Reader Cathryn Mataga complained yesterday in comments about the under-reporting of how bad things are out in the real world where most people live. It’s not hard to find proof of her thesis.
I received an e-mail today about an Associated Press story that ran on July 28, “80 Percent Of U.S. Adults Face Near-Poverty, Unemployment: Survey.” The findings are grim:
Four out of 5 U.S. adults struggle with joblessness, near-poverty or reliance on welfare for at least parts of their lives, a sign of deteriorating economic security and an elusive American dream.
Survey data exclusive to The Associated Press points to an increasingly globalized U.S. economy, the widening gap between rich and poor, and the loss of good-paying manufacturing jobs as reasons for the trend.
The findings come as President Barack Obama tries to renew his administration’s emphasis on the economy, saying in recent speeches that his highest priority is to “rebuild ladders of opportunity” and reverse income inequality.
Notice the framing: the story uses as its hook the contrast between how precarious most Americans’ hold on prosperity is, versus Obama’s rather late in the game efforts to do something to improve the welfare of ordinary citizens.
This piece tells us that things are much worse than most pundits would have you believe, namely, that the overwhelming majority of Americans encounter serious hardship. Now perhaps it was just an accident of happenstance that it didn’t get traction (Huffington Post did feature it, but Obama has told us that you can’t believe everything you see in the Huffington Post, so that doesn’t count). But I wonder if it was politely ignored by many MSM reporters precisely because reporting the survey on a timely basis would undercut Our Fearless Leader’s empty gestures towards what is left of the middle class. As Lambert put it,
“Middle class,” forsooth. It might as well be the Lannisters talking about the “smallfolk”.
Key parts of the Associated Press report:
Hardship is particularly growing among whites, based on several measures. Pessimism among that racial group about their families’ economic futures has climbed to the highest point since at least 1987. In the most recent AP-GfK poll, 63 percent of whites called the economy “poor.”…
While racial and ethnic minorities are more likely to live in poverty, race disparities in the poverty rate have narrowed substantially since the 1970s, census data show. Economic insecurity among whites also is more pervasive than is shown in the government’s poverty data, engulfing more than 76 percent of white adults by the time they turn 60, according to a new economic gauge being published next year by the Oxford University Press.
The gauge defines “economic insecurity” as experiencing unemployment at some point in their working lives, or a year or more of reliance on government aid such as food stamps or income below 150 percent of the poverty line. Measured across all races, the risk of economic insecurity rises to 79 percent.
Marriage rates are in decline across all races, and the number of white mother-headed households living in poverty has risen to the level of black ones.
“It’s time that America comes to understand that many of the nation’s biggest disparities, from education and life expectancy to poverty, are increasingly due to economic class position,” said William Julius Wilson, a Harvard professor who specializes in race and poverty. He noted that despite continuing economic difficulties, minorities have more optimism about the future after Obama’s election, while struggling whites do not.
I’ve been struck at the number of people who’ve shown up in comments vociferously arguing that the threat that someone might rob them justifies shooting, meaning killing, them (Older attorneys have piped up to express their horror that this argument is even being advanced). But economic desperation, and the fallen standing of white people, who once had a presumption of social standing to bolster their dignity, is fracturing social norms. Game of Thrones is looking uncomfortably germane: “Guest rights don’t mean so much as they used to…Some o’ them swinging down by the river figured they was guests too.”
And on a different front, Counterpunch (hat tip Rich) tells us the BEA is coming up with new and more creative ways to goose reported GDP. The usual device, that of using a not-credibly-low (but weirdly hardly ever commented upon) GDP deflator can’t be deployed when inflation is already really low. This change was announced a few month back but this piece gives a good recap. Key sections:
Facing the prospect of a 2nd quarter GDP report showing economic growth less than 1% (some professional forecasting services predict as low as 0.5%), and a year to year growth of the US economy likely to come in at barely 1%–compared to a 2011-12 already tepid 1.7%–today the Obama administration will announce a major revision of how it calculates GDP which will bump up GDP numbers by as much as 3% according to some estimates. That’s one way to make it appear the US economy is finally recovering again, when all other fiscal-monetary policies since 2009 have actually failed to produce a sustained recovery…
Instead of an actual, paltry 0.4% GDP growth rate in the fourth quarter of 2012, a weak 1.6% in the first quarter 2013, and the projected 0.5%-1% for the 2nd quarter 2013—all the numbers will be revised higher in the coming GDP estimate for the 2nd quarter 2013. The true GDP growth rate of the most recent April-June 2013 period, projected as low as 0.5% by some professional macroeconmic forecasters, might not thus get reported..
One explanation is that Gross Domestic Income (GDI) has been running well ahead of GDP (Gross Domestic Product). GDP is supposed to measure the value of goods and services produced in the US, while GDI is a measure of the income generated in the US. They are supposed to be about equal, with some adjustments for capital consumption and foreign net income flows. The idea is whatever is produced in terms of goods and services generates a roughly equivalent income. However, it appears income (GDI) is rising faster than GDP output. The BEA revisions therefore appear aimed at raising GDP to the higher GDI levels.
