Robert Reich: The truth about jobs that no one wants to tell

[babylonsister]

http://www.salon.com/opinion/feature/2009/10/02/unemployment/


The truth about jobs that no one wants to tell

If the feds don't spend money to put people back to work, the economy won't recover and politics will get uglier

By Robert Reich

snip//

Let me say this as clearly and forcefully as I can: The federal government should be spending even more than it already is on roads and bridges and schools and parks and everything else we need. It should make up for cutbacks at the state level, and then some. This is the only way to put Americans back to work. We did it during the Depression. It was called the WPA.

Yes, I know. Our government is already deep in debt. But let me tell you something: When one out of six Americans is unemployed or underemployed, this is no time to worry about the debt.

When I was a small boy my father told me that I and my kids and my grand-kids would be paying down the debt created by Franklin D. Roosevelt during the Depression and World War II. I didn't even know what a debt was, but it kept me up at night.

My father was right about a lot of things, but he was wrong about this. America paid down FDR's debt in the 1950s, when Americans went back to work, when the economy was growing again, and when our incomes grew, too. We paid taxes, and in a few years that FDR debt had shrunk to almost nothing.

You see? The most important thing right now is getting the jobs back, and getting the economy growing again.

People who now obsess about government debt have it backwards. The problem isn't the debt. The problem is just the opposite. It's that at a time like this, when consumers and businesses and exports can't do it, government has to spend more to get Americans back to work and recharge the economy. Then – after people are working and the economy is growing -- we can pay down that debt.

But if government doesn't spend more right now and get Americans back to work, we could be out of work for years. And the debt will be with us even longer. And politics could get much uglier.

[On the Road]

1. Obama's Stimulus Bill Was Criticized

for spreading out the spending through 2010, but it looks like we're going to need it.

[silversol]

20. Obama's Stimulus

was too small and was 40% tax cuts for business

[jgraz]

29. You have it exactly backwards

The reason unemployment is not coming down is partially because there's not enough up-front spending. It's also due to the fact that Obama let too much of the Repukes' Hooverism pollute the bill.

The stimulus should have been much bigger and used for direct job creation rather than worthless tax cuts.

[defendandprotect]

43. Agree . . . job creation . . !!

[Alcibiades]

47. Hooverism

A word too seldom heard. It's apt.

[truedelphi]

59. One of the best and easiest

Ways to have gone about this would have been to take the total amount of monies allotted to the stim package, divide by the number of Americans in this country, and apportion to each individual state that amount times the states' legit population. With a strong requirement that the states in trouble with their deficits must use the money to keep those employed at jobs classifications from 2006 at that level.

This would have insured that teachers, fire fighters, police, social workers, project managers, computer technicians, etc (and many others) would still be working.

Instead Obama went all shovel ready. Which really means that those most affected (folks in their fifties) are out of luck. A person in their fifties is not gonna want to scrap their master's degree education to start in with a jack hammer.

Additionally, as money used at the state level costs about 2005 less than money spent at the Federal Level, it would have been more productive and cheaper.

Then if we still needed some of the infrastructure to be built, he could have kept the big huge Wall Street tit at bay, and squeezed the money from that to the infrastructures.

But no, that would have been too efficient.

[midnight]

66. Also the banks should of never been bailed out unless the taxpayers

had access to the money to help create more jobs. This bailout did not come with any oversite to insure any help in this area.

[pokercat999]

68. Bingo, WPA or CCC type federal jobs especially in the

inner city restoring our infrastructure.

On Tuesday 10-6-09 there will be a show on the History Channel about the crumbling infrastructure in the US. A friend recommended it, he said it was scary and he is a racially and class stymied liberal. R.C.S.L. is a person that is at their core a liberal but has "fallen" for the constant propaganda from the Rich Republicans that the problem facing them are people of color and the poor stealing their tax dollars. I'm glad he doesn't vote, although with the performance of the Democrats and President Obama I can see his point, it doesn't matter if you vote the result is the same.

