely from the US economy, making zero jobs, starting zero businesses, and paying zero taxes. That's what "globalization" is really all about: the ability of the ultra-wealthy to take all the capital OUT of a localized economy without being held responsible for the human misery, environmental degradation, poverty, crime, etc. left behind in the vacuum.

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Sutter
Posted by: Sutter on Jun 4, 2007 8:53 AM   
Current rating: 5    [1 = poor; 5 = excellent]
The BLS estimates new jobs using its "Birth-Death" model. How accurate are their estimates? For the third quarter in '06, the BLS estimated 498,000 new jobs. Actual tax rolls, compiled later, show only 19,000 new jobs created for that period. Phantom jobs or massive tax avoidance?
The government has a lot of reasons to paint a rosy senario. If actual job creation is near zero, one can imagine a few nails in the coffin of immigration reform.

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» RE: Sutter Posted by: Trazom
“Arkansas GOP Head: We Need More Attacks On American Soil So People Will Appreciate Bu$h”
Posted by: freethink7 on Jun 4, 2007 9:06 AM   
Current rating: 5    [1 = poor; 5 = excellent]
…so says Dennis Milligan. Freudian slip, or subtle insidious psychological warfare warning to Americans that there could be another attack similar to 9/11 to bring Bu$h/GOP #’s up and/or kick off war in Iran. (or, Americans have been far too critical of Bu$h lately for making U.S. a plutocracy and being instrumental in the massive wealth consolidation that has occurred in the last six years).

In any case, this foul mouthed cretin should refrain from making these kind of crude albeit nefarious comments publicly. It’s despicable and unethical.

Link:
rawstory

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And what do we do about it?
Posted by: NumberSix on Jun 4, 2007 10:06 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
More pieces about how close Amerika is to becoming a leader on global feudalism, yet, I ask, what are we doing about any of it?

Overseas, in Germany, the protestors are already locking horns with the law. They see Shlub and his money pals as the goons they really are. Why don't we see this level of protesting here, despite all the noise we keep hearing?

We aren't angry enough, obviously. Too easy to bitch, but it takes work to generate genuine dissent. Oh, well, soon as we have a few hundred thousand poisoned by Chinese toothpaste, well, maybe, then, eh?

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» RE: And what do we do about it? Posted by: JoshuaLudd
What if?
Posted by: mom'z the word on Jun 4, 2007 10:30 AM   
Current rating: 5    [1 = poor; 5 = excellent]
I think one of the reasons why the rich are so rich and keep getting richer is because they are organized and have no fear of being obvious about their wealth. Everything about them says look at me I am rich. While the not so rich, almost rich, trying to get rich, are disorganized, scattered, and generally invisible to the naked eye. Apparently,an organized 2% of the entire population can easily control a confused and shell shocked 98% of the population. What if the 98% were organized in the same manner as the 2%? I am no math genius but I think the larger number would have the loudest voice at that point.

The obvious problem of course is trying to organize the 98%. Without knowing who is unhappy and dissatisfied with the way things are going makes it very difficult to try and organize the invisible.

First before we can effect a change by joining forces we need to know who wants to change things. What if everyone that was unhappy and dissatisfied with the way things are going had a small little sign that would identify us. A heart with a tear drop in the middle. Or maybe a simply little ~. Then we take this sign and put it in your car window or a little banner on our front lawn or anywhere where we could very quietly get to know each other. You know kinda like that fish thing from years ago.

Knowing who is unhappy and dissatisfied is the very first step to getting organized. It is like a secret society only because the rich don't care if we are unhappy or not. The powers that be don't care if we are struggling and unhappy they just keep passing laws giving more privileges and advantages to the rich. The unhappy and discontented in this country are a well kept secret and the only ones that care what is happening to us is us. We have been intentionally covered up and swept away by media and lawmakers. So a small sign is just our quiet subtle way of joining forces, leaving a mark so to speak. I love this saying: Ten people who speak more noise than 10,000 who are silent. A small sign is a way of speaking. Say what?

