The American Economy is Not Coming Back

[Joanne98]

The Ugly Truth
By DAVE LINDORFF

President Barack Obama and his economic team are being careful to couch all their talk about economic stimulus programs and bank bailout programs in warnings that the economic downturn is serious and that it will take considerable time to bounce back.

I’m reminded of an experience I had with Chinese medicine when I was living in Shanghai back in 1992. I had come down with a nasty case of the flu while teaching journalism at Fudan University on a Fulbright Scholar program. A Chinese colleague suggested I go to the university clinic. When I told him there wasn’t much point since doctors couldn’t do much for the flu besides recommend fluids and bed rest, he said, “That’s Western doctors. You could go to the Chinese medicine doctors at the clinic. They can help you.” I figured, what the hell, and we went. The doctor inquired into the lurid details of my illness—how my bowel movements looked, the color of the mucus in my nose, etc. He didn’t really examine me physically. Then he prescribed an incredible number of pills and teas and sent me home with a huge bag of stuff, and instructions on the regimen for taking them through the course of each day. I followed the directions dutifully, and my colleague came by each day to check on my progress. By the fifth day, when I was still running a fever and feeling terrible, I told him I didn’t think the Chinese medicine was working. He replied confidently, “Chinese medicine takes a long time to work.”

I laughed at this. “Sure,” I said. “But the flu only lasts a week or so, and now, when I get better, you’ll say it was the Chinese medicine, right?”

He smiled and agreed. “Yes. You are right.”

Obviously the Obama administration recognizes that it needs to keep the finger of blame for the current economic collapse squarely pointed at the Bush administration, which is certainly fair in large part (though the Clinton deregulation of the banking industry played a major part in the financial crisis and its enthusiastic promotion of globalization began the massive shift of jobs overseas that has left the nation’s productive capacity hollowed out). But it also seems to recognize that it cannot tell the bitter truth, which is that our national economy will never “bounce back” to where it was in 2007.

America, and individual Americans, have been living profligately for years in an unreal economy, propped up by easy credit which inflated the value of real estate to incredible levels, and which led people to spend way beyond their means. Ordinary middle-class working people have been encouraged to buy obscenely oversized homes at 5% down, or even no down payment. They have been lured into buying cars the size of trucks, one for each driving-aged member of the family (in our town, so many high school kids drive to school that the school ran out of parking spaces and the yellow school buses, largely empty on their runs, are referred to by the students as the “shame train,” an embarrassment to be seen riding). They’ve installed individual back-yard swimming pools, unwilling to share the water with their neighbors in community pools. Boring faux ethnic restaurant franchises of all kinds have befouled the landscape, filling up with families too stressed out to cook, and willing to endure over-salted, over-priced and tasteless cuisine and tacky plastic décor night after night.

http://www.counterpunch.org/lindorff01302009.html

[Auggie]

1. Is globalization lowering our standard of living?

This is something was pondering just the other day. The article touches upon it here:

"What we are now seeing is the beginning of an inevitable downward adjustment in American living standards to conform with our actual place in the world. As a nation of consumers, and not producers, with little to offer to the rest of the world except raw materials, food crops, military hardware and bad films (none of which industries employ many people), we are headed to a recovery that will not feel like a recovery at all. Eventually, productive capacity will be restored, as lowered US wages make it again profitable for some things to be made here at home again, but like people in the 1930s looking back at the Roaring 20s of yore, we are going to look back at the last two decades as some kind of dream."

[Veritas_et_Aequitas]

3. Eh. I think it's more unadulterated greed that's lowering our standard of living.

We tend to do better when we do act cooperatively and help one another out. But when everyone's in it for him or herself, everyone tends to suffer on way or another (except for those at the very top of the system, perhaps). Globalization isn't really helping the matter, though.

[Auggie]

6. If there are a finite number of good paying jobs, and many get shipped

overseas, doesn't that raise the S.O.L. in other countries while bringing ours down? Particularly when those jobs are replaced with smaller, lower-paying jobs here?

[Veritas_et_Aequitas]

11. Fair enough.

Of course, the stats will never admit to that because our per capita income has been rising/holding steady for a while now. Silly statistic.

[Tansy_Gold]

19. Not necessarily

The process of "shipping" the jobs overseas allows the corporations -- specifically their upper management, boards of directors, and stockholders, since corporations aren't (legalities notwithstanding) really people -- to pocket more of the profit.

If a job paying $20/hour in the U.S. goes to Chinese worker making $1/hour, where do you think the other $19/hour went? Not into the Chinese economy; it went into the pockets of the managers, executives, stockholders, etc.

In some cases, the "foreign" worker may earn, say for the purpose of discussion, $5/hour and that would be 10 times what she/he is accustomed to make, and that may stimulate a consumer economy in that nation. But that still leaves $15/hour in profit.

And yes, I'm ignoring for the moment the increased costs of transport, etc. The point is, shipping the jobs overseas does NOT raise the standard of living there to anything even remotely comparable to the U.S. level. The purpose is not to benefit the workers of the low-wage countries; the purpose is to generate additional profits for the stockholders.


Tansy Gold

[Auggie]

22. True. And that's a major, major problem in the equation.

Though that Chinese worker is getting $1.00 he/she may not have gotten otherwise.

[Tansy_Gold]

30. One of the problems with "globalization" is that it has suckered

in "workers" who may not have needed the "work."

