Robert Reich on Budget & Economy
Former Secretary of Labor; Democratic Challenger MA Governor
Under these circumstances, Greenspan’s caution is ludicrous. It’s also grossly unfair. As the economy falls into steeper recession, the people hurt the most will be those who are likely to lose their jobs first and have no cushion to fall back on.
Waiting and seeing if the rebound occurs isn’t all that burdensome for [the rich. For the poor], it’s a different matter. The economy will rebound, eventually. It always has. That’s not the test. The question is the human cost of the wait along the way. And by this test, too, it’s time to act. [We need a stimulus package right now which would] respond directly to these people caught in the worst of the recession.
A: In many respects the economy is doing marvelously well. We’ve had twenty months of unemployment under 6% and we don’t have any inflation in sight. But there is a long-term challenge ahead of us, having to do with a widening gap that has accumulated over 20 years between people at the top and wage earners at the bottom. A lot of people in the middle are anxious, for two reasons. One, because of the long-term decline in median wages, but also because the rate of job loss that is permanent is higher in the 1990’s than in the 1980’s. You have two wage earners most families rely on, or they rely on a single wage earner who is the sole parent of that house, and therefore, if one wage is lost, that can mean the difference between making ends meet or destitution. So for a whole variety of reasons, there is genuine economic insecurity out there, even though the economy overall is doing splendidly.
But every link in their chain is fragile. Private savings now travel [to wherever] labor costs are low or where skills are very high. Global investors may be indifferent to the choice, but our nation can’t be.
I’ve been writing about these trends for years, trying to explain them, suggesting ways to remedy them. I’ve burdened Bill Clinton with every one of my books and articles, and urged him to run. And he did. And he used my ideas. “Putting People First” [the Clinton campaign’s economic plan] was all about investing in the nation’s most precious asset-its human capital-so that everyone has a chance to make it.
And then he won. He called my bluff. Now, Reich, put up or shut up. You’re so concerned about all of this? You’ve talked a good game. Now you have a chance to do something about it. So DO it. It scares the hell out of me.
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