Voters Say U.S. Gov. Responsible For Helping Puerto Rico

The chart above is from the Politico / Morning Consult Poll -- done between September 23rd and 25th of a nationwide sample of 2,005 registered voters, with a 2 point margin of error.

Economist Predicts Economic Boom After Virus Controlled

Donald Trump has been predicting a booming economic recovery for months now, but it hasn't happened. It hasn't happened because Trump bungled the response to the pandemic, and is currently bungling the roll-out of vaccinations for American citizens.

Fortunately, he will be gone in less than three weeks, and we will have a new president -- one that will act to control the virus and protect citizens.

And when that happens, Nobel Prize-winning economist Paul Krugman (pictured) is predicting the economy will enter a booming recovery that will last for a significant period. 

Here is part of what Krugman wrote in The New York Times:

Science has come to our rescue, big time, with the miraculously fast development of vaccines against the coronavirus. True, the United States is botching the initial rollout, which should surprise nobody. But this is probably just a temporary hitch, especially because in less than three weeks we’ll have a president actually interested in doing his job.

And once we’ve achieved widespread vaccination, the economy will bounce back. The question is, how big will the bounce be?

Our last economic crisis was followed by a sluggish recovery. Employment didn’t return to 2007 levels until 2014; real median household income didn’t regain the lost ground until 2016. And many observers expect a replay of that story, especially if Republicans retain control of the Senate and engage, once again, in economic sabotage under the pretense of being fiscally responsible.

But the crisis of 2020 was very different from the crisis of 2008, in ways that make our prospects look much better this time around.

The last economic crisis involved a Wile E. Coyote moment: The private sector suddenly looked down, realized that there was nothing supporting extravagant housing prices and extremely high levels of household debt, and plunged. The result was an extended period of depressed spending. The only way to have avoided multiple years of high unemployment would have been sustained, large-scale fiscal stimulus — and the G.O.P. prevented that.

This 2020 crisis, by contrast, was brought on by a headwind out of nowhere, in the form of the coronavirus. The private sector doesn’t seem to have been particularly overextended before the pandemic. And while we shouldn’t minimize the hardships faced by millions of families, on average Americans have been saving like crazy, and will emerge from the pandemic with stronger balance sheets than they had before.

So I’m in the camp that expects rapid growth once people feel safe going out and spending money. Mitch McConnell and company will, no doubt, do what they always do when a Democrat occupies the White House, and try to sabotage the recovery. But this time the economy won’t need support as badly as it did during the Obama years.

And I suspect, although with less confidence, that the boom will go on for a long time. Why? Because like a number of other people, I’m getting optimistic about the future of technology. . . .

I’ve been hearing a lot of buzz around new physical technologies that reminds me of the buzz about information technology in the early 1990s, which presaged the productivity surge from 1995 to 2005. Biotechnology finally seems to be coming into its own — hence those miraculous vaccines. There has been incredible progress in renewable energy; I’m old enough to remember when solar power was considered a hippie fantasy, and now it’s cheaper than fossil fuels. There’s room for more skepticism about the near-term prospects for things like self-driving vehicles and lab-grown meat, but the fact that we’re even talking about such innovations is a good sign for the future.

This new wave of innovation doesn’t have much to do with policy, although progress in renewables can be partly attributed to the Obama administration’s promotion of green energy. But the Biden administration, unlike its predecessor, won’t be anti-science and won’t try desperately to preserve the coal-burning past. That will help us take advantage of progress.

I’m less confident in my techno-optimism than I am in my expectations for a rapid employment recovery once we’ve been vaccinated. But all in all, there’s a pretty good chance that Joe Biden will preside over an economy that surprises many people on the upside. Happy New Year.

Public Not Buying Trump Claim Of Quick Economic Recovery

The chart above reflects the results of the new Economist / YouGov Poll -- done between April 12th and 14th of a national sample of 1,500 adults (including 1,166 registered voters). The margin of error for adults is 3.2 points and for registered voters is 3.4 points.