But income is rising faster because investors, wealthy households (2%), and their corporations are increasing their income at an accelerating pace from financial securities investments—that don’t show up in GDP calculations which consider only production of real goods and services and exclude financial securities income like stocks, bonds, and derivatives. So instead of adjusting GDI downward, the BEA will raise GDP.
And these revisions play directly into upcoming policy moves:
For one thing, it will make it appear that US federal spending as a share of GDP is less than it is and that US federal debt as a share of GDP is less than it is. That adds ammunition to the Obama administration as it heads into a major confrontation with the US House of Representatives, controlled by radical Republicans, over the coming 2014 budget and debt ceiling negotiations again in a couple of months. It also will assist the joint Obama-US House effort to cut corporate taxes by hundreds of billions of dollars more, as legislation for the same now moves rapidly through Congress in time for the budget-debt ceiling negotiations.
Revising GDP also enables the Federal Reserve to justify its plans to slow its $85 billion a month liquidity injections (quantitative easing, QE) into the banks and private investors. This ‘tapering’ was raised as a possibility last June, and set off a firestorm of financial asset price declines in a matter of days, forcing the Fed to quickly retreat. But the Fed and global bankers know QE is starting to destabilize the global economy in serious ways and both, along with the Obama administration, are looking for ways to slow and ‘taper’ its magnitude—i.e. slow the $85 billion. Redefining GDP upward, along with upward revisions to jobs in coming months, will allow the Fed to revisit ‘tapering’ after September, when the budget-debt ceiling-corporate tax cut deals are concluded between Obama and the US House Republicans.
Now there’s a long and proud tradition of manipulating and redefining official statistics for political ends. When I started blogging in 2006, the dubious state of officials numbers was, perversely, a hotter topic than it is now, and you also had some bloggers dedicated to parsing some of them (such as Brad Setser on the Treasury International Capital report). One of the reasons may be that the BEA went on a concerted campaign against John Williams of ShadowStats (I was at an economics conference that had a panel from the BEA patiently and geekily debunking some of the things Williams had said). My impression has been that Williams did and continues to do a good job of recording the changes in various official reports over time. But for some measures, he’s also tried publishing his own versions and his methods for some of them (like adding a fixed number to the Consumer Price Index) and that set him up for attack.
I didn’t want to short change Mataga on her remark from yesterday:
The media just won’t report on this crappy economy — that is until we get a Republican president.
I have to take issue with her on that. The dot-bomb period, which took place early in the Bush administration, was most assuredly presented as better than it was. I was barely watching the economy back then, and I recall seeing one GDP release (maybe first quarter 2002) and recall that I was so incensed at how ridiculous it was (2% ish) that I called everyone I knew (as in people who had real economy contacts outside NYC in various parts of the US) and asked them if they saw any growth. None did. By the time the final revision came in, the GDP for that quarter was under 1%. Similarly, the period before the crash was depicted in the media as being a period of good growth when it was by many measures not all that hot.
The fact is that business advertisers don’t can’t take very much reality, and so you’ll always see the business press represent the economy through rose-colored glasses, but not so much as for them to lose credibility. But with ordinary people, aka the consumers who drive the American economy, under more and more stress, it’s also getting harder to make the normal Panglossian media treatment look credible.
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Plummeting birth rates were also seen in many of the former Soviet Republics after that empire fell. I think the US will experience a similar decline, but most of the population is far less prepared for it than the Ukrainians, Russians etc. were. At least they effectively owned their dwellings and many people kept small gardens so they did not just starve to death.
It remains to be seen who the public will blame, if they resort to the usual tactic of blaming each other, as the MSM and oligarchs will certainly push for, and why not? it has worked well so far. If so, the nation will simply continue its rapid spiral downward I fear.
So very depressing.
oops, I see it is marriage rates, not birth rates that are in decline. My bad.
“The findings come as President Barack Obama tries to renew his administration’s emphasis on the economy, saying in recent speeches that his highest priority is to “rebuild ladders of opportunity” and reverse income inequality”
Obama is trying to stave off his lame duck status by changing the subject from the massive and massively unconstitutional NSA programs he’s running which are hammering his job approval ratings. But all he’s got on offer are Amazon-type crap jobs and tax cuts for corporations, both of which are more likely to increase cynicism than rekindle enthusiasm for him.
The whole concept of GDP as a measure of how well we are doing as a society as been bunkum from the beginning. And who seriously cares if the “economy” is doing well when we are not? But GDP has been propagandized along with other phony measures like the stock markets, the unemployment rate, and jobs created into some quasi-religious symbol for the country’s, but somehow not our, well-being.
That the BEA is cooking the GDP numbers now because the old numbers show that for the bottom 80% of us the 2007 recession never ended. All the benefits of the “recovery”, that is the bailouts and the bubbles the Fed has been blowing on Wall Street and trying to reflate in real estate have gone to the rich. It is a tale of two economies. The real economy in which the 99%, or more accurately the 80%, live, which is in the crapper, and the paper economy of the wealthy.