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» RE: What if? Posted by: Logic's Edge
One sided.
Posted by: Lincoln fan on Jun 4, 2007 10:53 AM   
Current rating: 5    [1 = poor; 5 = excellent]
Maybe I'm wrong, but it seems to me that to blame Reagan and Bush for our down-spiralling ecoonomy is counterproductive. Reagan didn't know the score and neither does Bush. They are part of a string of Republican and Democratic figureheads that front for the corporate establishment. Our public servants are hired by private interests.

Vote the Republicans out and vote the Democrats in and you've exchanged Tweedledee for Tweedledum. Mr.Fatcat will still pull the strings. To control our government, we must take control of both parties.
Bob Reichenbach.
Director, The Lincoln Initiative.

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» RE: One sided. Posted by: Trazom
» RE: One sided. Posted by: Lincoln fan
Plausible premise...
Posted by: terrawhistle on Jun 4, 2007 11:15 AM   
Current rating: 1    [1 = poor; 5 = excellent]
This article reminds me of the picture of a young woman or old woman, depending on how you perceive it.
Here is a writer who has a reasonable mastery of written English, but is lacking in logic and reasoning. He is also quite lazy when it comes to anchoring his arguments to any references to credible sources. Who can validate the premise and conclusion without references?
A reader possessed of critical thinking skills might not take this hastily written piece seriously, especially after looking at the author's bio. 'Part-time skiing instructor' is hardly a qualification for expertise in economics. Dude!!!

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» RE: Plausible premise... Posted by: bigbad
You can't fight reality
Posted by: ebachan on Jun 4, 2007 11:33 AM   
Current rating: 5    [1 = poor; 5 = excellent]
This article fails to provide a solution to the problem. It seems to say, or rather I have inferred from it, that corporations should not look for the least expensive solution to a problem; that corporations in the US of A, should choose higher labor and other inputs instead of cheaper alternatives and other solutions. If corporations were to employ higher cost inputs, be they domestic employees or only American made goods, they would lose competitivenesses in not only the world market, but also in the American market. Consumption of US made/provided goods and services would no longer be affordable and thus desirable. This would allow non-US based corporations to enter the US market and provide these goods and services to the consumers. Face it, buying American made is great for Americans, except when the cost is higher and the quality is lower. Consumers will pay more on principle only in so much as their consciouses dictate and their pocket books allow. Corporations and consumers both look to the lowest cost highest quality products and services in the pursuit of higher consumption and productivity. This will not change. The way that we can change this (if it needed to be changes with unemployment at 4.5% and household incomes rising) is to create alternative choices to outsourcing and cheaper foreign goods. If we are to do this, one great place to start is the UAW where a high school drop out makes $60,000 plus with no student loans to repay and 4 weeks of vacation. The average college graduate earns $38,000 a year and has, on average, 12 days of vacation per year. Unions do not further the ideals or goals of a meritocracy by which the cream of the crop rises to the top. They merely pay employees more and more for showing up and doing less. If we all earned Union wages and received Union benefits, we would not be able to export anything we produced and only be able to purchase third world manufactured goods.

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» RE: You can't fight reality Posted by: JERSEYDAN
» RE: You can't fight reality Posted by: Lincoln fan
Don't be ashamed to call it a Class war
Posted by: dajson on Jun 4, 2007 11:35 AM   
Current rating: 5    [1 = poor; 5 = excellent]
I've been watching this since the 2 car garages of the 1970's, and now we live in the two jobs just to stay afloat 21st Century. This article all but cuts to the chase that a class war has been declared on the middle and lower classes by an upper class who defends itself by shouting the opposition down for trying to start a class war. Well the class war has already been started and the middle and lower classes stand to loose it if they don't cut to the chase and fight it. Take heart, the assholes in the world are out numbered by us millions to one. The only way we won't kick some ass is if we don't fight.

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A little icing on the cake?
Posted by: jlm72 on Jun 4, 2007 11:41 AM   
Current rating: 5    [1 = poor; 5 = excellent]
After reading through this I remembered another article I came across not long ago. Not exactly economics but ties in with employment. I wonder how the coming years will affect this workforce...

Attracting the twentysomething worker

I really think we are living in the most contradictory, confusing and outright corrupt periods in our history.