Speaking of tax dollars I have a comeback every time a RWer starts down the "my" tax dollars path. I ask them if they were for the war in Iraq, they ALWAYS say yes. I then tell them that ALL of the tax dollars their grand parents, parents, children, grandchildren and the next several generations of their family and EVERY dime they have ever paid was spent in the Iraq "war", so they can just STFU it's MY tax dollars we're spending now.

[barbtries]

2. kick

more people need to get this.

[exboyfil]

3. The biggest question is how much will

the rest of the world loan us to spend and at what price.

[DUlover2909]

64. I agree with you. The rest of the world is hurting too.

We need to change our economy and concentrate on our needs. People need only a few things to survive. We need food, clothes, a place to live that provides basic utilities like water, sewer, and energy, and some form of transportation. All these things just cost too much for someone with little or no income. Forget cable TV, the internet, or cell phones. We need to band together and create an economy that provides these things at a lower cost. The problem, as I see it, is that too much of the real wealth of our country goes to making people rich beyond what is necessary or sustainable and providing for people that live off the work of others; the capitalists and the indigent. We are reaching a breaking point. The indigent class is exploding and the wealth accumulation of the capitalists (corporatists) is becoming increasingly concentrated.

The answer to this dilemma is to tax the rich. It's a simple fix. Just jiggle IRS numbers a little. We have millions of people living large off the recession. These are all the well connected upper middle class and upper class folks that game the system for their benefit every day. The money is there, but in an economic downturn their first reaction is to horde their cash and hide their wealth.

Wanna see an economic boom? Cut the defense budget in half. That would mean that lots of defense contractors would lose their jobs making bullshit products that nobody needs. Those intelligent hard working people could then find employment making innovations in a new green economy or agriculture and make a lasting impact on the future of this country instead of defrauding the tax payers, or electrocuting or poisoning our troops in the field.

Want more money? Stop the off-shore tax havens. Tax the churches. Eliminate the golden parachutes of failed CEO's and end the bonuses for Wall Street losers. Stop paying for unsustainable agriculture that makes people fat and mistreats animals.

More money you say? Legalize and tax marijuana and then hike taxes on domestic tobacco use. Those two things alone would reduce alcoholism, obesity, and cancer among Americans significantly.

The answers are here. The political will isn't.

[mucifer]

4. hmmm maybe your NAFTA had something to do with people not working Mr. Reich.

Tho I agree we need government programs to put people back to work. Clinton's administration did send lots of jobs to China.

[digidigido]

19. Nafta wasn't Reich's baby, you're confusing him with Robert Rubin

[mucifer]

26. sorry here's a link to an article Reich wrote about it on his own website

he's a nafta guy:

http://www.robertreich.org/reich/20041208.asp

In this article not only is he proud of nafta he's lobbying for cafta.

[defendandprotect]

40. So . .. rather than overturning NAFTA or CAFTA . . . push for more stimulus . . . ????

For me, you could do both!!

[truedelphi]

58. Thanks for posting the link to the truth.

I sort of remembered the guy promoting NAFTA. It was making my brain swell up - thinking that I was wrong when I could remember it.

[HamdenRice]

5. My worry with this argument is that FDR's debt was largely internal, owed to Americans

So the flipside of all that debt was savings bonds (wealth) owned by other Americans, which made them richer and made the want to go out and spend.

This debt is owed to China. Unless we could have some sort of trade deal in which China agreed to purchase hundreds of billions of dollars of US goods and services with the debt they accumulate, I'd be more worried about this debt than the New Deal/WWII debt.

[AllentownJake]

7. absolutely correct

Borrowing our way out of the problem by indebting ourselves to foreign nations is not the answer.

[Krakowiak]

33. also FDR significantly raised taxes on the wealthiest Americans (nt)

[intheflow]

51. Which was a good thing!

:)

[Krakowiak]

53. I agree 100% - love your photos btw..

[defendandprotect]

41. Plus the World War II went on only 5 years . . . and ended. Look at where we are !!

Lies for perpetual war -- bankrupting the Treasury --

[Auggie]

6. One of the biggest construction jobs on the West Coast is being built with Chinese steel

The San Francisco Bay Bridge




Construction jobs are nice, but what happened to manufacturing? Do we even make steel in the country anymore?