Donald Trump is eager to reopen the U.S. economy, and claims that once it is reopened it will have a quick recovery. But the American people are not buying that. A majority of all groups (including Republicans) say it will take a year or longer for the economy to recover.

It will not be easy or fast to recover from this recession.

Inflation Has Eaten Away At Wages Since The "Recovery"

The figures above, from the National Employment Law Project, shows what has happened to the wages of American workers since the economy "recovered". While the rich have gotten richer, and the super-rich are making out like bandits, the recovery has not been so good for most other Americans.

Wages have remained stagnant (with ownership and management eating up all of the rising productivity), and when inflation is figured in the workers have actually lost buying power. All workers have lost at least some buying power, but the biggest loss comes with the workers who have the lowest wages. They have seen 5.7% of their buying power leave since 2009.

It is obvious that the wages paid to American workers needs to rise. And that is especially true of workers making the minimum wage. We already knew that minimum wage workers are making over 30% less in buying power than a minimum wage worker was making back in the late sixties. Now we see they have lost nearly another 6%.

This should make it clear that the minimum wage must be raised, and should be raised to at least $10.10 and hour (although $15.00 an hour would be even better). This would make up for the buying power they have lost, and give them a livable wage. It would also put an upward pressure on wages for those making more -- helping them to make up for what they have lost with inflation.

The congressional Republicans will try to tell you that businesses can not afford to raise the minimum wage. That is not true. Raising the minimum wage will give those workers (and those making more) more income, and they will spend that extra income -- raising the demand for business goods/services, and creating both increased profits and new jobs. It would be good for the economy, and both workers and businesses.

About 46% Of Americans Are Still Struggling In This Economy

I found this Gallup Poll interesting. It's a slightly different way of looking at how Americans are doing in this economy. Every year since 2008 (the first full year of the Bush recession), Gallup has done a survey of the "life evaluation" of American citizens -- rating each individual as thriving (doing well), struggling (having trouble meeting financial obligations), or suffering (unable to meet those obligations). Here is how they determine that:

Gallup classifies Americans as "thriving," "struggling," or "suffering" according to how they rate their current and future lives on a ladder scale with steps numbered from 0 to 10 based on the Cantril Self-Anchoring Striving Scale. Those who rate their present life a 7 or higher and their lives in five years an 8 or higher are classified as thriving, while those who rate both dimensions a 4 or lower are considered suffering. Respondents whose ratings fall in between are considered struggling.

The good news is that 54.1% of the population is thriving -- the highest percentage since the survey has been taken (and since the recession's start). This means more people are starting to put the lingering effects of that recession behind them, and returning to a normal life.

The bad news is that 45.9% of Americans still find themselves trying to recover -- with 42.1% classified as struggling, and 3.8% as suffering. That 3.8% may not sound like much, but it translates into over 12 million people. Those struggling are about 133 million people. That means over 145 million people are still struggling in this economy -- a shameful figure for the richest nation in the world.

The chart below shows the groups having the most trouble recovering (click on chart to get a larger version). It's no surprise who those groups are -- those making under $24,000, those making between $24,000 and $48,000, and seniors. Also unsurprising is the fact that those are the very groups the congressional Republicans want to cut help for -- so they can give more to the rich and the corporations.

Is this really what we want from our elected officials? Were they really elected to make life harder for the 46% of Americans who are already having a tough time? Do we really think the rich and the corporations need more money at the expense of those struggling and suffering individuals?

Spending Shows Most Are Still Suffering From Recession

The chart above is made from information provided by a recent Gallup Poll. The survey was done between June 9th and 15th of 1,029 randomly chosen national adults, and has a margin of error of 4 points. The numbers above were arrived at by subtracting the number saying they are spending less from those saying they are spending more for each of the items. In other words, a positive number means a majority of Americans are spending more on that item, while a negative number means a majority are spending less.

Note that the areas in which people are spending more are basically those areas that they have to have (groceries, gas, household items, rent/mortagage, utilities, etc.). There is not much people can do to reduce spending in these areas (since they must have food, shelter, transportation, etc.).

