Sunday, December 11, 2011
Shared prosperity is not just the vital cornerstone of social stability and cohesiveness but the key to a sound and sustainable economy. The support for many govts today depends very much on how well they tackle the issue of income inequality.
Obama inherited the worst initial economic conditions since Franklin Roosvelt in the 1930s. If you can recall, the US and the world economy went into freefall in early 2009. Even before the financial crisis, the US economy had serious problems as the income inequality rose to levels that was only seen in 1929, the eve of the Great Depression. Obama was elected to office to address the income iequality problem and mitigate the effects of income gap by reforming healthcare. Howver, before he got around to solving the longer term problems, he had to find ways to stop the US economy from plunging into the abyss. The US economy has since rebounded but the recovery has been unsatisfactory because the financial crisis resulting from the birsting of the housing bubble seriously damaged a large part of US economy - the housing sector kept falling even as the economy recovered causing a drag on job creation limiting the magnitude of the recovery. Throughout his presidency, Obama was thwarted by the big business lobby that tried to stop health care reform and environmental protection policies by misinforming the American public. Impatient with the slow economic recovery, American voters compounded Obama's problems by voting a group of right wing Senators supported by the Tea Party who later blocked tax reform, measures to control waste in defense spending and attempts to regulate the financial sector to prevent future crisis. Much time is lost in the US political deadlock on issues for which the clock is ticking like climate change. The frustration has spilled into the streets with Occupy Wall Street movement spreading across the country.
There is only one developed country in the world where the income gap is higher. The only place in the developed world with a 3rd world wage structure where a man can work full time without minimum wage and cannot afford to raise his family ...and he is still required to support the hawkish stance of the ruling party by serving in the military as a conscript without in return getting the corresponding security of social safety nets and universal health care. Worse still, he is made to compete with a massive influx of foreigners that gives business and state owned corporations access to cheap labor from 3rd world countries at time when corporate profits as share of GDP is at historic highs. The frustration has built up but kept hidden by harsh authoritarian rules and a state controlled media ....but as the thresholds are crossed and the middle class declines, the demand for change will grow stronger with time and at some point accelerates and becomes unstoppable.
Posting Time 10:32 AM
Posted by Lucky Tan