[madrchsod]

9. we do not have the capacity to supply the steel that will be needed

thanks to the last 35 years of trade policies our labor costs have been sent overseas. hundreds of thousands if not millions of steel trade workers have lost their jobs in the last 35 yrs.

we will rely on foreign owners and foreign governments to meet our future needs.

[Auggie]

12. That's why we are screwed until real manufacturing returns to our shores

[eilen]

27. Yeah, Pittsburgh in the late 70's to early 80's-- not a pretty place

Good thing there was no G20 meeting then.

[Alcibiades]

48. We can build the capacity

we could rebuild our steel industry. Then we would have the capacity.

[TrogL]

22. You won't even import it from Canada

We've got steelworkers in Hamilton, Ontario standing around doing nothing because of the current trade embargo. You'd rather buy cheap, poorly-inspected stuff from China.

[Auggie]

24. Horrible...

And cheap, poorly-inspected stuff from China is exactly what it is. Building has been delayed while it's being inspected on the job site.

It burns me what politicians refer to as "stimulus" or "job creation". Total B.S.

[provis99]

63. you can buy all kinds of Chinese steel at the Dollar Stores.

steel screwdrivers that are wrecked on the first screw, utility knives that won't cut butter, metal picture frames that fall apart if you put a picture in them. Chinese steel is useless even for a paperweight, and now I hear that that crap is being put into the new littoral destroyers that the US Navy wants. Capitalism is about buying the worst shit possible for the lowest imaginable price.

[Craftsman]

8. No Decent Paying Jobs = No Recovery

Remember in 2010 it is the economy stupid cuts both ways.

[Aeon10101110]

17. Cutting both ways

The economy, to be used as a bludgeon in the 2010 elections, is a double-edged sword for primarily one reason. Conservatives have somehow managed to hypnotize their followers that Democrats are somehow at fault for the economic collapse of 2008.

As we all know however, deregulation and subsequent clustering greed did it. Of course deregulation is the clarion call of Republicans, most of that was accomplished by conservative congresses.

"No money down" is the republican swan song as they fade into history.

[Iwillnevergiveup]

39. Welcome to DU, Aeon

Your little dragon (?) is hypnotizing me!:hi:

[LiberalEsto]

10. The problem is, what kinds of jobs?

Not everyone has the physical ability to be a construction worker. Not everyone has the intelligence and stamina to go into one of the medical professions.

Manufacturing jobs have been disappearing for decades. The computer/tech jobs have all either gone overseas or been given to foreign workers who come here on H1-B visas. Call center jobs have gone to India and the Philippines, among other places.

I've been out of work for a year, and am unable to do physical work, even standing and bagging groceries. (I'm a former newspaper reporter and marketing writer) When I've looked for entry-level clerical-receptionist jobs, employers are demanding people with varied and extensive computer skills. Like many people, I can't afford the necessary courses to master Excel, Quick Books, hotmail, Powerpoint and others, especially for a job that might only pay $8.50 an hour. Each job opening requires different skills, so I don't even know which one I would need to learn first. And with a daughter enrolled in community college, I can't afford to go back and get a second college degree myself.

Luckily I just landed a 3-month freelance writing assignment, but there are many others like me who can't pave roads, build schools, etc.

So what jobs are available to us? Not a whole lot. Creating jobs for us ordinary folks is the real challenge for this country.

[tonysam]

13. Good question

I am too old at almost 55 to do much physical labor, but jobs CAN be created if Washington would just have the political will to do so.

Job creation should have been the FIRST priority of Obama's when he was inaugurated. He has lost precious capital frittering away his mandate on stalled health care "reform" and bailing out the Wall Street crooks who created this mess we have.

[LiberalEsto]

15. I hear you.

I'm 57, with sciatica, a herniated disc, and an arthritic ankle. And female. Nobody wants a woman in her 50s, I've discovered. Thank heaven my husband's got a job.

What are we supposed to do, according to the Repukes? Sit around twiddling our thumbs until we drop from our pre-existing conditions?

I agree with you that bailing out Wall Street was a stupid waste, but we need healthcare reform desperately. Many employers turn down older job-seekers because they don't want them making demands on the company's health insurance.