J

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Ah, but Money Flows Uphill
Posted by: thornwolf on Jun 4, 2007 11:57 AM   
Current rating: 5    [1 = poor; 5 = excellent]
Putting money in the pockets of the working classes ends up in the pockets of the wealthy anyway because money flows uphill. The only difference is that everyone can prosper, not just the rich.

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To Yellow: Regarding Federal Reserve et al - It’s Not Much of An Ideological Leap
Posted by: freethink7 on Jun 4, 2007 12:41 PM   
Current rating: 5    [1 = poor; 5 = excellent]
to make from Left-Dems to Right-Rethugs nowadays (in case you haven’t noticed). I was a lifetime Democrat, that is, until the last 7-8 years and witnessed the behavior of our so-called dem congress/senate. Dem behavior is despicable. Maintaining the right wing–neocon status quo – that’s all our dem reps have done in the past 7-8 years. Please don’t take refuge in making baseless - false accusations such as ‘you’re a right wing populist’, because nothing could be further from the truth. In fact, I am a liberal/progressive independent. I view dems-rethugs as opposite sides of the same coin. The dems are merely talking heads beholden to their corporate and neocon masters doing nothing for we the people, while simultaneously giving the illusion of a two party system.

As to the issue of the Federal Reserve….after tedious research and reading books that are delineated below, I have ascertained and otherwise extrapolated that it is illegal and must be abolished. Since it is privately owned by a group of private international/global bankers (it is not a federal agency nor is there a “reserve”), the Federal Reserve does not support the majority of the American people’s interests (masses/middle class/and lower classes). In fact, it does the quite the opposite. Federal Reserve is tantamount to a central bank and is beholden to the interests of the extremely wealthy (wealth consolidation).

Simply put: The Federal Reserve also creates economic cycles of boom and bust, thus enabling this group of private bankers to make enormous amounts money during these cycles (buy low – sell high). Our graduated income tax pays the exorbitant interest of Federal Reserve loans to banks here and abroad.

It is interesting to note that the Federal Reserve has never been audited, refuses to be audited, and furthermore has never paid any taxes (I guess just us little people/middle class actually are required to pay taxes).

Incidentally, a central bank and graduated income tax are two separate planks in the Communist Manifesto. (This is explained explicitly in the book references below). The Federal Reserve also encourages the following:

Fed encourages perpetual war(s)
Fed is a supreme instrument of totalitarianism in U.S. and globally
Fed promotes new world order/one world government (end of U.S. sovereignty)
Fed encourages a Plutocracy
Fed promotes communism and/or fascism

The Federal Reserve is in fact supported by mostly unthinking albeit well-intentioned American people who have not thoroughly researched the issue of the Federal Reserve and all it’s negative economic, political, and social ramifications.

p.s. If you respond to this post, please refrain from your usual name-calling and baseless accusations…..it is far easier to engage in personal attacks instead of addressing the content of what a person is saying.

Sources (Books):
The Creature From Jekyll Island
Case Against the Fed
None Dare Call It Conspiracy
Treason: The New World Order

Look around at what you are witnessing economically, socially and politically in this country…..it's all perpetuated by the Federal Reserve System.

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Misery is King..for The Bushes and Rockefeller..
Posted by: TJ-stars4peace on Jun 4, 2007 12:49 PM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
The overall plan is to lower the living standard of the Average American by one third or 33%..!

There is a disease many of the super rich like David Rockefeller and the Bush's have it's that no matter how much money they may have, more they can ever live to spend of even their grandchildren spend the thing is how much the poor and working class suffer..!

If the working class is not suffering sufficiently then the Bush's or Rockefeller may not be rich enough..!

How can the Bush's feel rich when all around them others are not suffering and living hand to mouth or just barely and at risk and fear of just having a roof over their heads..!

You see this is an old long term disease and it's gotten worse since the Reagan greed is good years..

As Don Rubin pointed out Middle Class earning and income are stagnant for the last 25 Years..!

The Bush's and Rockefeller et all yearn for those good old days of the 20's and even for the 30's..!

When misery was king and so where they..!

