Reich: Income Inequality Dooms Recovery

Tuesday, 03 Apr 2012 07:10 AM

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
The recovery is going great guns for a tiny slice of upper income Americans, and that means trouble, warns economist and author Robert Reich.

Virtually all of the growth has led to gains among the top 10 percent, and most of that went to the top 1 percent, says Reich, who was labor secretary under President Clinton.

“Over a third of the gains went to 15,600 super-rich households in the top one-tenth of 1 percent,” he writes on his personal blog.

Editor's Note: Did Obama Betray America? Video Reveals Truth

It’s getting worse over time, he says. “The top 1 percent got 45 percent of Clinton-era economic growth, and 65 percent of the economic growth during the Bush era,” Reich asserts.

The problem is, all that wealth doesn’t necessarily mean jobs are being created. And jobs are the driver a broad recovery needs, he maintains, since ordinary incomes and spending are the engine of economic growth.

“Fed Chief Ben Bernanke — who doesn’t have to face voters on Election Day — says the U.S. economy needs to grow faster if it’s to produce enough jobs to bring down unemployment. But he leaves out the critical point,” Reich warns.

“We can’t possibly grow faster if the vast majority of Americans, who are still losing ground, don’t have the money to buy more of the things American workers produce.”

Ben Bernanke likely has a close-up view of the effects of income disparity. Even though Washington, D.C. escaped the brunt of the recession as federal spending ramped up, the money flow didn’t go that far down.

The D.C. Fiscal Policy Institute found that the richest 5 percent of District households have an average income of $473,000, the highest among the 50 largest cities in the United States.

Nevertheless, the poorest fifth of District households have incomes averaging under $10,000. “As a result, income inequality in DC — the gap between rich and poor — is tremendous. It is third highest among the nation’s largest cities,” reports the think tank.

Editor's Note: Did Obama Betray America? Video Reveals Truth



© 2014 Moneynews. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

BRIC Wall: Brazil's Economy Slips into a Recession

Friday, 29 Aug 2014 16:24 PM

Brazil's formerly high-flying economy, once the darling of emerging markets, has fallen into recession, according to gov . . .

Aluminum Sets Record Run of Monthly Gains as Supplies Shrink

Friday, 29 Aug 2014 14:34 PM

Aluminum posted its longest-ever run of monthly advances as faster U.S. expansion added to signs of rising metals demand . . .

Watt Plans to Maintain Level of Fannie-Freddie Lending to Poor

Friday, 29 Aug 2014 14:04 PM

Fannie Mae and Freddie Mac would maintain current levels of home-mortgage purchases meant to spur lending to lower-incom . . .

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved