Exactly, Robert Reich
Robert Reich, who has steadily become one of my heroes, has a great piece on Salon today about how the “economic recovery” is all smoke and mirrors. I am 100% in agreement and think we are headed for even worse times than we have already seen. I know absolutely nothing about economics. I never even took a basic econ class. But it just seems like common sense that if we are losing more jobs than we are gaining, then we are not recovering. Right? Reich says:
What’s pushing the stock market upward? Mainly, unexpectedly positive second-quarter corporate profits. But those profits aren’t being powered by consumers who have suddenly found themselves with a lot more money in their pockets. The profits are coming from dramatic cost-cutting — including, most notably, payroll cuts. …
The problem here is twofold. First, such profits can’t be maintained. There’s a limit to how much can be cut without a business eventually disappearing — becoming, in effect, a balance sheet in space. Secondly, when businesses slash payrolls to show profits, consumers end up with even less money in their pockets to buy the things businesses produce. Even if they hold on to their jobs, they’re likely to fear that they won’t have the jobs for long, which causes them to retreat even further from the malls.
I think we have a tendency as humans to find ways of complicating issues that are actually pretty basic. The economy is one of those things. It’s like any conspiracy theory: the deeper you get into it, the less reality seems to matter. I’ve seen multiple experiments in which monkeys are able to make better stock picks than trained stock brokers. When Wall Street sees those studies, they don’t say, “hmm, maybe we are engaged in a non-scientific pursuit.” They say, “hire that monkey!”
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