Wage-slavery often forcibly removes people from land where they were moderately or even meagerly self-sufficient and puts them into low-paying manufacturing jobs which do not pay sufficient wages to provide them and their families with anything approaching a "decent" standard of living. So you have 12-year-old girls working seven 18-hour days a week to make name-brand shoes that sell for $100/pair in Chicago or Seattle. These 12-year-olds are not going to school, they are living in "dormitories" and are fed subsistence meals so they can get up and go to work again the next day.

In some cases, yes, there is exaggeration. In some cases, yes, the money gets sent home so the aged grandparents can get medical care. But OVERALL, the system benefits ONLY the corporations, ONLY the already wealthy stockholders.

Do you really think these global manufacturing corporations are going into Bangladesh and Honduras and Uzbekistan to make the lives of the people better? THEY AREN'T. They are going into these countries to make as much money for their stockholders as they can. They don't give a shit about the people. They don't give a shit about us.

The sooner you realize that, the better off you'll be.

The irony is that the right wing has been terrified of "one world government" and yet they've been the ones who have facilitated it: but it's government by the corporations, and they've screwed us all.


Tansy Gold

[onethatcares]

36. word. you have it nailed

Peace

[Auggie]

42. The point is that there is a great deal of wealth redistribution happening.

That which belonged to the American middle class in the form of good-paying jobs is ending up in the hands of a few mega-corporations, while some money trickles down to workers in other countries.

[jwirr]

70. So the slave laborers do not make a good living and we the workers

of America are not given any price break for the goods they produce cheaper and the only people to profit are the stock holders. What are we going to do about it? I for one am going to buy only as much as I absolutely need and try to make it buy America. I know that does not help President Obama fix the economy but as the OP said this economy may never respond to the old ways of life we were used to.

[Left Coast2020]

75. If you ever have a chance to see slave labor, go to

Saipan. Its in the Marianna's Islands--just east of the Philippines. Beautiful place for a get-a-way--very tropical and hot, but the Gap, and Tommy Hilfiingr sweatshops are there. My hotel was located just across the street from this monstrous looking facility. Only thing is it resembles a WWII prison camp with (I'm not kidding here people) barbed-wire fence, and rippled sheet metal around perimeter of fence. The young girls who are bussed in-out every few minutes look like they are no older than 15-16. And since it is an American "territory", the label of clothes made can say, "Made in USA". But wages are not managed like they are here. No workers rights, no fair wage law, and by no means, no union representation. Yes, this is the same Saipan where Delay went to deal with island representatives to get contributions for his PAC. I have been there twice because thats where I got married in 2001. It also has a lot of
WWII history too. But to see these girls going in and out of this facility is saddening.

[rucognizant]

90. No wonder.......

shoes made in china fit so poorly, thy're made by 12 year olds?
Maine made shoes were excellent! Made by ADULTS who took pride in their product.
I used to wear $5.00 sneakers made in USA from the Acme MArket od r Woolworth's. ( a mural painter; when they were paint covered I disgarded them and bought a new pair at no jeopardy to the budget.) $5.00 sneakers from Walmart are real killers.......slippery soles, not good for climbing ladders or walking around my hilly garden. I have started to slide right to the bottom wearing them!
Ergonomic sneakers all have those outriger soles that don't fit into the ladder steps, so I buy $50.00 keds, the only shoe that works for me,( made off shore but NOT china) and work not to spill paint on them!
The other thing I've noticed about china made shoes; they never fit tight around the ankle there is always a gap. Hard to walk in impossible to garden on a slope in!
Sure does slow down the American Prolatariat to have shoes you can't run in!

[NorCalDem]

32. Truth. n/t

[Moostache]

96. Not the way it was done...

The jobs left, but the PAY did not accompany them. When a manufacturing job left America, it was not sent overseas to another country along with all the perks and benefits and pay levels. It was strip-mined to the lowest common-denominator and sent to whatever country would accept the lowest possible wage (and when THAT became a drag on profit stealing, it was moved AGAIN - think about the furniture manufaturing industry from North Carolina and the south to Mexico to China to Vietnam to Thailand...)

The difference in costs of production were NEVER passed on to the customers, they were pocketed by the owners as "increased profitability"...and then instead of actually paying a fair share of taxes on that form of income, the greedy cock-sucking bastards took it as capital gains, paid for the politicians who gutted the tax code and then ended up paying a LOWER effective tax rate than the people who originally amde the goods that put them in position to steal such large sums in the first place!

When society breaks down, there are going to be some ugly, ugly stories of retribution. I will try very hard to not smile my ever-loving ass off when I hear of them....

[unblock]

20. globalization, at least the way it's been done, is part of the unadulterated greed

globalization has been done in a way that guts america's producing potential (which affects all of us) but creates huge profits for corporations in a position to import massively (which affects far fewer of us).


had globalization been done in a very two-way-street manner, we would have an economy that provided massive EXPORTS as well, and there would be jobs aplenty and the economy would be humming.

[bvar22]

27. "Globalization" is not the problem.

The problem is the removal of all regulation, oversight, transparency, and accountability from the Large Corporations and Financiers. It was mass marketed to a gullible public in the 80s as "Free Trade" which was the result of this "new" thing called "Globalization".
It was ALL bullshit, of course.

Globalization began before History when the first cave man hiked over to the next cave and traded some meat for a stone knife.

A well marketed and well financed mass media campaign to remove all regulation from Corporations WAS a NEW thing (in the 80s)....and it was an incredibly effective.

