The heart of the matter isn't the collapse in housing prices or even the frenetic rise in oil and food prices. These are contributing to the mess but they are not creating it directly. The basic reality is this: For most Americans, earnings have not kept up with the cost of living. This is not a new phenomenon but it has finally caught up with the pocketbooks of average people.
Exactly. And if (unlike Reich) we rightly reject the Great Education Myth, one of two things must happen. Either wages for lower- and middle-income people are going to have to come up considerably, through a revitalized labor movement, government intervention, heavily rewritten rules of trade, etc.--i.e., through what I assume will be a fundamentally forced and strenuously resisted change in behavior by companies--or most Americans are going to have to accept a much lower standard of living, which few will be willing to do. Either way, the social and policical impacts will be concussive--to put it mildly.
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