An interesting article! I particularly liked the part that tied low wages with low interest rates. Going back to 9/11, the Bush administration encouraged people to go out and spent more to support the economy. Apparently, Wall Street early on recognized that driving down wages would also drive down the consumer market that was supported by those wages. Low interest rates were and are an attempt to keep our consumer drive market going even if wages were going down.
As this article notes, the most recent attack on wages began during the Reagan administration. This was rather a slow, but steady movement against the wages structure. Up until NAFTA, we still had tariffs that protected Industries and jobs in this country. "Free trade agreements" outsourced industries and jobs outside the country, which had supported our consumer-driven society that accounted for 70 percent of the economy. Low interest rates were a feeble way of compensating for the loss of those industries and jobs that were the engine of the American market. While Wall Street high jinks may have accelerated the process, a depression was and is a certainty, because the consumer-driven market was outsourced with American industries and jobs. You will not get those jobs and industries back without tariffs, and there will be no recovery!
Pervis James Casey
Jul 15 2010 - 4:31pm