Two pieces appearing in the MSM today, by Robert Reich (“The Truth About the American Economy”) and Paul Krugman (“Against Learned Helplessness”), reminded me of an excerpt from a diary I posted a little over a month ago, entitled: Benjamin Wallace-Wells’ NY Magazine Cover Story on Krugman: “The Loneliness of the American Liberal.”
Here’s the excerpt…
…the current definition of a "bipartisan consensus" in our government pretty much excludes most political ideology to the left of center in U.S. politics, today.
There are some real gems in Wallace-Wells' piece, including behind-the-scenes commentary by President Obama in December, in a 90-minute, “off-the-record” meeting, speaking to Krugman and a group of five other “liberal economic thinkers” (Nobel Prize-winner Joseph Stiglitz, Clinton administration Labor Secretary Robert Reich, and economists Jeffrey Sachs, Alan Blinder and Larry Mishel) at the White House, the day after “...the president had announced a deal with congressional Republicans, agreeing to extend the Bush tax cuts in exchange for middle-class tax relief and an extension of unemployment benefits.”
...It was a month after the midterms, and many progressives were worried that even the modified liberalism of the administration’s first two years would dissolve in a new spirit of conciliation with the ascendant right. The economists present understood the meeting, one of them says, as the moment when Obama “talked to the left...”
...
...Now, in the Oval Office, he [President Obama] told his guests that this effort had been his “last chance to move the dial” on jobs, as one economist present recalls, and that, with the exception of smaller initiatives (he mentioned infrastructure spending), the politics had now made further stimulus impossible...
Today, we’re reminded by both gentlemen of the impression left upon them by the President in their meeting with him, six months ago. There’s a definite sense of frustration here with regard to our nation’s jobless situation, especially with regard to Krugman’s commentary. He even beats himself up, to some extent, for not focusing upon this more frequently in his writing, in general, stating:
…In fact, looking back at my own writings over the past year or so, it’s clear that I too have sinned: political realism is all very well, but I have said far too little about what we really should be doing to deal with our most important problem…
Reich, today, provides us with an excerpt from his testimony before the U.S. Senate Committee on Health, Education, Labor and Pensions, from May 12th. Personally, I find that when former Clinton administration Labor Secretary Reich discusses our nation’s jobs situation, he’s at his best. Today’s column is among the very best I’ve ever read from him.
The Truth About the American Economy
Robert Reich
RobertReich.org
May 30th, 2011
The U.S. economy continues to stagnate. It’s growing at the rate of 1.8 percent, which is barely growing at all. Consumer spending is down.
It’s vital that we understand the truth about the American economy.
How did we go from the Great Depression to 30 years of Great Prosperity? And from there, to 30 years of stagnant incomes and widening inequality, culminating in the Great Recession? And from the Great Recession into such an anemic recovery?
Reich proceeds to answer these questions with historical analysis and a sense of clarity that is both refreshing and spot-on.
I strongly suggest a read of his commentary.
Summing up a portion of it, we have segued from “The Great Prosperity” (1947-1977), to “The Middle-Class Squeeze” (1977-2007), to where we are today: picking up the pieces left behind due to the “exhaustion” of the “three coping mechanisms” that evolved within U.S. society to deal with this assault upon our country’s middle class over the past 34 years.
Those three coping mechanisms are:
Coping Mechanism #1: Starting in the late 70’s, women moved into the paid workforce to prop up family incomes. (Reich doesn’t mention the significant increase in single-parent households during this period, however; so I am.) He points out that, in 1966, “20 percent of mothers with young children worked outside the home. By the late 1990s, the proportion had risen to 60 percent. For married women with children under the age of 6, the transformation has been even more dramatic — from 12 percent in the 1960s to 55 percent by the late 1990s.”
Coping Mechanism #2: Everyone is working longer hours. He notes that “the typical American middle-class family” now works 500 hours longer per year (12 weeks more) than they did in 1979.
Coping Mechanism #3: We then went into our “savings and borrow[ed] to the hilt.” He notes that, during “The Great Prosperity” (through 1977), Americans saved roughly 9% of their net incomes on an annual basis. “By the late 1980s and early 1990s, that portion had been whittled down to about 7 percent. The savings rate then dropped to 6 percent in 1994, and on down to 3 percent in 1999. By 2008, Americans saved nothing. Meanwhile, household debt exploded. By 2007, the typical American owed 138 percent of their after-tax income.”
He concludes…
All three coping mechanisms have been exhausted. The fundamental economic challenge ahead is to restore the vast American middle class. That requires resurrecting the basic bargain linking wages to overall gains, and providing the middle class a share of economic gains sufficient to allow them to purchase more of what the economy can produce. As we should have learned from the Great Prosperity — the 30 years after World War II when America grew because most Americans shared in the nation’s prosperity — we cannot have a growing and vibrant economy without a growing and vibrant middle class.
Bold type is diarist’s emphasis.
As I noted above, Reich’s historical analysis of the labor force (which I barely touched upon, above) is both extremely well-written and very much on the money. His post is well worth the read!
Krugman’s frustration is far more palpable than Reich’s, today. Like many reading this diary, when it comes to the current state of U.S. unemployment, he’s legitimately fed-up with the inaction demonstrated by our nation’s status quo, regardless of party affiliation.
Against Learned Helplessness
Paul Krugman
NY Times
May 30th, 2011
Unemployment is a terrible scourge across much of the Western world. Almost 14 million Americans are jobless, and millions more are stuck with part-time work or jobs that fail to use their skills. Some European countries have it even worse: 21 percent of Spanish workers are unemployed.
Nor is the situation showing rapid improvement. This is a continuing tragedy, and in a rational world bringing an end to this tragedy would be our top economic priority.
Yet a strange thing has happened to policy discussion: on both sides of the Atlantic, a consensus has emerged among movers and shakers that nothing can or should be done about jobs…
…
…So someone needs to say the obvious: inventing reasons not to put the unemployed back to work is neither wise nor responsible. It is, instead, a grotesque abdication of responsibility…
…
…As I see it, policy makers are sinking into a condition of learned helplessness on the jobs issue: the more they fail to do anything about the problem, the more they convince themselves that there’s nothing they could do. And those of us who know better should be doing all we can to break that vicious circle.
The actionable item through all of this commentary, today?
This past December, (at the time) the President may have written off a direct push for jobs and renewed public stimulus as not being politically feasible. But, now, at a time when he has acquired more political capital and is doing well in the popularity polls, there is nothing, IMHO–I repeat: nothing–he could do to more forcefully propel our Party and his own candidacy for re-election to a resounding victory in 2012 than to put this issue front and center on the public agenda, once again.
The frustration on this matter, among both the Democratic wing of the Democratic Party and throughout the U.S. population, at large, is well past palpable.
On the other hand, as I write this, our elected officials in Washington could not appear to care less about the matter. Krugman notes that there's a big difference between recognizing that something's extremely difficult to accomplish, politically, given the zeitgeist in D.C.; however, he points out that there's a big difference between acknowledging that truth and failing to even talk about it.
Contact the White House and your elected officials and tell them it's time to bring the jobs issue front and center on our national agenda, one more time. It is time, once again, to publicly discuss another, formal round of stimulus on Main Street.
If not now, when?