An excerpt from this excellent article by Robert Reich:
"The key reason why the recovery is so anemic is that so much income and wealth are now concentrated at the top is America's the vast middle class no longer has the purchasing power necessary to boost the economy.
The richest 1 percent of Americans save about half their incomes, while most of the rest of us save between 6 and 10 percent. That shouldn't be surprising. Being rich means you already have most of what you want and need. That second yacht isn't nearly as exciting as was the first.
It follows that when, as now, the top 1 percent rakes in more than 20 percent of total income -- at least twice the share it had 30 years ago -- there's insufficient demand for all the goods and services the economy is capable of producing at or near full employment. And without demand, the economy doesn't grow or generate nearly enough jobs.
Wall Street is part of the problem because it's responsible for so much of the concentration of income and wealth at the very top -- and for much of the distress still felt in the rest of the economy after the Street nearly melted down in 2008.
The Street has turned a significant part of the economy into a giant casino involving mammoth bets with other peoples' money. When the bets go well, the rich owners of the casino (Wall Street executives, traders, hedge-fund managers, private-equity managers) become even richer. When the bets go sour, the rest of us bear the costs."
Update: here's a link to an interview/discussion with Paul Krugman on the difference between supply-side economics and austerity and looking at demand and governmental policies for stimulating the economy:
Jedi, first, thanks for catching my spelling error. Fool-hardy it is!
I agree about creating our own communities; I had to end my membership in unhealthy, destructive relationships and burn the bridges behind me. I have never regretted it.
Perhaps an internet community gives us the kinds of support and encouragement that is so easily weakened by unhealthy traditions and values. I feel inspired by those I have met here and look forward to more possibilities as we progress.
Oh yeah, and I found this: http://en.wikipedia.org/wiki/Chartalism
I'll have to read through it all when I have more time.
Elizabeth Warren: 'Libor Fraud Exposes Rot At The Core Of The Financial System'
""The Libor scandal is more than just the latest financial deception to come to light. It exposes a fraud that runs to the heart of our financial system," writes Warren, a long-time Wall Street critic who is running for the U.S. Senate in Massachusetts.
"The Libor fraud exposes rot at the core of the financial system," Warren writes.
Sixteen major banks, including Bank of America, JPMorgan Chase, and Citigroup, are under investigation for allegedly rigging the Libor, a benchmark interest rate that banks set and use to lend money to each other. It is the basis for hundreds of trillions of dollars' worth of loans and derivatives and its manipulation possibly cost some cities and states millions of dollars.
Matt Taibbi has also pointed out the far-reaching ramifications of the Libor manipulation, telling the news show "Democracy Now!" that "[e]ven the tiniest manipulation downward, when you’re talking about a thing of this scale, would result in tens of trillions of dollars of losses.""
"Super-Rich Hold Up To $32 Trillion In Offshore Havens"
"The study estimating the extent of global private financial wealth held in offshore accounts - excluding non-financial assets such as real estate, gold, yachts and racehorses - puts the sum at between $21 and $32 trillion.
Private wealth held offshore represents "a huge black hole in the world economy," Henry said in a statement."
Walmart's Stock Surge Reflects Hard Times for the Cash-Strapped
"Walmart's numbers are considered bellwethers for the retail industry. But on the other side of the equation, when Walmart sees its earnings improving, the theory goes, it's often because times are tougher for the nation's financially strapped.
Walmart's stock surge followed the retailer's healthy first-quarter earnings report.For the most recent quarter, which ended in April, the discounter posted its biggest comparable-store sales gains in three years.
Meanwhile, poverty in America is poised to reach its highest level since 1965, the Associated Press reports. The poverty rate is expected to reach 15.7%, up from 15.1% in 2010, according to a survey of economists, think tanks and academics."