This economy stinks worse than you think

Too many top economic commentators are drawn from a pool of talking heads and economists who treat the welfare of corporations as a top priority.

By MSN Money Partner Apr 26, 2012 2:49PM

By William A. Collins, OtherWords


David Kocieniewski just won the Pulitzer Prize for his in-depth reporting on the loopholes that the richest Americans and corporations routinely exploit to minimize their tax bills. Congratulations to him! But most of his counterparts covering economics and business are a bunch of lapdogs.


Do you get your economic news from TV or newspapers? Big mistake.


Their income derives heavily from corporations that need you to buy things. You're more likely to do so if you think (accurately or not) that the economy is OK. Increasingly, well-known journalists on the business and finance beats top off their earnings with speaking fees from Wall Street outfits, according to a recent Columbia Journalism Review article appropriately headlined "Money Talks."


With notable exceptions like Paul Krugman, most of the prominent commentators who tackle the economy are drawn from a pool of talking heads and economists who treat the welfare of corporations as a top priority. This claque includes business journalists who understand that their continued employment depends on making the economy sound chipper.


Trapped in the middle of this artifice is Fox News. While it too prefers to sound upbeat about the economy for the benefit of its advertisers, it simultaneously prefers to sound downbeat so as to drive President Barack Obama from office. What a dilemma.


At any rate, the bushy-tailed economists on TV (and even those on NPR) emphasize the expanding economy and declining unemployment rate. Hallelujah! Salient questions of whether those new jobs are part-time or full-time and how much they pay are often shoved aside. The news on that front isn't good. Too many Americans are taking any crummy job they can find just to keep up with the mortgage or to hold off the landlord.


Perhaps the most telling benchmark for America's economic debacle is median family income, which has shrunk by 6.4 percent since 2007, the year before the Great Recession began. No wonder the middle class is disappearing at apocalyptic speed.


Then there's the fact that another 2.6 million folks drifted out of the painful "near poor" world down into real poverty in 2010. In addition, devastating "extreme poverty" has also mushroomed to 6.7 percent of the population, a new record. (Extreme poverty is when you earn less than half of a poverty-line income. In 2010, the income for the poorest poor totaled $5,570 or less for an individual and $11,157 for a family of four.)


Looked at from another angle, the bottom line on pay rates in 2010 was very scary. The median annual wage per employee was only $26,364, meaning that half of all workers made less. Inflation adjusted, that's the lowest income since 1999. And those are just the folks who are working. If you add together those who are officially unemployed, those who have given up, and those who are part-time but seek to be full-time, it comes out to around 27 million Americans. And besides that, prices are still going up.


So is there a cure? You bet. John Maynard Keynes figured it out back in the 1930s. Then President Franklin D. Roosevelt implemented it. What you do is have the government hire poor people to build stuff. You know, schools, bridges, parks, ports, works of art, and all those wonderful projects that date back to the WPA. I attended just such a great high school which still serves as our city hall today, complete with enough original murals to be a tourist attraction. Yes, the country went way into debt, but when the Depression and World War II ended, we paid it off.


Today's Republicans "just say no" to similar plans. Obama's stimulus package got us off to a good start, but the GOP soon squelched it. They want the recession to last at least until November so that the public will vote out you-know-who. And why not? Corporations are doing OK.


Plus there's no danger that it will all be explained on TV.


OtherWords columnist William A. Collins is a former state representative, and a former mayor of Norwalk, Connecticut.

Apr 26, 2012 4:23PM
Another pro Obama liberal news media article!!!!! Our economy needs major restructuring and Obama hasn't got a clue.
Apr 27, 2012 10:18AM

how about we start by having all those on gov't assistance, doing public trash pick-up, along our roads, parks, lakes, , and other open areas.  


then they can move on to other manual labor issues,  that need attention,  then back  again, to trash pick-up.


we have a paid 'work' force that is getting paid for not working......lets start  'fixing  things' by changing this 'endless, going no where' process.

