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Day two of David Pecker testimony wraps in NY Trump trial; Supreme Court hears arguments on Idaho's near-total abortion ban; ND sees a flurry of campaigning among Native candidates; and NH lags behind other states in restricting firearms at polling sites.

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The Senate moves forward with a foreign aid package. A North Carolina judge overturns an aged law penalizing released felons. And child protection groups call a Texas immigration policy traumatic for kids.

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Wyoming needs more educators who can teach kids trade skills, a proposal to open 40-thousand acres of an Ohio forest to fracking has environmental advocates alarmed and rural communities lure bicyclists with state-of-the-art bike trail systems.

Did Wealth Inequality Help Cause The Great Recession?

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Monday, October 10, 2011   

CHARLESTON, W.Va. - The "99 Percent" movement has spread from Wall Street around the country, including West Virginia. And according to one of the architects of Clinton-era prosperity, the protesters have a point when they criticize the gap between the richest one percent and everyone else. Former Labor Secretary Robert Reich says concentrating wealth at the top makes the entire economy weaker, because it undermines consumer demand.

"The only way the vast middle class and working class can keep the economy going and keep spending, is by going deeper and deeper into debt. And of course those debt bubbles eventually explode."

Reich, now a professor of public policy at the University of California, Berkeley, says inequality is worse now than at any time since the Great Depression of the 1930s.

He says that, contrary to accepted dogma, increasing money for investment by the top one percent is not the best way to create jobs. He says the rich tend to funnel their money into just a few places, which also makes the economy fragile.

"People at the top are taking their assets and they are investing them in a limited number of asset classes, which inevitably generate speculative bubbles."

Reich says that, since the rich don't consume as big a chunk of their income, they can overheat specific parts of the economy trying to get a good return on the larger portion they do save.

"Whether you're talking about dot-coms, or real estate, or commodities, you get big hikes and then big plunges."

Conservatives argue for lower taxes on businesses as a way to spur job creation. But Reich says businesses already have two trillion dollars in the bank they're not investing now.

"It's not as if businesses are not creating jobs because they don't have enough money or they don't have enough profits. The reason they're not creating jobs is they don't have enough demand."

Real hourly wages for most West Virginia workers have fallen over the last three decades, while the wages of those at the top have increased by over 10 percent.

A protest in Huntington targeted a bank this past weekend. More events are planned in other parts of the state.




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