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Will We Repeat Failed Solutions, Again?

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  • MikeSar
    AFTERSHOCK - Next Economy & America s Future – Robert Reich - www.robertreich.org $6 Barnes & Noble Apr 2011
    Message 1 of 2 , Jul 28, 2012
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      AFTERSHOCK   -  Next Economy & America's Future – Robert Reich   -  www.robertreich.org   $6 Barnes & Noble Apr 2011  INTRODUCTION – The Pendulum

      /Pg. 1/ "I wrote this book so you would know why the economy remains bad for so many Americans, why our politics has become so angry and the fundamental choice we face in the years ahead.

      What I have to tell you is not being told by lobbyists and economists working for big corporations and Wall Street. They say the problem is most Americans have lived beyond their means and must now endure the painful adjustment of living within their means. They are correct that for years most Americans spent more than they took in. But the remedy is not austerity. [added comments in brackets -mfs]

      The reason most Americans have lived beyond their means is because their means have not kept up with what a growing economy can, and should have been able to provide for them: Adequate wages. Over the last three decades working families have taken home a smaller and smaller share of the nation's total income. A larger and larger portion has gone to people at the very top. This has hurt the economy. The rich don't spend as much of their earnings as the rest of us. They invest their savings wherever around the world they can reap the highest return [Romney's Bain Capital? -mfs] And the rest of us, with a smaller share of the total, lack the purchasing power to keep the economy going at full speed.

       This problem was disguised for a time. Most Americans continued to buy as if their incomes had continued to rise. They did this by going deeply into debt. But when the debt bubble burst in 2008 the game was up. Without enough buyers, companies shed workers. The Great Recession began [and continues in 2012 -mfs].

      [Pg 3]  Technically, the Great Recession has ended. But its aftershock has only begun. Economies always rebound from declines, even from the depths of the darkest downturns. To this extent, the business cycle is comfortably predictable. [in which case] Businesses eventually must reorder when inventories grow too depleted, families have to replace cars and appliances that are beyond repair and governments spend what they can and make it easier to borrow money to stimulate job growth. But, conditions are out of whack, economies and societies are imperiled. I will argue here that our fundamentals are profoundly skewed, that the Great Recession was but the latest and largest outgrowth of an increasingly distorted distribution of income, and that we will have to choose, inevitably, between deepening discontent (and its ever nastier politics) and fundamental social and economic reform. I believe that we simply must –and will– choose the later."

        Dr. Reich (Clinton's Labor Secretary) wrote the above well before officials were aware of the coming decline, now, his words appear to be totally ignored and we continue to "the depths of the darkest downturn" like he predicted –in 2011! He joins the list of great oracles and wise from Ancient Greece to the end of WWI who were unable to prevent future disasters in their, and now our, times that include, at least, these new trends:

      1. Officials seem unable to grasp the size of the economic problems or awareness of state funds: "Billions in State Money Found" Headline Contra Costa Times 22 July 2012.

      2. Billions invested in High Speed Rail and new tunnels to ship water to So. California. With no published cost/benefit analysis on the benefits HSR that will take passengers from airlines? It seems like a Zero-sum game that could ruin jets for HSR trains with no net job gains? But, airlines seem totally indifferent, why? Do they know HSR will fail? I believe so. Chinese travelers chose jets to their own new HSR to Shanghai, which had to cut speed and frequency and increase fares- and we learnt nothing?

      3. Sending farm water to swimming pools in Los Angeles Area may ruin agriculture and state. What if less irrigation water leads to higher food prices and reduce the number that can afford food, schooling and homes with swimming pools?

      4. Ignored Lessons: A. Intel built a $1 Billion microchip factory in Vietnam, hired and trained local teachers to train all workers. Training took less time that building the factory. College degrees are not used to run modern, factories with robotic assembly lines.

      B. Modern Jet Engine, jets, electric cars, solar cells, etc., assembly lines use computer- controlled robots, two California sites use 5-function Multi-tasking robots. The skill needs are easily grasped by high school graduates, here or in other countries –our choice.

      Conclusion:

      The future will belong to High Schools Graduates with job skills, like they have trained in Germany and other nations for many years. On the other hand, we graduate thousands of high schools students with no job skills and no funds to pay for college!! Graduates may not earn enough to pay college loans. My teachers suggested a general education and skill training, my brothers and I got degrees paid by old and new GI Bill.


      In 1936, Pres. Roosevelt cut federal work projects and jobs shrank until WWII. Now, Europe will bailout nations in need, while Congressional gridlock blocks new investments and our Recession continues.

      Dow-Jones is 13,000+ after 3 times over 12,800 that fell below 12,600 since June. The "Weakest Postwar Rebound". Drought continues over 20% of USA (up 7% in June) with "Exceptional Drought", higher food prices expected – Jan-June 2012 hottest Midwest on record. –Wall Street Journal, 29 June, 2012. Pg A6

      Ø     Daily we import $1.6 Billion MORE than we sell – up from a Billion-a-day a few months ago. How long can we continue this deficit?

      Ø                All seek high salary work but cannot compete with computer-controlled assembly line robots. Japan runs a 12 year-old factory without workers to build assembly line robots sold worldwide. Are we the last to use them?

