The Real Problem of American Economy - Assignment Example

The real problem of American Economy Task The main problem Reich explains that the government’s size is not the real issue in America’s economy and democracy as Republicans wants us to believe. The real problem is “who is the government for.” A surge of cynicism has engulfed America and this time, not about the size of the government. The cynicism has been conceived from a perception that the government does not have the interest of the average Americans in mind. It is for Wall Street, the very rich and big businesses instead. A recent poll by Pew Foundation has revealed that seventy-seven percent of respondents believe that the tremendous power lies under control of a few corporations and rich people (Reich, pg. 27). Task 2 Lesson from the great depression The lesson America should have learnt from the great depression is that growth of the economy by itself does not decrease poverty. Task 3 Labor not a problem in current economy There is a large pool of unemployment in the market. A contributing factor is the low wages. Reich believes that with correct remuneration, better economy and society are not a farfetched idea. Labor is readily available in the market, but the poor wages discourage workers to apply for the job. People are even trading their jobs for a lesser paying job that matches their remuneration (Reich, pg.35). Task 4 Three Reich’s proposals for reform Stop bankers from creating risky huge bets with the money of other people. If they have to, then they should second the bet with a good proportion of their own capital. They should also be hindered from creating cash off their balances through trade derivatives. In addition, put a requirement they receive their remuneration in warrants, or stock that cannot be can be cashed in no less than 3 years. Place precautionary measures in place preventing a bank from being too big for a fail; Combining the casino with the basic utility made bankers richer and subjected us to risks we had not asked for. If separating investment from commercial banking is not adequate in keeping all banks in check. Anti-trust laws are used to break them up. Pluck out the three major interest conflicts: credit-rating agencies, institutional investors, and regional feds. The same companies having their issues rated should not pay the agencies. Those who use their ratings should be the ones paying them. Institutional investors, for example, a mutual and pension funds should not receive investment advice from the banks that gain from their investment. Presidents elected by regional bankers should head the regional feds. The major say should come from non-bankers, and the senate should have to confirm regional presidents (Reich, pg. 38). Task 5 Regression 2 repeated lies One lie states that the rich tax cuts tickle down all the way to everyone else, but taxing the rich highly leads to slow job growth and hurts the economy. This is untrue. During Americas’ three decades of their greatest growth that lasted from the end of the world war two to 1981, 70 percent marginal tax rate was employed on America’s richest. Both George W. Bush and Ronald Reagan’s cuts in tax caused no growth (Reich, pg. 55). Trickle-down economics was a sick joke. More growth and jobs would result if American Corporations were taxed lower. The sound of it may seem reasonable until one unveils that most of those corporations do not actually pay taxes: they manipulate a code. A sum above $300 trillion sits untouched in cash because companies do not see adequate customers with enough cash to purchase what any other capacity of manufacturing would produce. What is required is not lower taxes but better payments. Task 6 Major divisions and cleavages promoted by the regressive rights The option offered by the so-called conservative republicans as a solution for all these problems would only worsen matters. They do not intend to conserve what is already there; rather, they want to fast rewind America to the period long before the achievement (Reich, pg. 89). Their agenda is rather regressive. Social Darwinism is their belief, and many are relenting to have it their way. Their strategy is to cause division in the working Americans and convince them of fabricated truth Task 6 b The conservatisms believe in a phenomenon that has an agenda of dragging America way back in the past (Reich, pg. 98). The mechanisms they believe in having evidently not been successful in the past. This in addition to the lies they spread translates to decline of public good. Several leaders may have taken their philosophy and embraced their belief. Their philosophy is deceptively appealing to the average American hence they may likely get a good number especially the public sector. Task 7 real threat The system favors the rich and the corporations. The lower and middle risks have real risks. They are the direct victims of tax increments and in most cases; they bear the heavy burden of tax on their shoulders. Taking over the bigger political system, there was a plan where I said that one could not advocate politics or people will take over. Wrote this memo to richest people telling them to get involved and occupy Washington. Basically, keep people from taking over blaming the victim. Task 8 Change switch in tax policy changes Most of the regressive beliefs about taxes held no water. Instead of focusing energy on the new tax-avoidance trick of changing the nationality of a corporate, any global corporation should be taxed on all profits accrued in the U.S and cease taxing American corporates if the revenues were earned outside America(Reich, pg. 78). Task 9 Case of missing money Overproduction and under-consumption have led to a realized money loss since companies sit on huge amounts unable to identify customers with enough cash to purchase their goods. Task 10 Reich and the banner For ages, the masses have always followed their ‘leader’ but with the current trends, the leaders do not have the low-level citizens in mind. These times call for doing things differently. A reform that takes this approach will have citizens initiating their own reforms without waiting for their leaders, and since the leaders cannot stop them, they join in to support the citizens in their own initiative. Task 11 Theory of social responsibility It is a theory that an individual or organization entity has the responsibility of acting to the benefit of the larger society. Balance between ecosystem and economy are maintained by the duty of every citizen for social responsibility. Task 12 Principal strategy of the regressive side Their principal strategies are to cause division between the working Americans. They base their belief on Darwinism and, therefore, attempts to drag America to long gone days. They also pick lies and repetitively tell them as if they were true which aims at luring people into their way of reasoning (Reich, pg.78). Task 13 Families coping to pressure in 18th century Families adopted to these changes by women entering the job market to have a double income and try increasing their income. This led to wives and husbands taking longer shifts and a condition called double income no sex (DINS) (Reich). Eventually, families ran into debts. In this respect, inequality somewhat helped stoke the bubble of credit. Task 14 government successful in projects The government passes policies and regulations in most of the economic and social institutions. They are therefore, better placed to perform such tasks. The government also has better financing via taxes to complete such projects without trouble. Reference Reich, Robert B. Beyond Outrage: What Has Gone Wrong with Our Economy and Our Democracy, and How to Fix It. Random House LLC, 2012. Print. Read More