The Financial Crisis - Who's To Blame?
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- Blip
The Financial Crisis - Who's To Blame?
http://www.americanprogress.org/issues/domestic Who's to blame for the global financial crisis? A cynical conservative agenda that rewrote the rules for the rich. Today, working Americans feel less and less secure, and their prospects for economic mobility seem more and more remote. People are working longer hours than ever before, change jobs more frequently, and have more volatile incomes. Forty-seven million live without health insurance. Few are represented by a union. Many face tough competition from lower-wage workers abroad. The land of the American Dream now has less inter-generational income mobility than many other developed countries. Family incomes have risen on average within generations only because the incomes of women have risen as their participation in the workforce has grown dramatically; incomes of men have stagnated. The additional income from the second earner is essential to cover the rising cost of healthcare, energy, and childcare, among other things. Each of the traditional pathways to progress is littered with roadblocks. Incomes are not rising; the historical link between greater productivity and higher wages has broken down. Personal savings in the United States is near record lows. From pre-school through high school, we are failing to prepare many for college and the workplace. Those who begin degree or credential programs to improve earnings complete them at alarmingly low rates. Until recently, homeownership was a pathway to wealth accumulation, but many now see their equity slipping away. American workers feel less secure with good reason. Their prospects for getting ahead are more limited. Working hard and playing by the rules is not enough. In recent years, economic growth has been relatively strong, but the economy has added jobs at a lackluster rate compared to similar times in the economic cycle. The share of the nation’s income that goes to those in the middle is lower than it has been in 50 years. The benefits of economic growth have all flown to those at the very top. The prospects for long-term growth are also weak. Our economy is increasingly reliant on unsustainable, debt-driven spending (by consumers and the federal government), instead of innovation and investment. Between March 2001 and March 2007, 84 percent of economic growth came from consumption spending, while less than 4 percent came from investment. The United States has fallen behind many countries when it comes to equipping the workforce with the education and training necessary for individual and national success, doing a mediocre job especially of preparing our children for careers in the innovation economy. Younger cohorts moving into the work-force in coming years will be smaller and have less education than the older generations leaving the workforce. Globalization and technology have changed the rules of the game. Unsustainable appreciation in the housing market buoyed the economy for too long. And we face a clear and present danger to our economy and the earth itself from global warming. As Rajendra Pachauri, Chairman of the Intergovernmental Panel on Climate Change and recipient of the 2007 Nobel Peace Prize, said recently, “If there’s no action before 2012, that’s too late. What we do in the next two to three years will determine our future. This is the defining moment.” America needs policymakers with a plan for restoring U.S. economic leadership in a global and carbon-constrained economy, making it possible, once again, to dream that our children can look forward to a better future. The next administration can offer a new vision of America as an economic leader with a growing middle class in a vibrant global economy. America’s economy could be driven by ongoing invention and the production of high value-added goods and services. America could lead a global energy transformation based on more efficient technologies and clean, renewable fuels. These forces could fuel the creation of good jobs and good prospects for workers at all skill levels. America’s students and workers could be readied to meet the demands of the innovation economy. Moreover, we could ensure the economic security necessary, so that people can take risks and generate wealth for themselves and our country. America could put globalization and change to work for American workers and for millions around the globe.
Blip | October 21, 2008
