Quote:
Originally Posted by sebastian_dangerfield
I disagree with his mantra that we need to have a middle class consuming to have a robust economy. The argument misses the issue at hand entirely. Those in positions of power don't give a fuck about the underlying economy. They want the best returns and they can do that without hiring people. They can do that putting money in emerging markets. And no, those markets don't need us as much as we think. As they grow, they self sustain in terms of consumption.
We get a two tiered USA: Those with capital employed abroad, and those fighting it out in the domestic economy. People like you and me are in the middle. I'm thrilled for my folks, who are happily enjoying market gains. Not so happy about the tax bill I know is coming because all the laid off people can't support the school being built down the road from me.
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I haven't read the book, but it's Reich's schtick, and I'm pretty familiar with that.
Something that is critical that I think Reich generally underemphasizes that you pick up on here is really brought out well in those Hans Rosling videos if you have seen them. We do need consumers to have a robust economy, and traditionally the US middle class has been the biggest body of consumers anywhere in the world. But as the rest of the world catches up, especially India and China, there's just not as much incentive on the global stage for the US to keep it's big middle class. I think there are serious economic forces that would push the class separatiosn in both the US and India and China to move more toward each other - more stratified in the US, with more poverty, but with more wealth and a greater middle class in India and China. Yes, we need consumers, but they don't have to be here.
Kind of meta, but I see those tendencies every day in my work. And I don't think they're particularly good for us.