You see the truth is and I know having grown up around not just big money, but Old money as they say as these people look down even on those who have worked hard and made themselves a success as well that' new money neuvo riche..!

They these people like the Bushes and Rockefeller and such are miserable bastards themselves and so they cannot stnad that many others live lives or contentment with so much less than these other ghouls have like the Bush family and such people love their families and love life while these ghouls uber capitalists judge their lives and themselves by how many zeros they have in their bank accounts and such..!

So the best way to get even with miserable lying scum like the Bushes and that bastard David Rockefeller is be happy they hate your being happy, have fun and laugh in their faces and smile at their miserable wives who most of them have to take drugs and drink like sailors, just to live in the prison they made for themselves..!

Just remember it's David Rockefeller et al who are the poorest and most miserable among us their cup will never be filled, never it's God's way of balancing things out..!

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Workers earn less now than in the 70s
Posted by: athamandia on Jun 4, 2007 12:54 PM   
Current rating: 5    [1 = poor; 5 = excellent]
Yes it's true, in terms of wages adjusted for inflation. Yet, the stock market is UP, the so-called economy is UP, and "core" inflation is steady (of course it is -- after you take out all the things that people have to pay for that are going up, like energy, food and education). But just keep reading those Business page reports about how great the economy is.

The truth is that people are working harder for less money and less job security. So what's to be done? As Ghandi said "Be the Change."

Each and every one of us justifies our particular form of consumption of the global resources. Consumption that DRIVES the economy, don't forget. So here's a simply way to practice being the change. The next time you see a red light in front of you -- take your foot off the pedal and COAST to the light. Try coasting down the hills instead of hitting the accelerator. It's a way of practicing the fact the you (WE) are not entitled to have everything. It's a way of practicing letting go of your (OUR) sense of entitlement.

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"The spectacle of the sucker economy"
Posted by: thoughtcriminal on Jun 4, 2007 1:13 PM   
Current rating: 5    [1 = poor; 5 = excellent]
That's a phrase used by another Alternet commentator to describe this ridiculous situation. This excellent article should be required reading for every high school student in the UNited States.

The college loan scams are particularly nasty, and when you add that onto the increased corporatization of the universities and their abandonment of their teaching responsibilities, you have a real mess.

The problem with the universities is two-fold - first, there are the social conservatives like David Horowitz who believe that all social science should be abolished, or at least reduced to a Disneyland version of history that suits the interests of the billionaire class (read: the Chicago school of neoliberal economics and 'monetary policy'). We can call this the 'assault on the social sciences and history'.

The second problem is the takeover of the science departments by corporate interests - large corporations know that research and development is expensive, and so they want to turn it into an 'externality' - i.e. they want the public to pay for the research, while they get control of all the patents produced. This is what's happening to university research departments all across the country - out goes the free exchange of ideas and information, in comes the proprietary research and the non-disclosure agreements. (this is why studies on industrial pollution and pharmaceutical side-effects are actively discouraged by university administrators).

The solution? I don't know. What was the solution to the Hudson Bay Company and the British East India Company's monopoloistic control of the American colonies in the 1700's? The American Revolution was a war against the Crown Corporations that were exploiting the colonies... now the Crown Corporations have taken over the US government and are busy exploiting the American people, while squirreling the profits away in the Cayman Islands and in Swiss bank accounts.

The first step is simply not to play along. Don't get the credit cards, don't take out loans on property (if you are lucky enough to own any). Furthermore, copy this article and send it to every person you know - too many people are simply unaware of this (they don't discuss this on FOX, CNN, NPR, the NYT, WP, WSJ, etc.)

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We have the power to change this country but
Posted by: Krain61 on Jun 4, 2007 1:47 PM   
Current rating: 5    [1 = poor; 5 = excellent]
We have the power to change this country but we cannot get people to make a sacrifice. I drive truck and so do thousands of others and people drive everywhere.. We stop traffic in this country for just a few days we have there attention.
We demand not request our elected do there job or things will stay idle and not move. Nothing moves money is not being made. No money being made no bills being paid.. Other countries will loose there trust and stop sinking money in here which our puppets will see us finally pulling stings.. I thing at that point even our brothers and sisters amd daughters and sons in arms will finally stand where they belong..Beside us! If we don't stand up soon our window will close because look around at the way they brain wash our kids and law enforsement and the militarty.. We need for people to see where we were and where were going..
I don't thing our toilets can hold that much shit!