[bertman]

23. For every huge construction project there are hundreds of clerical and non-labor jobs

created. Everything from the folks who estimate the cost, order the materials, copy the blueprints and deliver them to the jobsite, fill out the paperwork, process the payroll, keep track of the schedule, drive the trucks, change the light bulbs in the offices, etc, etc, etc.

Just because it's a construction project rebuilding our infrastructure doesn't mean it's only for the young and strong.

I hope this makes you feel a little better.

Also, more projects should equal more government jobs as well.

cheers.

[katkat]

28. LiberalEsto

You seem pretty smart. You can learn Excel, Powerpoint, etc. by yourself. Play with them. Read the help docs. If you have a question, type it into google, chances are 99% that other people have asked it on the web and the answer will be there with a small amount of looking.

The only problem is if a potential employer demands a course credential, but you should be able to get around that (unless they are really stuffed shirts) by showing them that you can use the programs.

Actually, adult education courses in computers run by high schools are pretty cheap, much cheaper than the places that charge hundreds of dollars to teach this stuff. Some libraries have such courses. Or the libraries have (free, of course) books on how to use these programs.

I would start with Word. Then make judicious choices depending on what employers are asking for.

If you're stuck at home unemployed, you might as well use the time to learn this.

[lib_wit_it]

30. Also, google free online tutorials for the programs you listed. There are some good ones out there.

PM me if you have trouble finding them.

[Fire1]

32. I learned Word and Power Point on my own and neither are

as difficult as they may seem. The key is practice. If you don't use it, you lose it. Patience and practice. If I can do it, ANYBODY can! Instructions can be found online and most pc's and lap tops come with microsoft office free trials for 60 or 90 days. Mine was microsoft office 2007 and my hubby installed microsoft office 2003. Both have power point. You should give it a try just for an hour a day. You'll be surprised how much fun it can be.

[defendandprotect]

42. We have to pay for education . . . for everyone - plus MEDICARE FOR ALL would create 2.3 million job

Corporations used to train people -- we have to get back to that being an automatic.

50,000 manufacturing plants closed in last 10 years -- we should begin to reopen them --

and lock the doors so those corporations who left to harvest slave labor can't get back in!!!

[lib2DaBone]

11. The economy grows from the bottom up... Demand.. not supply...

You give a Billion dollars to a Bankster/Gangster.. what happens? They pay themselves a huge bonus and send the leftover money to a secret account in the Cayman Islands.

You give a working family one dollar and what do they do? They buy tires, microwave ovens, shoes for the kids, and maybe treat themselves to a movie rental once a week (if they are fortunate).

The Bankster/Gangsters along with the criminal members of CONgress have bled this country dry... it has to change.

[blossomstar]

35. Amen to that. It is so wrong.

Years from now, this time in history is going to be known as the "era of greed" and hopefully a great lesson in how NOT to treat fellow human beings... God, why can't we evolve into something better? Healthcare/education should never, ever be about making money. Greed overcomes human compassion every single time, especially from corporations who only people as numbers in their data base. It has to stop. It is inhumane.

[Enthusiast]

60. Republicans would disagree.

The ONLY way to prosperity is through tax cuts.

[Aeon10101110]

14. Conspiracy?

Risking paranoia, I am suspicious of the Right, in that they may be artificially depressing employment. That is, there is a conspiracy among Republicans to set a moratorium on hiring. I know it seems paranoid, but they have motive and means. Due to the last several years of their dominance, the Right occupies much of the upper economic echelons. As such, employing the workforce is largely within their purview.

The fascist Right will do fine without business growth, even if they shed jobs. In fact, that will just be used as improvement to efficiency and profits will rise. While unfettered growth in profit is being forestalled for a few short years, they gamble that a protracted recession will benefit Conservatives, who will again cut their taxes.

Perhaps the boycotting of Republicans needs to be extended to exponential levels!

[LiberalEsto]

16. Oh, I agree

I suspect quite a few corporate bastards are laying off more people than they need to, just to make the economic situation worse for Obama. And to punish Americans for electing Democrats.

