Lately, the economic news has not been good. And that’s an understatement. Anemic or negative job growth – in a nation that needs 200,000 to 300,000 new jobs a month just to keep even with a growing work force. Housing sales down 25 percent. You name it. The only good news? Our remaining bankers and Wall Street wizards are doing quite well, thank you.
As might be expected, the bad news is far from evenly distributed. Take unemployment. I listened to a talk on C-span last week stating that the upper echelons of our society were only experiencing a 1-2% unemployment rate, whereas it was over 16% for those on the lower end. I tried to track down these data, but it’s hard to find unemployment figures categorized by the economic class people used to belong to. But there were enough unemployment numbers at the Bureau of Labor Statistics (http://www.bls.gov/data/) to construct this little graph.
It shows monthly unemployment for the last few years (through July 2010). On the left, according to educational background for those older than 24; On the right, by sex, race and age (16-19, and older than 20). None of it’s good news, but it’s obviously better for white women with Bachelor’s degrees (5% unemployment), then for men with only high school diplomas (10%), or (God help you!) a black kid who left without graduating (45%). The more education, the better your employment chances; whites are doing better than blacks; and women better than men. No surprises there – except perhaps the last one.
But official figures are the best part of the bad news. The worst part being that they are far too optimistic: they don’t include those who have given up active job hunting, nor those, who can’t find full-time jobs, working only part-time (our government makes no distinction between part- or full-time employment: if you’re working you’re not unemployed). And there is no end in sight. No one, except possibly those shilling for the Obama administration, thinks better news is just around the corner. Even optimists see substantial improvement only by 2014 or 2016; the pessimists, not until 2020; and the real pessimists believe that a good portion of those lost jobs may never come back.
Unemployment, of course, is a tragedy for those who have lost their jobs. Our most basic question of one another is, “what do you do?” The implication being if you do nothing, you are nothing. Ask any woman who has had to reply “I’m ‘just’ a housewife.” But it’s a tragedy for the rest of us too. We are a society accustomed to smoothing over our various fractures and discontents with continual growth – we are a “bigger pie” nation. Not very good at readjusting the size of the various slices, much less slices of a shrinking pie. Our Pledge states: “one nation, indivisible . . . “ But that’s always been a hope, not a fact. We are anything but. Neither are we a nation inured to adversity.
High unemployment – long-lasting high unemployment – is a recipe for civil discontent and a breakdown of societal norms. For increased fear and anger. We are probably seeing some of it already. But not among those who have lost the most. The “Tea-Partiers” are not mostly young, black or disadvantaged. They’re mostly white, older and well-to-do. But the fear and anger are very real.
And the morons, i.e., the Republican Party, are playing with fire. It’s one thing to be against something, quite another to solve problems once you achieve power. You have to believe in fairy tales to think that their time-honored nonsense – free the free market, lower taxes, cut social spending, fix the deficit – offers any solution for current problems. Repeating Herbert Hoover’s prescription for getting out of the Depression is unlikely to work better the second time around. Combining “up the establishment” with “populism” may not prove to be all that clever.
What about the Democrats? Well, give them some credit. Obama and most of the congressional democrats tried, but their feeble and relatively feckless efforts seem to have fallen far short. The “stimulus” was too small and included little of the “infrastructure reconstruction” it was touted to finance. Injecting money into the banks turned out to be not quite the same as injecting money into the economy. Failure to allow bankruptcy judges to adjust mortgages downwards, and give-aways like “cash-for-clunkers” and “first-time home buyer credits,” seemingly emphasized the unfairness of it all, and may simply have increased the anger of those who didn’t benefit.
They have fought hard – and it’s become an increasingly harder fight – for the continuation of unemployment benefits, perhaps the most efficient way to inject money into an economy. So thank ‘em for that. I could go on, but why bother. A majority, perhaps even most, of the congressional Democrats wanted to do better, and would have had the votes been there – and had the administration been more supportive. Unfortunately, come November and the mid-term elections, these are probably the ones who will suffer most.
