It's not just that one out of four Americans is unemployed or underemployed (working part-time, overqualified, or at a lower wage than before).

Actually thirty-five percent of Americans over 16 are not considered to be part of the labor force. Add in the BLS-defined unemployed and an unreported portion of the balance who are underemployed (which the BLS doesn't measure), and subtract the people who don't have to work (reirees, etc.) and the above portion of Americans w/o fulltime employment or at a lower wage is probably much more than 1/4.

But who knows? We should know, but we don't.

BLS Report June 2010

Civilian noninstitutional population 237,690,000
Civilian labor force 154,767,000
Participation rate 65.1
Employed 139,882,000

Employed persons:
Persons 16 years and over in the civilian noninstitutional population who, during the reference week, (a) did any work at all (at least 1 hour) as paid employees; worked in their own business, profession, or on their own farm, or worked 15 hours or more as unpaid workers in an enterprise operated by a member of the family; and (b) all those who were not working but who had jobs or businesses from which they were temporarily absent because of vacation, illness, bad weather, childcare problems, maternity or paternity leave, labor-management dispute, job training, or other family or personal reasons, whether or not they were paid for the time off or were seeking other jobs.
Unemployed persons:
Persons are classified as unemployed if they do not have a job, have actively looked for work in the prior 4 weeks, and are currently available for work.
.

I think we need to acknowledge that our current life style is non-sustainable. Our living standards are based on buying stuff cheap, made in another country by vastly underpaid workers. To get the money to buy that cheap stuff we have been cashing in our equity in our homes. The cash machine is now virtually empty, and the jobs that generated our income are largely gone.

Also, we built our economy on the raw materials we could obtain cheaply from other countries. But, those countries now demand to be paid more nearly what the raw materials are worth. Oil is an example.

This is not a disaster. If you want to talk about a disaster, let's discuss how a small group of our citizens now own a huge percentage of all of the wealth of the nation, and that percentage is going up, as those wealthy folks now own the government too. This is what is going to destroy our country.

Living without lots of cheap stuff isn't going to harm us at all. Living is a joy that doesn't depend at all on lots of cheap stuff.

But, living as serfs beholden to the capitalists who own everything harms all of us beyond belief.

It's unfortunate to see Professor Reich repeating US Chamber of Commerce talking points, though it reveals just how far right wing economic premises have taken over the thinking of even so-called liberals.

let's unpack the oversights and untruths (in no particular order)which Prof Reich, whom I respect, has unfortunately put forward:

"the disastrous Smoot-Hawley tariffs that worsened and lengthened the Great Depression": -
A favorite untruth of the economic royalists, straight from the Wall Street Journal editorial page and the pen of Jude Wanniski, notorious crackpot, fabulist and supporter of Slobodan Milosevic.

Paul Krugman knocked this particular canard down, let's see, 2 days ago:
http://krugman.blogs.nytimes.com/2010/07/10/hayek-trade-restrictions-and-the-great-depression/

Professor Reich is absolutely right when he says that American middle-class families used their homes as ATMS, borrowing against their bubble-inflated values to pay for consumer spending (which maintained the illusion of American prosperity for the last decade or two).

He also has it right that most of that spending went for imported goods "high-tech gadgets assembled in China, car parts from Japan, shirts and shoes from Southeast Asia, and precision instruments from Germany."

He is correct to identify the role American consumer played as the engine of the world economy, the consumer of last resort. From that, he properly questions why we should be able to export our way to prosperity, as the Administration proposes, since the rest of the world has been using our market to export its way to prosperity.

But while Bob correctly questions the Administration's proposal- "President Obama has vowed to double U.S. exports within the next five years" - and although he convincingly concludes there aren't enough foreign consumers to fill the gap - and even after he shows that domestic production in China and India will fill demand in those countries, he still stubbornly clings to the false premise of the Administration's flawed policy: "exports are critical for rebooting the American economy."

Why? What word is conspicuous in its absence? Why does Prof Reich, like so many mainstream commentators, have a blind spot to imports? If foreign consumers are not there to purchase the goods we want to produce and sell them, how about we produce more of the goods we consume here at home.

Instead of doubling exports in five years to cut the trade deficit in half, how about we halve the deficit cutting imports in half - make the crap here, and put our people to work in the process.

Well, the US (Multinational) Chamber of Commerce and the big-box cheap retailer lobby, if not Professor Reich, would call this "protectionism."

Nonsense.

One final note to the good professor regarding his title "The Vanishing American Consumer and the Coming Trade War"

The trade war is not coming - it's been here. And we've been losing. (Which is why the American consumer is vanishing.)

As Michael Moore, and Walter Reuther before him, said, when the Big Three (and the same goes for any manufacturer) moved production offshore, they weren't just firing their workers - they were firing their customers.

To repeat, we were able to maintain the illusion of prosperity despite the loss of stable jobs and incomes for a substantial number of families because the customers/ex-workers papered over the predicament by borrowing against their homes.

Until we reinvigorate domestic production, employment and demand by putting our citizens back to work producing the goods we consume and paying them enough to buy the goods they produce (Fordism), there is no solution to the economic ditch we've landed in thanks to the Washington/Geneva consensus.