US incomes fall to 1989 level- but Obama is not the cause

This is a very interesting article for a couple of reasons. first of all, it confirms that the economic problems we've been facing for years stem mainly from globalization and wealth inequality- neither of which have anything to do with President Obama. Secondly, the article says that government programs keep people out of poverty, which is exactly the opposite of what conservatives have been claiming forever.
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US incomes fall to 1989 levels. How did that happen?
A Census report signals that for much of America, the economic downturn has produced not one lost decade but two. But the data also show that federal safety-net programs helped keep people out of poverty.
By Mark Trumbull | Christian Science Monitor – 3 hrs ago


The typical US household saw its income fall last year to 1989 levels.

That news, contained in a US Census Bureau survey released Wednesday, points to difficult questions of how the US can get back on a track of job growth and rising prosperity.

Median incomes fell 1.5 percent in 2011, while the official poverty rate remained essentially unchanged at 15 percent.

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A family right in the middle of the income spectrum had an income of $50,054, which is actually lower than the 1989 median level of $50,624 expressed in 2011 dollars. The implication: For much of America the economy has produced not just one lost decade but two. Stagnation has even hit wealthier and more educated households (the 95th percentile in the Census data) for the past decade.

Why the hard times? And what can be done about it?

Those questions were already urgent before this latest data release. The presidential election campaign is pivoting largely around the economy and what role the government should play in it. This year, since the time period of the Census data, conditions have improved somewhat – with about a million Americans gaining jobs and hourly wages rising about 5 cents an hour. But the unemployment rate remains high, as does economic anxiety, even among people with jobs.

Economists haven't reached a consensus about what forces have caused the middle-class stagnation, but they have pointed to some that may be involved to varying degrees:

Globalization: The rest of the world is playing catchup to the nation that came to dominate in technology and sheer productive muscle during the 20th century. In theory, the US can still prosper as emerging nations from China to Brazil rise, but recent years have seen fierce global competition. America needs to boost its skills faster to stay in the game.

Technology: As with globalization, in theory this isn't a job-destroying force, just one that causes the nature of jobs to change. But some argue that rapid technological advances are having an especially hard impact on many middle-wage jobs that can be largely automated.

Inequality: A wage premium for the educated, the decline of labor unions, and the failure of the minimum wage to keep up with inflation have been among the factors widening the income gap between the rich and the middle class or poor. Some economists say that gap makes for a less vibrant nation. "Lack of opportunity means that its most valuable asset -- its people -- is not being fully used," Joseph Stiglitz of Columbia University has argued. When the rich are able to win big tax cuts it "leads to underinvestment in infrastructure, education and technology, impeding the engines of growth."

Debt and government: Another line of reasoning, taken by some conservative economists, is that economic growth is slowing as America becomes more of a European-style welfare state, with more people receiving public services and government spending accounting for a larger share of the economy. Some say the rising level of public debt, in particular, is emerging as an obstacle to be reckoned with. Others cite high levels of regulation and "crony capitalism," in which government policies favor some industries or companies at the expense of others.

Two other factors, mentioned by Census officials as affecting the recent data, are demographic aging of the population (income typically goes down as people hit retirement age) and a skewing of new jobs in 2011 toward the lower end of the wage spectrum.

The prescriptions for the road ahead depend on the diagnoses of causes, but many economists agree on the need for stronger education, better matching of skills with job opportunities, and an effort to overhaul the nation's fiscal policy, including taxes.

news.yahoo.com...

I believe the main cause is the executives and ceos continue to get more and more money while the labor force takes the cut for the greedy bunch . Obama just seems to bail them out for no reason and shell out tax money like its free the ceo of gm was making 350 million a year couldn't he of used some that money to soak back into the company nope instead he probably is making more and everyone else makes the same or less...

No, Obama isn't necessarily responsible for this mess, but he hasn't truly helped with it either.

The real cause behind the current national and global slowdown is the debt based monetary system a little else FULL STOP!

The bubbles have popped... there aren't any significant increases in economic efficiency to be gained anywhere. The result is that the debt catches up to the spending and forces things to stall and inevitably dive to the floor. The various central banks and "major" can only talk up confidence in the economy to keep the normalcy bias going until the last possible second. However, the reality is sinking in that no matter how confident the "great leaders" sound things will have to inevitably collapse. Once you understand the current monetary system things become quite obvious to you that it will have to collapse, there is no other path for it.

99% of the talking right now is all about pointing fingers around blaming various people, groups, and other things.

Less than 1% is blaming the actual fundamental systemic flaw in the economy, the debt based monetary system.

I hope to see the day people stop pointing fingers around and take the time to look at the full reality of the current situation.

I feel like I am part of a lost generation trying to survive in the current economic climate by ourselves and yet is failing to do so due to systemic failure.

Once the monetary system is changed to something superior than today's monetary system, everything will change. There is nothing that the monetary system doesn't effect which is why is such an important point to make sure that it is functioning "properly".

A truly balanced monetary system is one where individual transactions control inflation and deflation is controlled by a time inflation ratio. All of this needs to be completely out of the hands of any central authority otherwise things will just get screwed up once again. A free market monetary system is the only thing that will keep things balanced and prevent government from having a credit card.

I have hope in humanity that this will one day be accomplished.

maybe Obama isn't necessarily at fault for it...but it's not like he's doing anything amiable to make it better other than going on more golfing trips and running his campaign exactly the same way he did in 2008...

Can this really be correct? I mean just this year alone I got an 8.5% raise. I am making 3 times as much as in 1990 when I got out of college. And I am a middle class average worker bee. Although in a city not as affected by this.

Many people certainly will not agree. But Reganomics "trickle down" actually worked. The wealth I amassed during those years was amazing! Just for one mutual fund alone I was earning nearly $5,000 a year on only $20,000 worth of certificates. And interest rates on my CD's were 10% or greater! A woman that worked at my hospital was taken to human resources and told that she had over a million dollars in her retirement fund. The woman had no clue that she had that much. She was earning 38.5% interest on global equities.

Only those that could afford a home got one back then since the mortgage interest rates were so high. (If they would have stayed like this, maybe things wouldn't such a mess now.) But still, those that couldn't afford one yet were getting 10% on their savings for when they did decide to! Thus, they could buy a home much sooner. High interest rates overall were an advantage for the consumer.

So what am I trying to say here? The feds need to stop playing games with our interest rates. The interest rates need to be increased to save the economy. Every dollar we lose in interest is also lost income. This is why folks can’t get ahead.! So when did the economy take a dive? Well maybe take a look at interest rates to get an idea! The feds created this mess!

I say Clone Ronald Reagan, and have him get us out of this mess......

Of coarse he's not the cause but under his watch, trillions of dollars (more than all of ww2) flooded the market dissolving the worth of the dollar.

Originally posted by sonnny1
I say Clone Ronald Reagan, and have him get us out of this mess......

I cannot afford that kind of tax hike right now and the country sure as hell cannot afford that kind of spending.

That report is flawed.

In 1989 you could work for $5 an hour and only 200 hours of labor would get you 1 acre of America to call your own.


We are far worse off today. 200 hours of labor won't get you squat. At $20 an hour.