<%@LANGUAGE="JAVASCRIPT" CODEPAGE="65001"%> Kalet Time for a Moment


Time for a Moment

The American economy is broken, and it has been for some time. While we tend to point to the 2008 financial crash as the starting point for our current economic malaise, the reality is that it dates back much farther.

Median family income has been stagnant for years – if you look at the graphs published on many of the financial sites on the web (such as Advisors Perspective (http://www.advisorperspectives.com/dshort/updates/Household-Income-Distribution.php), you see a relatively flat line dating back to the 1970s.

The latest numbers continue these trends. According to an AP report on the most recent US Census Bureau numbers, published by the Chicago Tribune in September, “most US households again saw no noticeable increase in their income last year.”

The report says that “the country’s median household income edged up just $180 last year to $51,939, a gain deemed statistically insignificant” and that continues to lag well behind the pre-recession figure.

The AP put it in traditional, partisan political terms – the numbers “make it easier to understand why many Americans think the United States remains in recession and why President Barack Obama’s approval ratings have hovered near 40%” – but these income figures, especially when considered along side other indicators of individual economic well being, point to a much deeper issue.

Consider the report from the Corporation for Enterprise Development, a non-profit that looks at financial issues. As reported by the New York Times’ Upshot blog, “(n)early half of all households in major cities don’t have enough money saved to cover essential expenses in an emergency” – defined generally as not having “enough money to meet basic expenses for three months at the federal poverty level, about $6,000 for a family of four.”

“For many Americans, living without any cushion can lead to financial disaster,” Patricia Cohen wrote for the Times in September. “This nerve-racking financial insecurity has come to characterize life in cities across the country.”

The numbers are worse in some cities – Newark, N.J., nearly 75% of families do not have enough money to meet basic expenses for three months, Detroit is at about 68% and smaller cities like Heath, Fla., and San Bernadino, Calif., are in the mid-60s, as well.

“The absence of assets that can be quickly converted to cash — like stocks, bank accounts or retirement accounts — is why the study calls these people ‘liquid asset poor,’” Cohen writes.

Andrea Levere, president of the CED, told Cohen that “it’s not just income; it’s also assets that matter when you’re attempting to change financial opportunity.”

Cohen adds that a “lack of savings not only means that families are frighteningly vulnerable to setbacks but that they are also unable to plan for the future even in the good times,” because “(f)inancial advisers recommend having savings equivalent to three months’ income to get through a rough patch.”

As Jared Bernstein, in a piece at the Washington Post in September, said the median-income report shows “that the economic challenge facing the middle class and poor is at least twofold.”

“First, the structure of the economy has made it harder for them to benefit from overall growth. Global competition, technological changes, barriers to education, deunionization, financial and housing bubbles, intractable recessions followed first by jobless and then wageless recoveries, the persistent absence of tight labor markets — all of these factors contribute to the growing disconnect between growth and the economic well-being of most households.”

The second, he says, is policy, which has focused on austerity measures designed to shrink government and reduce the budget deficit and federal debt.

These austerity measures have led lawmakers and the president to enact policies that “have not only failed to protect or adequately prepare the less advantaged for these developments, they’ve exacerbated their impact.”

These federal and state efforts – cuts to food stamps, unemployment insurance and the earned-income tax credit, broad attacks on Social Security and Medicare, cuts to education and a failure to spend on infrastructure – “are examples of near-term ways in which policymakers are hurting the prospects of working families.”

It is an indication, he says, that “economic recoveries are taking much longer than in the past to reach the poor and middle class, and that reality poses a fundamental challenge that too many of today’s policymakers are ignoring.”

Bernstein, of course, is right. The economic expansions of recent decades have not reached down to all segments of the population and the public is angry. They are tired of the “seemingly endless partisan squabbling.”

It is not partisan squabbling that is the problem, however, or not entirely. There have been moments over the last two decades when the parties have come together on economic issues.

The problem is that these short political truces have resulted in policy that has nothing to do with helping middle-class and poor Americans – from welfare and bankruptcy reform under Bill Clinton to so-call food-stamp reform under Barack Obama. It could be argued, then, that on some level, partisan gridlock has prevented worse things from happening.

What we need is not a compromise among parties indebted to Wall Street and big finance, but a movement among the poor and middle class to re-energize the debate, to put what used to be called “kitchen-table issues” on the national agenda.

What we need are good-paying jobs, access to quality healthy food and water, clean air and sustainable energy.

The American way of doing business – relying on bigger and bigger corporations who move their profits off-shore and lobby to weaken the kinds of rules that protect workers and community members – has utterly failed us.

We need more than compromise in Washington. We need a movement.

Hank Kalet is a poet and journalist in New Jersey. Email, hankkalet@gmail.com; blog, kaletblog.com; Twitter @newspoet41; Facebook, facebook.com/hankkalet.

From The Progressive Populist, November 1, 2014


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