Sunday, September 13, 2009

The Great Division....

Terrific post for the economically innocent such as myself over at The Moderate Voice blog today. It's a simple report on economic tendencies with two remarkable items. The first is the less politically charged one, which is the unravelling of the so-called "Great Compression". This Great Compression is when America transformed through WWII from a land of haves and havenots into a land of the middle class, the world which most of us grew up in. Since the mid to late 80s, about the time I was in high school, wealth has divided again. It's hard to know exactly why this has happened, but I would hazard that it's part of the change in economic focus from manufacturing to service more than anything else. It is also the dismantling of many LBJ social programs, but I don't know if that's important or not.

The more politically controversial fact is that the recent Bush administration has the dubious distinction of being the only two-term President to preside over a decline in income since WWII as well. And, and this is the important part, it is not because of the recession that started in 2007. Even when the economy was growing overall from 2000 to 2007, the average income was falling. The bottom just fell out even more then.

What to do about it is of course a very good question, and I cannot answer it. But it's the right question to be asking.


blogless troll said...

Even when the economy was growing overall from 2000 to 2007, the average income was falling.

Yes, income was flat or falling, but the economy was not growing; credit was expanding and demand was being pulled forward. This is key to understanding it. Find some debt to GDP ratio charts, they're out there.

I tried to figure out what that guy was saying. The first chart is incomprehensible to me. I have no idea what those terms mean.

Chris Eldin said...

This is an interesting post. My husband came over here from Egypt when he was 18 to go to college (He had citizenship since he was born in Texa...his father working for the U.N. Don't know why I always feel compelled to say he didn't need the Green Card. Grin)

Anyway...he said the first thing he noticed, and was quite perplexed by, was the shipment of manufacturing and research jobs overseas. This was during the Reagan era. In Egypt at the time, the country was pulling all its resources to create jobs, and we were shipping them out.

It's just very sad, all around. I've been looking into the job market myself, trying to get back in (it's been more than a decade). I know, great timing, right. But my expectations are very low. I have a Master's degree in education, so I went to apply for substitute teaching jobs. The lady at the county board of education told me there were hundreds of applicants ahead of me. I told her I have a Master's and am certified. She said, 'okay then, there's only a hundred ahead of you.' Since the state just cut millions from the budget, there have been layoffs everywhere, including teachers. So, the little part-time job I wanted to get my foot back in the workplace---I'd be competing with laid-off teachers.

Not sure where I'm headed with this, will be back later.