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the economy is growing, growing, growing.........
Posted by: eosrk on Jun 4, 2007 3:06 PM   
Current rating: 5    [1 = poor; 5 = excellent]
......right away from us into china, vietnam, malaysia, inonesia, phillipines, africa, nepal, pakistan.

They're right, the economy is growing.....just not in the United States. What is growing is the Bill Gates, Buffets, Jobs, and the rest of the rich and super-rich bank accounts! Me and your accounts are either flat or in the negative!

as one newscaster calls it; "the goldilocks economy". Diffference is Goldilocks is the Wolf!

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In America: What You Are Born Into Determines What you Get
Posted by: sofla100 on Jun 4, 2007 3:29 PM   
Current rating: 5    [1 = poor; 5 = excellent]
Look, it's a 90+% correlation in America based on what you are born into and what you get. This means that your being born into a rich family overwhelming increases the probability you will be rich as an adult and vice versa.

Therefore, why do you think Bush et al are so against estate taxes? Why do you think they are against federally subidized student loans for the poor? Why do you think they are against health care and a decent education for the poor? The current system they support is designed to maintain the status quo.

The biggest myth of America is the nonsensical Horatio Alger beliefs. That is you work hard, save, and act responsibly, you will get rich. It DOESN'T HAPPEN folks, the set-ups in the system are always against you if you are born poor.

If you are born poor, you will never receive a decent education. Your jobs will always be close to minimum wage. You will always pay the highest rates on credit cards if you ever receive any.

In Europe and the rest of the Industrialized World, at least a system exists to redistribute wealth somewhat to reduce this problem. Everyone receives health care and advanced education is often paid for by the state. America has no such system at all.

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» RE: Bull Crappolla Posted by: kbest
» I totally agree with you Posted by: ateo
» RE: I totally agree with you Posted by: aussidawg
Careful what you vote for
Posted by: Mamarianne on Jun 4, 2007 4:03 PM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
Voters lined up to vote against abortions and gays. Were either of these issues likely to directly impact their well-being? No! Recently, I listened to a conversation been a father and his son as they lamented the state of the economy. The father--once anti-choice and ambivalent about gays--has since educated himself to the issues, and he looked at larger issues and did not vote Republican. The son, however, simply did not vote, but many of his friends--with redneck, Biblebelt pride, voted against their best interests because of those two red-herring issues. Now, as well as in the past, it is the economy, stupid. Stupidly people voted for Reagan, stupidly they will vote their "values" and elect the crooked and corrupt who devalue them with every stroke of the legislative pen.

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Empirical evidence refutes this commentator's claims. (Note the cheap shot of bush giving a toast)
Posted by: Jak_dah_rippah on Jun 4, 2007 5:10 PM   
Current rating: 3    [1 = poor; 5 = excellent]
In fact, from 1979 to 2004, the percentage of households in the "middle class" category -- those with incomes of $30,000 to $90,000 -- fell to 39 from 47 percent. But it would be hard to describe that as bad news when the proportion of well-off households -- those with incomes of more than $90,000 -- rose by nearly nine percentage points. During the same time frame, the percentage of households that were poor or near-poor remained about the same.

More importantly, the progression within each income bracket is more telling than a snapshot of income distribution at any particular time in history. For example, an overwhelming majority of those in the lower income brackets in 1979 are now in the upper income brackets today!

Irrespective of the data, it is empirically, logically, and factually proven that leftist/socialist/marxist policies advocated by beinhart just dont work!!

To paraphrase Churchill, "capitalism is the worst form of wealth creation, except for all of the others"

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» Fake Statistics Posted by: sofla100
» RE: Fake Statistics Posted by: yellow
Get an Editor
Posted by: bigbad on Jun 4, 2007 5:40 PM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
Larry, although I agree with you and enjoyed the movie "Wag the Dog", I have to say this article makes you sound dumb. Not as dumb as Bush, of course, but still embarrassing.