[arikara]

43. Globalism is just the current word for

unbridled capitalistic corporate greed. History will show capitalism as another failed "ism", and globalisman offshoot of it. This collapse has to happen before we can make things right for people and for Earth. We'll have to come up with a new system of government. "Democracy" as it is today is another failed ideology painfully gasping its last.

[MindMatter]

74. Right on the money. Globalization is a way of putting a guilt trip on the American workers

It is a way of the aristocrats to say "it is your fault. You just aren't good enough to compete." But instead the real game is the moneyed elite systematically sucking the resources out of our country by raiding the treasury. Turn the country back over to the American workers and we'll compete just fine.

[Igel]

80. The area I grew up in disintegrated when the

steel mill went under.

It went under for two main reasons: It hadn't kept up with the technology needed to produce the steel that American manufacturers wanted; steel mills in other countries did, and produced it for less than it cost in the US. 38k jobs down to 600 over just a bit more than 15 years, as the company tried to increase productivity then laid everybody off but the security guards.

The reduction in the workforce happened gradually for the first 10 years of the process, then it hit a crisis with massive intermittent layoffs combined with some permanent reductions in force. At that time "de-industrialization" was the operative catch phrase, with the US president jawboning long and hard about how wonderful de-industrialization would be. It would reduce pollution, it would increase efficiency, it would let us focus on what we were good at. De-industrialization was what that president strove for. In my little town de-industrialization disposed of more than 20k jobs in a year, even as the steel mill put up a single, massive blast furnace ... all their eggs in one basket. Property values dropped like a stone until it became a nice middle-class bedroom community.

I really hated it when Carter talked about "de-industrialization" because while I was just finishing high school I nonetheless knew at once how horrible it would be for the people where I lived. It preceded talk of free trade; it preceded the marketing of globalization.

[Enthusiast]

83. Unfortunately his is an accurate

assessment of our predicament. We are fucked.

[4_TN_TITANS]

86. Absolutely...

The dirty secret of globalization is that, in order to find a job, Americans more and more have to lower their standards to what people in other countries are willing to carry. Companies found a way around unions and employee expectations by simple job competition with third world contries. Americans unwittingly fueled the race to the bottom by consuming cheap made foreign goods, that increased demand for more of the same.

[pokercat999]

87. More wrongheadedness, "productive capacity will be restored

as lowered US wages make it profitable again for some things to be made here". Why should we lower our standards when we could force the world to rise to ours? What the US Government should do is prohibit imports from countries that do not share and strictly enforce our wages and hour laws, OSHA regulations and EPA regulations, period and immediately. Set a maximum wage pegged from the minimum wage for any corporation or LLC of any size or any private employer with more than 50 employees. Free medical care and pre-school through 16 education. State supported car insurance to complete directly with the private insurance companies as it is a state mandate that every driver be insured.

These are some of the things that will restore our economy and eventually we could return to the times when one income supported a family.

I do agree with the writers assessment of the "pizza every-night lifestyle" of our families, but with everyone working 50 or 60 hours a week who exactly is going to cook those sit-down dinners?

[Enthusiast]

88. Thank you, pokercat999.

I like your thinking. It would be at least a partial solution.

Why should we lower our worker health and safety standards to compete with third world workers? Manufacturers should have to elevate working conditions and environmental standards or face tariffs to offset this unfairness.

[Auggie]

95. Wishful thinking trying to get 3 billion people to raise to our standards

[Enthusiast]

97. Well then tariffs should be enacted.

Fair trade, get it? They should have no advantage because they treat workers less humanely.

[rucognizant]

91. This works for Germany!

Why should we lower our standards when we could force the world to rise to ours?

[Veritas_et_Aequitas]

2. Not a bad article. nt

[HereSince1628]

12. It would have been better without the anti-materialistic rant.

I don't think personal swimming pools, no matter how decadent, and boring ethnic restaurants really were/are the problem.

Take them away and we still don't have an international balance of trade.

[lostnotforgotten]

39. He Who Owns Little Is Little Owned - Old Yankee Expression

eom

[bvar22]

44. Or.....

When you got nothing, you got nothing to lose.

OR

Your freedom is inversely proportional to the number of keys in your pocket.

[HereSince1628]

56. The nation doesn't need months/years late survival tips

All the folksy crap that can be dragged out about how we GOT HERE is very quaint and I'm sure has schaudenfreudist support. But it isn't helpful in deciding how to GET OUT OF HERE.

In the midst of the pro-socialist anti-materialism there really were a few things worth considering in the OP.


Personally I think the introduction of ideological rants that are toll-payments to the muse of Socialism undermine public support for some important ideas.

Saying that I 100% realize the editors of Counter-Punch don't give a fart let alone a good turd about what I think.

[lostnotforgotten]

62. Well - You Have Very Quaint Ideas - Get Ready For Depression Version II

eom

[Lorien]

64. As true now as when it was first written

My mother is really into the whole voluntary simplicity lifestyle. Everything is paid off and she lives comfortably on about $350 a month. I'm not terribly worried about her-she'll weather the coming depression better than 99% of Americans.

[Left Coast2020]

73. HERE'S ANOTHER ARTICLE. THIS WILL PISS YOU OFF.

These corporate CEO bastards just don't give a damn. Here is another CEO banker who got caught taking trips with his family (pictures provided) to Mexico on a corporate jet--after we the taxpayer bail his ass out. If this new A.G. is worth his weight, he would toss these scumbags in jail..no questions asked.

http://www.nypost.com/seven/02012009/news/worldnews/citis_sky_high_arrogance_152995.htm:mad: :mad: :mad:

[eilen]

4. Truth

Our society is going to have to transform. It will not come back. We are experiencing a contraction. All those Starbucks jobs are gone, not really needed to begin with. How did we ever need a Starbucks on every corner--$5 a cup? I hope to see the small diners come back, a decent place you can get breakfast and a cup of coffee owned and operated by a local family.