[laughingliberal]

54. It's not just about making Obama look bad

It is about keeping the workers desperate and afraid so they work harder and demand less. Not new but worse now than ever.

[Demeter]

18. Why Isn't This Man Secretary of the Treasury?

[troubledamerican]

37. Same reason Howard Dean isn't welcome as HHR Secretary

Not willing to be a little bit corrupt

[TrogL]

21. Classic Keynes

These days, no economist worth his salt strays too far from Keynes (ignore the supply siders, they're either insane or authoritarian (or being paid by one)). When everything's fine, market forces can be allowed their dips and swings like a flock of pigeons. But when things get crazy, it's time to get good old Keynes off the shelf, blow off the dust and get cracking.

They're doing it up here. Government revenues have shrunk drastically due to the drop in oil prices, revenue generated by investments and various taxes.

In order to stimulate the economy they're thrown money at infrastructure. You can't see the sky properly because of all the cranes in the way and they're running practically 24/7. You can't drive anywhere and expect to get there on time because every major street is torn up and they're right there working on it from 6 a.m. to 11 p.m. Two of the major hospitals have additions being built that pretty much double their capacity.

There's a theory that many successful countries (from a social standpoint) reside in the Targa climactic zone. Think Scandinavia and Siberia. Canada also qualifies because the majority of the country is up there and holds considerable voting power over the rest of the country's more benign climatery regions. We have a saying (from the Red Green show), "Keep your stick on the ice - we're all in this together".

Up here, you cannot get behind on your infrastructure. The reason the streets are often torn up is because the wild temperature swings are hard on asphalt and concrete. We keep our hospitals up to date (and have basically free health care) because we need a healthy, working population - it's easy to get sick up here(1). We need to keep everything else working because at -40, you can die really fast. We don't want to spend a whole lotta money getting somebody educated, kept healthy through adolescence, trained in the workforce, then have them freeze to death 'cause somebody let a powerline fray.

There's another reason to keep your infrastructure up to date - crime.

I'm on a number of committees relating to crime(2) and neighbourhood development. In our research we found studies showing that the number one way of keeping crime down was to keep up your infrastructure by removing graffiti practically before the paint's dry, replacing old store fronts (we've got government grants), pointedly encouraging businesses (and fining those who don't) to keep up their property, and keeping the streets clean and well lit. We've even got a program started here encouraging people to install extra lighting for their back alley (and providing the light bulbs). There's also huge artistic murals on the side of buildings. All this on a deficit budget.

So I go to the local transit station and notice there always seems to be some guy there sweeping or doing windows or washing the floor and it seems overkill until I also realize that the only person around who seems even vaguely threatening is the busker with the guitar singing waaaaaaaaaaaaaaaaaayy off key. Yes, he's allowed there. There's even a picture of him on one of the murals.


----------------------Footnotes and digressions---------------

1. Yes, I'm aware the ambulance is going to have trouble getting to you if the streets are all torn up. That's why they send two from opposite directions.

2. I've been having a few mental health issues and dropped by the (free(3)) clinic at the hospital. One of the questions on the intake procedure is "have you had any involvement with the police?" When I replied, "Well, yes, I worked for awhile as a volunteer police officer and I'm currently doing quite a bit of committee work", I got these really wierd look, then "no, the other kind of involvement."

3. Yes, I'm going to keep rubbing it in.

[Enthusiast]

61. I would adopt much of your

system today if it was up to me.

[femrap]

25. Before all that....tax

the fucking top 5% in this country. They've had a nice ride...time to pay up.

[Krakowiak]

34. Abso-fucking-lutely see my post right below yours (nt)

[Krakowiak]

31. Top US Marginal Income Tax Rates, 1913--2003 -

Agree 100% on the need for spending... but we need to combine the spending with high taxation for the super rich, as FDR did when needed (see notes at bottom).

