America was cruising along in the early part of the year, Trump touting the amazingly low unemployment and extremely high Dow Jones Industrial Average. Companies were making profits, and things were moving in that generally-optimistic direction. Infrastructure was being neglected, health insurance was a damnable mess, and Americans were probably more divided that any time since the tumultuous 1960s. Then, a bat’s DNA and some other animal’s DNA combined in a pernicious and horrifying way in some God-forsaken food market in Wuhan, China. All hell broke loose. Instead of landing in a well-constructed and life-saving social safety net, millions of Americans are out of work, depressed, socially strained, and terribly pessimistic. This blog features some markers of where we are, economically, in this, the worst economic disaster since the Great Depression.
In the immortal words of the late, great lyricist from the rock group Rush, Neil Peart sketches a hauntingly-prescient picture of America’s fate:
We can go from boom to bust
From dreams to a bowl of dust
We can fall from rockets’ red glare
Down to “Brother can you spare…”
And another lost generation
(LINK to the song “Between the Wheels”)
Patricia Cohen, in an astonishingly well-done report in the New York Times shows that “[w]ell before the coronavirus established a foothold, the American economy had been playing out on a split screen. On one were impressive achievements: the lowest jobless rate in half a century, a soaring stock market and the longest expansion on record. On the other, a very different story of stinging economic weaknesses unfolded. Years of limp wage growth left workers struggling to afford essentials. Irregular work schedules caused weekly paychecks to surge and dip unpredictably. Job-based benefits were threadbare or nonexistent. In this economy, four of 10 adults don’t have the resources on hand to cover an unplanned $400 expense.”
All those black workers Trump touted as doing “better than ever before!” Now they are absolutely eating shit. These are the perils of capitalism.
But Hollywood mogul David Geffen is happily quarantined on his $590,000,000 yacht, so that’s a relief.
“We built an economy with no shock absorbers; we made a system that looked like it was maximizing profits but had higher risks and lower resiliency,” noted the Columbia University Professor of Economics, Joseph Stiglitz.
“Since the recession’s end, the economy has pumped out enormous wealth. Workers, though, have gotten a smaller slice of those rewards. Companies prioritized short-term gains and stockholder returns at the same time that employee bargaining power was eroding,” Cohen believes. And she is correct.
In less than two decades, the share of income paid out in wages and benefits in the private sector shrank by 5.4 percentage points, a McKinsey Global Institute study found last year, reducing compensation on average by $3,000 a year, adjusted for inflation. The result is that a job — once the guarantor of income security — no longer reliably plays that role.
At the same time, the cost of other necessities like housing has shot up. Millions of renters spend more than half their incomes on housing. Middle-income households, too, have been hit by escalating housing costs. Since 2000, a steadily growing share of this group has spent more than a third of earnings on rent.
Pulitzer Prize-winning writer Thomas L. Friedman sums our situation up thusly:
“Pandemics leave nothing hidden. They flow into every tiny corner and pore and expose every weakness or strength in your society: how much trust you have in your government; how much social trust exists in your community to enable collaboration; the strength of your companies’ balance sheets; how prepared your government is to tackle the unexpected; how many of its people are living paycheck to paycheck; and what kind of public health care safety nets you’ve built.”
Professor Stiglitz taps into the pain we are experiencing as an “exceptional nation” (my words): “A lot of the people in the economy are living at the edge, and you have an event like this that pushes them over. And we are unique in the advanced world in having people at the edge without a safety net below them.”
This astonishing picture is people waiting in line last week in San Antonio, TX for food distribution:
That reminds me of this amazing image from the ‘30s:
“Powerful forces like advancing technology and globalization are partly to blame for workers’ economic instability. But Dr. Stiglitz also criticized the short-term mind-set prevalent in corporate America. Airlines — now being propped up with emergency government aid — used billions of dollars in profits to buy back their stock, he said, instead of investing in employees and productive capacity or building up reserves to withstand a downturn,” Cohen indicated.