The new focus will be on local, sustainable methods. High school girls carrying $300 (and up) hand bags-- that is so 2006.

I overheard a lady who seemed to be retirement age in a local cafe talking to the owner of the shop saying something like "the only options for our kids seem to be to either work as servants or mercenaries."

[chill_wind]

14. Truth-- and some parts of it I don't find to be all that bad:

We can live with less. More and more of America already does, much of it already has, for a long time.

Eventually, the economic slide will hit bottom and begin its slow climb back, as all recessions do, but there will be no return to the days of $500,000 McMansion developments, three-car garages and a new car every two or three years for both parents plus a car for each highschooler. Not only will banks no longer be able to offer such credit to clients. People, having been burned, will not be willing to borrow so much.

This we have to worry about and concentrate on for new solutions:

Company health care benefits, pension programs or 401(k) matching programs that were slashed during this downturn will not be restored when the economy picks up again.

"Eventually, productive capacity will be restored, as lowered US wages make it again profitable for some things to be made here at home again, but like people in the 1930s looking back at the Roaring 20s of yore, we are going to look back at the last two decades as some kind of dream."


If the price of letting go of those "dreamy" years is a death to the militaristic state, the obscene cost and spending on it that makes it our number one economy- if it means a return to the manufacturing of goods we need, something besides the vast profits to the few in the great death machinery industry, if we can become a little saner and a little more moral as a country once again, so be it. I welcome it.

The Cost Of War

http://www.nationalpriorities.org/costofwar_home

[juno jones]

15. "the only options for our kids seem to be to either work as servants or mercenaries."

It's been that way in some parts of the country for years. There has been a major 'brain drain' from the heartland, plains and south because of this very problem. Its probably why those who are left to vote are *ahem* dumb enough to consistently vote against their best interest. (No offense to those DU'ers who struggle to stay, my hat is off, but damn, I couldn't do it...)

My home town, once a thriving, fairly liberal place is now a virtual ghosttown centered upon a wal-mart.

[Vinnie From Indy]

5. While over consumption is certainly a part of our problems,

the real issue is that Americans will probably never see manufacturing jobs come back until we are willing to compete with the slave wages of other countries. The one thing that never seems to be discussed much is that it appears that America's fight against totalitarianism and for Democracy has been lost. Our own corporations have seen to that by shipping our jobs overseas by the millions to places like China and other countries where corruption is the rule and the rule of law is non-existent.

[Auggie]

9. Add to that the corporate takeover of Congress

and ensuing lack of government oversight and protectionism. I think were seeing change along the scale of the Industrial Revolution. What that leads to I'm not sure...

[Grinchie]

51. They not only shipped the Jobs overseas, but the machinery as well

It is truly amazing how they managed to destroy the industrial base by creating a service economy fully supported by imports by suckering in developing nations into the family of Capitalism.

When people say that we lack the education to be skilled craftsmen, people always scream in indignation and point out the few trades that actually produce something for the benefit of society. They are only partially right, because that ever shrinking segment supports a huge industry of "Make Work" jobs that really do nothing to further the quality of life for anyone. The "Phony" jobs merely serve as a means of distributing wealth to the merchants, banks, insurance and government through taxes.

I believe that people have been led to believe that an actual skill like being and Electrician or woodwoorker has been denigrated to such a point, or made so complex, that the average American Sheep thinks pouring a cup of coffee at Starbucks is a much better job, even though it does nothing for society, other than training them to be a servant to someone else by making their coffee and pouring it for them. They also get to sweep up for them and take care of the machinery that someone else owns.

Most people are too stupid to realize that everyone is capable of amazing things when given the time to pursue their dreams. Unfortunately, the leaders need to keep free time away from the masses in order to continue to money making scheme they have developed.

I challenge everyone to focus deep thought on what you do for a living. Examine if it really produces anything other than more complexity or cost. If you produce a physical entity, such as transport or production of foods, energy or raw material, you are generally a producer.

If you're a bean counter at a health insurance company, or a clerk at Starbucks, you are living in a made up job that's riding on the shoulders of somebody elses labor.

[snappyturtle]

67. I understand what you're saying but we don't have to compete with

other countries in terms of wages. We will come, I hope.. to recognize the value of American made, probably locally made, products. If we adjust to that we should be better off. Of course, the free traders won't like it but I'd rather have quality over quantity any day especially if products are backed with service IN THIS COUNTRY. I am tired of talking with India about my laptop.

As far as the rule of law as non-existent in other countries, what about China? I have read of harsh treatment for individuals who have screwed up.

[Joe Steel]

7. Do you agree?

Do you agree with Lindorff's observations?

Over the last 20 years, America has degenerated into a nation of consumers, with 72 percent of Gross Domestic Product (sic) now being accounted for by consumer spending--most of it going for things that are produced overseas and shipped here.

America always have been nation of consumers. Consumption is the point of any economy.

What's his point?

[many a good man]

10. relative to production

Consumer spending amounts to a MUCH higher pctg of GDP here than in any other country. It is much higher now than in decades past. I assume that production-related activities comprise a higher pctg of GDP in countries that still produce things. We also have a terribly low savings rate compared to our past and to other countries.

