“Push the Republicans out of the way.”

March 12, 2009 at 12:02 pm | Posted in Economy | Leave a comment
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Family living in shacktown community, mostly from Kansas and Missouri. This family has five children, oldest in third grade. Rent seven dollars per month, no plumbing. Husband working on Work Projects Administration wages, forty four dollars.  1939 August.

Family living in shacktown community, mostly from Kansas and Missouri. This family has five children, oldest in third grade. Rent seven dollars per month, no plumbing. Husband working on Work Projects Administration wages, forty four dollars. 1939 August.

(Joe Conason) The fundamental issue not only in America but in the world economy is a crisis of demand. As the Nobel economist Joseph Stiglitz has explained—most recently at a panel in New York City sponsored by The Nation magazine and the Nation Institute—average wages have fallen for more than three decades. Among the results of that invidious pattern was rising indebtedness, as banks extended usurious credit to working families struggling to maintain their living standards. Years of rising inequality has upset the equilibrium that resulted in rapid and sustained economic growth for most of the postwar period in this country, and created a prosperous, well-educated and optimistic middle-class society.

Back when America worked well, the gaps between the top and bottom of the income scale were far smaller, the public sector was more robust, the labor movement protected living standards and the rewards of work were more fairly distributed. There is only one way to stop the downward slide and begin to restore that proven pattern of economic dynamism with a wage-led recovery.

Public spending, even unto additional trillions, is the only instrument available to prevent a global depression, assuming that we have not already forfeited that chance. The stimulus bill and the Obama budget are only first steps. We will need another strong shot of stimulus before the summer—not a spending freeze—and we can only pray that the president and the Congressional Democrats will have the guts to push the Republicans out of the way.

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