News Column

Steady Growth -- But What About the Little Guy?

September 16, 2013

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Despite years of steady economic growth, regular Americans have seen little or no gain since the Great Recession.

U.S. policies since Lehman Brothers' collapse helped the economy but didn't boost most people's incomes, President Obama conceded five years after the collapse.

"We came in, stabilized the situation," he told ABC's "This Week" on the fifth anniversary of Lehman Brothers Holdings Inc.'s $639 billion bankruptcy declaration -- the largest bankruptcy in U.S. history.

That bankruptcy, in the final months of the George W. Bush administration, is widely blamed as a key domino in a series of business failures and market gyrations in the unfolding implosion of the global financial crisis that led to the Great Recession.

"We've now had 42 straight months of growth," Obama said Sunday, "7 1/2 million new jobs created -- 500,000 jobs in manufacturing, 370,000 jobs in an auto industry that had completely collapsed.

"The banking system works. It is giving loans to companies who can get credit. And so we have seen, I think undoubtedly, progress across the board," he said.

"But what is also true is we're not near where we need to be. And part of it has to do with a whole bunch of long-term trends in the economy, where the gains that we've made in productivity and people working harder have all accrued to the people at the very top," Obama said.

"And the folks in the middle and at the bottom haven't seen wage or income growth, not just over the last three, four years, but over the last 15 years," he said. "And so everything that I've done has been designed to, No. 1, stabilize the economy, get it growing again, start producing jobs again; No. 2, trying to push against these trends that had been happening for decades now."

U.S. income inequality has grown significantly since the early 1970s, after several decades of stability, to the point that the gap between the richest 1 percent of Americans and the rest of the country is at its highest level since such statistics started being taken in 1917, a University of California, Berkeley, study released last week indicates.

"In sum, top 1 percent incomes are close to full recovery while bottom 99 percent incomes have hardly started to recover," the study says.

Obama, who said Sunday the economic problems are global, is to start a series of economy-related events this week with a White House Rose Garden speech at 11:40 a.m. Monday.

He to follow that Tuesday with an interview on the economy and its ties to immigration reform with Spanish-language TV network Telemundo and an address Wednesday to business leaders at the conservative Business Roundtable. He will speak Thursday to his advisory Export Council on the importance increasing U.S. companies' trade overseas and then visit Ford Motor Co.'s Kansas City Assembly plant in Claycomo, Mo., Friday to highlight U.S. auto industry progress.

Ford is the only Detroit Three automaker that did not receive a bailout in the recession.

Obama's National Economic Council released a report Sunday saying the U.S. economy had "cleared away the rubble" from the recession and was now poised for "stronger, more durable" growth.

Council Director Gene Sperling, a senior Obama economic adviser, told reporters the administration knows its 2009 economic decisions were divisive.

But "these very difficult, bold and politically controversial measures that the president took in 2009 have uniformly performed better than almost anyone could have projected," Sperling said.

He cited the Troubled Asset Relief Program, or TARP, that propped up the financial industry, the General Motors and Chrysler bailouts, the $800 billion stimulus bill and overhauled banking regulations among the controversial measures.

A Pew Research Center poll released Thursday indicates one-third of Americans say the economic system is more secure now than it was in 2008 and 52 percent disapprove of Obama's handling of the economy.

About 70 percent say government policies have done little or nothing to help the poor, middle class and small business, while about 60 percent and more say the policies have helped large banks, big corporations and the rich.

Henry Paulson, treasury secretary in the Bush administration during the Lehman collapse and ensuing crisis, told NBC's "Meet the Press" Sunday the economy would only improve if Democrats and Republicans come together "to deal with some of the big structural reforms we need."

He cited immigration reform and "a new tax system" as among the areas to focus on.

House Speaker John Boehner, R-Ohio, who has long criticized the administration for "mediocre" job growth and a growing national debt, said this month, "The sooner President Obama starts working with both parties to ... solve Washington's spending problem, the stronger our economy will be for all Americans."

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Original headline: Obama concedes policies didn't boost most U.S. incomes


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