Having such a high pctg of GDP tied to consumer spending makes us much more vulnerable in downturns where job losses are high and wages stagnate.

[bbgrunt]

24. yes, that stat is meaningless. Consumption always has been

in that range, relative to the other basic components of GDP: Investment and Government spending and net exports. Basically, all these components represent spending by someone.

[Joe Steel]

26. Yes. That's the way I recall it.

yes, that stat is meaningless. Consumption always has been in that range, relative to the other basic components of GDP: Investment and Government spending and net exports. Basically, all these components represent spending by someone.

Yes. That's the way I recall it. Consumption isn't the problem. Our problem is a lack of consumption and that's caused by a lack of disposable income. Blame that on conservative-dominated economic policy.

[NorCalDem]

33. Consumption is hardly the point of an economy....

and is completely unsustainable. PRODUCTION is sustainable because if you MAKE things, you can barter and trade them for things to consume.

[dmallind]

8. If Clinton shipped all those jobs overseas

Where did the 23,000,000 new ones in his tenure come from - far more than the previous or following eight years so not just normal growth?

[many a good man]

16. winners and losers

Much was written in the days and months prior to the US entering GATT and NAFTA. It was expected that many jobs would be lost and many new jobs would be created. It was hoped that the new jobs would "better" jobs and would result in a big net gain for workers and business.

We have seen the results and all the gains have gone to capital and all the losses have gone to workers. This imbalance over many years is not sustainable and has contributed mightily to the we mess we currently find ourselves in.

[Auggie]

23. Ross Perot predicted a "Giant Sucking Sound"

And that's exactly what happened

[Baby Snooks]

48. Yes he did...

Awful, isn't it, to find out all these years later he was right!

[Joe Chi Minh]

41. Were they full-time or part-time? A living wage or a mini-wage - an insult forcing

people to do one, two or three jobs, consecutively, in the course of 24 hours?

[dmallind]

79. Well median income went up and poverty went down so guess. NT

;j;ljk

[Joe Chi Minh]

92. Poverty went down? Well, now, that's funny. Jobs were lost by outsourcing,

many jobs became part-time, and couples were having to work two or three jobs to get by!

Incidentally, median income is relatively pretty high, compared to most people's. Not that you would consider it high, I expect.

What's more, the method for compiling related statistics has been changed to massively minimise the damage done to working people's pay-packets and and working conditions, under Republican governments, and Bill Clinton's - notably by the passing of NAFTA.

Do you have any conception how the pay-packet of the average, American worker has shrunk since the early post-war years? Don't guess and don't read the crystal ball, read the articles posted by DUers from many respected sources.

Still no word from you about the inclusion of poorly-paid, part-time jobs in those figures. Just a half-witted throw-away line.

[creeksneakers2]

47. The 3rd quarter of 2008 had the second highest manufacturing

profits since back as far as at least 1996. Manufacturing has grown. It hasn't all gone away.

http://www.census.gov/csd/qfr/view/qfr_mg.pdf

See US manufacturing corporations seasonally adjusted after tax profits bar graph

& table 2.

[D-Lee]

58. Manufacturing has NOT grown -- some informative links

Adding fast-food to manufacturing categories for the Bureau of Labor Statistics was done some time after 2004 -- see this NY Times link criticizing the Bush White House trial balloon on this possible change:
http://query.nytimes.com/gst/fullpage.html?res=9D02EFDC113DF933A15751C0A9629C8B63

I can't find the date of the change, but fast-food now is classified as "manufacturing" by the BLS. This link gives the currently included job classifications in that manufacturing group: http://www.bls.gov/oco/cg/cg1002.htm

And the foreign worker visas and outsources have definitely impaired job availability in America. Here is a GREAT analysis showing the drying up of entry level jobs over recent years, the spots from which employees used to "grow" upward: http://www.counterpunch.org/roberts03062006.html
Please read the article, it is really informative and shows that what the US has been left with is lower level jobs which do not need a college education.

The US was eaten away from the inside. Don't think any cost savings went to the shareholders. It probably went to executive bonuses, as a reward for illusory economic benefits to the executives' employers.

Hey, it is not as if people weren't asking if there were going to be any US consumers left when this process unwound ...

But, with enough work and time, I do believe the US can return to economic health, at least if Democrats are in charge. Tax deductions for the rich, proposed by Republicans, will not accomplish this goal as we know from past experience.

We really do need entirely new US jobs, located here and in a new economic activity area. That is why the "Green Jobs" initiative makes such sense. But let's put our own innovators to work and NOT have foreign worker visas in this area. We've already lost too many skilled jobs for our own citizens.

[dmallind]

78. ....and the point about jobs is what? NT

[Grinchie]

54. They were phony jobs that disappeared when the Dot.Con bust arrived

I can ussure your that hundreds of man years of labor were destroyed when the Dot Com bubble burst. Most the work done in those prior years was discarded and the cream of the software crop was stolen for pennies on the dollar.

We have been living in an Enron economy since the end of the 80's.

[dmallind]

77. BS. The entire IT industry never employed more than 10% of that number. NT

l;jklkj

[4dsc]

13. Tell me something I don't know

I've been asking for the past 6 months "where" in this economy will the recovery come from and so far, no one has been able to answer that question.. Why, because there isn't a sector that will lead us.. They have all been devastated and lay in ruins..

Depression is just a long recession and I don't this recession ending time soon..