Historical Top Rates for wealthiest americans (married couples, filing jointly)




Rate taxable income over

1913 7 500,000
1914 7 500,000
1915 7 500,000
1916 15 2,000,000
1917 67 2,000,000
1918 77 1,000,000
1919 73 1,000,000
1920 73 1,000,000
1921 73 1,000,000
1922 58 200,000
1923 43.5 200,000
1924 46 500,000
1925 25 100,000
1926 25 100,000
1927 25 100,000
1928 25 100,000
1929 24 100,000
1930 25 100,000
1931 25 100,000
1932 63 1,000,000
1933 63 1,000,000
1934 63 1,000,000
1935 63 1,000,000
1936 79 5,000,000
1937 79 5,000,000
1938 79 5,000,000
1939 79 5,000,000
1940 81.1 5,000,000
1941 81 5,000,000
1942 88 200,000
1943 88 200,000
1944 94 <2> 200,000
1945 94 <2> 200,000
1946 86.45 <3> 200,000
1947 86.45 <3> 200,000
1948 82.13 <4> 400,000
1949 82.13 <4> 400,000
1950 84.36 400,000
1951 91 <5> 400,000
1952 92 <6> 400,000
1953 92 <6> 400,000
1954 91 <7> 400,000
1955 91 <7> 400,000
1956 91 <7> 400,000
1957 91 <7> 400,000
1958 91 <7> 400,000
1959 91 <7> 400,000
1960 91 <7> 400,000
1961 91 <7> 400,000
1962 91 <7> 400,000
1963 91 <7> 400,000
1964 77 400,000
1965 70 200,000
1966 70 200,000
1967 70 200,000
1968 75.25 200,000
1969 77 200,000
1970 71.75 200,000
1971 70 60 200,000
1972 70 50 200,000
1973 70 50 200,000
1974 70 50 200,000
1975 70 50 200,000
1976 70 50 200,000
1977 70 50 203,200
1978 70 50 203,200
1979 70 50 215,400
1980 70 50 215,400
1981 69.125 50 215,400
1982 50 85,600
1983 50 109,400
1984 50 162,400
1985 50 169,020
1986 50 175,250
1987 38.5 90,000
1988 28 <8> 29,750 <8>
1989 28 <8> 30,950 <8>
1990 28 <8> 32,450 <8>
1991 31 82,150
1992 31 86,500
1993 39.6 89,150
1994 39.6 250,000
1995 39.6 256,500
1996 39.6 263,750
1997 39.6 271,050
1998 39.6 278,450
1999 39.6 283,150
2000 39.6 288,350
2001 39.1 297,350
2002 38.6 307,050
2003 35 311,950
taken from http://www.truthandpolitics.org/top-rates.php

for more detail on rates and what prompted each change: http://www.taxfoundation.org/taxdata/show/151.html

note the drop from 1921-1925 for the top rate (went from 73-25), right before the crash years

then raised in 1932 from 25 to 63

by 1944 it was 94% !!!

under Kennedy in '63 it was 91% !

When Carter left office in 1980 the top rate was 70%

When Reagan left in 1988 it was 28% AND the top bracket had been reduced from 215,000 under Carter (still much lower than under previous presidents) to 29,750, lumping the megarich in with the common folk to create an army of anti-tax regular Joes.

Right now we are looking at 35%.... this country grew to prosperity during the years when the super wealthy were taxed at very high rates. We have a long way to go, as Reagan essentially destroyed our economy and set us up for this with his revolutionary shift in the tax code. The reason we can't pay for anything is tied to this, and it's also a big factor in our lack of industry - it's an antigrowth philosophy.

We need a politician with the courage to raise taxes in the spirit of FDR. No new taxes during wartime or recession? Are you kidding me? It's absolutely the time for new taxes, but only on those that can easily afford them! What a sad state we find ourselves in now.

[dreamnightwind]

49. Excellent post

Could be its own OP. I think there are a lot of numbers we Americans need to get familiar with, such as top tax rates.

