World's major economies no longer depend on America's. Neither do America's own largest corporations

[marmar]

from the American Prospect:


Double Decoupling
The rest of the world's major economies no longer depend on America's. Neither do America's own largest corporations.
By Robert B. Reich
Web Exclusive: 05.02.07

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I'm spending my spare time these days debating supply-siders who are convinced that the record-breaking Dow proves the correctness of the Bush tax cuts.

Yes, the Dow did reach a record high last week. But the Commerce Department also reported that economic growth slowed to its weakest pace in four years. How can investors do so well while the real economy is doing so poorly? My supply-side friends don't have an answer, but I do.

It's because of two great decouplings that have occurred in recent years. First, the rest of the worlds' major economies have decoupled from the United States economy. China, India, Japan, and Europe are now such large markets they can grow briskly even as America slows.

Second, America's largest corporations have decoupled from the United States. Their overseas subsidiaries are booming even as their American operations stagnate. General Electric expects more than half its revenue this year to come from outside the United States for the first time. More than half of Boeing's new orders are from overseas. Ford is struggling in America but doing well in Europe.

In other words, the president's supply-side tax cuts are great for America's global investors, who have been investing their extra money around the world -- either in foreign companies or in global American-based ones.

But little or nothing is trickling down to average working Americans. Half of U.S. households do own some shares of stock, usually through their IRAs or 401-Ks. But the vast majority own less than $5,000 worth. Their equity is in their homes, whose values have slumped. They're paying far more for health insurance and fuel. And their wages haven't kept up.

Bottom line: The Bush tax cuts have delivered for Wall Street but done zilch for America's Main Streets.

http://www.prospect.org/web/page.ww?section=root&name=ViewWeb&articleId=12739

[madrchsod]

1. we will spend close to a trillion dollars on the war in iraq

and we spend more than the combined nations of the world each year to feed the war machine.every penny of that money is killing the future of this country.

is no incentive to invest in america because there is`t a middle class to sell goods to.

oh yes, the best car buick has to offer is sold in china and not offered here in the usa.

[marmar]

2. "because there is`t a middle class to sell goods to."

Sad but true. That's what it's rapidly coming to.

[The2ndWheel]

7. You don't need a middle class if everything is mass produced

The middle class came along because of circumstances that allowed it. As long as people have just enough to get by and stay in debt, that's all that is needed. Not to mention that if a middle class exists, by definition a lower class must exist, so poverty can never be done away with, but the fight will go on. Unless you create one class where everyone has relatively the same income, but then that process would create problems of its own.

[Demeter]

3. Sure, the Dow Doubles When the Dollar Value Is Cut in Half

to maintain that balance of true value....I say cut the corporations off at the knees. Tax them on world-wide profits, or tell them to get out entirely. Embargo all trade except for things absolutely not available here, and for manufactured goods, impose tarrifs high enough to let local manufacturing recover and grow. Impose strict CEO to minimum wage ratios, and really progressive taxation on all forms of income. Do things for the country and all its people, not for corporations and their would-be lords.

[loudsue]

5. Tell them to get out entirely is the best idea: they're still controlling our politics

with their bribes & republican revolving door on no-bid contracts. The money goes from the tax base to the republican-no-bid-contracts to the RNC, who gives more tax money to the no-bid-contrator-buddies, back to the RNC.

It is a scandal of monumental proportions, and I'm sick and tired of corporations having their way with the American taxpayers.

:kick::kick::kick:

[formercia]

4. Junior plays to his base

the Rich have done very well.

[blueworld]

6. But we're the world's only superpower

Isn't that the battle-cry of the neocon nincompoops?

This administration has pissed on, screwed or bombed so many countries in 6 short years, that even our allies despise us. We don't help with their genocides, we don't rebuild after their disasters - Bush bombs & blusters & that's it.

Not only don't they want to buy American, they don't want to look or smell American or sell to America.

The Chimp gave us cooties. :hide: