Bush Proves He’s an Upper-Class Act

Old Blog Import

Robert Reich, former secretary of labor, argues that the problem with the economy is that increasing inequality is making the masses increasingly unable to consume — so tax cuts for the rich won’t help. There isn’t a need for more corporate investment because we have a surplus of production power that isn’t being used! Will the democrats become the party of sound economic planning and fiscal responsibility? They have an opportunity to do so in the face of Bush’s economic recklessness.

But here’s the rub. All the goods and services that can now be produced have to be bought by someone. Individual consumers account for two-thirds of what’s purchased in the nation. And because of the productivity revolution, a lot of items can be made cheaper. But they’re not so cheap that consumers can afford to buy all of them on paychecks that haven’t gone anywhere.

The only people whose pay has skyrocketed are at the very top. They’re spending princely sums on exotic vacations, mansions in the Hamptons and cashmere sweaters. But they spend only a fraction of the money they have. The much-larger anxious class doesn’t have a lot of discretionary income after paying for utilities, food and housing. The underclass has virtually none.”

LA Times (free reg. req’d)