Since the GDP can no longer hide the crap nature of the real economy, the BEA, far from being an objective, non-political entity, is jiggering the numbers to make GDP and hence the economy and our society look better than it is. In other words, they are inviting us not to believe our lying eyes. What they are factoring in is what Frederick Soddy called virtual wealth, and I can’t help thinking that his criticisms of money made from money and not from actual productive activities apply. You can not eat or drive or live in the purely financial, but this is precisely the false equivalence the BEA is making and would have us believe.
Not to worry, Larry Summers is riding in on his white horse to save us all. Praise Jeebus!
Absolutely.
And I suspect that as the economy shifts to less industrial activity, the measure of GDP is becoming more misleading by the month. Particularly in a globalized era rife with tax havens.
GDP is the ‘worst metric’ to gauge China: Steven Roach http://www.moneycontrol.com/news/world-news/gdp-isworst-metric-to-gauge-china-steven-roach_927745.html
GDP is almost entirely a measure of waste.
Agree entirely with your analysis.
I would add that besides having a monopolistic business climate, we have a monopolistic political climate. Sure, we have Kabuki fights over gay marriage and abortion, but both parties believe in the police/security/surveillance/financial state.
And aggregates – how the state loves aggregates. Because the aggregates hide that most are getting poorer, and a very few at very best are standing still. And only a tiny, tiny few are making out like bandits. Of course, growth is part of the ruse – because if we admit there is no growth, than we are in a zero sum world, and JPMorgan and Goldman getting richer means you are getting poorer…and that would be the WORST thing possible, because CLASS WAR is the worsest thing there is ever – worser than child molestation, animal cruelty, or Hitler with a clown face.
. . . the 2007 recession never ended
The recession following the dot com bubble never ended either. A new bubble, the housing bubble, was created to cover it up and to provide an alternative channel for rentier extraction.
For reasons which should be obvious, Wall St. loves bubbles, but creating them is not so easy. It wasn’t possible to create a new bubble based on something tangible to replace the housing bubble, so the government simply starting dumping money (QE) into the financial markets to create one. This approach is ultimately counterproductive and a clear sign of desperation, as is the BEA’s redefinitions of GDP. By failing to rein in the financial industry and worse, feeding it, they are prolonging, enlarging, and institutionalizing the problem, at a cost so high the debt can never be repaid and only be repudiated.
Their only other choice is to enable the real economy to actually grow, organically, by sharing the benefits of economic production with the workers who produce it. But this directly contradicts the established policy of indulging the rentier class, so it won’t happen. The real economy can only continue to shrink as the financial industry continues to cannibalize the real economy. We’re watching it happen.
Without QE, the DJIA would have to more closely reflect economic realities and would be somewhere in the 4000 range at best, which is no doubt to where it would sink if QE were ended. Cities and states need to start creating their own public utility banks to prepare for that eventuality and to at least somewhat mitigate the coming inevitable crash.
If people think things are bad now, just wait for the situation to turn ugly, and then weird ugly in short order. The crash, when it occurs, and not if it occurs, can be expected to be precipitious.
The bubble that is being blown this time is the US dollar. The printing presses started in 2008 and never stopped. Somewhere recently I read something like 14 trillion created since 2008.
Can’t you just see the trust in the US growing in leaps and bounds recently. Why it seems like everyone wants to own US dollars………….until they don’t.
Will the Snowden revelations pop the trust bubble? Or just make it more ready for another truth out of Amercia’s Empire ways to do so?
The international fuse on the demise of the US has been lit. How long is the fuse and what will detonate when it burns down?…..stay tuned. It would be more fun to watch this happen if real people were not being hurt in the process of ending even worse hurt.
There is no risk created *merely* by printing lots of dollars. That would be OK with a trustworthy government.
The risk is created by the US Government behaving like a gang of insane criminals. We now know, because of confessions, that the NSA Director, Director of National Intelligence, FBI chief, Attorney General, and President have lied to us; we know that the President has ordered murders and claimed that it was “legal”, has impisoned people without trial for his entire term, etc. etc. etc. And on top of that, all of this seems pointless even from a strictly power-play point of view — this is a government which loses every war it gets involved in.
When the Federal Government resembles nothing more than the Joker in behavior, this is not good for the safety of the currency.
I think it was Noam Chomsky who pointed out that levels of religious belief in the US were at the level of some ‘devastated, peasant society.’ He goes on:
“I remember reading something by a political scientist who writes about these things, Walter Dean Burnham, maybe ten or fifteen years ago. He had also done similar studies. He suggested that this may be a reflection of depoliticization, that is, inability to participate in a meaningful fashion in the political arena, which may have a rather important psychic effect, heightened by the striking disparity between the facts and the ideological depiction of them. What’s sometimes called the ideal culture is so radically different from the real culture in terms of the theory of popular participation versus the reality of remoteness and impotence.”
Noam is right. Americans are a devastated peasant society. Religion is one of the few things that many people have to cling to that gives them hope, or at least something to look forward to after they die. Unfortunately, IMHO, this is exactly what keeps them from asserting themselves and seeking betterment of their circumstances in this world, the only one we know exists. I think people who are not convinced that there is anything beyond this reality are more motivated to improve the world and pass on some sort of positive legacy. This is one of my beefs with Christianity especially.
