Piggy banks endangered: Few saving for retirement

In a WSJ article titled “We Must Change Policy Direction”, ex-Treasury Secretary (and Wall Street Master of the Universe) Robert Rubin argues that “the longer-term underpinnings of our economy are unsound at a time of historic competitive change in the global economy.”

He focuses in particular on the growing bifurcation between the rich and the poor that I have previously discussed;

“The seeming inertial tendency of our economy toward less and less broad-based participation is startling and too little discussed. Median real wages, household incomes and family incomes have increased relatively little over the last 30 years, except during the last five years of the ’90s. Thus, a study showed that in 1979 it took 44 people with average earnings in the bottom half of the population to equal each person in the top 0.1 of 1%, while in 2001, the last year in that study, that number was 160. Our economy is not working for too many of our people, and that is a problem for all of us.”

“Our strategy should reaffirm market-based economics as the most effective organizing principle for economic activity, while recognizing the critical role of government in providing the many requisites for economic success that markets, by their very nature, will not provide.”

“Broad participation in economic well-being and growth is critical, both as a fundamental value and to realize our economic potential. Enabling all citizens to obtain adequate housing, nutrition, education, health care and much else will best promote productivity. Broad-based participation is also the best antidote to protectionism, and to pressures for undue restrictions on our economic flexibility and immigration. For these same reasons, measures to increase security for the growing number of people dislocated in our rapidly changing economy may well be wise economically. This can be done without creating the rigidities and excessive social benefits that have led to chronically slow growth and high unemployment in Continental Europe.”

“WASHINGTON (AP) - Most military reservists who left their civilian jobs to fight in Iraq or Afghanistan made more money there than in their regular jobs, according to a study that contradicts the notion that citizen soldiers lose money when they go to war.”

Sacramento Bee

“WASHINGTON (MarketWatch) — Sales of existing homes in the United States fell 5.7% in December to a seasonally adjusted annual rate of 6.60 million, the lowest in nearly two years, the National Association of Realtors reported Wednesday. Sales were much weaker than the 6.89 million expected by economists. Sales have fallen three months in a row. “Speculators are pulling out,” said David Lereah, chief economist for the realtor group. Inventories of unsold homes fell 4.4% to 2.80 million in December, a 5.1-month supply.”