Prior to recent months, a nonprofit that works with homelessness named Destination: Home, had a budget of $7,000,000 which was to go to assist homeless or at-risk families. One thousand families. Now, they receive 1,500 requests a day. The organization placed 10,000 people on a wait list. Jennifer Loving, the leader of Destination: Home complained “I thought there was nothing that I haven’t been involved in when it comes to homelessness, but this is incomprehensibly catastrophic.”
CEOs can definitely work from home. Restaurant workers absolutely cannot. The CEO of any mid-sized to large U.S.-based company will also have health insurance that would be solid, even during times like this. Retail workers making $13 an hour probably weren’t even getting employer-provided health insurance, and folks in the $30,000 — $60,000 a year salary range probably saw their insurance disappear when they got furloughed.
At every turn, President Trump’s policy regarding Coronavirus has unfolded as if guided by one rule: How can I make this crisis worse? Presidents are not all-powerful, especially not in the case of pandemic disease. There are limits to what they can do, for good or ill. But within those limits, at every juncture, Trump’s actions have ensured the worst possible outcomes. The worst outcome for public health. The worst outcome for the American economy. The worst outcome for American global leadership.
Note that unemployment applications, once something many Red State types were not proud to admit they needed, reached 22,000,000 in one month.
The inadequate social safety net in this country is not able to handle either the raw numbers of people needing government assistance, or the huge and rapid influx of them. “In Louisiana, for example, the backlog of applications for food stamps filed since businesses were closed in mid-March already exceeds 87,000″ (Cohen)
Much weight thus must fall on the shoulders of food banks and the like. The president of Fulfill, a New Jersey-based nonprofit specializing in food insecurity, Kim Guadagno, notes that “We went from 0 to 60 in five seconds. Hurricane Sandy in 2012 was devastating, [but now] “the need is widespread, with no end in sight.”
There’s no question that we have to expand and comprehensively fund the social safety net, but if we do that without altering the more basic structures that disempower people and keep them in wage slavery, we’re never going to see long-term social change.
Many people are not paying their rent, and from the landlord’s perspective (of which I am one), evictions being placed on moratorium means that tenants — both the truly needy and those who want to take advantage — are not required to pay rent. Many landlords are just small-time folks who rely on rents to pay mortgages and keep the insurance in place — let alone bolster their personal incomes.
Ethnic minorities and both legal and undocumented immigrants will clearly shoulder a harsh burden during this crisis. McKinsey & Co put out a report that indicated that “the unfolding public-health and [the clear] economic disaster of the pandemic will disproportionately affect black Americans….” In the report, Aria Florant, Nick Noel, Shelley Stewart, and Jason Wright show that “Amid the rising deaths, infections, and possible economic implosion of the COVID-19 pandemic, our country’s most pressing need is to save lives and arrest any plunge into a prolonged recession or depression. The crisis is already hitting major social and economic systems, yet black Americans will experience a disproportionate share of the disruption—from morbidity and mortality to unemployment and bankruptcy.” They continue: “black Americans are almost twice as likely to live in the counties at highest risk of health and economic disruption, if or when the pandemic hits those counties.”
The nation’s tattered social safety net is in desperate need of reinforcement. Americans need reliable access to health care. Americans need affordable options for child care and for the care of older members of their families, a growing crisis in an aging nation. No one, and especially not children, should ever go hungry. Everyone deserves a place to call home.
In a potentially-Pulitzer-Prize-winning series, the New York Times “asked 40-year-old Times readers to share how they are doing compared to their parents. Nearly 500 wrote in. In their own words, here is how 10, drawn from across the country, are doing.” Here are some snippets:
Lauren Bruce, a higher education administrator from Madison, WI: “My financial situation is vastly worse than that of my parents, who were 40 when I was born. They always owned houses and had new cars, never worried about seeing a doctor, benefited from solid pensions and preached that college was the secret to their success. (Their tuition in 1960s Arkansas was about $250 a semester.) There were opportunities for them that they were able to take advantage of. There was a ladder. I’m not sure that ladder exists any more.”