As Muslim countries in the 20th-21st centuries show, if you take everything away from the majority of people, including their political agency, but leave them religion as a consolation, their religion becomes their politics.
Witness the explosion of abortion restrictions, which are in very large measure driven by fundamentalist politicians and their supporters who rely on patriarchal belief systems rather than science or even in some cases reality to drive legislation.
I think they are going too far with it, as they inevitably do, but until them, women will probably suffer consequences that will go unreported.
Actually, that’s not quite true. Traditional Islam made no distinction between politics and religion; the system was expected to be both,and Muslims are generally encouraged to be political (at least in theory). In practice, the last century or so of colonial and post-colonial dictatorships have driven a wedge between politics and religion in those cultures, but have done a lousy job of promoting what we see as secular values (in part because the rulers WANTED there to be division among the people). As their economies tanked & those rulers got richer, some of the people have radicalized, and the better organized entities for them to turn to have always been the Islamist ones (for good or ill).
John Williams acknowledged he doesn’t calculate CPI via his own methodology, he simply adds an arbitrary figure to the government’s numbers until it matches up better with what he thinks the rate of inflation is.
It’s the XKeyscore economy. They’re just searching through the database to find the right formula that fits the narrative. But don’t worry, they’re not really reading your information. LOL!
Soon we will get paid for ratting on each other. Now there’s a basis for a productive economy.
“Soon we will be paid for ratting on each other.”
Already; Snowden who came to his senses (or lost them), was an IT guy living in Hawaii, (I believe he likened it to paradise) making 200K. Essentially performing a sensitive but distasteful task, techincally arranging to rat out everyone. IT work has greatly devalued since the 1990s, the 200K was not for his technical skill alone.
This reminds me of IT in finance, where pay is also well above industry standards. Lets face it, actively destroying the world requires high pay or a chance to kill something.
And FYI Snowden’s last job as Booz “only” paid something around $130k. He took a pay cut from that $200k job to get those final juicy docs ;).
I have often wondered how comfortable retirement with a secure income (read Social Security) and worry free and cheap healthcare (read Medicare) affect the lives of citizens. Such a person has lots of time and lots less to worry about in life. So, what does this person do every day? What will motivate and drive them? Sports? Politics? Religion? All of the above?
If you had a strong method to organize them then one could construct a political force out of them.
NASCAR + NRA + Abortion + Pornography + Gay Rights + Evangelical Christianity = Jimmy Carter + Bill Clinton + Barack Obama
‘Comfortable retirement’ – for who, the CEO?
My 75 year-old mother still works just to pay her monthly expenses. She lives a ‘comfortable’ but frugal life. The same is true of my mother-in-law. Take away Social Security & Medicare and both would be utterly destitute.
I’d love to help out more than I can however I am currently the bread winner in my household – my spouse has found only intermittent freelance work. The exact same thing is true of my sibling.
The people on the political stage of a country are largely a mirror of that nation’s Society. The Leaders we elect in most part resemble ourselves. There may be a lag between who we are now and what we see in the mirror, i.e. we may have changed now but who we see in Congress, Senate and White House are people who used to be us in the past – unless you have not changed personally that is. The 1970s were a parade of the numskulls led by Chief Numskulls such as Richard Nixon and closely followed by Carter, Clinton and today Obama. The parade was a reaction to the Civil Rights Act marked by the use of the Southern Strategy. We lost the South. We never recovered the South because the middle class Whites could afford to vote on the basis of prejudice stemming from color and ‘social’ issues despite screwing themselves economically. A large majority of them retired within the decade or 15 years thence with the blessing of defined benefit pension plans which were fast disappearing. From thereon they jumped into Social Security a decade later and still economically secure and cloistered from the real economy they continue to make sure that we will never regain the South. There is anecdotal proof of this in the recent news events which claimed that Baby Boomer poverty has increased. The only exception were those over age 65. Their poverty actually decreased from around 9% to 8% range. Here is an excerpt:
” For children younger than 18 the poverty rate went from 19.0 percent in 2008 to 20.7 percent in 2009. For people 18 to 64 — and that includes the Baby Boomer cohort — it went from 11.7 percent in 2008 to 12.9 percent in 2009. It dropped, however, for people 65 and older, from 9.7 percent in 2008 to 8.9 percent in 2009.”
http://www.examiner.com/article/baby-boomers-share-poverty-pain
Your Mother may be an exception perhaps. I am talking mostly about those people with nice White Collar and Blue Collar jobs in the middle class and upper middle class. Remember, these are the people who turn out to vote in most elections. The lower classes have never had the time.
Right now, the average Social Security is $12,000 a year. That means half the recipients live on less. Most of them need food stamps to survive and if they didn’t have Medicare they’d be broke or dead.
As for price inflation, I have been bitching about that since 2009, particularly about how the national media ignores it. I am now paying 50-100% more for pet food, 40% more for sugar. And if you start figuring out how packaging has shrunk while prices are the same or higher, you get inflation of 25-100% on many items. These real numbers are not reflected in any government numbers.
Most small businesses are not making money. Law firms are going bankrupt. Restaurants are empty. The thrift shops are full. And any job opening has at least 6 applicants …but more like hundreds applying. Anybody who thinks the economy is improving is seriously deluded.
