The "Walmart Death Spiral of the U.S. Economy"
(U.S. Neoliberal Economic Theory in Practice, 1992-Present -- in Pictures) .
Neoliberals Take the Reigns In December 1992, according to Bob Woodward's The Agenda, President-elect Bill Clinton was about to announce Laura Tyson's appointment as chair of the Council of Economic Advisors, when Tyson mentioned she and Robert Reich had debated in The American Prospect whether the nationality of a firm was important. Suddenly recalling the debate, Clinton said, “You know what? You were right, and [Reich] was wrong.” So we decided to ask them now: Bob Reich, were you wrong? Laura Tyson, were you right? The American Prospect
Setting the Stage
1. Reaganomics (1980-1992) 2. The Era of Globalization (1992-1999)
In 1999 the Democratic House Ways and Means Committee showed us that Reagan-era attacks on organized labor and globalization had collapsed the U.S. Personal Savings Rate
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ACT I: The Collapse Begins
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Later revisions by the Bush Administration ensured that the negative values were scrubbed from the historical record. . .
without these revisions the U.S. Personal Savings rate would have been negative between 1999 and 2008
The negative savings rate from 1999 to 2008 was twice as strong (-3.0% vs -1.5%) and 8 years longer than the negative period of 1933
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ACT II: Financial Services Modernization
1. Removing the Engine of Job Growth
The collapse of the U.S. domestic job market began in 2000 immediately after the signing of the Financial Services Modernization Act of 1999
In 1999 the U.S. economy stopped creating jobs after it became more profitable for banks to create risky derivatives than to actually invest and grow the domestic economy
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Some saw the writing on the wall
YouTube Video. .
ACT III: The Great Recession
1. Financial Services Bubble Economy leads to the loss of 8.5 million jobs 2. The engine for job growth is still missing
The rate of job growth during this recovery is the slowest since World War II
The 6-year recovery has nearly produced enough jobs to make up for those jobs lost during the 2008 recession
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The Great Walmart Death Spiral
1. Population growth demands are barely below current job growth rates
The rate of job growth to maintain a vibrant and growing U.S. economy was last seen during the 1990s
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Population Growth Outpaces Jobs
Others say reversing the (job to population growth) trend is beyond the power of short-term measures like the Federal Reserve’s monetary stimulus. But these views only raise further questions: Why are more Americans choosing not to work? What kinds of government policies might be able to reverse the trend? And, if we cannot, what are the long-term consequences for our nation’s fiscal and economic health? Appelbaum, B. "Population Growth Outpaces Jobs." The New York Times. September 6, 2013
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The U.S. economy is now dying in a slow dance of economic death. I call this effect the "Walmart Death Spiral of U.S. Neoliberal Economic Theory"
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How will it end?
The U.S. economy has been under direct attack since 1980, with little hope of recovery under current economic practices. Over the course of these last 34 years we have seen a wholescale collapse of the U.S. social welfare. The long and slow non-recovery since 2008 has significantly eroded the nation's ability to withstand inevitable short-term economic impacts. .
the next economic impact will push the United States over the edge, beyond any hope of stabilized economic recovery while maintaining a functional democratic economy.
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A total economic mobilization effort, on scale with the WWII wartime mobilization is needed to prevent further economic collapse -- the clear and present danger of climate change also requires a total economic mobilization effort to address domestic carbon emissions.
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I implore our leadership in Washington to call David Korten, Call Robert Reich, Call Amartya Sen, Call Joseph E. Stiglitz
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Begin drafting legislation empowering a Federal Climate Change Mitigation Authority Now!
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WE CAN DO IT!!!
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12:55 PM PT:
At the request of SE Portland in the comments, this image shows how the bottom 80% of the U.S. has seen declining household incomes since 1999.
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U.S. household incomes show declines for the bottom 80% of wealthiest households. Later trends show that this collapse is increasing! This is not sustainable under any circumstance!