All economic expansions since the 80s simply meant that the economy as a whole was expanding. The growth in wealth however was experienced by only a small percentage of the population - those that were already wealthy and derived their income from capital, not from labor. This expansion will likely by the same, with portfolios recovering for the wealthy, and the rest missing out on the growth.

We simply have too much labor for wages to grow in any meaningful way. Increasing health care costs eats away much gains in income. A good chunk of my "raise" went to cover higher insurance premiums, but I should feel "lucky" to even get a raise in this downturn.

In a global economy, the growth will be biased to those with assets as you have stated. In fact, the Dems have created a hugh buying opportunity in both real estate and equities. However as we saw in the late 90's and following the Bush tax cuts, there were entrapanuers and small busniness who were able to achieve wealth via low interest rates and a favorable investment climate as we had somewhat of a bubble.

Obama's plan was to redistribute wealth, to narrow the gap between the wealthy and the underclass. Instead of trickle down, Obama thinks it will trickle up.

I guess the only way to prove Obama wrong is to let him try his plan and suck it up. Unfortunately, the gap between underclass and wealthy will grow not shrink as the wealthy buy low and sell high in a few years.

Care to hazard a guess as to one of the main reasons we have "too much labor?"

and it isn't an immigration problem (or "mexicans," to unveil what I think you're alluding to). It is a lackluster national system of education, that leaves too many people with too few options beyond service and labor.

hyperionred:

Care to hazard a guess as to one of the main reasons we have "too much labor?"

Can I have two?

1) Globalization.

2) Technological progress.

KHpoliticalinnuendohere:

and it isn't an immigration problem (or "mexicans," to unveil what I think you're alluding to). It is a lackluster national system of education, that leaves too many people with too few options beyond service and labor.

Say what? US schools are the envy of the world. How many US students go abroad for their entire education compared with how many international students come here? On top of that, anyone here who is so motivated can get a college degree. Don't mistake people not getting degrees with a bad school system.

Say what? US schools are the envy of the world.

Graduate programs, maybe, particularly in engineering and medicine. Not our system of k-12 public education.

"Data from the Third International Mathematics and Science Study (TIMSS) suggests that the relative international standing of U.S. students declines as they progress through school. In both subject areas, our students perform above the international average in grade 4, close to the international average in grade 8, and considerably below it in grade 12."

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KHpoliticalinnuendohere:

and it isn't an immigration problem (or "mexicans," to unveil what I think you're alluding to). It is a lackluster national system of education, that leaves too many people with too few options beyond service and labor.

Wrong. Wrong. Wrong. There are millions of overeducated people in America with Masters and PhDs in serious technical areas like engineering, who are currently out of work.

We don't need more education. We need a government that isn't willing to screw what is left of the middle class in order to benefit their Wall Street puppetmasters. We need a revolution.

You'd argue, then, that it's somehow possible to import somewhere between 10 and 20 million workers (doing mostly skilled labor in the construction fields), without having an effect on the people in this country who were doing those jobs before?

fortitudine:

Say what? US schools are the envy of the world.

Graduate programs, maybe, particularly in engineering and medicine. Not our system of k-12 public education.

"Data from the Third International Mathematics and Science Study (TIMSS) suggests that the relative international standing of U.S. students declines as they progress through school. In both subject areas, our students perform above the international average in grade 4, close to the international average in grade 8, and considerably below it in grade 12."

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I'll concede that K-12 education isn't stellar. But K-12 education isn't what was being referred to. A high school diploma isn't job training, nor is improving K-12 education going to fix any problems. But if you're looking at job training prospects - which is at the university or tech school level - the US has a large number of accessible, high quality schools.

"But K-12 education isn't what was being referred to. A high school diploma isn't job training, nor is improving K-12 education going to fix any problems."

Whether improving K-12 is going to fix any problems or not will be decided by each individual depending on what they think the problems really are. It is my opinion that providing job training to each child is significantly less important than providing them with the tools which will serve to benefit them throughout their lives. In this light, I believe that there is much too little education in economics and (dare I say it?) ecology. There is also a need for more of an emphasis on political history and somewhat less (if needed to provide time) emphasis on ancient history that, in any case, is presented in an interesting manner in any number of widely available books which are best read expeditiously rather than spread over a semester, which drains the interest from it. On the particular issue of reading, it is a basic skill which is the entry point to much information (even if it is read from a screen rather than from paper). Reading needs to be taught in the earliest grades, it cannot be deferred to some remedial reading class for college freshmen.