[Why Syzygy]

17. kr and Digg nt

[olegramps]

18. Clinton deregulation of banking

It has been stated over and over that the banking crisis was a result of the deregulation that took place during Clinton's administration. What they always leave out is that it was firmly opposed in the Senate, only on Democrat voted for it on the first go around. The Repeal of several provisions of the Glass-Steagall act was solely lead by the Republicans at the urging of their banking friends. It was written by Senator Phil Gramm (R-Texas) and Representative Jim Leach (R-Iowa) and Thomas Bliley (R-Virgina). When it came up for vote in the Senate it was passed on vote of 54 to 44. 53 Republicans and only 1 Democrat vote in favor while 44 Democrats voted against it. The House version was opposed by Democrats and passed on a voice vote.

When no compromise could be achieved the House voted on the demands by the Democrats to instruct the negotiators to include provisions for medical and financial privacy and most importantly for stricter enforcement of non-discriminatory access to financial services provided in the Community Reinvestment Act. The vote in the House was 241 for to 132 against. 58 Republicans voted in favor with 131 voting against the provisions. The majority of Republicans even opposed these measure which were opposed by the insurance lobbyists. 182 Democrats voted in favor of the provisions with only 1 Democrat voting against. The final vote was 90 to 8 in the Senate and 362 to 53 in the House for passage. With these compromises the bill was sent to Clinton for signature. At that point it was virtually veto proof.

The Republicans are quick to point out that it was passed during the Clinton administration and when that tactic fails scrutiny they claim that the Community Reinvestment Act forced bankers to make bad loans to Black and Hispanic low wage earners and that is the cause of the collapse. Both of these arguments are unsupportable. The collapse is solely attributable to the greedy bankers and their henchmen on Wall Street. The regulators just simply failed to do their job in protecting the depositors from bankers making loans that were not viable and then bundling them as securities that are known as derivatives.

It was just a big Ponzi scheme that can be laid directly on the Republicans' doorstep.

[Olney Blue]

21. Thank you for that historical data- we need more posts like this in DU.

[bbgrunt]

25. I agree that Clinton was basically forced into

signing this but I believe that Rubin was also pushing for this deregulation.

I also remember well that Clinton spared no effort in getting NAFTA passed without any enforceable standards regarding environmental or labor laws. I had expected better from him.

[notesdev]

31. And Rubin

next went to CitiGroup where he orchestrated an immense pump-and-dump scheme and pocketed $150 million for his trouble.

[Grinchie]

55. Clinton is a Corporatist, another signpost of Corporate control of American Government

In other words, he is the Illusory "Democrat" in an illusory "Two Party" system.

I used to like Clinton, until I did the research on what his policies did, the people he installed in the USDA, FDA, and EPA. NAFTA, and his continuation of the so called drug war which financed Monsanto for another 8 years. Through his giveaways we now eat pesticide laden GMO foods, pay much higher costs for medical care, and got a chance to see what a full exploitation of his policies in the white house can do, such as the DOJ Scandal and political meddling in the Justice system.

Clintons chinese connection is just a little too creepy and close to think that the rise of Chinese imports is just the result of some free market philosophy.

[bvar22]

28. Clinton was not "forced" into signing this.

He SHOULD have vetoed it, and FORCED the Republican Congress to pass it.
Then the Republicans would have OWNED it.

As it stands, "Glass-Steagall" is a bi-partisan bill signed by a Democratic President.
NO amount of spinning and rationalization can change that FACT.

Clinton's legacy would have fared much better had he scrounged up the courage to STAND against this bill.
At that point, he really had nothing to lose.

[bbgrunt]

29. well, I agree with you that he should have vetoed it

and let them own it.

[nikkos_71]

34. But at least

with the information regarding the provisions and the many
steps it took to get to his desk, the fact that it would of
passed anyway is something to take into consideration.  When
the Republicans state it was under Clinton's administration,
they imply that Clinton gleefully signed our death
certificate.  Of course he could of forced the hand but only
in hindsight would that be an important detail.  

[bvar22]

46. Not so.

There were plenty of Liberal voices who spoke out passionately AGAINST this legislation.
They predicted the results we are seeing today.
It is not a "matter of hindsight", but a matter of Capitulation and Betrayal.

Marcy. Kaptur, Ohio

This bill is pro megabank and it is against consumers. And I would say to the people listening tonight, Are you tired of calling banks and getting lost in the automated phone system, never locating a breathing human being? This bill will make it worse.

Are you fed up with rising ATM fees and service fees that now average over $200 a year per account holder? This bill will make it worse.

Are you skeptical about banks that used to be dedicated to safety and soundness and savings but are now switching to pushing stocks and insurance and debt? This bill will make it worse.

Are you tired of the megafinancial conglomerates and mergers that have made your community a branch economy of financial centers located far away, whose officers you never know, who never come to your community? This bill will make it worse.

-------

Maxine Waters, California

Madam Speaker, I have spent hours on this bill. I served on the conference committee. I am the ranking member of the Subcommittee on Domestic and International Monetary Policy of the Committee on Banking and Financial Services. I have spent hours on this bill, and I am absolutely surprised that the Members of this House can support a bill that would do what this bill is about to do to working people and poor people.

This is a one-man vendetta that took place on the conference committee. We should never have negotiated with them, but the negotiations took place in the back room, not in public.


-------

The final vote was 339 for, 79 against, and 20 not voting. The "nays" include names well-known today: Dennis Kucinich, John Dingell, Nancy Pelosi, and John Lewis. Kucinich spoke only briefly to enter an article against the bill into the record. Dingell, Pelosi and Lewis did not speak.



http://www.progressivehistorians.com/2008/05/bill-clinton-glass-steagall-and-current_30.html

This bill should have NEVER been signed by a Democratic President.