Eric Axcell, a Lawrence, KS-based pharmacist: “I’m a pharmacist like my dad. I ended up taking over his store, which he started a few months before I was born. I grew up in it. There’s pictures of me on the pharmacy counter when I was 7 weeks old. The life I envisioned having when I decided to follow in my father’s footsteps has not materialized. My worries about job security, and if the store will be able to stay open in the future, are constant stressors.”
Stress, as you know, is a precursor to heart attack, still the #1 killer of Americans, I believe. Yes, the top 1% of earners — which include three individuals (Warren Buffett, Bill Gates, and Jeff Bezos) who own as much wealth as 160,000,000 Americans combined — have their own stress to cope with, but does not the stress at the lower end of the income and wealth spectrum mean more, if you will? Can choosing between medications and food really compare — in that objective and in that moral sense — to stress about losing 25% of one’s retirement in the stock market? I live this situation. I have seen hundreds of thousands of dollars disappear due to both the pandemic’s affect on the stock market and choices made by my stock broker, and though that can keep me up at night, it doesn’t cause that hyperventilation, that rapid pulse, that many breadwinners are clearly experiencing during this, the worst economic situation since the Great Depression in the 1930s.
So many people voted for Trump the last time because they wanted a disrupter who would shake things up. Well, he’s sure done that, running through multiple chiefs of staff and secretaries of defense and directors of national intelligence, not to mention four secretaries of homeland security and five national security advisers, not to mention reckless attempts to slash the budget of the Centers for Disease Control and Prevention, not to mention constantly denouncing the professional ‘deep state’ civil servants whom we need now more than ever to protect our laws. This [Coronavirus] epidemic is going to remind people how dangerous it is to have a disrupter with no ethics and no discipline. It is going to remind people that the G.O.P. laugh line ‘I’m from the government and I’m here to help’ and other efforts to trash and weaken the federal state are not at all funny.
We went from Trump touting how “incredible” the stock market, unemployment numbers, and the economy in general were to “brother, can you spare a dime?”
This is not a coincidence. Note that Congress and the President allocated three trillion dollars in a matter of weeks to prop up the economy, but in the decades prior, they seem helpless or unwilling to stop the seemingly-inexorable loss of good jobs to outsourcing, globalization, greedy corporations, lax regulations on business, a massive wealth transfer toward the wealthiest class, and lackluster educational preparation of workers. Infrastructure, which was a global embarrassment? Not enough money. Tax cuts that mostly went to the wealthy and for companies to buy back stock? Yep, done.
Alexandria Ocasio-Cortez wisely commented: “To me, what socialism means is to guarantee a basic level of dignity. It’s asserting the value of saying that the America we want and the America that we are proud of is one in which all children can access a dignified education. It’s one in which no person is too poor to have the medicines they need to live.”
Importantly, as though speaking to the Mitch McConnells of the country, the Congresswoman and bootstrapper also pointed out that “It’s important we realize how this virus hasn’t just created new problems; but poured gasoline on the crises we’ve long had. It’s okay if you didn’t see the extreme urgency of our healthcare, housing, wage, carceral, FPol, etc. crises before. But I hope you don’t unsee them later.”
We are living in a time when the values of Mitch McConnell, Donald Trump, and Jeff Bezos are ascendant, and the social safety net is fraying and weak. They didn’t see much of these problems before, and now that we are waist-deep in it, they should be seeing clearly. The question is whether they will see to it we improve our social safety net now so that it can be used later when it will no doubt be desperately needed.
Trump presided over a lazy and incompetent national government that didn’t see the wisdom in, say, keeping a cabinet-level position dedicated to pandemic preparedness and response (LINK). Now we see the folly of that. We also see how Trump’s emotional and characterological impediments to an economically-progressive governing priorities has exacerbated the numbers of deaths by a staggering amount (LINK).
Bernie Sanders noted that “If there was ever a case to be made for universal healthcare, this pandemic is it.”
