What do you do when the economy’s a disaster, things are getting worse, and nobody seems to give gives a damn? What do you do? This country has been divided into two economies. One’s the economy of Wall Street and corporate Manhattan, along with Washington’s thriving economy of lobbyists, politicians, ex-politicians, national security contractors, and assorted hangers-on.
Call that one the “Acela Economy,” since Amtrak’s Acela Express links the two urban areas.
Then there’s the other economy, the one where most people live. Let’s call it the “Majority’s Economy.” It’s a catastrophe, and it’s getting worse, not better. Guess which one is getting more attention and care in Washington DC?
It’s illegal to shout ‘fire!’ in a crowded theater. But what if there really is a fire – and nobody cares? It’s not like anybody’s going to start a stampede in Washington. It would be a major accomplishment just to disrupt their REM sleep.
Meanwhile the volunteer firefighters are back at the station as flames rise higher, drinking beer and bitching about how much it costs to gas up the truck. That’s because they’re afraid the well-paid folks at both ends of that train line will be asked to picked up some of the tab.
Which would only be fair, since they started the fire.
You want the bad news first, or the really bad news? It’s like the gambler said: Read ’em and weep.
Jobs? What jobs?
The next time somebody celebrates a report that reads “244,000 new jobs were created in April, which is 20,000 more than the previous month,” remember that there are 7.5 million fewer jobs now than before the financial crisis. We need roughly 150,000 new jobs every month just to keep up with new job seekers.Of the 244,000 new jobs created last month, roughly one in four of them – 62,000 – were at McDonalds – which is now turning away more applicants than Harvard.
One grown man in three isn’t working. That’s a record. Long term unemployment is at record highs. African Americans are hit much harder by unemployment in this Jim Crow Depression. Young people are hard-hit too, which dooms many of them a lifetime of lower earnings. Older, long-term unemployed Americans have essentially been discarded, unlikely to find a new job and slipping down the ladder into a life of chronic deprivation.
For every job that opens up, there are 4.5 or five people looking for work. The total number of unemployed, underemployed, and discouraged workers, along with the unemployed, is approximately 25 million people, an un- or underemployment rate of 15.9%.
Losing the War on Poverty
Some of us can remember when President after President from both parties pledged to end poverty. Forget it. Since the financial crisis, more than two million Americans have fallen into poverty. More than 43 million Americans now live below the poverty line. More than 20% of this country’s children now live in poverty, more than twice the figure for children in Great Britain or France.
And more than one household in twenty lives with “extreme food insecurity,” which means normal eating patterns have been disrupted “at times” during the year because they didn’t have money for food.
House on Fire
Most of the American middle class has kept its wealth in housing, something bankers and government leaders encouraged them to do. Thanks to Wall Street, that wealth is gone, replaced by debt for real estate value that no longer exists.
Rresidential real estate has lost more than six trillion dollars in value since 2008, after 57 consecutive months of decline – although a large chunk of that money is still being repaid as bank loans. (Six trillion in lost value — and the banks are government are quibbling about a proposed $20 billion settlement for mortgage fraud.)
Housing values are down by a third over the last three years. Even more ominously, they’re down 4.6% since their 2009 lows, and they’re still falling. Fewer homes were sold in the first three months of this year than … well, since they started keeping records. 8 million homeowners are now at least one month behind on their mortgage payments.
The New Lost Generation
Young people aren’t just jobless. College tuitions have gone up 900% since 1978. The country’s total student debt is now greater than its credit card debt, and will reach $1 trillion this year. And in a statistic that should bring tears to any thoughtful person’s eyes, only 44% of those polled believe that children will have “a better life than their parents.”
Ten years ago that figure was 71%. Like the old song says: The dream is over.
It gets even worse
Not weeping yet? Try this:
Gasoline went up 30% over the last twelve months. Crops are lousy this year, so food prices are going to go up.
Consumer confidence is falling. When consumers aren’t confident, they don’t spend money. And when they don’t spend money, people don’t work. Small business confidence is falling, too. Why shouldn’t it? Their customers don’t feel like buying very much.
Millions for Misers, Misery for Millions
So what are people talking about in Washington? Less spending, and no new taxes for corporations or the wealthy. Bear in mind, for the wealthy – one person in 100 – things are great. They now own one-third of everything, while tte lower 50% of Americans own 2.5% of everything.
Meanwhile the other ninety-nine people are watching their dreams of a better life die, and there’s no serious talk about investing to create jobs and turn this economy around. There’s jive talk instead: “Business doesn’t like economic uncertainty,” we’re told, “so it won’t hire and invest.” But John Boehner just went to Wall Street and threatened to bring about an economic collapse if his radical demands weren’t met. That’s a recipe for massive uncertainty. How did business react?
The stock market went up.
They’re pushing “job creating” tax breaks for big businesses and wealthy individuals, even though corporations are sitting on two trillion dollars in cash and the wealthiest among us are richer than they’ve been at any time in modern history.
It. Does. Not. Compute.
Free the arsonists!
Meanwhile the people who caused this catastrophe – the banks – are being unleashed from the few restraints that were imposed on them last year. It’s increasingly clear that the government still has no tools for winding down a “too big to fail” bank when it’s imploding.
There’s no political discussion about turning these explosive banks into something smaller and less combustible. Pretty smart people are beginning to agree that the government hasn’t been given the tools it needs to prevent the next crash.
It’s not that the recurring deficit doesn’t need to be controlled. It does – but only after we’ve rescued the economy, and those who are suffering within it. And cuts alone can’t – and shouldn’t – do the job.
Which programs do the Republicans want to cut? They’ve already voted to decimate seniors by eliminating Medicare (which, in Alice-in-Wonderland style, they insist wouldn’t eliminate Medicare). And they would also slash Medicaid, which would be a gut-punch to the poor, the disabled, and children. They want to cut Social Security just as a new wave of retirees enters the program, along with a whole range of programs designed to help the newly-struggling victims of the economic collapse.
Tax cuts for the wealthy would make a major contribution to reducing the deficit – so, of course, Mr. Boehner has taken them off the table.
These policies are against the public’s interests and against the public’s will. The American Majority project (I’m a contributor) has the details: most people want higher taxes for the wealthy, oppose cuts to Social Security and Medicare, would like to see the defense budget reduced, and want the government to address jobs and economic growth before focusing on deficits.
Good economists think that’s a smart way to go. But the Acela crowd doesn’t agree. Apparently unprecedented levels of wealth aren’t enough to satisfy them. Guess who’s winning in Washington?
If humanity is becoming more rational (how that for an debatable question?), people will one day look back on this moment with amazement, awe, and pity. They’ll wonder how a few influential people could be so blind and so heartless, when so many people are so brokenhearted. Self interest plays a big part, of course. Politicians win campaign contributions this way. Misguided Democrats can fool themselves into thinking they look “moderate” for embracing the warped priorities of the Acela crowd and compromising with its radical demands. Journalists can repeat false economic truisms, secure in the knowledge that editors and billionaire-funded foundations will have their back.
The real question isn’t why so many people serve the AcelaCrats: It’s why the rest of us tolerate it. Why do people still vote for politicians who work against their interests, or watch and read journalists who fail to report the facts impartially and thoroughly?
If you’re wondering the same thing yourself, you’re probably not reading this in the Business Class car of the Acela Express.