Of course, all kinds of predictions became available around the new year. “New Year’s Prediction (II): The US Economy in 2011” is one of them, and its author’s capsule bio is presented here:
Robert Reich is Chancellor’s Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written thirteen books, including The Work of Nations, Locked in the Cabinet, Supercapitalism, and his most recent book, Aftershock. His ‘Marketplace’ commentaries can be found on publicradio.com and iTunes.
Like many other observers of the economy, Reich has noticed the phenomenon described by the first line of A Tale of Two Cities, by Charles Dickens:
It was the best of times, it was the worst of times…
Reich feels that the coming year will be maybe not the best of times, but pretty good for the stock market and anybody connected with Wall Street. Giant corporations will make giant profits. What he calls the Big Money economy will do just fine.
The rest of us, not so much. What Reich calls the Average Working Family economy is doomed to more of the same. American workers will continue to be lucky to be working at all, but no matter how fervently grateful they are to be employed, their pay isn’t going to go up. The working poor will stay poor, though not necessarily working. The number of people who wish they had jobs will keep growing. Americans will sink deeper into debt, if they can even get loans or credit at all.
Small businesses will flounder and fail. The housing situation won’t get any better for either owners or renters. Reich does not specifically mention the population of Americans experiencing homelessness, but it’s easy enough to extrapolate from the foregoing, and understand that “dismal” is not too strong a word. Here’s part of the problem as Reich diagnoses it:
America’s big businesses are depending less and less on U.S. sales and U.S. workers. Their big profits are coming from two sources: (1) growing sales in China, India, and other fast-growing countries, and (2) slimmed-down US payrolls….
In short, profits aren’t coming from American consumers — and profits won’t be coming from American consumers in 2011.
Reich mentions that General Motors makes more cars in China than in the United States. Gee, I hope they do a better job with cars than with audiocassette players. I just threw away an American-brand, made-in-China, personal cassette player because batteries could not be inserted into its body. To make a compartment that holds a couple of AA batteries — how complicated an engineering feat is that?
And the other General, General Electric, plans to invest $2 billion in China very soon. Wal-Mart’s customers are mainly outside America and its workers will soon be too, if not already. Reich says,
Most Republicans and too many Democrats are dependent on corporate America and Wall Street. Their version of tax reform is to cut taxes on the wealthy and on big corporations, and either raise them on everyone else (sale and property taxes are already on the rise) or cut spending on programs working families depend on.
He sees a new progressive movement forming up, composed of (not surprisingly) progressives, Independents, minorities, organized labor, and the young. He also includes the “enlightened Tea Partiers,” which is an important distinction to make. There is too much stereotyping and labeling going on, and not enough serious consideration of views.