The Economic Policy Institute, a non-profit research organization which studies trends in wages and employment, has just issued its latest State of Working America. Its facts and figures show that conditions were not good for wage-earners even before the Great Recession, and that, even though the recession is officially over, the United States has a long way to go before working people recover lost ground.
The Great Recession was by far the worst in the United States since the end of World War Two.
And while there has been recovery in economic output, and in the financial markets, the United States is a long way from getting back to a full employment economy.
There has been some improvement in jobs, perhaps partly because of President Obama’s stimulus program, maybe partly because of the natural turn of the economic cycle, but not to pre-recession levels.
I believe that the reason the Great Recession was so bad and the recovery is so weak is that it is more than a routine downturn in the economic cycle. I believe the United States has reached the limits of creating spending power by substituting credit for income, and we Americans need to somehow recreate an economy based on production rather than finance.
I think President Obama’s economic stimulus program kept things from being worse than they otherwise would have been. I don’t think Mitt Romney’s and Paul Ryan’s economic philosophy, which is essentially make rich people richer and poor people poorer, would help. But I do criticize Obama for giving free rein to the too-big-to-fail banks whose fraud and follies were the immediate cause of the crash, and thereby setting the stage for a new and bigger crash.
Click on Economic Policy Institute for the EPI home page. Click on The State of Working America to read the digital edition of the EPI report. A print edition is scheduled for publication in November.
Click on Did the stimulus work? for summaries of 15 economic studies by Dylan Matthews of the Washington Post’s Wonkblog. Matthews’ scorecard is that 12 studies said the stimulus was beneficial, two said it was useless and one said the effect is uncertain.
Click on Obama, Romney and the Low-Wage Future of America for an article by Dan Froomkin for
Huffington Post Nieman Reports on the lack of a plan from either candidate for a full-employment, high-wage economy.