As for what comes next? Your guess is as good as mine. But I wouldn’t be living up to my chicken-little reputation if I thought the next news would be good news, and it will all turn out swell.
Al
I’ve read lots of book on the economic crash of 2007-09, perhaps because I’m into doom and gloom; or because it just might prove to be the transformational event of our times; or maybe because I’m the son of Depression Era parents for whom an earlier crash was the transformational event.
So let me make a recommendation: Read “I. O. U.” by John Lanchester (its British title, “Whoops,” is far more apt and descriptive). It’s clearly – nay, elegantly – written. It’s simple and short, and to the point. Lanchester, a novelist (winner of the Whitbread Prize) and sometime columnist, has written the absolutely best book on what happened. The best book that’s ever likely to be written. And if that wasn’t enough, it’s wickedly funny (perhaps not to those he skewers). (You can also watch him on a youtube video at http://www.youtube.com/watch?v=k0RbK2kuN2c but Lanchester writes better than he lectures.)
I’ve read other books worthy of mention, “Crisis Economics”, by Nouriel Roubini (one of the few economists who predicted what was going to happen), “Freefall”, by Joseph Stiglitz (a Nobel Prize winning economist whom I always read, but not the most elegant writer), and “The Return of Depression Economics and the Crisis of 2008”, by Paul Krugman (NY Times op-ed columnist and another Nobel winner I always read). All worth getting, but none should be considered “easy reading.” “Diary of a Very Bad Year: Confessions of an Anonymous Hedge Fund Manager” (by Keith Gessen), however, is. It’s a series of transcribed conversations between said hedge fund manager and a not very knowledgeable reporter, conducted as the crisis unfolded. It would be my second pick for those wanting to be informed, but without feeling that they’ve signed up for a college course.
As might be expected, the bad news is far from evenly distributed. Take unemployment. I listened to a talk on C-span last week stating that the upper echelons of our society were only experiencing a 1-2% unemployment rate, whereas it was over 16% for those on the lower end. I tried to track down these data, but it’s hard to find unemployment figures categorized by the economic class people used to belong to. But there were enough unemployment numbers at the Bureau of Labor Statistics (http://www.bls.gov/data/) to construct this little graph.
It shows monthly unemployment for the last few years (through July 2010). On the left, according to educational background for those older than 24; On the right, by sex, race and age (16-19, and older than 20). None of it’s good news, but it’s obviously better for white women with Bachelor’s degrees (5% unemployment), then for men with only high school diplomas (10%), or (God help you!) a black kid who left without graduating (45%). The more education, the better your employment chances; whites are doing better than blacks; and women better than men. No surprises there – except perhaps the last one.
But official figures are the best part of the bad news. The worst part being that they are far too optimistic: they don’t include those who have given up active job hunting, nor those, who can’t find full-time jobs, working only part-time (our government makes no distinction between part- or full-time employment: if you’re working you’re not unemployed). And there is no end in sight. No one, except possibly those shilling for the Obama administration, thinks better news is just around the corner. Even optimists see substantial improvement only by 2014 or 2016; the pessimists, not until 2020; and the real pessimists believe that a good portion of those lost jobs may never come back.
Unemployment, of course, is a tragedy for those who have lost their jobs. Our most basic question of one another is, “what do you do?” The implication being if you do nothing, you are nothing. Ask any woman who has had to reply “I’m ‘just’ a housewife.” But it’s a tragedy for the rest of us too. We are a society accustomed to smoothing over our various fractures and discontents with continual growth – we are a “bigger pie” nation. Not very good at readjusting the size of the various slices, much less slices of a shrinking pie. Our Pledge states: “one nation, indivisible . . . “ But that’s always been a hope, not a fact. We are anything but. Neither are we a nation inured to adversity.
High unemployment – long-lasting high unemployment – is a recipe for civil discontent and a breakdown of societal norms. For increased fear and anger. We are probably seeing some of it already. But not among those who have lost the most. The “Tea-Partiers” are not mostly young, black or disadvantaged. They’re mostly white, older and well-to-do. But the fear and anger are very real.
