Monday, July 13, 2009

When Is a Recovery? And, Is It, Even Then?

All the talk of a ‘jobless recovery’ going on gives me the heebie-jeebies. What bothers me is that people get left out of the equation. The economy becomes nothing more than Gross Domestic Product (GDP) on the idea that if it goes up, things get better for everyone. A rising tide floats all boats sort of argument.


Somehow, I suspect, that’s related to ‘trickle down,’ even though the water’s going in different directions.


Some people do understand that a ‘jobless recovery’ is no recovery at all—not for most of us, certainly. Not for those burdened by student debt, over-leveraged overpriced homes, under-employment, family members in increased need of assistance, unemployment itself, credit-card debt, or the myriad of other financial problems or responsibilities threatening to drown them. Among those who do understand is (not surprisingly) Paul Krugman, who writes in today’s The New York Times:

At this point… the acute crisis has given way to a much more insidious threat. Most economic forecasters now expect gross domestic product to start growing soon, if it hasn’t already. But all the signs point to a “jobless recovery”: on average, forecasters surveyed by The Wall Street Journal believe that the unemployment rate will keep rising into next year, and that it will be as high at the end of 2010 as it is now.


Now, it’s bad enough to be jobless for a few weeks; it’s much worse being unemployed for months or years. Yet that’s exactly what will happen to millions of Americans if the average forecast is right — which means that many of the unemployed will lose their savings, their homes and more.


If this happens, no matter how much GDP goes up, our overall economic situation will worsen, with more and more people relying on catch-as-catch can possibilities just to survive (see Barbara Ehrenreich’s piece in yesterday’s Times for more on this), putting greater and greater strain on precarious family and friendship ties. This, ultimately, must lead to further breakdown of our social fabric, for it will not be able to stand the strain, leading to a new upsurge of crime, dislocation, and retreat into a gated ‘I’ve got mine; to hell with the rest of you’ attitude on the part of those who have managed to keep their heads above water.


What will that lead to?


Disaster. GDP up and markets through the roof notwithstanding.


We need to do two things as a country, as a society, and we need to do them now:


  1. We have to create jobs, and do it now. And not simply infrastructure jobs (though ‘shovel-ready’ projects may be the fastest way to getting things moving immediately), but jobs that can improve the life of the comity now and in the future: jobs addressing the problem of global warming, focusing on renewable energy, making recycling and reusing central parts of our economy. Not simply make-work jobs, but jobs that will improve all of our lives and that will, in the long run, pay for themselves.

  2. We have to find ways of easing the burden of debt that too many are shouldering. Doing so will be a trip through a minefield, but we have to take it. Sure, there will be those who will benefit unfairly and others who will never change their behavior (and who will slide right back into their bankrupt ways), but there are many, many more who will make use of the opportunity and will return to positions of personal and societal responsibility. We might start by completely restructuring student loans, capping interest, forgiving penalties, and forgiving a percentage (half, say) of the loans across the board. Who pays? Ultimately, we all do. But young people burdened by loans they cannot possibly repay will cost us even more—and this is one area where, I think, we can achieve broad agreement. We will have to do something about home loans, too… not by simply propping up the banks which made the bad loans, but by assisting those who cannot, given the current housing market (and even the rosiest forecast for the future), sustain their mortgages. Here again, it will cost us all more if we do nothing than if we help out. Sure, some of the people who will be helped acted foolishly or even venally, but most did not. Sure, it does seem as though we would be rewarding bad judgment and punishing good, but the bad are being punished right not—and the good, as well—by the very state of the current economy.


There’s nothing radical or new about either of these suggestions, but they seem to have been passed by. The politicians, apparently, don’t believe there’s the ‘will’ necessary to get them implemented.


If we don’t try, however, we will never know… and the economy, GDP notwithstanding, will continue to tank for most Americans.


It’s going to be up to us, the people, to take the lead on this. Remember, the politician practices the art of the possible. That is, he or she will not act, even if believing in something passionately, unless it seems either possible or able to bring the politician some advantage. It is up to us, through our voices, to give birth to belief in that possibility.

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