+1000. You just hit it out of the park, sharonsj.
Restaurants are empty…………….
A small datapoint (7/31/13 @ 7pm) — wife and I never go out during the week — I said “let’s go out tonight”. Went to an old favorite — closed and replaced by a Chinese restaurant (empty). Walked by 2 other places — maybe 6 people in total. Ended up at a (cheap) Lebanese place — maybe 3 tables full (out of 25).
And this is mid-Silicon Valley – where the “economy” is as good as it get
Paul,
Here’s a real life example of a “high” Social Security retirement:
Soc Sec $1,950 – Medicare Supp $300 – shelter $600 – insurance $150 = $900 / month.
Survivable — you bet. But not what most would consider “comfortable”.
Good point about the impact on advertising on economic reporting.
The dot bomb recession was under-reported because a clear accounting would have diminished the divinity of Alan Greenspan and Bill Clinton.
It doesn’t help that much of the economic reporting comes from NYC and DC, both of which benefit massively from Federal largesse. When it all goes south NYC will endure (it has its own well established currency after all) but DC will disappear faster than Detroit – unless Disney decides to buy it up and run it as a theme park.
MSM and even the HuffPost represent the upper middle class. Their dictionary misses the entry for poverty; it doesn’t exist. About a year ago, I counted the number of times “labor” is mentioned in the HuffPost. Findings: hardly 2-3 times a month. The well off and the pretend well off see nice pastel colors. Poverty has gray and black tones only.
Granted, the MSM works for the oligarchs, Obama is their ambassador to the American people and the open abuse of customers by companies such as Verizon, power companies, big stores is astonishing. (We pay for Internet three times as much as Europeans do and the quality we get is much lower.)
We ourselves sit on our hands. We elect our enemies. We buy from the abuser and when OWS came out we thought that it’s a nice curiosity.
this is the 14th national income and product account comprehensive revision and it’s been in the works for 5 years, so it aint something Obama’s pulling off to play into his policy initiates or to bump GDP 3% to make it look like the economy is recovering…one can argue that GDP is an incomplete measure or our focus on measuring everything in dollars is the wrong approach, but once you have a measure like GDP you can hardly deny including the dollar value of intellectual property such as drug patents or seinfeld…
all that said, the 0.3% deflator for GDP does look suspiciously low, but no one can yet say why, because how they arrived at that wont be released until tomorrow..
policy initiatives…
that wasnt even a spell check error, that was me…
Been in the work for 5 years, so that it would be ready to be used whenever it became necessary I guess. The problem of course is all that IP value, a rentier economy.
Including intellectual property investments in GDP isn’t “funny business” and other countries have been doing it for years. It increased the level of past GDP but won’t really affect the recent growth numbers on a chg basis.
Also, the AP article headline is _extremely_ misleading. 80% of the US is not facing near-poverty. But 80% of Americans have, at some point in their lives, faced unemployment and other hardships (as Mark Rich, who authored the study, actually states it). Unfortunately, this isn’t well-communicated in the AP article and has caused a lot of misunderstanding. The misquoting of statistics makes those who are trying to bring awareness to economic injustice look hyperbolic.
NYTimes recently featured a new study from Miles Corak on intergenerational mobility and inequality in the US.
Additionally Richard Haas at CFR is actually talking about this as an issue in his new book, which has gotten mainstream media attention.
Perhaps it’s being underreported, but the narrative of the ongoing economic crisis is certainly out there.
today’s headline at MW
5 REASONS WHY EVERYONE HATES THIS BULL MKT
http://www.marketwatch.com/story/5-reasons-everyone-hates-this-bull-market-2013-08-01
my personal fav #5: INFORMATION OVERLOAD
from commenter Eric:
“So come on in and take part. Start a business and join the business side of America.”
“All you need in this life is ignorance and confidence, and then success is sure.”
twain
would you looka there…MW changed the front page headline to WHY THIS BULL MARKET REMAINS UNLOVED heheheheeee
goRuperTgo
“A jacketless Murdoch resumes his quiz, brushing off the assault as ‘an overexcited autograph-hunter wanting to have his shaving foam signed.”
andy zaltzman
Seize the Fed already! Uber bankrupt, TBTF albatrosses the Fed failed to regulate during the Greenspan era are at the epicenter of class warfare.
Speaking of Greenspan, why is this man not sharing a cell with Madoff? King Ponzi rightly bears responsibility for not only a mere pawn like Madoff, but for the larger, negative state of affairs reported here.
Per Greenspan’s sidekick, Capo Confetti, and his academic exercise in late-stage hyperinflationary shutdown of the global physical economy, he can keep the beard and use it to polish Greenspan’s shoes while they both rot in the can.
FYI – something funny. I posted an open letter to Pres on my own word press blog to Twitter re the issue of poverty v corporate tax cuts including a reference to the AP study. Soon after a DNC staffer started following me. Feelin the love here.
Jakarta is not coming. It’s already here.
Mainstream press here (UK) separate economic coverage, always done by highly patronising gawps, from hard-hitting documentaries that actually show indecent treatment of the disabled, workers, patients and what goes on in jobcentre plus. I haven’t even heard the major critique on the financial curse discussed since the early 70’s.