But don't think the increase in spending in these areas is because people have more money to spend. That is simply not true. Wages remain stagnant (because owners & executives continue to hog almost all of rising productivity), and the median wage is still falling (due to the increase in the percentage of low-wage jobs). The reason people are spending more on basic items is because inflation has raised the cost of those items. People have to spend more just to maintain the same amount they need to purchase.

The rich and the corporations have recovered nicely from the Bush recession, but Main Street has not. Most Americans are falling further behind each year, as inflation rises and wages do not. Add to this the fact that far too many Americans still are unemployed, and most of those who get a job find themselves making a low wage. Main Street needs some help -- but our politicians continue to cut help for hurting Americans, so they can continue to let the rich pay abnormally low taxes (and many corporations pay no taxes at all).

Wall Street Has Recovered - But Main Street Has Not

The charts above (from Mother Jones) paints a pretty good picture of what has happened, both in the United States and in some other developed economies. The recession that hit at the end of 2007 and all of 2008 hurt everyone from Wall Street to Main Street (and in other developed nations). But in 2009, the economy began to recover, both in the U.S. and abroad -- and Wall Street and the giant corporations recovered all of their losses, and once again began to post record-breaking profits.

And in most developed nations employment also began to recover -- in all but the United States. In the U.S., millions remain unemployed and corporate America (in spite of their record profits) still refused to hire many new workers -- but instead used the high unemployment to hurt unions, keep the median (and minimum) wages low, and shrink the middle class. And they continued another vicious trend, started in the Bush administration with tax breaks that rewarded the exporting of American jobs. They continued to send American jobs to other countries (where they could abuse workers with impunity).

Most Americans don't need these charts to tell them that though, because they are still feeling the effects of the Bush recession (even if Wall Street and the corporations are not). They can see the huge unemployment that remains, and they can feel the falling wages and rising inflation. And they can see Wall Street and the corporations getting richer each day (while sharing none of the rising productivity with their loyal workers).

That's why I wasn't surprised at this newly released Gallup Poll (taken between April 30th and May 1st of 1,005 nationwide adults). The poll (see chart below) shows that while two-thirds of Americans think the corporations are very good at creating jobs in foreign countries, they are not so good at doing the same in this country. A clear majority (54%) say the big U.S. corporations do a very poor job of balancing the interests of citizens with corporate interests, do not help grow the U.S. economy, and are also doing very poorly at creating jobs in this country.

Much of this is because the congressional GOP has blocked any attempt to remove tax breaks for exporting jobs or forced those corporations to pay their share in taxes (or for many, any taxes at all). They have also blocked all attempts at job creation or a raising of wages (especially the minimum wage). And there is no reason to believe the Republicans will allow a more fair and sane economic policy to be instituted (because they are getting too much Wall Street and corporate money to allow that).

This is one more example of how the policies of the Republican Party are out-of-step with the desires of the American people. They have opted to represent the rich instead of ordinary Americans -- and they need to pay for that in November.

The Uneven Recovery In Our Sick Economy

The two charts above were made from information contained in a study at the University of California at Berkeley  by Emmanuel Saez. It shows the rise in income during the recovery from the Bush recession, and who has gotten that rise in income.

Note that the income for the richest 1% of Americans rose by about 31.4% between 2009 and 2012, while the income for the bottom 99% of all Americans rose by only 0.4%. That means the top 1% got 95% of all income gained in the recovery, and the bottom 99% got only 5%. There couldn't be a better definition of income inequality than this.

The rich have not only recovered everything they lost in the recession, but are once again making record profits and/or incomes. They like this pitiful economy, because stocks are going through the roof (which represents most of the income for many of them), while corporations and other businesses can pay less and less in wages thanks to high unemployment and lots of desperate people wanting work at any price.

