By John Ballard
I'm vain enough to imagine that visitors here sometimes watch for my name, either nodding in agreement or rolling their eyes at yet another empty post. In either case my output has been limited lately by a care-giving assignment that takes my early morning hours which are always when I am most alert and have the fewest blogging interruptions. And lately a couple of malware viruses have slipped through Norton 360 and made my keyboard life a lowgrade annoyance. I'm gonna take the otherwise serviceable PC to be reformatted and start from scratch. Meantime, I'm combing through several GB of detritus deciding what to keep.
Shorter version -- Bear with me while I take care of some personal stuff.,
I'm coming in contact lately with an increasing number of underemployed people. My years in the cafeteria business were filled with such people but it seems different now. And worse. In the food business when I enrolled a new employee to serve on a cafeteria line, clean tables or wash dishes I didn't expect that to be a career move for that person. And in most cases the person hired was not thinking in career terms either. Most people who work at or near the minimum wage are mainly interested in just getting some kind of a job, any job, to earn whatever they can. Thinking in career terms is not part of the mind-set for people with little or no education, immigrants, workers who have lost other jobs, students or those already working full-time looking for additional income.
There are lots of reasons people get a job. And at the lower end of the wage scale most are either on the way up or on the way out of the work force. In my case, for example, I work for low wages at a job which is not covered by the federal wage and hour laws. (Farm workers, non-medical caregivers, and several other categories) but I'm learning a lot about senior care and the post-retirement circumstances of aging, and I am fortunate enough that anything I earn becomes discretionary income.
For privacy reasons I cannot go into detail, but in my work I have met other low-wage workers doing excellent work who are richly qualified to earn much more but jobs consistent with their qualifications are not available. In many cases they are constrained from moving by family or financial obligations. When it takes the combined incomes of two people to maintain a lifestyle, it is better that one or both of them be unemployed or underemployed.than either (or, God forbid, both) become unemployed altogether.
The picture I see emerging, not only in personal experience but nationally and internationally is one of a swollen population of available good workers with no place to go. More than once I have heard talking heads use the term "new normal" to describe what's happened in the aftermath of the housing bubble. It's as though millions of people have awakened from a dream and suddenly realize they have fallen into a deep financial hole they may never dig their way out. Reports of thousands of educated or otherwise qualified available young people who cannot find work are not only the core group of the MENA Awakening but are outnumbered in places like Italy, Spain and elsewhere.
In this country the savings rate for workers has increased from practically zero before 2008 to nearly five percent at present, credit cared delinquencies have declined to twenty-year lows (under 1%) and the average outstanding credit card balance has dropped from the five thousand dollar range to under four thousand. These are stats from memory, but I have heard them from more than one source. No one can deny that today's consumers are much more careful than they were a few years ago.
The level of concern for fiscal matters is reflected in the rise of the Tea Party. We all know the loud and extreme views of the useful idiots making news, together with the populist rhetoric of a spate of uncharacteristically demagogic GOP presidential hopefuls is an essentially astroturf phenomenon. I saw a tweet that with a couple of exceptions the Tea Party freshmen in Congress are all millionaires with eight-figure incomes. Whether precisely true or not is beside the point. We know there is plenty of money behind that insurgency and the source is ultimately corporate, not individual.
Nevertheless, the message is having an impact. I heard a woman talking on Clark Howard's call-in radio show about how all our money is the result of debt. She was sincere, and Clark Howard in his polite way was not about to teach her global macroeconomics in a couple of minutes. .But she couldn't understand why as a country we have so much debt. She was seriously blind to the reality that borrowed money is the mother's milk of capitalism, that ordinary folks borrow to buy an automobile or a house and that's the way it's done. The Amish and a handful of others have the quaint idea we should pay cash for everything but borrowing money has been part of human history since the creation of money. Why else would the Old Testament mention usury restrictions and Jubilee Years?
So speaking of capitalism, It seems Nouriel Roubini's interview has been making the rounds and hitting a few nerves. I've noticed it popping up in a number of places since Ron and I posted it here. Among other points he made was the inflammatory flat remark that Karl Marx was right about a few things.
Those who have yet to see it can go to Time, where Tony Karon has a nuanced reaction that is worth a look.
...having danced on the grave of the Soviet economic system, which finally imploded in 1990, a U.S. corporate, political and media elite weaned on the shibboleths of free-market capitalism wasn't about to embrace the jeremiads of a bearded 19th century German sage in whose name Lenin and then Stalin built their planned-economic nightmare.
Still, Marx knew a thing or two about capitalism that its boosters prefer to ignore, Roubini argues, and it's time to face up to some harsh realities.
"Karl Marx, it seems, was partly right in arguing that globalization, financial intermediation run amok, and redistribution of income and wealth from labor to capital could lead capitalism to self-destruct (though his view that socialism would be better has proved wrong)," writes Roubini. "Firms are cutting jobs because there is not enough final demand. But cutting jobs reduces labor income, increases inequality, and reduces final demand."