Uh, no, it wasn’t. No doubt the issues leading into the crisis of 2008 were underplayed (or, more accurately, not seen or foreseen), but there is literally no question that the economy 2001-2007 was downplayed repeatedly by the same punditocracy that is downplaying how bad it is now, and the commenter you quoted has it exactly right- it will take a Republican at the helm to get the media see and report the reality again.
Test.
So, the stories about jobless recoveries every day from 2001-2008 were imaginary? The original commenter was correct- it will take a Republican in the White House to get the media to actually do its job again.
Here we go again. Let’s blame the guy in the cat-bird seat.
How about blaming the 62% of the electorate that spectated the 2010 midterms, whilst 38% voted the T-Party into power in the HofR?
Let’s recall that when America was entering the Great Depression in the early 1930s, an English economist (Keynes) first came upon the notion of Stimulus Spending. That is, in the face of inadequate consumer spending, the government must fulfill that role and jolt the economy back to hiring.
Before 1933, Roosevelt had had an austerity budget, one that tried to match expenditures with tax revenues. Having seen the light, he switch strategies and started spending on what became known as the Alphabet Soup government agencies, one of which built the Hoover Dam.
But in order to do so, Roosevelt needed his party in control of Congress, which the Americans gave him from 1933 to 1939 in the 73rd, 74th and 75th Congresses. (Verify that historical fact here.)
In this manner, Roosevelt had the ability to enact the spending he needed, a possibility that we, the sheeple, deprived Obama. We put Obama back into office with his fiscal-policy hands tied behind his back. We diminished the number of T-Partiers in the HofR, but we did not deliver the majority in that chamber back to the Dems.
Had we done so, it is more than likely that Obama would have done a Version 2 of the American Recovery and Investment Act of 2009 – which spent more than $800B on stimulus spending. And by doing so, helped cap Unemployment at 10%.
Ten-percent! You call that “capping”? Yes, I do. The unemployment rates went as high as 20/25% during the Great Depression and they could well have done the same from 2009 onward also.
When pointing the finger of blame (for economic policy), let’s not forget that we have a tripartite system of governance (the Executive, Legislature and Judiciary). It was devised with great forethought specifically in that manner in order not to let one body accumulate too much power.
Nice deflection on the 2010 midterms.
. . .we did not deliver the majority in that chamber back to the Dems.
And yet, as we have seen, it doesn’t do any good. The Democrats had control of the Senate, House, and presidency in Obama’s first term and they relied on the convenient ‘Republican obstruction’ excuse to avoid doing anything.
Worse, Obama has avoided doing even what he could do without congressional approval, even the very simplest things. The ‘Republican obstruction’ excuse has been wearing thin for years now.
Don’t you know a kabuki dance when you see one? The paralysis of the U.S. federal government is by design, for the purpose of buying time for the Financial Industrial Complex to economically degrade the enemy – the general population – and get the National Stasi Apparatus up to speed to keep the population intimidated and subjugated.
Other than that I mostly liked your post.
“Don’t you know a kabuki dance when you see one?”
Well no, he’s gettin’ paid not to see it.
Before 1933, Roosevelt had had an austerity budget, one that tried to match expenditures with tax revenues
HUH?
Roosevelt wasn’t president until March 4, 1933.
IIRC he campaigned on balancing the budget.
— In this manner, Roosevelt had the ability to enact the spending he needed, a possibility that we, the sheeple, deprived Obama. We put Obama back into office with his fiscal-policy hands tied behind his back. We diminished the number of T-Partiers in the HofR, but we did not deliver the majority in that chamber back to the Dems.
Had we done so, it is more than likely that Obama would have done a Version 2 of the American Recovery and Investment Act of 2009 – which spent more than $800B on stimulus spending. And by doing so, helped cap Unemployment at 10%. —
He already had a majority, and used it to place his name on Romney-Care. Even before his election in 2008, he talked like a neo-conservative. He was and continues to be a true believer in neo-liberal free markets. He is actively working to dismantle Social Security and Medicare programs, constantly repeating the Republican false-hood that “we can’t afford it.” The advocates that we are told he represents are locked out of the Whitehouse and even arrested when they try to gain attention. He has legalized Bush’s wire-taping programs and expanded it to monitor everything and every one. He has expanded Bush’s drone program, perpetuating American atrocities across the face of the earth.
The only thing missing is the goose stepping parades marching around Time’s Square to the tune of God Bless America.
And some how it’s OUR FAULT for not giving him even more power. If he doesn’t fight for progressive values while in the monitory, what makes you think he would do so if he was in the majority?
Just once, I wish these Obamanots would address the substance of the argument, instead of trying to cash in on some one else’s reputation.
Here’s an opinion piece in the Guardian by Anna Marie Cox of all people. The headline: “Obama pitches ‘grand bargain’ to a middle class that no longer exists.” Basically, yeah.
Go over to Michael Hudson’s site for a clear explanation of our current malaise.