Meanwhile, most other Americans are still mired in the effects of the recession. Those with a job have stagnant wages (which are being eaten up by inflation), while those who find new work must accept a lower wage, or even a minimum wage (resulting in a dropping of the median income), and those without work are reduced to begging for food stamps.

This is what the Republican "trickle-down" economics has done to this country. It benefitted the rich, and hurt everyone else -- and nothing "trickled down". And now they want to make things even worse by imposing a severe austerity, which cuts help for those at the bottom while lowering taxes for those at the top. It is an insane economic theory that is quickly turning our democracy into a plutocracy.

Wealth And Income Gap Continues To Grow

The economists tell us that the recession ended in 2009. And if you look at the incomes of the rich, the profits of corporations, and the rise of Wall Street stock values, that would seem to be true. All are at record levels.

But the "recovery" hasn't reached Main Street yet, where ordinary workers are still struggling to get by. Millions remain out of work, and even those lucky enough to have jobs aren't doing great. The chart above illustrates what has happened to workers in the last four years -- four years of "recovery". The chart shows what has happened to the median wage, both as a whole for all workers and for the different groups of workers.

Note that not only has the median wage for all workers dropped over the last four years (by 4.4%), but the wages for every single group of workers has also dropped. It has dropped more for some groups than other groups, but all groups have suffered a decrease in wages. Obviously, the "recovery" hasn't "trickled-down" to Main Street.

And with incomes of the rich increasing while worker wages are decreasing, it doesn't take a rocket scientist (or an economist) to see that the wealth and income gap between the rich and the rest of us has grown larger. It was already as large as the last hugely unequal period (the time immediately before the Great Depression), and now it has grown even larger. And it will continue to grow larger until we change our economic policies.

The Republicans want to make this situation even worse -- by cutting taxes for the rich and cutting government programs that help children, the poor, the unemployed, seniors, and low-wage workers. Many of them even want to eliminate the minimum wage. These policies, the same failed policies that got us into this mess in the first place, would just make the income and wealth gap much larger -- and set this economy up for another recession (and maybe even a depression).

We need to return to a saner and fairer economic policy. But this cannot be done until the Republicans are voted out of power. That's why the 2014 election is so important. If they aren't voted out of power in 2014, they will continue to obstruct any efforts to improve the economy -- and that will delay a real recovery by at least two years, maybe more.

Worst Recession Recovery Since WW II

As I have said before, the recession is over for the rich and the corporations. The rich are making record incomes and the corporations are making record profits -- both quickly bouncing back from the recession and back on track. But the same cannot be said for the rest of America. For Main Street, the median income continues to fall while the middle class shrinks and the ranks of the poor keep growing.

The chart above, from the Pew Research Center, shows this failure of the economy in general to recover from the last recession. Since World War II, it has normally taken less than a year to recover all of the jobs lost in a recession. That was true until the recession of 1990-91, when it took 21 months to recover all the jobs lost. But even that pales in comparison to the current "recovery". It has been 42 months now (twice the recovery period of 1990-91) and still, all the jobs lost in the recession started in 2008 have not been recovered -- and it could be quite a while longer before they are all recovered.

One might conclude this is because the 2008 recession was much more serious than other recessions since World War II. That might be part of the reason, but it doesn't account for all of the current shortcomings. If that was the only reason, then the rich and the corporations should also be having trouble recovering.

The biggest reason for the failure of most Americans to participate in the recovery is the economic policy put in place and maintained by the Republicans -- the "trickle-down" policy which tilted the economic playing field to favor the rich (and corporations) to the detriment of all other Americans. This could have been fixed (as it was after the Great Depression -- also caused by policies favoring the rich), but it wasn't. And the reason it wasn't fixed is because the Republicans have been able to block all efforts to create jobs and a more equitable economic system, clinging instead to their failed "trickle-down" policies.

This can be changed, but not until the Republicans are voted out of power. That's because, unlike previous recessions, they refuse to compromise for the good of the country. They have made it clear that they intend to continue to punish the poor, working class, and middle class, so they can keep favoring the rich and the corporations (their only real constituencies).