Interesting Note:
Howcum the wing of the Democratic Party that showed good judgment, concern for Working Americans and the Poor, and were RIGHT about almost everything have been marginalized by the Democratic Party Power establishment who are currently REWARDING those who have been WRONG?

[Ikonoklast]

66. Add Sherrod Brown to that list.

FACT: Sherrod Brown Consistently Opposed Trade Agreements That Cost Ohio Jobs.

Sherrod Brown Opposed NAFTA, CAFTA, and PNTR with China. Sherrod Brown has consistently opposed bad trade deals like NAFTA, CAFTA, and PNTR with China. China that hurt Ohio, even breaking with his own party to do so. He led the bipartisan opposition to CAFTA, working with conservative Republicans like Walter Jones (R-NC) and Virgil Goode (R-VA).

---

Brown: Our Workers Can Compete with Anyone. Sherrod Brown believes that "there is no doubt that American workers can compete with anyone in the world on a level playing field" and he supports measures to guarantee that level field."

http://www.sherrodbrown.com/press/releases/870/


No one listened, but some of us knew then that Brown was spot-on.

[olegramps]

89. You have to be kidding about not signing it.

The Democrats insisted on changes in an agreement for their suport. If Clinton did veto it, then it would have been over ridden. The Democrats should have never agreed to the compromise in the first place. Who in the hell wrote the bill and who in the hell controlled congress. It sure wasn't Clinton.

[bvar22]

93. Fine. Let "them" over ride it.

Then "they" would own this piece of shit.
Bill Clinton's name is on the bottom line.
It would have cost him nothing to VETO this bill.

[NorCalDem]

35. This...

People forget Republicans controlled the house and senate from '94 to '06, so just about everything that they blame on Clinton also falls on them. They had control of the house and senate, they could have stopped Clinton if they wanted to. The truth is that Clinton wasn't strong enough to stop them, not the other way around...

[Baby Snooks]

50. But he signed it....

"With these compromises the bill was sent to Clinton for signature. At that point it was virtually veto proof."

He didn't have to sign it. No president has to sign something he doesn't believe in. He can veto it and can let Congress hold the bag if it chooses to override his veto. Clinton is holding this bag along with the Republicans. It's called principle. Something that quite frankly Bill Clinton never had and never will have. A sense of principle.

[AwakeAtLast]

60. Can you make this it's own thread?

Many, many people need to see this.

[JTFrog]

84. self-delete. wrong place.

[MannyGoldstein]

71. And Clinton Handed The Signing Pen To The CEO Of CitiGroup

Great way to use his bully pulpit!

Clinton/Rubin were strongly in favor of deregulation. Functionally, Clinton was a classical Republican.

[Baby Snooks]

85. Classical Republicrat...

He was our second Republicrat president. George HW Bush was the first. The problem was the number of Republicans who didn't know their party had become the Republicrat Party. Which is the problem now. The Democrats don't realize their party has become the Republicrat Party as well.

[Still Sensible]

37. Incredibly biased Lindorff reaches wrong conclusion

The new economy, which may take 5-10 years to fully recover from this debacle, will most likely feature some serious differences, particularly in the area of credit as it should be. But we were a growing, robust economy with a high standard of living before this mess and I believe we will be again.

Lindorff makes some quite valid points, but he betrays his incredible bias when, in the last paragraph of his rant, says "It also explains why we’re about to blow another trillion or so dollars on propping up failing banks, funding pointless highway and bridge construction..." That is just about the stupidest thing I have heard said about the Recovery Act. "Pointless" highway and bridge construction... that's crazy. That construction is not only necessary, but way long overdue, and it will create an incredible number of jobs, which is exactly what needs to happen now.

[drexel dave]

52. They will seem pointless

if the peak oil scientists are correct in any fashion.

Americans think their happy-go-lucky lifestyle of constantly burning oil will never end.

Think again.

[Tansy_Gold]

57. It depends.

"New" construction, or repair of the existing infrastructure?

We don't need, as one NPR commentator said this morning, any more bridges or roads to nowhere. We need to fix what we've got before we start building new.

We also have to make sure that this whole thing doesn't become a temporary band-aid. Unless and until the fundamentals of the economy are repaired, we'll just end up back where we started.

One of the fundamentals that needs to be repaired is the structuring and regulation of the corporations. NOTHING should ever be "too big to fail." What that essentially means is that -- yes, that good ol' right wing "moral hazard" meme -- they can do whatever they fucking well please and someone will come to bail them out.

They need to succeed, or fail, on their own.

There are other options besides bail-outs. They are not as dramatic and may not yield immediate results. But what they WILL do it re-establish a sound basis for the economy, not just a bunch of bubble gum and baling wire holding the catastrophe together.


Tansy Gold

[Union Yes]

38. Bury Supply Side Economics forever! Rename it Econofascism.

We could learn alot from Sweden if we could only remember how to listen.

[sasquatch]

40. Wow this looks like an amazing article

[earth mom]

45. Lindorff nailed it and summed it all up perfectly.

:applause:

How many of us saw this coming 25 years ago when Reagan pushed his evil "service" economy?

OR when Clinton signed NAFTA? And Bush CAFTA?

I know I saw it coming and it's why I'm so pissed that the status quo is STILL alive and well in Washington D.C.

