We are not Korea. We are not Taiwan. Or germany. Or Canada. Or Europe. Or any other country. Quit comparing ourselves to them. Our geography, our culture, and our history are very different. We have problems they don't and they have problems we don't. We need to concentrate on what works for us, not what works for other countries.
The official unemployment rate is 9.5%, but if counting the underemployed and those that have given up, it's close to 16% or higher. Extrapolating that number it to households, there are probably around 30% households severely affected by this downturn financially. This is more than just structural inevitable. The rise of emerging economy probably has lot to do with this, but the housing bubble, the meltdown of wall street, the war and other domestic fiasco also have lot to do with this too. This downturn cannot be explained just by the effects of globalism. We shouldn't exclaim by looking at company's profits and ignore the folks that are suffering from it. Is economy doing badly? Of course it is and Washington needs to get its acts together.
But, I think it's important to analyze what the problem really is before you can know what you should do about it. You want to know what (1) causes present suffering and (2) causes future loss of prosperity. Because if the problem is that our companies aren't producing value as well as they used to/should be, taking measures to boost their productivity like deregulation and lower corporate taxes might make sense. But, if their productivity is strong and the problem is wealth distribution, those solutions won't alleviate the present suffering. To resolve a wealth distribution problem, you may want to do things like tax the rich, widen the availability of healthcare, generously fund education, and spend government money on projects that would pay good salaries to a large population of blue-collar workers.
Fotune 500 are making profits, yet only make up 33% of the entire US economy, the other 66% comes from small/medium businesses that are struggling to even stay afloat. You can't judge the economy by just fortune 500 companies because they are not the biggest sector of it. Small/medium businesses are the majority of the economy and those are not hiring which causes the stagnant unemployment, along with the fact that big corporations are simply sitting on their profits and not even hiring/expanding.
We are like a third world nation in terms of distribution of wealth, the lower 20% of our population die at an age 6 yrs younger than the upper 20%. We have more and more of the elite living in gated communities. Can we expect body guards next? We certainly have more beggars at the corners than then we did 40 years ago when I was in college. How long till we have crowds of folks swallowing fire and performing tricks at upper middle class intersections? I am mainly talking about the trend. Arianna Huffington and others have noted the similarities of America to a third world nation. Note I said "richest nation in the third world". Azadre, hopefully you aren't getting the conservative doctor syndrome yet.
No kidding. The middle class in this country has taken hit after hit. The real income for those Americans has actually fallen compared to that of the middle class of 40 years ago, if memory serves. That's absurd for such a "great, powerful country" that is the driving engine of the world's economy, and for better or worse, we still are. So why does the American middle class find itself in a stagnant situation, stagnant and sliding backwards? The deliberate policy of corporate America, the American welathy class, and their ardent allies, the Republican Party. In my opinion, any member of the middle class who votes Republican today and has for the last couple of decades are damned fools. The Republican Party doesn't have the interests of the middle class in mind when they slash taxes to the bone (with help by a lack of leadership on the Democratic side) for the wealthy class/corporate class, and then refuse to raise revenue during a crisis of record deficits. Refuse to discuss it. Instead, they call for more tax cuts for the wealthy and corporations, and slashing "entitlement" programs. People should wonder just how those programs came to be called "entitlement" programs. Why should they be? They are programs you paid for with your taxes. They aren't some nebulous "gift" from the federal government. They are called "entitlement" programs because the Republican Party, and their wealthy backers, labeled them as such. Labeled them as such for so long that some Democrats even call them that. It's far past time for the middle class of America to wake up and smell the proverbial coffee. The GOP doesn't have their interests in mind. The GOP has betrayed the American middle class, and continue to do so.
I think so too. Several posters were quick to point out that while big companies are profitable, most small companies aren't. So you gotta look at which companies are making money and why they are making money before tackle the problem too. We can't just gloss over by only looking at the $3 trillion (or whatever) companies holds.
I figured they were called entitlement programs because those who qualify are entitled to receive benefits.
Join the army. Start a war. Problem solved. Rules of war? Pick on a country that has no nukes and declare the omission of nuclear weapons.
Over time, everything regresses to the mean. The United States has been very lucky as a geographical entity to have so many characteristics conducive to economic success. Over time, as globalization takes hold, rich countries will get poorer and poor countries will get richer. It's inevitable. The reason the economy is doing badly is that weaker countries have gotten stronger, so we are weaker as a result.
I concur. As these countries continue to develop they will demand specialized services from the US. They can keep the routine labor. It's a good trade-off.
Combine that with the amount of people who dove into real estate (agents, mortgage brokers, home ispectors, etc...) who are sitting around looking for jobs that will never come back. Also, many Internet marketers are counted as unemployed and they are making a living online and not reporting all of the income.
South Korea and Taiwan are very susceptible to plunging into a deep hole. Their manufacturing is what is keeping them alive, but it is the only thing that they are riding on. Southern America in the 1900's (Or 1800's... I don't remember World History) attempted a similar approach and ran into many problems as their economy either soared or plunged according to demand. While there may be mass panic over the US not manufacturing anything: The US was almost never a strong manufacturing-based economy, most of the jobs in the US are service-based jobs. Tertiarisation in 1st-world countries are inevitable and encouraged. Also, the employment rate hinges really closely with GDP; if you find a way to solve unemployment then you will have already figured out how to fix the GDP and the economy. The fact remains, creating random jobs won't fix the employment rate until profits are made. The only thing you can do in a recession is smart fiscal planning by government AND private industries (banks really suck at this concept) and pretty much waiting it out. Short-term solutions aren't going to do anything unless you put it ALL DIRECTLY into infrastructure; which even then ends up being a long-term process anyway.
All in all, there needs to be an education reform and a complete about face from cold war era scare tactics. Even if America recovers and the wealth distribution is allocated correctly, the rich will build up again and brainwashed Americans will keep supporting presidents with laissez-faire policies. Too bad Americans are taught that since Socialism = Nazi Germany and Communism = Soviet Russia. So therefore both are BAD and leftists are remnants of both of them. Hitler may have been insane and a genocidal scourge of humanity, but his economy policies were brilliant. No ordinary man can take an economy that bad and help it recover to a moderate level within that small amount of time. I'm not advocating Socialism, but the only thing Capitalism contributes to is initial progress which is followed by social class stratification; huge income-class gaps, and economic stagnation.
Lol. Whoops. Replace 'never' with 'in the past 3-4 decades'. And even if I didn't outright state that I'm not talking about anything that far back...
