“There are two things that are important in politics. The first is money and I can’t remember what the second one is.”

Great column explaining how the calamity we face today is eerily similar to the calamity faced by the American economy in the 1870's. Oddly enough, the failed solutions put forth back are eerily similar to what is being proposed by the political Right today:

"In the face of economic calamity and skyrocketing unemployment, the government did, well, nothing. No federal unemployment insurance eased families’ suffering and kept a floor on demand. No central bank existed to fight deflation. Large-scale government stimulus was a thing of the distant future.

As demand collapsed, businesses slashed payrolls and reduced wages, and a ruinous period of deflation began. By 1879, wholesale prices had declined 30 percent. The consequences were catastrophic for the nation’s many debtors and set off a vicious economic cycle. When economic growth eventually began, progress was slow, with periodic crises plaguing the economy through the end of the century."

The only thing missing today are the riots.

Reich: How to End the Great Recession

Former Clinton Administration Labor Secretary Robert Reich wrote a very informative op-ed in the New York Times. One passage that initially seemed like a partisan argument but proved to be an insightful observation was:

In the late 1970s, the richest 1 percent of American families took in about 9 percent of the nation’s total income; by 2007, the top 1 percent took in 23.5 percent of total income.

It’s no coincidence that the last time income was this concentrated was in 1928. I do not mean to suggest that such astonishing consolidations of income at the top directly cause sharp economic declines. The connection is more subtle.

The rich spend a much smaller proportion of their incomes than the rest of us. So when they get a disproportionate share of total income, the economy is robbed of the demand it needs to keep growing and creating jobs.

WSJ.com: A Nation That Won't Be Fooled Again

In today’s Wall Street Journal, David Weidner criticizes the criticism surrounding the recent report by two highly reputable economists, Alan Blinder of Princeton University and Mark Zandi of Moody’s. My suggestion: read the report and decide for yourself rather than reading panicked analysts overreacting to its premises based on their own personal biases.