In 2009 “Main Street Got Shafted.”

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Robert Reich, professor at the University of California and former Secretary of Labor under President Clinton in the 1990s, has an excellent blogpost about how working people got screwed in 2009 and a pessimistic view of the future unless people force change:

As long as income and wealth keep concentrating at the top, and the great divide between America’s have-mores and have-lesses continues to widen, the Great Recession won’t end — at least not in the real economy.

2009: The Year Wall Street Bounced Back and Main Street Got Shafted

Richard Trumka, head of the AFL-CIO, generally agrees with How We Got Here:

In other words, merely rebuilding the same economy will not help working people.

More, after the fold.  (x-posted from Daily Kos:…

More How We Got Here from a 2007 article in the New York Times:

Then, starting in the late 1970s, as the constraints receded, new tycoons gradually emerged, and now their concentrated wealth has made the early years of the 21st century truly another Gilded Age.

Only twice before over the last century has 5 percent of the national income gone to families in the upper one-one-hundredth of a percent of the income distribution – currently, the almost 15,000 families with incomes of $9.5 million or more a year, according to an analysis of tax returns by the economists Emmanuel Saez at the University of California, Berkeley and Thomas Piketty at the Paris School of Economics.

Such concentration at the very top occurred in 1915 and 1916, as the Gilded Age was ending, and again briefly in the late 1920s, before the stock market crash. Now it is back, and Mr. Weill is prominent among the new titans. His net worth exceeds $1 billion, not counting the $500 million he says he has already given away, in the open-handed style of Andrew Carnegie and the other great philanthropists of the earlier age.

NY Times, 7/15/07:  The Richest of the Rich, Proud of a New Gilded Age

In 2008, President Obama appeared to agree with the cause of the crash:

Now, this didn’t happen by accident.  Our falling GDP is a direct result of eight years of the trickle down, Wall Street first/Main Street last policies that have driven our economy into a ditch.

And the central question in this election is this: what will our next President do to take us in a different direction?

Remarks of Senator Barack Obama-as prepared for delivery, Thursday, October 30th, 2008, Sarasota, Florida

On September 16, 2008, as the stock market melted down, then Senator and Democratic Presidential Nominee Barack Obama proclaimed it to be the final verdict on a failed economic philosophy:  

So let’s be clear: what we’ve seen the last few days is nothing less than the final verdict on an economic philosophy that has completely failed. And I am running for President of the United States because the dreams of the American people must not be endangered any more. It’s time to put an end to a broken system in Washington that is breaking the American economy. It’s time for change that makes a real difference in your lives.

Senator Obama in Golden, CO: Confronting an Economic Crisis, 9/16/08

In his post today, Robert Reich notes that in September and October 2008, even President Bush was afraid of a Great Depression:

In September 2008, as the worst of the financial crisis engulfed Wall Street, George W. Bush issued a warning: “This sucker could go down.

2009: The Year Wall Street Bounced Back and Main Street Got Shafted

This sucker could go down.  Well, it did for millions of people who lost jobs and homes, but we have avoided a Great Depression through TARP, the stumulus, and Fed loosening of credit and injections of money into the system.  (My view, not necessarily Reich’s).  

Avoiding a Great Depression is a good thing and the Obama adminstration deserves credit (as well as Congress and Bernanke, and even Bush in late 2008, although the latter two did much to create the problems.)  But that is just a start and not enough if we just rebuild the same failed economy, the Two Americas.  

Reich notes that Wall Street is making out like a bandit now, although in my view that gives bandits a bad name:

In less than a year, Wall Street was back. The five largest remaining banks are today larger, their executives and traders richer, their strategies of placing large bets with other people’s money no less bold than before the meltdown.

2009: The Year Wall Street Bounced Back and Main Street Got Shafted

But if Wall Street under a Democratic administration and Congress are making out well, working people are suffering.  Wealth never seems to trickle down.  We know what trickles on us, and it ain’t money.