      Ø                Tesla uses multi-tasking robots to build electric cars in Fremont. Canadian planes, fast trains and rail cars sell worldwide with components made in Canadian assembly lines in Mexico. Canada modified a German auto assembly line to build US jet engines for the largest US jet engine builder.

      Ø    Newest technology microchips are built in $1 Billion factory build by a US company -in Vietnam last year, don't we have abandoned military bases in California? Workers trained by teachers trained by company; construction took longer than training. No college graduates employed. 

      Ø    Only US and Canada build composite material airplanes with robots.

      Only Two Options: Either

      A. Return to the 1936 policy and stop spending on jobs and expect Great Depression II. Or

      B. Elect Democratic Party President and Congressional majorities to avoid gridlock. Current Congressional gridlock stops all comprehensive solutions.
    • MikeSar
      Census data: Half of U.S. poor or low income December 15, 2011 6:25 AM WASHINGTON - Squeezed by rising living costs, a record number of Americans — nearly 1
      Message 2 of 2 , Jul 30, 2012
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        Census data: Half of U.S. poor or low income 

        December 15, 2011 6:25 AM  WASHINGTON -

        Squeezed by rising living costs, a record number of Americans — nearly 1 in 2 — have fallen into poverty or are scraping by on earnings that classify them as low income. The latest census data depict a middle class that's shrinking as unemployment stays high and the government's safety net frays. The new numbers follow years of stagnating wages for the middle class that have hurt millions of workers and families. "Safety net programs such as food stamps and tax credits kept poverty from rising even higher in 2010, but for many low-income families with work-related and medical expenses, they are considered too `rich' to qualify," said Sheldon Danziger, a University of Michigan public policy professor who specializes in poverty.

        "The reality is that prospects for the poor and the near poor are dismal," he said. "If Congress and the states make further cuts, we can expect the number of poor and low-income families to rise for the next several years."

        TV reported Monday, July 30, 2012: The Low Income Rate  is 20% and this is increasing at the highest rate in 40 years. 

        Heading to Great Depression II under Pres. Mit Romney?

        BayPointMike Reply to:

        > AFTERSHOCK - Next Economy & America's Future – Robert Reich

        > - www.robertreich.org <http://www.robertreich.org/> $6 Barnes &
        > Noble Apr 2011 INTRODUCTION – The Pendulum
        >
        > /Pg. 1/ "I wrote this book so you would know why the economy remains
        > bad for so many Americans, why our politics has become so angry and the
        > fundamental choice we face in the years ahead.
        >
        > What I have to tell you is not being told by lobbyists and economists
        > working for big corporations and Wall Street. They say the problem is
        > most Americans have lived beyond their means and must now endure the
        > painful adjustment of living within their means. They are correct that
        > for years most Americans spent more than they took in. But the remedy is
        > not austerity. [added comments in brackets -mfs]
        >
        > The reason most Americans have lived beyond their means is because their
        > means have not kept up with what a growing economy can, and should have
        > been able to provide for them: Adequate wages. Over the last three
        > decades working families have taken home a smaller and smaller share of
        > the nation's total income. A larger and larger portion has gone to
        > people at the very top. This has hurt the economy. The rich don't
        > spend as much of their earnings as the rest of us. They invest their
        > savings wherever around the world they can reap the highest return
        > [Romney's Bain Capital? -mfs] And the rest of us, with a smaller
        > share of the total, lack the purchasing power to keep the economy going
        > at full speed.
        >
        > This problem was disguised for a time. Most Americans continued to buy
        > as if their incomes had continued to rise. They did this by going deeply
        > into debt. But when the debt bubble burst in 2008 the game was up.
        > Without enough buyers, companies shed workers. The Great Recession began
        > [and continues in 2012 -mfs].
        >
        > [Pg 3] Technically, the Great Recession has ended. But its aftershock
        > has only begun. >
        > Ø Daily we import $1.6 Billion MORE than we sell – up from a
        > Billion-a-day a few months ago. How long can we continue this deficit?
        >
        > Ø All seek high salary work but cannot compete with
        > computer-controlled assembly line robots. Japan runs a 12 year-old
        > factory without workers to build assembly line robots sold worldwide.
        > Are we the last to use them?
        >
        > Ø Tesla uses multi-tasking robots to build electric
        > cars in Fremont. Canadian planes, fast trains and rail cars sell
        > worldwide with components made in Canadian assembly lines in Mexico.
        > Canada modified a German auto assembly line to build US jet engines for
        > the largest US jet engine builder.
        >
        > Ø Newest technology microchips are built in $1 Billion factory
        > build by a US company -in Vietnam last year, don't we have abandoned
        > military bases in California? Workers trained by teachers trained by
        > company; construction took longer than training. No college graduates
        > employed. Only US and Canada build composite material airplanes with
        > robots.


        > Only Two Options: Either

        > A. Elect M. Romney and return to the 1936 policy and cut spending on jobs, training and expect Great Depression II.

        Note: This time we don't have a World War to lend foods and weapons to our allies. Yes, they paid it all back, with interest.

        Or

        > B. Elect Democratic Party President and Congressional majorities to
        > avoid Congressional gridlock.
        Current Congressional gridlock prevents passage of any and all comprehensive Economic solutions.
        >

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