Apr 27, 2012 5:16PM
Judging by some of the comments, maby your readers aren't as clueless as you'd like to believe.  Just because the liberal media feeds the us citizens a bunch of bull, doesn't mean we believe it.  I'd say by the comments people realize the economy is in the shitter, in spite of what odumbo would like us to believe.
Apr 26, 2012 5:15PM
Talk about a dilemma, MSNBC, NBC, CBS, ABC, CNN have to talk up the economy to help the Prez, but have to hammer the corps, and the rich to raise the taxes and that will hurt the economy....
Apr 27, 2012 9:24AM
I don't understand. The Savior in Chief was supposed to have our backs. He was the great fix. Oh, wait a minute. He meant he would bend the USA over and have its' back. I get it now.
Apr 30, 2012 4:23AM
I glanced at this article a tad. This article stinks far more than the economy does.  What a crock of political BS!  BO is a disgrace to the Presidency, the US, his party, and his race. He is a socialist. He is trying to redistribute the wealth and he has a personal agenda that he tries to advance at all costs. Blacks will vote for BO for no other reason than he's black. Giving illegal immigrants a free ride is a kick in the teeth to all those immigrants that went through our system and EARNED their citizenship. His stimulus just pi--ed away 800 billion dollars and he's raised the national debt 5 trillion dollars in 3 years and 3 months. He has outspent all other Presidents in our history and has precious little to show for it. God forbid he gets re-elected. Another 4 of his years and he may damage our country beyond repair.
Apr 27, 2012 4:33PM
Hey Collins, spoken like a good Socialist.  Tax those greedy corporations that dare make a profit, tax tax tax until you squeeze em dry!!!  Then scratch your head as even more of them move off-shore and take our jobs with them.  Yeah, Socialism's the answer, errr, where did you say it was actually working????
Apr 27, 2012 8:40AM
Things are so complicated now, poor people don't have the knowledge needed to "build stuff". It's not pick and shovel work anymore.
Apr 30, 2012 7:04PM

This article tries to say that economists can't be trusted unless they are the shifty-eyed Paul Krugman.  Krugman views the austerity in Europe as a failure. He wants governments to spend more.  The issue there is that they've spent all they could and in trying to borrow more encountered increased interest rates.  If Greece wasn't in the EURO it would just print more Drachmas and inflate itself to avert a crisis.  Lenders would get deflated drachmas and pay the price for lending foolishly.  Krugman is right that our government could spend more, it does, constantly.  And what does that get you...ask Detroit.  That was a "model city" where the federal government pumped money.  It will eventually be a vast sinkhole for all our federal largesse.  The government tells us that they bailed out GM (not really) they bailed out the UNION.  If GM had gone through bankruptcy it would have had the opportunity to redo the union contracts and reorganize.  Instead the union got to keep itself whole and we now have the Volt.  We (taxpayers)own GM at something around $50 per share.  GM is trading around $25.  Why doesn't Krugman buy some GM stock from us at $50?  Does Krugman drive a Volt?

This is not a macroeconomic issue.  It's about putting capital to work in the right places.  Generally speaking, the market figures this out with lots of small bets here and there.  Government doesn't know what a small bet is.  They give $500 million to Solyndra which then builds a state of the art plant built on a flawed business plan.  Ooops.  No worries, we'll tax the rich.  Or somebody didn't pay their fare share.  But government never makes even a little mistake.  Unfortunately they are always big mistakes.  When was the last time Krugman talked about a successful government program? 

Apr 27, 2012 9:09AM
No matter that unemployment is not really dropping, corporation profits are sliding, more countries getting close to default, debt growing, the stock market just keeps going up, news and facts don't matter. UP, UP, UP. WEEEEEEE!!!
Apr 30, 2012 10:29AM

2015 USA unfunded liabilities = $$ 145 TRILLION


That being said, the republicans are doing the right thing by saying no, not only no but hell no, not only hell no but F**k no.