Largesse means something different than what you intended.

Creditor means the opposite of what you meant (students would be debtors, and their lenders would be creditors).

Oh, and you used "effect" when you meant "affect" somewhere in there.

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As Rich/Poor Gap Widens, Social Mobility Stalls
Posted by: sofla100 on Jun 4, 2007 5:52 PM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
Social mobility has stalled in the USA:

http://www.post-gazette.com/pg/05133/504149.stm

It goes on and on. The conservatives will try to fight with numbers they concoct, but America remains a nation with vast disparities between rich/poor and the doors of oppotunity are closed to the poor and racial minorities.

I would also refer readers to the excellent NY Times series on class and lack of social mobility in America:

http://www.nytimes.com/pages/national/class/index.html

However, other developed countries, with adequate income-transfer programs, particularly in Europe, have overcome much of America's shame. Other rates, including number imprisoned, hunger rates, homelessness, etc., all can be used to buttress this argument.

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We need to understand that money is a public utility, not a commodity
Posted by: brodix on Jun 4, 2007 7:40 PM   
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In 1996, Bob Dole had a campaign slogan, "We want you to keep more of your money in your pocket." The first thought to cross my mind was, 'Thank God it's not my money, or it would be worthless.' The logic of this is that the actual currency doesn't belong to the holder, only its value. The monetary system is a function of government, which in a democracy is the people. Therefore money is actually a form of public commons, similar to a public road system. Instead of transportation, it's a system of economic exchange. While you are in total possession of the section of road you're driving on, its value is due to it being connected to those everyone else is on. So is the value of the money in your pocket due to its broad interchangeability. It is not an issue of socializing wealth, but of understanding what money is to begin with. Your home, business, car, etc. are private property, but the roads linking them are not. Money is more like the public road system, than private property. It provides a broad economic connectivity, without which the economy could not function.

Money has always been a form of public utility (Render unto Caesar...), but because it evolved out of barter and for much of history was minted out of precious metals to gave it inherent value, the issue of function has been confused with the issue of possession. Now all monetary value is a matter of public trust in government accountability and this is being abused to the breaking point. If we understand money as a public utility, then it flows from that that wealth is as much a responsibility to the entire wealth creation process as it is the right to direct that process. When it is just one more commodity to be traded, then there is little obligation beyond maximizing one's position.

The economy is an ecosystem and a functioning society is an organism. The neo-classical economists with monopoly over the field think that organisms simply exist within an ecosystem, so society is simply the predators and prey within the economy. The reality is much more complicated and ecosystems exist within organisms, such as the one in your stomach. The real relationship between a society and the economy reflects this. In a society mostly composed of predators and prey, such as exist in some parts of the world, there is very little working economy. It is only within a functioning and healthy society that the economy can become as prosperous and complex as what we have today. Understanding that money functions as a public utility, not as another commodity would clarify that relationship.

Also government borrowing is a large percentage of the investment pool and without this recycling of surplus wealth through the public sector and back into the economy, the potential to save would be seriously reduced, along with the size of the economy as a whole. The same is true for Social Security. There is simply no place to invest that much additional wealth in the private sector. Money is like electricity, in that it is difficult to really store more then very small amounts. It already is a public utility, we just need to begin understanding it as such.

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The top one percent increases relative wealth over 150 percent
Posted by: MountainMike on Jun 4, 2007 8:11 PM   
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Thank you Bush, you have been a good little cronie!!!

The bottom twenty percent of the permanent poor have increased only one percent while the middle class is treading faster on the squirrel exercycle just to stay even - but for the tax burden being shifted over to the middle class by the super rich - who have had tax breaks from their favorite prostitute.

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FBI reports robbery is up.
Posted by: DataDoc on Jun 4, 2007 9:38 PM   
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After crime fell for many years under Clinton, now crime is again on the rise - murders and robberies by the latest FBI report. If we can't give people meaningful jobs, then I guess we deserve what we get. The sad thing is this country was good at creating jobs, inventing new ideas, and changing the world. Now we are good at exporting jobs, clamping down on protest, and playing catch up to innovators in China. My small town has seen robberies increase and more violent crime in the last two years. Thanks George Bush!