Michael Hudson
China – Avoid the West’s Debt Overhead: A Land Tax is needed to hold down Housing Prices
I think that Obama’s public support of Summers for the Fed Chief appointment is giving disaffected Democrats an opportunity to go after the administration on these issues in a way that transcends the importance of the appointment itself.
Summers is one of the chief architects of a whole range of neoliberal policies and approaches that captured both parties in the late 20th century, but have proven to be social and economic failures. These approaches have brought us financial instability and collapse, extreme inequality, unaccountable corporate and financial corruption, shameless exploitation and predatory behavior, the loss of decent American jobs, the destruction of the economic foundations of middle class life … and even a decline in the moral fiber and decency of Americans as our communities, families and social lives have been swallowed up by ugly radical individualism and the commercialization of all values. Americans in the neoliberal era are isolated, angry and on their own.
Obama and his people don’t get this at all. He seems to be part of a group in the Democratic Party that has taken a purely partisan view of 2008, and that sees it as the result of GW Bush wrecking the glorious Clinton economy by “putting two wars on a credit card”. In other words, these neoliberal dead-ender Democrats in the current administration are still attracted to all the old theories of fiscal conservatism, oversized government, federal debt calamity and crowding out that were the intellectual calling cards of the conservative, neoliberal gang who took control in the 90’s. No wonder their response to 2008 has been so anemic and lacking! No wonder he wasted three years on Pete Peterson’s Fix The Debt antics and grand bargaining and government shrinkage! Their whole approach has been little more than a misguided effort at a “return to normalcy” which refuses to grapple with the deep structural failures engineered by BOTH parties over the past thirty years.
People need to say no to Summers because they need to get the Democratic Party wake up and renew itself, let go of this spotted past and embark on something really different. I don’t care how “smart” Summers is. The centuries are full of smart guys pursuing bad aims.
I believe the story got little traction because it is too hard to make sense of it without seeming sensationalistic or biased. It’s too broad. I received a couple unemployment checks about a decade ago but I would never consider myself poor or struggling overall. Would I have been part of the 80%? I have also received EITC money a few times but back when I was without a child and single. We could also spin this whole finding to show how well our social welfare system works to point out that 4 of 5 of us have used the safety net. If this story is to be mainstream we need more context. Would the percentage have been lower 10 years ago? And if so, would it be lower because we gave out less social welfare or because their was less poverty? Without these details it just comes across as another piece of propaganda designed to further someone’s agenda.
I agree it’s too broad and thus does read as sensationalistic and biased. I’ve been unemployed a couple of times. I actually consider periods of unemployment INEVITABLE. But I think anyone younger than a boomer learned that pretty early on (I did). The boomers might have had lifetime employment (at least until they started hitting age discrimination) but that hasn’t been the case for a couple decades, that’s not new.
That said I have never been near poverty even in my unemployment. Is unemployment still nerve wracking? You betcha, but there’s a real objective difference between stressed out about when you’ll get another job and near poverty.
So much of the U.S. population has already been impoverished that they won’t even notice when the next crash occurs, except that their numbers will seem to have doubled overnight.
Most of the population has already accepted their subjugation. Any effective mechanism for reversing present trends of Amerikan social, economic, and political devolution should have presented itself by now, so it’s most probable that there isn’t one.
The most hopeful scenario is that civilization will eventually break down almost completely, allowing for a more just social order to be built from scratch out of the remnants. Unfortunately the engines of totalitarianism will have an enormous head start and it’s most likely a completely repressive and exploitative social order will be established permanently.
Huis clos, sadly.
“Four out of 5 U.S. adults struggle with joblessness, near-poverty or reliance on welfare…”
Many of these people aren’t “struggling.” They are dying. As Lambert has said: murder by policy.
“The steepest declines were for white women without a high school diploma, who lost five years of life between 1990 and 2008… By 2008, life expectancy for black women without a high school diploma had surpassed that of white women of the same education level, the study found… The five-year decline for white women rivals the catastrophic seven-year drop for Russian men in the years after the collapse of the Soviet Union.”
http://www.nytimes.com/2012/09/21/us/life-expectancy-for-less-educated-whites-in-us-is-shrinking.html?adxnnl=1&pagewanted=all&adxnnlx=1375063274-be7zwF8lJ3Y8Ztq5xravBQ
This is what it looks like:
“And when it comes to heart and feeling, the best in town is a woman named Dottie. Dot is 59 years old, weighs almost 300 pounds and sings Patsy Cline nearly as well as Patsy sang Patsy. Dot can sing ‘Crazy’ and any other Patsy song ever recorded and a few that went unrecorded. Dot knows Patsy’s unrecorded songs because she knew Patsy personally, as did lots of other people still living in Winchester. We know things such as the way she was treated by the town’s establishment, called a drunken whore and worse, and snubbed and reviled during her life at every opportunity, and is still today sniffed at by the town’s business and political class. But Patsy, who took shit off no one, knew cuss words that would make a Comanche blush, and well, she was one of us. Tough and profane. (As you may have noticed, cussing is a form of punctuation to us.) Patsy grew up on our side of the tracks and suffered all the insults life still inflicts upon working people here. Hers was a hard life.