I've also been saying ever since I joined DU that the wars in the middle east are bogus and that the "terra terra terra" that the government keeps pushing is nothing more than an elusive bogeyman you can never ever catch or contain. But those wars are sure profitable as hell, aren't they?


Until people in this country accept how screwed we've all been and how screwed we will continue to be under current conditions and policies, nothing will change.

So, Welcome to 3rd World USA.

[leveymg]

49. Asia came back from the '97 "Asia Crisis", and we'll survive this one.

I agree, though, a lot of the wasteful crap that became commonplace during the Bush age of SUV dinosaurs will have to go.

The American Dream is about to change. That may be a good thing for everyone.

[readmoreoften]

53. I'm really sick of people blaming 'greedy' and 'lazy' working Americans for the state of the economy

The economy collapsed because, with no 'communism' to fear, capitalists have brutally underpaid the working class, made them go into predatory debt to attend school, made them go into predatory debt to get a house or a car, and used their tax money to pay behaviorist science to test better and better ways to make them manipulable consumers.

Capitalism is what made the American economy collapse and our only guilt should be that we bought capitalism's own rhetoric about how "inevitable" it is.

[bkkyosemite]

59. This article is not talking about me. So I guess I am not middle class. I am tired of the blame.

Tired and Angry real Angry!

[antimatter98]

61. Agree and may I add my two cents worth to this diary..

The American way of using credit, of moving up, of changing jobs, worked for a long time.

This worked for millions of Americans in the mid to upper income ranges, and worked very well
if you had a high income and very good job security. (talk to doctors and to tenured
university professors and CEO's with rock solid golden parachute contracts).

But a larger and larger segment of the above millions began to suffer job loss, income
insecurity, but like everyone else, they couldn't believe it, since they saw others seeming to do ok.
Enter the home equity loan and use of credit cards to backfill for incomes that could not
buy what Americans felt they needed to 'stay even.'

With this, I think corporations, aided by Congress (trade policy and tax policy) and the Reagan
trickle down people, began to reverse the tide: outsourcing, killing off unions, cutting corporate
taxes and placing more of the burden on taxpayers.

When a company I know of, in the early 80's began to want to cut back its Northern plants, it began to
move skills out of a particular plant to a new plant in the US South. This was called 'deskilling,'
and in short order the Northern plant would be identified as 'lacking needed skills' and this was
used as an excuse to render that plant obsolete---a self fulfilling prophesy. So, no investment
in Northern plants, and moving skilled people out = plant shut down.

We're seeing this now played out but on a national scale---we're being deskilled nationally,
with lower paid jobs being left, and the good jobs being eliminated as they are outsourced.

I think Obama and Congress know full well what is going on. And so must Larry Summers, and Robert
Rubin who were advocates of the 'world is flat let's globalize' idea during Clinton and even
Bush Sr. Certainly, the Republicans do.

And suddenly we have the Employee Free Choice Act, which is scaring corporations to death ---and so guess what? Layoffs, blamed on the economy. But watch these companies back fill with cheaper labor, either overseas or via H1B visas here domestically.

At the Davos conference, it was obvious that those guys are thinking 'global' and could care less about domestic economic issues. Our own government is so deep into globalization, subsidizing outsourcing, that there is no way back---our plants are mostly closed, China and Korea make everything, and we're truly in the McDonalds and Wal Mart Age.

Obama and Congress know this, but can't come out with it.

I wish everyone luck in what is to come. I think the earth has shifted.

[bkkyosemite]

63. "And suddenly we have the Employee Free Choice Act, which is scaring corporations to death ---and so

guess what? Layoffs, blamed on the economy. But watch these companies back fill with cheaper labor, either overseas or via H1B visas here domestically."

EXACTLY!!! EXACTLY!!!

We need to let them know the gig is up...WE KNOW.............

[K Gardner]

68. Wonderful article and this is an excellent response. n/t

[Number23]

65. Holy Hell

"Joblessness is soaring (At present, it’s approaching an official rate of 8%, but if the methodology used in 1980, before the Reagan administration changed it to hide the depth of that era’s deep recession, were applied, it would be 17% today, or one in seven workers)."

((FAINTS))...

[Waiting For Everyman]

69. The upper-middle class's inflated incomes might not be coming back,

and the upper class may get their hoarded-up wealth diminished too (rightfully, by their share of taxes), but the bottom 1/2 to 1/3 may well end up better off and more solid. And that's a good thing, for the entire economy.

A whole lot of people have been going through this for a VERY long time, already. It isn't real different, from how it already was. They, IMO, have the best chances of getting through what's coming. They already know how. And they're the most angry, the most willing to organize and stand up to this, and have the least to lose. They, if anyone, will save this country. And yes, bring it back. The more they are economically enabled and strengthened by these new programs, the better off all will be.

[whistle]

72. The very best consumers in America are drug addicts and active alcoholics

...They spend everything they can earn, con or steal on their habits and consume everything they can get their hands on. A trillion dollar stimulus package for this important segment of American consumers could jump start the economy immediately.

[Beartracks]

81. Damn -- I *still* don't qualify for a bailout! n/t

[eallen]

76. LMAO! During a boom, people think the good times will never end...

And come the bust, they think things will never get better. There are, in both cases, people eager to explain why "this time, it's different."

I'm betting this time, it's not so different.

:hippie:

[GeorgeGist]

82. The American Economy isn't gone ...

it's being held hostage by the rich.

[katty]

94. no, it's not coming back the way it has been

ever-and it has sucked for quite awhile anyway. This collapse has been decades in the making. What's next....who knows.