But if 2009 has proved anything, it’s that the bailout of Wall Street didn’t trickle down to Main Street.

2009: The Year Wall Street Bounced Back and Main Street Got Shafted

This is because, while important, the real problems were not with the financial health of Wall Street, but the 30 years of the war on working people:

The real locus of the problem was never the financial economy to begin with, and the bailout of Wall Street was a sideshow. The real problem was on Main Street, in the real economy. Before the crash, much of America had fallen deeply into unsustainable debt because it had no other way to maintain its standard of living. That’s because for so many years almost all the gains of economic growth had been going to a relatively small number of people at the top.

2009: The Year Wall Street Bounced Back and Main Street Got Shafted

The Great Class Stratification, the Two Americas, caused this, and until we address the real problem, working people still wil be suffering:

Too many Americans have lost their jobs, incomes, homes and savings. That means most of us won’t have the purchasing power to buy nearly all the goods and services the economy is capable of producing. And without enough demand, the economy can’t get out of the doldrums.

2009: The Year Wall Street Bounced Back and Main Street Got Shafted

Richard Trumka, head of the AFL-CIO, has said the same thing:

Our current economic crisis is just a symptom of larger long-term weakness and inequality in our economy, Trumka said, and good jobs are the solution:

Remember, wages have been stagnant for years, so people had to start borrowing…we got to the point where people just couldn’t borrow any more and the economy just sort of collapsed at that point…we reached the limit of that. Debt can’t continue to be the engine that fuels the economy.

When we talk about stimulating or rebuilding the economy, Trumka asks, we need to ask: “To what end?” If we’re just rebuilding the old broken economy-with an under-regulated financial sector taking precedence over the real economy-then we haven’t really gotten anywhere. We need an economy where productivity is rewarded and prosperity is fairly shared.

In particular, Trumka says that to ensure the economy is really working in the long term, we need to give workers the ability to bargain for a fair share. The freedom to bargain means we won’t just create jobs, we’ll create good jobs. That means passing the Employee Free Choice Act and giving workers the freedom to form a union-and it means training more organizers to help workers across the country form a union and get a fair contract. That will give people the wages and the economic security they need to support the economy, provide for their families and get engaged in their communities.

AFL-CIO Blog, Trumka Answers Your Questions, Lays Out Economic Vision, 12/16/09

So, apparently, does President Obama:

There is a parable at the end of the Sermon on the Mount that tells the story of two men. The first built his house on a pile of sand, and it was destroyed as soon as the storm hit. But the second is known as the wise man, for when “…the rain descended, and the floods came, and the winds blew, and beat upon that house…it fell not: for it was founded upon a rock.”

We cannot rebuild this economy on the same pile of sand. We must build our house upon a rock. We must lay a new foundation for growth and prosperity – a foundation that will move us from an era of borrow and spend to one where we save and invest; where we consume less at home and send more exports abroad.

Barack Obama, April 14, 2009 Speech on Economcis at Georgetown University

Too many unemployed and underemployed Americans are awaiting that New Foundation.  2009 seems to have just rebuilt the old.

As Reich says,

As long as income and wealth keep concentrating at the top, and the great divide between America’s have-mores and have-lesses continues to widen, the Great Recession won’t end — at least not in the real economy.

It’s time for working people to be heard in this adminstration. So long as we keep the same stratification, it’s not real change.

AFL-CIO has a plan:

While millions go without work, some people are talking about “recovery”–as though numbers on Wall Street or profits at the big banks are the same as the real economy for working families. Wrong. We’re still in crisis–and if we don’t create jobs now, we will slide even further.

We have to put America to work–at good jobs that support families. We’ve tried out the everything-must-go, trickle-down, bubble economy for the past decade, and it’s been a disaster. If we’re really going to have a recovery–not just a recovery on Wall Street or for the big banks, but for real people–we absolutely must create new jobs.