And the morons, i.e., the Republican Party, are playing with fire. It’s one thing to be against something, quite another to solve problems once you achieve power. You have to believe in fairy tales to think that their time-honored nonsense – free the free market, lower taxes, cut social spending, fix the deficit – offers any solution for current problems. Repeating Herbert Hoover’s prescription for getting out of the Depression is unlikely to work better the second time around. Combining “up the establishment” with “populism” may not prove to be all that clever.
What about the Democrats? Well, give them some credit. Obama and most of the congressional democrats tried, but their feeble and relatively feckless efforts seem to have fallen far short. The “stimulus” was too small and included little of the “infrastructure reconstruction” it was touted to finance. Injecting money into the banks turned out to be not quite the same as injecting money into the economy. Failure to allow bankruptcy judges to adjust mortgages downwards, and give-aways like “cash-for-clunkers” and “first-time home buyer credits,” seemingly emphasized the unfairness of it all, and may simply have increased the anger of those who didn’t benefit.
They have fought hard – and it’s become an increasingly harder fight – for the continuation of unemployment benefits, perhaps the most efficient way to inject money into an economy. So thank ‘em for that. I could go on, but why bother. A majority, perhaps even most, of the congressional Democrats wanted to do better, and would have had the votes been there – and had the administration been more supportive. Unfortunately, come November and the mid-term elections, these are probably the ones who will suffer most.
As for what comes next? Your guess is as good as mine. But I wouldn’t be living up to my chicken-little reputation if I thought the next news would be good news, and it will all turn out swell.
Al
I’ve read lots of book on the economic crash of 2007-09, perhaps because I’m into doom and gloom; or because it just might prove to be the transformational event of our times; or maybe because I’m the son of Depression Era parents for whom an earlier crash was the transformational event.
So let me make a recommendation: Read “I. O. U.” by John Lanchester (its British title, “Whoops,” is far more apt and descriptive). It’s clearly – nay, elegantly – written. It’s simple and short, and to the point. Lanchester, a novelist (winner of the Whitbread Prize) and sometime columnist, has written the absolutely best book on what happened. The best book that’s ever likely to be written. And if that wasn’t enough, it’s wickedly funny (perhaps not to those he skewers). (You can also watch him on a youtube video at http://www.youtube.com/watch?v=k0RbK2kuN2c but Lanchester writes better than he lectures.)
I’ve read other books worthy of mention, “Crisis Economics”, by Nouriel Roubini (one of the few economists who predicted what was going to happen), “Freefall”, by Joseph Stiglitz (a Nobel Prize winning economist whom I always read, but not the most elegant writer), and “The Return of Depression Economics and the Crisis of 2008”, by Paul Krugman (NY Times op-ed columnist and another Nobel winner I always read). All worth getting, but none should be considered “easy reading.” “Diary of a Very Bad Year: Confessions of an Anonymous Hedge Fund Manager” (by Keith Gessen), however, is. It’s a series of transcribed conversations between said hedge fund manager and a not very knowledgeable reporter, conducted as the crisis unfolded. It would be my second pick for those wanting to be informed, but without feeling that they’ve signed up for a college course.
As far as I can tell most of the "wealth" generated over the past 15 years was made up. It culmination into a Real Estate speculator extravaganza just a masterful orgasm of greed and self deception.
ReplyDeleteI believe that ALL economic data should be based on the land's (and sea's) ability to sustain human development and economic drive. This automatically substitutes never ending economic growth with economic (and ecological) sustainability. Otherwise, the reliance on the current model is just to continue chasing bubbles.
I fear that most of the electorate does believe in fairy tales. That's what I've found most disturbing ever since Reagan was elected.
ReplyDeleteNor do I think there is a solution for it.
I’m afraid you’re right. Fairy tales are usually a lot more comforting than facing up to the truth – especially if facing up requires sacrifice. The whole “wealth” question is also interesting. We measure progress by increased GDP, as if money – and the things money can buy – is the sole determinant of quality of life. That’s a fairy tale too; since we know, deep down, how fatally flawed that concept is. Money, the thing we use to keep score, is the modern version of the Emperor’s New Clothes.
ReplyDelete