We Moved from a Manufacturing to a Service Economy under Reagan-Bush-Clinton-Bush

A statement released last week by Obama administration Council of Economic Advisers Chair Christina Romer warns that when it comes to the economy we are very far from being OK. Romer put out a statement concerned that many “observers” are approaching the high unemployment rates in the country without the appropriate sense of urgency. Romer says the unemployment remains high because the economy is producing dramatically below its capacity and the tools and knowledge are available to counteract economic shortfalls and they should be used aggressively. Let me add a few things to Christina Romer's observation. About 25 percent of all profits being generated in our economy right now are in the financial services sector - the billions in profits and bonuses going to a few thousand banksters, mostly on Wall Street. Historically this was a tiny slice of our economy, because banks don't actually manufacture any product that adds value to our economy. Additionally, since we moved from a manufacturing to a service economy under Reagan-Bush-Clinton-Bush we've seen manufacturing fall from about a quarter of our economy to only 11 percent of it. That means we no longer make anything of value here. Without making things, we don't create true wealth - we just move money around. You wash my car, and I'll mow your law - a so-called service economy - leads to economic disintegration over time, as eventually the car will fall apart and the lawn needs to be re-seeded. We need to reject Reaganonomics and Clintonomics, accept Bill Clinton at his word that he was wrong to listen to Rubin and Sommers, and go back to an economy that works. And roll back the Reagan tax cuts as a starting point.


willbd's picture
willbd 13 years 7 weeks ago

I read this opinion piece from our local paper. It is spot on.


Recession’s roots have been digging deeper for years

I can’t help but feel this current recession has been five decades or so in the making, as major American corporations have slowly, but surely, swallowed more and more power in this country.

While mass layoffs have only recently taken center-stage, the art of downsizing has long been the preferred brushstroke of increasing “profits,” not just in the manufacturing industry with jobs being shipped to “developing” countries, but also stretching out into retail, the media, banking, technology and elsewhere, as executives trim payroll with the nonchalance of clipping an extra leaf or two from a rhododendron

Read the rest at the link above.

Jennifer Aument's picture
Jennifer Aument 13 years 7 weeks ago

I'm encouraged to hear the Obama administration talking about jobs. I buy products "Made in the USA" whenever possible, they're just impossible to find. A perfect example, I went to Whole Foods yesterday (in Sonoma County) to buy some honey only to find that most of the honey on the shelf was from India. Honey from India here in Sonoma County? This is insane!

thomhartmann's picture
thomhartmann 13 years 7 weeks ago

Thanks for the very cogent note, Jennifer - good on ya! And thanks for using your real name; I wish more would...


Denica_Cassandra's picture
Denica_Cassandra 13 years 7 weeks ago

I'm sick of Obama already- I voted for him and now my parents may lose their home to a predatory ARM loan. They have tried to get help for the last year from his "HAMP" program - it is non sense, and simply a lie to sound like there is action. My parents even had the Treasury Dept. claim that their case was closed, even as Boxer's office was telling them that they were going to help. At least with Bush you knew the pitchfork was coming. Why all this insane coddling of the weak Democrats from our side? Whoohoo I have to buy insurance from a criminal...what a victory...Wait What? The Banks inflate the market, tell people that it's going up, "trust me I'm a professional"...then bet it's going to fail (As some most likely TRIED to crash it). Power plants, clean coal and stealing Mom's house. You could say I am far from impressed. With Democrats like these..... ? And Advisors? What did they say?--Ya, let's give them billions to throw around, a tax rebate, ignore offshore subsidiaries and go after Grandma in Vermont. America the Beautiful.

Joseph.D's picture
Joseph.D 13 years 7 weeks ago

I think Obama wants more jobs to fail. I believe he doesn't want a manufacturing industry. It certainly seems that his policies and new laws are mostly going to take effect after he leaves office, making it seem that the failures will be the fault of the new president, as the housing crash was blamed on republicans when it was the democrats who made the legislation creating the problem. casino online = I love this casino online because the crap tables provide so much casino action and the progressive slots are just the best around.

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