[happyslug]

55. You are forgetting about Capital Gains, with Capital gains the top rate was 45%

Capital Gains was abolished by Reagan when he reformed the tax code, but it had been part of the tax code since the the Great Depression (And reintroduced by Bush jr in 2001). If an investment was held for five years or longer, when it was sold at a profit 50% of that profit was excluded from income taxation (You still paid the prevailing rate for the other 50%, but this had the effect of cutting the real rate from 90% to 45%). This provision, till abolished by Reagan, is considered the chief reason Corporations (and other investors) favored long term investment strategy till the late 1980s (i.e. if you made a million dollar in quick trades on the stock Market, the US Government ended up with almost 90% the profit over $200,000 and a lesser percentage for the first $200,000 based on the tax rates for those amounts, remember the US Income Tax system increase its tax rate as income goes up, 0% for so many dollars, then increasing rate till, in the 1940s it was 90% on any money made over $200,000).

Notice, the 90% rate forced investors to look long term, short term gains, unless your income was low, benefited the Federal Government 9 times what it benefited the investor.

As I said Reagan eliminated Long Term Capital Gains when he reduced the top rate to 35% (Which was below the previous tax rate even with the Capital Gain Tax exclusion). Bush jr brought "Long term Capital Gain" back, but in a bastardized form, taxed at a flat rate of 20% instead of whatever was the ongoing rate for that person, reduced by the 50% disregard i.e. Bush dropped the tax rate from the 35% Reagan had reduced it to (Increased from the top rate of 35% later on in Reagan's second term, again under Bush sr and again under Clinton). It is from these marginally increased top rate that Bush pushed through his 20% long term Capital Gain Tax rate, which will end in 2010. The 2010 elimination of Bush's Long term Capital tax rate is a product of the rules of the US Senate, when it was passed during Bush's first term, there were NOT enough GOP Senators to pass the reduction in taxation WITHOUT a time limit on the tax decrease (The GOP controlled the Senate, had over 50% of the Senate, by one vote and thus could pass the tax changes, but since less then 60 Senators voted for the increase, under the rules of the Senate, it had to be time limited, you need 60 Senators to vote for any PERMANENT tax change, and the GOP did not have the votes under Bush so the tax decrease was time limited and that time ends in 2010).

Just pointing out that the 90% tax rate was really NOT 90% for most people affected by it (Most people making over $200,000 are NOT on salaries, thus make most of their money on Capital Gains, i.e. selling assets, land, products, stocks etc). It was 90% on people trying to make a quick killing, and in many ways that is what FDR wanted, for it discouraged people from making quick killings and to look to long term investments when it came to making money. One of the reason the housing booms occurred and later the stock market boom (and even the housing boom) was that speculators could make quick money. If such income was taxed at a rate of 90% but long term investment is taxed at half that rate people will invest in long term investments. Corporation's CEOs will no longer have to look at what their company did this year, for what the company does over a five year period that is more important. It will be more important for the simple fact that any increase in value of the Company this year is less important then its value increase over a five year period. If some one invested in the Company this year and then took his profit, he would only gain 10%, 90% of any gain would be collected by the Federal Government via its 90% tax rate. On the other hand if some one held that stock for five years, the increase in value would be taxed at 45% (90% on only 50% of the stock, effective rate would be this 45%).

That was FDR's brilliance, he wanted to encourage long term investments and he did so by the above, and everyone who had money and wanted to manipulate the Stock Market to make money hated him for it, and worked to get it repealed for over 40 years (1930s till the 1980s when Reagan Repealed it). Bush jr has brought back a gutted version, but more to give the rich even more money NOT to encourage long term investments. Hopefully we can undo this damage by Reagan, but it will take time for the wealthy will fight it tooth and nail.

[Krakowiak]

70. thanks for this additional info!

[femrap]

69. Great Post....

something to show to the Willfully Ignorant!!!!

I'm cutting and pasting this info!

Thx.

[1776Forever]

36. That is the best thing I ever heard Robert Reich say! You cannot say it enough!

I hope someone is listening!

[troubledamerican]

38. "Politics will get uglier"? Harry Reid is ready.

Armed with apologies & compromises & milquetoast fuzzy niceness

[Thickasabrick]

44. I disagree. Reich is still living in the 1930's. We need to give the

money to the consumers - who will spend it. As long as consumers have no jobs, and no money they will not spend which will lead to more layoffs and an endless cycle.

Give it to the people who will use it and will use it fast. Infrastructure projects will take too long to flow back into the economy.

