"For 30 years Republicans have lied about the role of government." So asserts Joan Walsh in Salon, who quotes possibly the best description of just how the economy got here by Robert Reich (Clinton's Secretary of Labor and current UC Berkeley Professor). 

"The bursting of the housing bubble caused the current crisis, but the underlying problem began much earlier -- in the late 1970s, when median U.S. incomes began to stall. Because wages got hit then by the double-whammy of global competition and new technologies, the typical American family was able to maintain its living standard only if women went into the workforce in larger numbers, and later, only if everyone worked longer hours.

"When even these coping mechanisms were exhausted, families went into debt -- a strategy that was viable as long as home values continued to rise. But when the housing bubble burst, families were no longer able to easily refinance and take out home-equity loans. The result: Americans no longer have the money to keep consuming. When you consider that consumers make up 70 percent of the economy, the magnitude of the problem becomes apparent.

"What happened to the money? According to researchers Thomas Piketty and Emmanuel Saez, since the late 1970s, a greater and greater share of national income has gone to people at the top of the earnings ladder. As late as 1976, the richest 1 percent of the country took home about 9 percent of the total national income. By 2006, they were pocketing more than 20 percent. But the rich don't spend as much of their income as the middle class and the poor do -- after all, being rich means that you already have most of what you need. That's why the concentration of income at the top can lead to a big shortfall in overall demand and send the economy into a tailspin. (It's not coincidental that 1928 was the last time that the top 1 percent took home more than 20 percent of the nation's income.)"

And Walsh follows up this way: "Now honestly, I'm not sure how President Obama makes this point, roughly hourly, for the next four (and I hope eight) years. But this point has to be made, as often as possible, by anyone with an audience. We've had a deliberate shift of resources from middle- and working-class Americans and the poor, to the very rich, supported by our tax codes, twisted political values and the "winner-take-all" ethic that's prevailed at the highest levels of business and government for the last 30 years.

"Now, unbelievably, Republicans are saying we need even more tax cuts. (What part of tax-cutter George W. Bush's economic catastrophe, and his 22 percent approval rating, do they not understand?)"

Read the Salon article: http://www.salon.com/opinion/feature/2009/02/04/obama/index.html
Read Reich's blog: robertreich.blogspot.com/

Positively,
Carolan

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