By Dan Riker, Truthout | News Analysis
A protester throws a chair during the Occupy Oakland "Move-In Day" demonstration. (Photo: Glenn Halog)
Adapted from the as-yet-unpublished book by the author, Do What Works and Call It Capitalism.
That Improving Economy Is Further Away Than It Appears
Leisure and hospitality - the fastest growing major blue-skill industry - is the worst sector. The average leisure and hospitality worker makes just $18,900 a year (gross, before taxes). This is not even enough to keep a family of three above the poverty level ($19,790 in 2014). Similarly, retail, the largest blue-skill sector, is second-worst in terms of pay, with average annual earnings of $27,700. - Mike Cassidy, Where Are the Jobs? 2015 (1)
By most media accounts, the US economy at the beginning of 2015 is recovering nicely from the Great Recession. GDP is growing at a historically healthy rate, above 2 percent per year. Unemployment is about the historic average, at 5.7 percent. The stock market is near record highs. And more jobs are being created than at any time in more than 10 years. But this is all a great deception. The expansion is benefiting a tiny minority of the population only - the very rich. No one else has any money, and without significant changes in government policies, no one except the wealthy is likely to have any in the future.
This is the fact that eluded the Democrats in the 2014 election. When Democrats boast of how well President Obama has done with the economy despite Republican opposition to everything he does, they are missing the point. This economic resurgence has not reached most Americans.
Ronald Reagan brought supply-side economics to the federal government, the belief that suppliers of goods drive the economy, not the consumers. The supply-siders believe that lower taxes stimulate production and improve the economy. They also favor deregulation of industry. The theory, which acquired the nickname "trickle-down economics," was that economic growth would benefit everyone. That has not happened. The entire supply-side economic theory has proven to be totally wrong as the data in this article shows.
When George H.W. Bush ran against Reagan for the Republican nomination in 1980, he called Reagan's supply-side economics, "voodoo economics," and he was right. It has no basis in reality, but it has bewitched the Republican Party and they still cling to it. And most current government financial policies still are consistent with it. Bill Clinton did not change things. Barack Obama has not changed things. The Reagan economic program still is with us, and still is doing great damage to the US economy and most Americans.
At the beginning of 2015, more than six years since the crisis of 2008, most Americans were either in a worse financial condition than they were before 2008, or had experienced very little improvement in their economic condition. Most Americans have no financial reserves and live paycheck to paycheck.
In January 2015, the Pew Charitable Trusts published "The Precarious State of Family Balance Sheets," in which the incredible conclusion is reached that virtually no one in the United States has ready cash reserves to cover two months of lost income. Clearly, most of the top 20 percent have other assets, stocks and bonds, real estate etc. on which they can draw, and they seldom lose their jobs without good severance packages. But 80 percent do not have enough reserves to last more than a month, and half of them do not have enough to last two weeks.
Most Americans also do not have much in the way of assets - property or investments. The historic recovery of the stock market from the 2008 crash did not benefit the vast majority of Americans because they don't own stock. Yes, many do indirectly through 401k mutual funds and pension funds, but those assets cannot easily be converted into cash.
Please continue this article here: http://www.truth-out.org/news/item/29447-what-trickle-down-economics-has-done-to-the-us-the-rich-get-all-the-money
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