Deedee's Reviews > Pinched: How the Great Recession Has Narrowed Our Futures and What We Can Do About It

Pinched by Don Peck
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Sep 19, 11

bookshelves: challenge-2011-fall, current-events-economy
Read from September 18 to 19, 2011

** spoiler alert ** Not really a review, but NOTES
From the book:
p. 32 "I think a middle class life is gone forever for alot of people."
p. 33 "Since 1993, more than half of the nation's income growth has been captured by the top 1 percent of earners, families who in 2008 made $368,000 or more.
Causes: technology and trade
p. 34 "a college degree is not the kind of protection against job loss or wage loss than it used to be"

Previous economic downturns:
1880-1900; 1930-1940; "1970's"

Millenials:
p. 78 "In nearly every way, the Great Recession has delayed the ability of young adults to reach the milestones that society has always associated with full adulthood "

Housing:
p. 85 "In 2005, nearly one in four new mortgages was an interest-only adjustable-rate loan. In 2006, 20 percent of all new mortgages were subprime, up fourfold since 1994."
p. 86 "At the beginning of 2011, roughly one in four homeowners was underwater - their house was worth less than the principal still outstanding on their mortgage."
Continuing middle class magical thinking about real estate.

Plutocracy:
Oct. 2005: "the top 1 percent of households earned as much each year as the bottom 60 percent put together, they possessed as much wealth as the bottom 90 percent" and, not surprisingly, their economic and social interests are different from the rest of Americans

Long-term Affects:
Long-term unemployment harms the country as well as the individuals involved -- increased crime, decreased "family formation" (meaning: married couples with minor children) -- current twist: unwed parenthood

Solution:
Address Medicare - he advocates a voucher system, with p. 160 "the growth in annual voucher payments strictly limited to a rate below that at which medical costs have historically grown"

Increase infrastructure spending (employs those idled in the construction industry)

Get people moving: short run: government should p. 164 "do everything it can to get the housing market running smoothly again"; long run: faze out the home mortgage interest deduction; additionally: government financial assistance to relocate the unemployed to where there are jobs

"Wage insurance" to replace some income when people take a job paying less than the one they lost; job-training coordinated with hiring industries; tax credits for hiring the longterm unemployed

We can't wish away globilization so we have to adapt.
spend more on R&D (and less on Medicare)
reduce regulation (Sarbanes-Oxley bad)
increase immigration of p.173 "creative, highly educated, highly skilled immigrants"
improve education (and punish bad teachers)
p. 180 " the subsidization of low-wage work as a means of social inclusion " (like the Earned Income Tax Credit )
loosen zoning regulations to counter the p. 181 "geographic segregation of society by income and education"
don't soak the rich - but raise taxes on millionaires
p. 185 "we should keep money out of politics"

and, remember,
We are one nation.

Review: convincing on describing the current situation and in describing how we got there; convincing on describing the affects on individuals and communities of long-term unemployment; not as convincing as to solutions (alot of which is: more education, plus supplement the income of low-wage workers with taxpayer money).

Worth reading.
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09/19/2011 page 62
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