Anger at poverty, unemployment and despair is driving popular protest across the industrialized world, he notes, and "even the world's middle classes are feeling the squeeze of falling incomes and opportunities."
Marx, to put it more simply than he himself ever did, saw capitalism's market logic as producing recurring, ever more dangerous crises, precisely because of its tendency to channel most of the wealth produced in society into the pockets of a wealthy elite � and seeking to increase profits by cutting costs, i.e., the wage bill � leaving growing numbers of people no longer able to afford what was being produced, forcing a slowdown and contraction of the economy.
That sounds suspiciously like what we're seeing in the U.S. and other Western economies now � an economic crisis rooted in low and diminishing demand. Even though the financial crisis was averted, the economy has remained effectively stagnant at best, as depressed U.S. demand creates a vicious cycle in which corporations see no point in expanding production (and creating new jobs) if consumers can't afford to spend money and unemployment and poverty expands, further depressing demand.
The "greed is good" mantra may drive Wall Street, but greed can be bad for the wider capitalist economy. The depressed demand in the U.S. economy, for example, may be a product of decades of growing economic inequality. While real household incomes of working people have either remained largely static or fallen since the late 1970s, the rich have, to put it mildly, gotten a lot richer: incomes of the richest 1% have grown by more than 176% in the same period. Today 1 in 4 dollars earned in the U.S. accrues to just 1 in 100 Americans � or by a different measure, half of the income earned in the U.S. goes to just 1 in 5 Americans.
Roubini tweets, too. A few days ago he said Myth/Nonsense of the Year;"the Obama stimulus had no effect".Rather it prevented the Great Recession from turning into Great Depression 2.0.
His mention of the Great Depression reminded me of a book my parents had, Georgia: The WPA Guide to Its Towns and Countryside, a product of Roosevelt's WPA worthy of reprinting and reference to this day. It is a fat tome exceeding four hundred pages, filled with the most obscure information imaginable about the subject. For example, I live almost within walking distance from a hospital in Canton, Georgia, named for R.T. Jones. And who might that be?
Glad you asked, cuz right here on page 475 I find
R.T.Jones (1850-1937), grandfather of the golfer Bobby Jones, lived in Canton. Known to the townspeople simply as Mr. R.T., he wa influential in the development of the twon and the surrounding counties. As early as 1880 he served as banker for Canton; in 1891 he was instrumental...
I cite this book to remind today's readers that FDR's response to the Great Depression was far more dramatic than we have been led to believe. And opposition to the WPA in general and the Federal Writers Project in particular was every bit as contentious at the time as any issue we face today, as any quick glance at the history of WPA and its offspring will show.
But despite the opposition that project and others like it did want that lady calling into Clark Howard;s radio program would never grasp. It put tens of thousands of unemployed people to work, not just to make them feel good, but to get a broken capitalist machine back into operation.
Those who think a shrinking workforce and rising unemployment are nothing more important than the economic equivalent of an occasional flood or volcanic eruption are seriously misguided. Mt. St. Helens or Katrina are terrible events and the aftermath of both lingers to this day, but we recovered. Likewise there has been recovery from the Enron scandal, Madoff's world-class Ponzi scheme and the most recent market quake of 2008. And everybody knows we recovered from the Second World War and a string of little engagements since, including that little flap in Vietnam which only cost fifty or sixty thousand lives.
Thanks to the creation of the "all-volunteer" military and technology our learning curve is getting better all the time. We have learned to recover from just about anything. I'm starting to think there is no threat serious enough to frighten either the majority of Americans or the representatives they are sending to represent them. The old-fashioned clear and present dangers of the Dust Bowl, The Great Depression, World Wars I and II and the flu epidemic of 1918. Childhood diseases have been largely eliminated or forgotten. No one knows what an iron lung was and even people with AIDS live more than die with the disease. As a society we seem to have become fearless.
Worshiping as we do at the altar of capitalism our greatest fear has become the fear of losing money. Those without money sometimes fear never getting any in the future rather than learning to live without it. (Yes, Virginia. It can be done.) Why else do lottery tickets sell better to poor people than to those who can afford to waste part of their income on a system where losers outnumber winners with a factor of millions to one?
I want to end on an optimistic note but nothing comes to mind. A latter-day WPA is what's needed now. Unfortunately that is a politically impossible for already well-known reasons.
I see Steve just posted another piece pointing to the avarice of those in charge. It fits rather nicely into what I have been writing. Unless and until something happens to stop the rape of most new wealth getting grabbed by a tiny minority of already wealthy people at the top, the gap between them and the rest of us will only grow bigger. And the numbers, anxiety and frustration of a swelling population of unemployed and underemployed workers will eventually erupt with socially messy results. Think of a socio-political Mt St. Helens. Until then we'll wait to see what happens after that.