It's the economy, er.... is it?
We’ve heard it all: the sky is falling, the economy is in bad shape. Everyone run for cover. There has been no shortage of “analysis” about what to do, how to fix it, where we went wrong, and what the consequences are.
Robert Reich, whose name may be familiar to some, has published an op/ed in the New York Times all about who, what, where, when, why and how the economic turmoil we’re in exists.
He writes about how deep-seated this entire credit “problem” is. Neglecting of course, any role he might have played in furthering it. He discusses how middle income Americans are looking more and more like poorer Americans, and how tight people’s belts have to be. But this got me thinking:
I wanted to say, “why is there a limit?” and what of the 35% of mothers with school age kids working in 1970? That’s 35% of families – it’s a third of the pie!! We can’t pretend that being at 2/3 isn’t both a victory for Women’s rights and equality and a failure of economic policy making. I am struck that this new third of families, who have apparently needed the extra money since 1970 are enough to pull down the entire economy when the first third was already struggling then.
Despite my discomfort with his whole theory about why women entered and stayed in the workforce, he proposes some pretty concrete remedies that seem quite achievable:
So – what do you think? What would Reich’s policies do for all those folks who earn below 46k but above 38k now eligible for real genuine tax support? The risks Reich outlines are great: he says we face a reduced standard of living – and the only way out is “to give middle- and lower-income Americans more buying power — and not just temporarily.” Well, we all know it would be nice to have more buying power; but why doesn’t Reich mention affordable housing, or college tuition, or some of the biggest ticket items in the budgets of families and individuals?
I wonder if any of the “analysis” can be trusted anymore. Wasn’t this credit crisis spawned by credit rating agencies telling everyone these were solid investments – low risk, low return? And wasn’t there a really positive consumer spending report? When it comes to the economy, who can you trust anymore?
Most women streamed into the work force in the 1970s less because new professional opportunities opened up to them than because they had to prop up family incomes. The percentage of American working mothers with school-age children has almost doubled since 1970 — to more than 70 percent. But there’s a limit to how many mothers can maintain paying jobs.
I wanted to say, “why is there a limit?” and what of the 35% of mothers with school age kids working in 1970? That’s 35% of families – it’s a third of the pie!! We can’t pretend that being at 2/3 isn’t both a victory for Women’s rights and equality and a failure of economic policy making. I am struck that this new third of families, who have apparently needed the extra money since 1970 are enough to pull down the entire economy when the first third was already struggling then.
Despite my discomfort with his whole theory about why women entered and stayed in the workforce, he proposes some pretty concrete remedies that seem quite achievable:
A larger earned-income tax credit, financed by a higher marginal income tax on top earners, is required. The tax credit functions like a reverse income tax. Enlarging it would mean giving workers at the bottom a bigger wage supplement, as well as phasing it out at a higher wage. The current supplement for a worker with two children who earns up to $16,000 a year is about $5,000. That amount declines as earnings increase and is eliminated at about $38,000. It should be increased to, say, $8,000 at the low end and phased out at an income of $46,000.
So – what do you think? What would Reich’s policies do for all those folks who earn below 46k but above 38k now eligible for real genuine tax support? The risks Reich outlines are great: he says we face a reduced standard of living – and the only way out is “to give middle- and lower-income Americans more buying power — and not just temporarily.” Well, we all know it would be nice to have more buying power; but why doesn’t Reich mention affordable housing, or college tuition, or some of the biggest ticket items in the budgets of families and individuals?
I wonder if any of the “analysis” can be trusted anymore. Wasn’t this credit crisis spawned by credit rating agencies telling everyone these were solid investments – low risk, low return? And wasn’t there a really positive consumer spending report? When it comes to the economy, who can you trust anymore?