Richard Trumka, quoted in my diary, NAACP, La Raza, and AFL-CIO Call on Obama to Create More Jobs (from Trumka interview with HuffPo)

The Plan is here:

America Needs Jobs Now

I’ll just highlight it:

1. Extend the lifeline for jobless workers.

2. Rebuild America’s schools, roads and energy systems.

3. Increase aid to state and local governments to maintain vital services.

4. Put people to work doing work that needs to be done.  

5. Put TARP funds to work for Main Street.

Details here:America Needs Jobs Now

For 2010, we must make real change.  


Skip to comment form

    • TomP on January 1, 2010 at 6:52 pm

    the working man and woman.  

    • Edger on January 1, 2010 at 7:34 pm

    Here’s the link Tom’s essay:

    Send an email today. 😉

    • Xanthe on January 1, 2010 at 7:37 pm

    all jobs can be shipped out to other workers who will work cheaper – all machinery and equipment stripped down and sent off to other countries where other workers will work more cheaply.  No regulation – just a patchwork of bandaids due to political considerations.  I do not know how to fix this – unless we take over the production.  Ooops marxism!

    Trained tech workers imported so that they can work more cheaply here on USA soil.  

    My fear:  We need your land and water – here we are to take it.  

    There hasn’t been anything like this, has there?  We don’t know how to fix it.  Can we appeal to the wealthiests’ sense of nation  — not.  

    Someone help me out – if this has to play out – there’s a lot of suffering coming – real suffering.

  1. They didn’t pay any, the big zero,  and actually they were paid by the US government 18.8% of their income , which come out to roughly $200-400 miliion if not substantially more.


    Kinda nice when april 15 rolls around and you know it’s time to throw a party.

  2. I will read it more throughly when I have time. We do need jobs and we need to start making things we need here. Green and affordable things would be a start. Every solution that the government comes up with is a aimed at keeping the too big’s where they are and increases our dependence on them. All solutions only add to the problem as they are aimed at increasing the profits of the too big’s.

    Perhaps we will have to develop our own economy. One that is regional and trades with other regions to offer and what each other needs and can provide. It would cut sown on distribution and help remake ‘grid’ so that people have control over their own lives and work,locally. As long as we are dependent we’re serfs to the corporations who offer us nothing and take everything we have. As a people we have a long history of innovation were a nation of tinkerers. Lets start putting our skills to working for each other. Producing the things we need. Start now do not give them your money whenever possible. Invest in your community/state not the fat cats casino.  

  3. I just don’t see it anymore.  It is a hopeless gesture now to think we can work with the current political parties to bring about change to the working class.  It just does not compute.  What about the 18-24 trillion to the banks?  What about the 3 trillion in Iraq?  The over 10 trillion that will be spent on national defense over the next ten years, versus the projected 3.9 trillion domestically, which could actually be cut in half relative to real help to citizens.  What about the debt?  I’m convinced now it’s a monster out of control and no one knows how it will end.   How can people look at those numbers, yet still throw out the 800B stimulus, and a few other palty items comparatively speaking and not wonder how that will turn out.  Unless the casinos on Wall St and Big Banks are completely revamped, and the MIC is cut down to size, the only thing that can be offered are token gestures.    

    • dkmich on January 1, 2010 at 10:08 pm

    Barack Obama knows it, and he isn’t going to do anything about it.  It is the reason why I am so pissed at him, Clinton and Democrats.  They are the ones that did this to this country.  

  4. but the actions taken have me a lot less than “hopeful”

    • Xanthe on January 1, 2010 at 11:42 pm

    were foreign made.  Though I understand what you say as to some of those parts.    

  5. which is about as likely as the Pope converting to Buddhism, we might hear Obama actually translating his actions into words, any day offering up this quote for the ages:

    “Ask not what Wall Street can do for you,

     Ask what you can do for Wall Street.”

  6. From the Latin Shaftigus Maximus the entire decade was a bend over and apply your Globalization Grease exercise.

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