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» not just a mere shrub Posted by: jingles
"Voodoo Economics" ???
Posted by: cranberry on Jun 5, 2007 6:51 AM   
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Using terms like "Voodoo Economics" (in your email subject heading--when the article title uses the word "Magic") is offensive to a legitimate religion practiced around the world. Would you say "Protestant Economics," "Christian Economics," or "Jewish Economics" to mean Bad Economics? ... This only reaffirms that racism, ethnocentrism, and xenophobia permeate the left as deeply as the right.

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HOW MANY DEMOCRATS HERE WOULD VOTE FOR RON PAUL?
Posted by: poppop_schell on Jun 5, 2007 1:35 PM   
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I am a Blue Dog Democrat who believes that Congressman Ron Paul is TRUE POPULIST/PROGRESSIVES best hope to have a country where Constitutional government reigns. Has anyone noticed that many progressives aRe beginning to get behind Ron Paul even though they disagree with him on some social issues? Why? go to ronpaul2008.com to find out.

Because he speaks the truth to our hearts. We populist/progressives greatly love this country and want to see it once more be a government of the people, rather than one of the corporate plutocracy.

So forget about Bush... he's history. HOW MANY HERE WILL WORK FOR AND VOTE FOR RON PAUL?

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making me dizzy
Posted by: ventana on Jun 5, 2007 5:19 PM   
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"But median income, the amount that people in the middle of the group earn, barely budges. So let's look at that figure. Median income is down. The average person makes less now than when Bush came into office.

Not only that, the downward pressure on wages is no longer just a blue-collar issue, it's moved up to white-collar workers, the educated classes, even doctors."

Why couldn't you just say that the major income gains were among the lowest quintile. In other words, the poorest have gotten the richest. Sure the median barely budges (it does go up, however, even after adjusting for inflation), but the rich(er), and the rich(est) increased by far less than did the poor(est), and the poor(er) also improved (again, after adjsting for inflation). How is this spin? Look up the difference between average and median. The simple fact that the richer among us have not made gains affects the average, but it does not mean they are hurting. While at the same time, most of those who were hurting most, have seen double digit improvements. [Google Congressional Budget Office 2007 quintile for validation]

On which planet is that a bad thing? Planet Moonbat?

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» You've got it all wrong. Posted by: yellow
artmart
Posted by: artmart on Jun 6, 2007 5:59 AM   
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Frightening thought. Satirist Mark Russel was a speaker/performer on the Regent Seven Seas Voyager a few weeks ago. During his second show he took a poll, the last question was "If it was possible to do it, how many here would vote George W Bush back into office. The majority of the audience exploded into applause, cheers, foot-stomping and the rafters shook. It was, for some, the scariest moment of the cruise.

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fractional reserve banking as economic parasitism
Posted by: vzn on Jun 7, 2007 10:22 PM   
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maybe the basic "operating system" of economics
is intentionally, fatally flawed. or maybe the
matrix is designed that way-- to maximize
inequality. "thats not a bug, its a feature".

consider a free electronic paper I wrote called
fractional reserve banking as economic parasitism

endorsed by two phd economists. printed in nexus
magazine, 60k world circulation. #1 top downloaded
economics paper. used by economics
teacher in australia as standard classroom material.

more info on request.


recent supporting material:

- confessions of an economic hit man by Perkins

- money as debt video by Grignon

- Congressman pres candidate Dennis Kucinich at last years 2005 Monetary Reform Conference

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The haves, havenots and the havealots.
Posted by: Landbaron on Jun 9, 2007 5:09 PM   
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It's a free country, you're free to work and acquire all the wealth you want! Supply and demand dictates what anything is worth. Quit playing the lotto and invest more wisely.

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Bush's favorite riddles
Posted by: Landbaron on Jun 11, 2007 12:08 AM   
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How's the war on poverty going? It's over, the poor lost....... What is the one thing the rich are willing to let the poor call theirs and keep.........Envelope please...........Their distance!!!!!

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