Jonathan Campbell
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In this worst recession since the Great Depression - which President Obama says is officially over - we have the spectacle of vast poverty in this supposedly richest country in the world. As of December 2009 there are more than 50 million people in poverty. The Economics Policy Institute reported in October 2010 that there are 4.6 unemployed workers for every job opening (3.2 million jobs, 14.9 million unemployed), and that ratio only includes those who are currently actively looking for work. The official U-6 unemployment rate is much higher - 17% - unemployed or working part time or collecting unemployment insurance and about to be cut off at the end of this year, or "discouraged workers," those people who have already figured out that there aren't any jobs. A simple calculation yields more than 30 million adults unemployed or underemployed. Once unemployment insurance extensions run out, 14.9 million more people will have no  income at all.

Why no jobs? The reason there has been no real recovery is that there is nothing left to recover. For the last 40 years American companies have moved their operations abroad for super-cheap wages, first moving basic industries ("offshoring") to countries where you could hire people for less than a dollar per hour (and sometimes as little as a dollar per day), and then "outsourcing" service work to India and other countries where customer service professionals and engineers could be hired for a fraction of the salaries paid to American workers. This, while Alan Greenspan was promoting idea that the U.S. economy was becoming a "service economy." It was a fraud. No such thing was taking place. Greenspan artificially pumped up the economy with debt, and convinced people to borrow against their homes; the real economy had already left the country.

And now there is nowhere to turn: in 1996, the GOP-majority Congress convinced President Bill Clinton to enact "Welfare Reform" which obliterated America's poverty safety net, created during the Great Depression. Some states provide nearly nothing for people in abject poverty; it is left to charities and churches. Others provide only short-term help. Those who are able to get jobs find that they cannot survive on minimum wage, not surprising since the cost of housing skyrocketed while the minimum wage barely budged. Now with 30 million people unemployed or underemployed and thousands of foreclosures per month being processed, it will not be long before we have the spectacle of families starving, of children dying, among the riches of American society.

Welfare and poverty activists have been ringing the alarm bells. In December 2009, Peter Edelman and Barbara Ehrenreich reported in the Washington Post that Welfare Reform was failing. They collaborated with other activists at the Institute for Policy Studies, Center for Community Change, Legal Momentum, and Jobs with Justice and published a 44-page report entitled "Battered By The Storm - How the Safety Net is Failing Americans and How to Fix it"

The recession is profoundly affecting America. It is time we begin to look again at what we stand for. Is it the Promotion of the General Welfare that is explicitly stated in the Constitution, or is it the promotion of fabulous riches for the wealthiest 5% of our citizens and huge profits for the multinational corporations, at the expense of the rest of us? Will we address American poverty in a meaningful, lasting way, or will we become just another banana republic?

References:

Deepak Bhargava, Timothy Casey, et al, Battered By The Storm - How the Safety Net is Failing Americans and How to Fix it. http://www.badgerlaw.net/Data/DocumentLibrary/Documents/1260486538.35/

Peter Edelman and Barbara Ehrenreich, Why welfare reform has failed, Washington Post, December 6, 2009

Palash R. Ghosh, 4.6 unemployed workers in U.S. for every job opening: EPI, International Business Times, October 8, 2010, http://www.ibtimes.com/articles/70130/20101008/jobs-unemployed-openings.htm

U.S Bureau of Labor Statistics, The Employment Situation - Archived News Releases. http://www.bls.gov/schedule/archives/empsit_nr.htm

Standard Disclaimer: Any economic or financial information above, in Community Alert and Bulletin, Economic and Health Alerts, and the Economic and Health Survival Guide do not constitute financial advice, but are condensations and distillations of the work of others and a few words of what I believe to be common sense. The assistance and advice I may provide for you in setting up in setting up an IRA does not guarantee returns, which are dependent on market conditions, and you are taking full responsibility for financial decisions you make based on my advice. Please seek out an independent licensed accountant or financial advisor to review any information and references I have provided as well as their own expert knowledge, in order to tailor a financial plan to your circumstances. I cannot be held responsible for the consequences of decisions made based on the information and advice that I provide.

I am a health, environment, and economics researcher and consultant. I am not a physician, and the health information, suggestions, and recommendations that I provide are not prescriptions. When you pursue alternative remedies, you are taking full responsibility for your own health decisions, and it is recommended that you consult with a qualified physician to monitor your progress. This is especially the case if you currently take pharmaceutical drugs, as your dosage requirements will likely change as your body heals.

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