“The fat lady sings, then drops dead. Dot’s life has been every bit as hard as Patsy’s. Harder because she has lived twice as long as Patsy Cline managed to. By the time my people hit 60 they look like a bunch of hypertensive red faced toads in a phlegm coughing contest. Fact is, we are even unhealthier than we look. Doctors tell us that we have blood in our cholesterol and the cops tell us there is alcohol in that blood. True to our class, Dottie is disabled by heart trouble, diabetes and several other diseases. Her blood pressure is so high the doctor at first thought the pressure device was broken. Insurance costs her as much as rent. Her old man makes $8.00 an hour washing cars at a dealership, and if everything goes just right they have about $55 a week for groceries, gas and everything else. But if an extra expense as small as $30 comes in, they compensate by not filling one of Dot’s prescriptions — or two or three of them — in which case she gets sicker and sicker until they can afford the copay to refill the prescriptions again. At 59, these repeated lapses into vessel popping high blood pressure and diabetic surges pretty much guarantee that she won’t collect Social Security for long after she reaches 63. If she reaches 63. One of these days it will truly be over when the fat lady sings.
“Dot started working at 13. Married at 15. (Which is no big deal. Throw in ‘learned to pick a guitar at age six’ and you would be describing half the Southerners in my social class and generation.) She has cleaned houses and waited tables and paid into Social Security all her life. But for the last three years Dottie has been unable to work because of her health. (Did I mention that she is slowly going blind to boot?) Dot’s congestive heart problems are such she will barely get through two songs tonight before nearly passing out.
“Yet the local Social Security administrators, cold Southern Calvinist hardasses who treat federal dollars as if they were entirely their own — being responsible with the taxpayers’ money — have said repeatedly that Dot is capable of fulltime work. To which Dot once replied, ‘Work? Lady, I cain’t walk nor half see. I cain’t even get enough breath to sing a song. What the hell kinda work you think I can do? Be a tire stop in a parkin’ lot?’ Not one to be cowed by mere human misery, the administrator had Dot bawling her eyes out before she left that office. In fact, Dottie cries all the time now. Even so, she will sing one, maybe two songs tonight. Then she will get down off the stage with the aid of her cane and be helped into a car and be driven home.”
http://www.joebageant.com/joe/2004/09/karaoke_night_i.html
This was so depressing I couldn’t decide who to reply to. For the record, night before last I was wide awake worrying about all and everything and listening to the BBC radio. They did do this report – on the 80% of US adults who are devastated. Which was no surprise to me except that it had actually been reported. My thought was that impoverished adults means one thing: there will never be a market recovery. And so it will be something entirely different.
That Obama wants to refigure the GDP and imply that Gross National Income is a better measure of the health of the economy is ominous and it means the government is busy including retirement income (1099R taxable income) and it might mean that Social Security will carry a tax burden soon as well. Because there is no other income to fake an economy with. There is no “market” earned GNI to speak of.
The thing that bothers me most is the unrelenting feeling we are being secretly choreographed into a global economy controlled by central bankers; that trade will be only for big corporations who cooperate with governments because the market is gone, and the rest of us will get some government stipend for which we will do stg like work for welfare. I’m not all that paranoid, but there has to be a reason they are intentionally bringing down capitalism. Maybe Ban Ki Moon sunk in.
You are not alone in thinking this.
In fact, my opinion is that you are still understating the scale of the situation. I perhaps can be argued that we are watching the end of the nation state as a foundation of geo-political structure. Take a look at the power held by the free-trade regimes, the corporations, and banking cartels like the TROKIA. Even the Federal Reserve is taking on more authority is setting policy – bypassing the constitutional government. Democracy is no longer relevant to setting policy.
This rigid formula would require additional spending cuts in any year in which the debt grows in dollar terms, even if the debt is stable or shrinking in relation to the economy. Under the formula, programs that strengthen economic growth or serve low- and middle-income Americans could be cut to allow the debt ceiling to be raised, but savings from curbing special-interest tax breaks would not count for this purpose.
Well , What gets me is the utter disregard of the past by leaders of economic and political ranks . All so called US citizens or members of the 97% , you know the back bone of circulation of cash between bank commerce , government and back again. monetary flow , well , the media up to this point fails to question the financial systems past record . letting it off the hook so freely as if nothing was to get in a fuss about . Well!!!!! consumer confidance is in the shitter!and the system doesnt deserve a dime more of our sweat and blood and childrens futures until they get rid of the electoral coledge and pass laws voted upon by everyone !Then we the people would be able to secure or finances and not that of ….. you dont need socialism just honest unbiased rules fair for all !
Yves — you NEED to break the GDP manipulation story out into its own article. This is a BIG DEAL and the professional economists (Krugman, DeLong) will pay attention to it, but not if it’s buried under this heading.
Nathanael, that’s perilously close to an assignment. A polite request might yeild a better result.
* * *
A personal pet peeve of mine is that I really, really hate the “You need to….” formulation. It’s infantilizing. I determine my needs.
Fine. “If you want to continue the mission which you have set yourself on your blog, then you NEED to…”
“If you don’t give a flying **** any more, which I would understand at this point, then don’t bother.”
That makes the construction technically correct.