Wednesday, April 09, 2008

Income Gap Widens

Incomes fell for poor and stagnated for middle-class families since late 1990s, making it tougher for them to weather economic downturn.
Poor and middle-class families are entering the recession in a precarious situation due in part to declining or stagnant income growth, a study released Wednesday has found.

Incomes, on average, have declined by 2.5% among the bottom fifth of families since the late 1990s, while inching up by just 1.3% for those in the middle fifth of households, according to an analysis by the Center on Budget and Policy Priorities and the Economic Policy Institute, two liberal think tanks.

The wealthiest slice of Americans, however, saw their incomes rise by 9%.
This is what happens when people vote based on where they hope to be economically. People need to understand that in order to get to that promised economic lands they must vote where they actually happen to be. Conservative Republican policies have destroyed the middle class with the help of those in the middle class who simply don't understand that they are voting against their own best interests. Do you think I am wrong?
Unlike what happened during the economic boom of the 1990s, lower- and middle-class families did not share in the prosperity of recent years, the report found. In fact, the United States has had its longest jobless recovery and slowest rate of payroll growth during this decade.

"We're worried about the impact of the downturn on the families whose incomes haven't recovered from the last recession," said Jared Bernstein, Economic Policy Institute senior economist and co-author of the report.

Wages have not kept up with inflation, families have loaded up on debt and homeowners have seen the value of their largest asset decline, he said. The situation will only get worse during the economic downturn.
John McCain who wants to continue the economic policies of the Bush administration and who wants to make the tax cuts permanent, would be in effect a third Bush term. Can we afford more of those failed polcicies?
The income gap between the rich and the rest of the population is widening. In 22 states, the top fifth of families made more than seven times what the poorest fifth took home, according to the report. In the late 1980s, only one state - Louisiana - had such a spread. Meanwhile, in more than two-thirds of the country, the wealthiest saw their income grow more than twice as fast as the middle-class over the past two decades.
We now have the second widest income gap in the world after Brazil. Is this really what we want? We have made it nearly impossible that the next generation will live as well as our generation unless of course if you are rich then the good times just keep right on rolling.

Tuesday, April 08, 2008

Fed Sees "Severe and Protracted Downturn"

Minutes from central bank's last meeting show fear of 'severe and protracted downturn'
Some members of the Federal Reserve are worried about the possibility of a "severe and protracted downturn" in the U.S. economy that could last into next year, according to the minutes of the central bank's latest meeting released Tuesday.

The Fed said its staffers now expect the nation's gross domestic product (GDP) to shrink in the first half of this year, the clearest signal yet from the central bank that its members think the economy could be close to entering a recession -- if it hasn't already. Many Fed policymakers indicated that a downturn in the economy in the first half of the year "now appeared likely."

The minutes from the March 18 meeting show that some Fed policymakers are concerned the problems in the "housing sector had deepened and that considerable uncertainty surrounded the outlook for housing."

The release of the minutes come a week after Fed Chairman Ben Bernanke said during Congressional testimony that a "recession was possible." He also said that real GDP might grow slightly in the first half of the year but conceded that it could also contract.
It is nice to know that the Federal Reserve is finally catching up to the American public who have known for some time that things were getting very bad out there.
"Several participants noted that the problems of declining asset values, credit losses, and strained financial market conditions could be quite persistent, restraining credit availability and thus economic activity for a time and having the potential subsequently to delay and damp economic recovery," the Fed said.
I am sure whatever recovery happens will be at the corporate level and the middle and lower classes will continue to burden the brunt of the downturn. It will be yet another jobless recovery. The Federal Reserve will continue to cut rates which will in turn place even more pressure on the already depressed dollar. That will only cause higher commodity prices and even higher oil prices but hey the corporations will once again make record profits but you will need a full time job just to afford the cost of commuting to work.

If people vote for more of these insane plolicies that have driven us to this point then they deserve the financial ruin that is sure to come as a result.