Guest Post: The American Economy in Two Minutes?

July 11, 2011

Robert Reich has done his best to explain the problems with America’s current economy in two minutes and it’s definitely worth your time, especially if you haven’t read his book “Supercapitalism”. In this video he makes six key points:

• Since 1980 wages for most Americans have been flat despite a doubling in American GDP
• The wealthiest top 1% have 40% of the nation’s entire wealth
• Money=power and therefore control of the government
• Low tax rates for 40% of our nation’s wealth = huge deficits
• Middle class is broke and in conflict as a result
• The low purchasing power of the middle class means low employment and an anemic recovery

Needless to say, it’s an impossible task he has taken on here so it’s necessarily oversimplified and if you’re interested I can’t recommend “Supercapitalism” highly enough.

However, he omits a few critical points that could have made a much more impactful four or five minute video.

• There was no description or analysis of the methods of money creation that have driven “a doubling of America’s economy.”
• Americans deserve to be reminded of how fundamental natural resources are to our economy. Can they/should they be monetized, and if so who owns them and who has the right to despoil them?
• Lastly, there were no discussions of the biophysical constraints we face as we wrestle with how to get America’s economy growing again. When economic growth leads to accelerated top-soil erosion, depleted groundwater and ever more catastrophic weather, perhaps it’s time to re-think growth.

What would you put in a 5-minute video on today’s American economy if you could? Capital Institute would love to share your video, so post a link in the comments below!