It is said that the typical graduate in the current era may have 7 different careers during their working life. Given that uncertainty, it is apparent to me that it should be the responsibility of employers to provide and finance the training necessary for an employee to fill an assigned job. There is no reason to expect a high school graduate (and his parents) to select a course of studies in college which, all things being equal, has a small chance of being appropriate to one of those seven careers. It is better that their college career expand on what has already been learned in K-12, again with the emphasis on making the rest of their life as fullfilling and satisfying - to them! - as is possible.

Both of those should have created more wealth, thus more consumption, thus more output (and more jobs), not less. The problem isn't that we've freed up labor from mundane tasks, or outsourced manufacturing to more efficient producers, it's that the fruits of those efficiencies haven't been broadly shared, so consumption never kept up with the efficiencies. If we become 50% more efficient in manufacturing (through whatever means), that's only useful if there's 50% more demand -- otherwise you've only created excess capacity (which we have).

Henry Ford paid a wage that allowed the workers to afford the product they produced. He realized the need to create a market for his goods. Corporate Leaders of today think that demand simply materializes, or they can market sufficiently individual sized portions to allow masses of poor people to buy huge quantities of individually packaged goods. They've decoupled the concept of paying sufficient wages from the concept of having a sufficiently wealthy consumer base. It makes no sense to manufacture $100 jeans while paying people $100 per month. Such a regime assumes that your market is somewhere else, some place where people are being paid sufficiently. Unfortunately, by paying people $100 per month, you'e ensured a finite market, since the producers in your "over-there" market must also reduce wages to compete domestically with the imported goods (or, they simply stop competing all-together, the effect is the same on the market -- less money). It makes entirely more sense to produce for a domestic market that is sufficiently paid; that will never happen, though, because there is always going to be a short-term, individual, gain to be had by exploiting cheap labor and capitalizing on the sufficient wages of other firms.

Of course, the workers in developed nations are idiots as both workers and consumers. They, like their corporate bosses, have a short term view that makes them think they can buy cheap imported goods while somehow preserving their expensive domestic paychecks. Again, there's no problem with globalization. Globalization should be a component of any complex economy; but, we must select our partners more wisely. Importing cars from Germany? That's one thing, importing them from Korea is another entirely. Germany has a social welfare structure much like ours (and in many ways it is more robust), they simply cannot afford to undercut us sufficiently to create the race to the bottom. In a competition of equals (when it comes to pay and welfare) the playing field becomes quality. In a competition of unequals (China and the U. S.), the field is wages, environmental regulations, and welfare. These are two different kinds of globalization.

If we weren't competing with the Chinese, they'd simply have to develop their home economy just like every developed economy did (during a time of Mercanitilism, which today is considered a dirty word, something like Protectionism). Being forced to rely upon domestic demand, China would also be forced to ensure living wages and sufficient social welfare. At a time of relative parity, the Chinese (or Indians, or Brazilians, or Russians) would come to the trade table competing on quality and innovation instead of price. The consumer would be the winner, as would the worker.

But, again, the government lacks the initiative (cheap import goods help hide the fact that wages have been stagnant for three decades) to choose trading partners wisely, and consumers lack a sense of self preservation (they want their $30 per hour union construction job, but they want the cheap import car that puts union auto workers out of work -- out of work auto workers don't build houses, so the union construction worker finds himself living in his imported car).

It is a race to the bottom, there's no question. But not because of globalization and technology -- instead because these concepts are being implemented by a Confederacy of Dunces.

I'll concede that K-12 education isn't stellar. But K-12 education isn't what was being referred to. A high school diploma isn't job training, nor is improving K-12 education going to fix any problems.

Colage, remember that only 1/3 of Americans go on to attend college. The rest of the country's high school graduates go out into the workforce for which they have been very badly prepared by our current system of education.

fortitudine:

I'll concede that K-12 education isn't stellar. But K-12 education isn't what was being referred to. A high school diploma isn't job training, nor is improving K-12 education going to fix any problems.

Colage, remember that only 1/3 of Americans go on to attend college. The rest of the country's high school graduates go out into the workforce for which they have been very badly prepared by our current system of education.

High school is not job training, and it doesn't address the point I was responding to. If you want to improve primary education, then that's great, and I'm all for it. But, at the same time, if you want the US economy to remain competitive in the future, making sure that grocery clerks can quote Hamlet isn't going to help.

gmajesko:

Bush had nothing to do with interest rates and you should know this by the way you are tallking. If anything the tax cuts increased the deficits as a result of an imbalance between present day spending and revenues. Look to Greenspsin for creating a low interest rate scenario. Loook to the W$ CDO market for attracting international $ to the US looking for safe investments. Look to Clinton for the ability to take equity out of the homes tax free. Tax breaks benefited the < then 1% of the taxpayers making greater than $500,000, which would include the small entrepeneurs. Joe the plumber was wrong.