[happyslug]

56. The best way to do so is to increase welfare spending

But the GOP will campaign against it and most people do NOT want to accept the fact that since Welfare recipients Spend ALL of their welfare money and the act of spending is what gets the economy going NOT money itself, such a proposal will NOT be made.

We have to tell people that economies do NOT move by putting money into the system, but by producing the maximum number of transactions. Welfare recipient spend all of their money but in many different places. Each place has to hire someone to sell the item to the Recipients. These employees then take their new paycheck and buy things and the process goes on and on. Now sooner or later the money ends up in the hands of the wealthy where it gets put into savings. Savings do NOT get the economy going unless used by a borrower for long term investments (home, Cars etc).

Tax decreases to the rich produces the savings and the capital goods purchased, but NOT the transactions needed to get the economy going. Thus most of the tax deductions went to savings (or debt reduction) NOT to the purchasing of goods. Thus such tax deductions probably did less then a Dollar in transaction for every Dollar taxes were reduced, but for every dollar given to someone on Welfare will produce over $1.56 of transactions (as the money works it way up the economy ladder).

While such an increase in welfare would do the most good, it has the least political support. One of the problem with people on welfare (and the poor in general) is they low vote turnout (Through that has slowly been changing since before the 2000 Election). The Working Class and Upper Middle Class do NOT see themselves benefiting from such an increase and that being the case will NOT support a politician who supports such a plan. On the other hand both groups see themselves benefiting from employment of fellow Working class and Upper Middle Class people AND in use of the improvements produced in such infrastructure spending. Thus even in the 1700s, during economic down turns the call was for infrastructure improvements NOT increase welfare grants, even through the later is better at getting the overall economy going. We have to play politics and this is one of the rules of politics, the poor and the Economy, welfare has almost no support among the Working and Upper Middle Class but infrastructure spending does, so you go what you can get passed, and what will get passed is what the majority of Americans (Mostly Working class and Upper Middle Class) want and that is infrastructure spending NOT welfare Spending.

[Thickasabrick]

71. Excellent points.....if we could only "brand" it differently, welfare is

a no go...."working family stimulus" maybe....sounds more palatable. I really think the working class of this country need a marketing director.

[BREMPRO]

45. oh, but the Republicans told me the debt matters, oh wait, didn't they

used to say it didn't matter? Oh, i'm so confused!!!!!

Reich is right on- and the lie factory is just using the debt as a populist political ploy- I'd love to see JStewart and the Daily Show do some of his famous side by sides of rebububs contradicting themselves on the debt- this works.

[DallasNE]

46. Watch The Trade Numbers

The trade gap is currently at about an eight year low. That is keeping the dollar from sliding much lower. Likewise, it means more money can be used to stimulate the economy and it is beginning to look like it needs a second jolt.

[DissedByBush]

50. "we can pay down that debt."

HAHAHAHA! That's funny!

You know the first thing the government will do when people are back to work and paying taxes is figure out a new way to spend that money instead of paying down the debt.

Remember TARP? Remember how we were supposed to get paid back?

Remember how the TARP law said the payback "shall be paid into the general fund of the Treasury for reduction of the public debt"?

Back in June Barney Frank was already working on ways to spend it.

[intheflow]

52. SO glad to read, "{the government} should make up for cutbacks at the state level..."

YES!! Finally! Someone is publicly noting the states' budget crisis' are in large part due to huge chunks of public service funding being shifted from the federal budget onto the states. Roads, education, welfare, healthcare--it's all suffered deeply from federal cuts since Reagan started slashing services yet mandating coverage from the states.

[truedelphi]

57. K & R number 93. n/t

[indimuse]

62. YES!

KNR!

[Hubert Flottz]

65. Meanwhile, the pot holes are getting bigger...

and the bridges are rusting away.

[4dsc]

67. WHERE is the recovery going to start??

I've been asking this question for a while now but no can answer it.. In which sector of the economy do people believe the recovery is going to take place?? Manufacturing?? Nope.. Housing?? Nope. Financial?? Nope.. So where? Once you are able to answer that question honestly, you'll see just how much trouble this economy is truly in.. We're screwed..