Only idiots throw money at bad investments which is what O'bama's policies have done. I HAD great hopes for O'bama on his message of Hope and Change. It is a shame for us and his race that he couldn't pull it off. Guess thats what you get from a community organizer.


Hope and Change needs to come from the Tea Party who has a fiscal plan to save America!!

Apr 30, 2012 8:00PM
macroeconomics doesn't mean shyt if the government is not a good steward with our tax dollars!! For all of you that fall for this B.S., FEEL FREE TO PULL OUT YOUR CHECKBOOKS AND START WRITING CHECKS TO BE LOST IN THE BLACK HOLE!!!
Apr 29, 2012 11:50AM
jayb id say unbridled corruption is the reason most countries fail.the roman empire the french revolution the russian revolution.all of these events had one thing in common the concentration of wealth in a very few people hands while the majority did without.poverty breads political instability. Yes even here.the occupy wall street movement was just the first sign the rich have gone too far. Their free trade is responsible for the exporting of over 6 million manufacturing jobs since 2006.manufacturing is the creation of material wealth.that does trickle down.when its allowed to be exported you get a growing disparity between the rich and the rest.if it goes too far your get a bloody revolution.end free trade before its too late and raise taxes on the rich
Apr 29, 2012 11:44AM
Smile Thanks for the reminder I have pretty good idea that things are hard and can easily get tougher so try to save dollars quarters dimes nickels and penny's. Don't go out on your F-250 you would spend dollars easily.
Apr 30, 2012 4:52PM

As a career economist, I totally agree with Collins sentiments.  There are many well known Wall Street business economists (such as Roubini) beyond Krugman who have clearly said they same thing:  without massive Federal spending the U.S. economy, like that in the EU is doomed to long term stagnation or recession.


The math behind macroeconomics is well settled--there are a half dozen such models available through private firms and universities that tell the same outcome.  The math behind macroeconomics is compelling and convincing, and not based on political ideology rather intrinsic mathetical relationships and well known statistics.


The corporations, the rich and their paid pr agents try to discredit macroeconomics because they want their favored position to continue and frankly enjoy the benefits of cheap labor.  They are profit maximizers even if this means destroying the system that brought them so much profit.  Unlike Henry Ford, an enlightened billionaire who paid his workers more because he wanted to sell more cars, today's capitalists do not understand their long term peril.


Apr 29, 2012 1:42PM
Keynes/Roosevelt had it right, not sure Obama or anyone else could make similar moves today as it would be seen as "socialism" and "government intrusion into our lives" by many who instead believe doubling up & reinforcing the neoconservative economic ideologies which ran this country (and world) into the ground is actually the answer! All those voting for Romney will be doing so. Many Americans are reacting much differently to this crisis than they did during the Great Depression, which means we're truly going to be in uncharted waters if Republicans continue to get their way in November. Of course, during the Great Depression we didn't have the right-wing  propaganda machines we do today such as Fox News and the other cast of characters on TV and radio which have had great effect on millions of highly impressionable (gullible) people. So it's going to be interesting, to say the least, and if we collectively blow it this time Americans are going to learn their pain can and probably will  get worse, but it will be their own stupidity.
Apr 30, 2012 2:22PM

The Tea Party is destroying America.  Most of you righties squeal "socialism" but without looking at wikipedia or the nearest dictionary couldn't define it.  The Party of No is killing MY country (that would be the United States of America) and none of you are bright enough to realize it. 


How's that "trickle down" working for ya?

Apr 28, 2012 10:50AM

Seems like a bunch of comment writers here are simply against Obama.  They would like Bush back and then get us into another useless war.  People are really clueless how much those useless wars started by Bush have cost us.  Either the people writing comments here are plain stupid or paid for by vested interests.


Stupidity is the ultimate reason why any society fails.

Apr 28, 2012 12:55PM
I really think what's lost in the terrible jobs situation right now is the great job that President Obama is doing.  
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