So they can buy more TVs? I'm not sure that's sound.

For nearly a decade we were told that the American savings rate was historically low (negative, in fact), that were were living on credit, and that the music was going to eventually stop and we were going to pay for it.

Well now the music's stopped and we're paying for it. And I'm incredibly suspicious of any proposed remedy that sounds like starting the music again and getting easy credit flowing again and savings rate low again.

Maybe there needs to be a permanent, sustainable adjustment to less consumerism.

"...we need to get money back into the pockets of average American consumers -- including major investments in infrastructure, affordable health care, and a more progressive tax code."

Sidereal: "So we can buy more TVs?" Where did that come from?

Reich wasn't talking about buying more TVs; he was talking about paying for "energy, food and health insurance," among other things.

Trust me, you'd much rather have them buying TVs again than breaking into your house for food.

There's no shortage of work to be done (maybe even a functioning LEVY or two?).

There's no shortage of willing workers...here or abroad.

The important point here is to re-regulate and cut clowns like Fuld Jr from Lehman Bros and Cassano Jr from AIG out of the equation.

Windfall profit taxes on large corporations (Exxon, I'm looking at you).

Increase capital gains and payroll taxes on the upper quintile, lower taxes on the rest of us, and create jobs the same way FDR did...public works.

Scanning Chinese imports for melamine, auditing financial corporation's credit default swap transactions, alternative energy research, whatever (gotta keep in mind that we can't ALL be rocket scientists though).

Dow 5k by xmas...

I think he was. Energy, food, and health insurance are the things people are buying now, rather than stuff from the mall, by his own construction.

He describes the problem as:

They're pulling in their belts. They're leaving the malls. They're not buying a new car or TV or anything else they can do without.

and the solution as:

But even more than that, we need to get money back into the pockets of average American consumers

I think the only reasonable interpretation is that Mr Reich believes Americans should be renewed as the 'Energizer Bunnies of the world economy' by going back to the malls.

The problem is that we had a party wedded to supply-side economics that took the demand side for granted.

You can either pay people a fair wage and share prosperity broadly so consumers can afford things, or you extend vast amounts of credit with which to imitate this effect. The latter, as we have seen, is ultimately unsustainable as a basis for a modern economy.

The dive of the Dow, all the other facets of the worldwide financial meltdown, the excruciating strain on the American people, and the general loss of confidence in "The System" or "The Establishment" or whatever you want to call it will mean massive and comprehensive and breathtaking societal transformation. This is sometimes referred to as revolution.

Parts of this multifaceted and multidimensional revolution may well look very much like a traditional revolution with lots of seemingly out of control violence. Afterall there are lots of people in finance and other businesses and in government and the media and other powerful positions who have caused so much misery, so much fear, so much chaos that perhaps they ought to pay for it all in some very substantial way.

But many aspects of the revolution will go beyond the mere breaking of heads. Those aspects will look very different, may not even feel like a revolution, and will lead to new societal structures, new institutions, new ways of life, new mentalities, new mores. In short a whole new society.

I cannot predict the contours of this now emerging revolutionary society but the stars are all aligning to herald its birth. Just you wait.