As I wrote yesterday, the markets around the world are in a freefall. This morning, things are looking just as grim, with predictions that the Dow will drop 500 points in early trading based on what happened yesterday and overnight in foreign markets. The Federal Reserve has just announced a 3/4 of a point cut in the federal-funds rate–a fairly hefty cut that may not help much. Everyone seems shocked. But, they shouldn’t be.

    If the pundits had included people from the labor movement and more voices from people whose primary interest is not greed and profit, then, I’d guess that we would potentially have avoided this crisis. It was clear that something fishy was happening, as politicians and economists and pundits encouraged people to buy, buy, buy even if that buying was being fueled by a housing bubble. You could see the crash coming.

    Now, the question is: will policymakers and pundits and the rest of those people who did very little to stop the crisis from happening–and, in fact, encouraged its development–listen to more sane voices. For example, in a letter to Congressional leaders, John Sweeney had this to say:

One of the underlying causes of our current economic weakness is the stagnation  of ordinary Americans’ incomes. This will probably be the first business cycle in which the typical family will have lower incomes at the end of the recovery than they did at the beginning of the last recession. Wage stagnation, which began in the 1970s, has led to  longer working hours, higher consumer debt, and increasing reliance on home equities.  But today home values are plummeting, home foreclosures are on the rise, consumer debt is reaching unsustainable levels, and prices for energy, health care, and education are soaring out of reach for many working families.

There are various long-tenn solutions to the underlying problem of wage stagnation. They include fixing our broken labor laws so that workers who want to form a union can bargain with their employers for better wages and benefits; ensuring

affordable health care and retirement security; fixing our flawed trade policies; and reactivating the historically successful fiscal and monetary policies that place a higher priority on full employment. Near-term energy investments in the greening of our energy base would also offer both environmental and economic payoffs in the form of good jobs

and improved competitiveness.

Another underlying cause of our current economic weakness is deregulation of the financial sector. The absence of transparency and effective regulation of the mortgage and financial services industries cries out for urgent attention.

    Well said. Will anyone listen?