Some countries are doing better than others, and the social safety net and other decisions made at the highest levels make a huge difference in mortality and expenditure. As UNC-Chapel Hill Professor Richard Larres points out, “The solid and publicly funded German health system is also credited for Germany’s relatively low death rate. There are over 28,000 intensive care beds with sufficient respirators available at German hospitals, more than in most other parts of the world” (LINK). Canada is clearly faring better than we are, which includes dense urban areas such as Toronto and Montreal. It has much to do with how the country in question prioritizes the social safety net vs. the decision to let each person more or less fend for themselves in times in crisis, and how the crisis is conceptualized and managed from the get-go (LINK).
If America is the greatest country in the world, how is it that we are leading the world in coronavirus deaths, and how is it that I saw a 30% drop in my retirement account in the last 50 days? Our friends and neighbors are dying lonely, excruciating deaths in nursing homes and hospitals, and we have tested 1% of our populace. No way can we get back to normalcy (as if that were even good enough!) with one or two percent of Americans having been tested. No way can we claim we “killed it” with this virus like we did in World War II if we can’t find a respirator for everyone who needs it, or if doctors need home-made masks to not die while on the job.
As Americans are dying in small (relative) numbers, stress-related-health-issues, economic hardship, and massive social disruption are looming large. These are hard times. Are we all in this together, or is there a ruling class, an economic aristocracy, a well-heeled elite who are going to weather this storm and come out ahead, just like they did in the wake of the 2008 Wall Street and Washington-caused financial disaster?
Would 51% or more Americans vote for our current economic system, given the chance? Or does it really make more sense for the rich and the powerful and the political?
Is this the best we can do in what most Red State Americans would consider to be “the greatest country in the world?”
Economically, politically, and socially-speaking, is the United States the pride of the industrialized world, or more of an embarrassment?
How do all the Christians in charge of companies, governorships, and legislative bodies reconcile their belief that Jesus shared the message of economic egalitarianism and responsibility of one’s fellow-man with the decisions made that led us right to this very place?
My friend had this to say about this crisis (Robert L. Lloyd):
This is an opportunity to focus on the good in each other, not just the bad; the blessings we have, and not the desires we don’t [have the opportunity to fulfill at this time].
A chance for a reset, to get away from consumerism and bring into focus our relationship to and with others.
An opportunity to reconfigure our priorities from what mass-marketing and the media have hypnotized us into believing our wants and desires should be.
A chance to pause. . . to look around at our world and make our own decisions about what is best for us and for others,
A way to see clearly that outside inputs have their own agenda, but that if we trust our own instincts and let ourselves love each other without bias of race, gender, ideology, or any other identity, well, then we can use this opportunity to its fullest.
I really do believe that everything happens just the way it’s supposed to; America needed this to happen. Sometimes we all need a slap upside the head to get our attention so we can get out of our ruts.
I will end with one of the many illustrative vignettes shared by the Times. This is from Melissa Haddock from Florence, Alabama, one of the poorest and least-educated states in the troubled Union. The stress she relates should be enough for all good-hearted individuals in this country to be willing to come together and construct a social safety net that, though too late to help with the blitzkreig of the COVID-19 pandemic, can be helpful in future calamities. Doing so could prevent much misery and financial suffering, and potentially, the ruin of many decent individuals whose number is up when fate comes calling.
Again, Melissa Haddock of Florence, AL:
“I really, really hope that this pandemic changes things in our country and stresses the need for health care for all and more equality in general.
My parents, a mechanic and a waitress in rural Alabama, were able to purchase a home and land and save money for the future. When I was a child we lived in a trailer, but they transformed it room by room into a three-bedroom house with multiple levels and chicken coops and greenhouses and all kinds of stuff. I live week to week and rent.
I am an admin, which you think would be a decent living. You should be able to afford a car payment and a house payment. I mean, that’s what my parents could have done. It was more affordable; their fair wages went further. But that is not something that’s a reality for me.
I don’t have health insurance. I’ve been opting out of my company’s coverage because it costs so much. Our wages have not gone up that much and I’m single. It’s really hard to afford a place just on my own and there’s no way I could afford the upkeep of owning a home.
My parents very much believe that you can pull yourself up by your bootstraps. And that’s great when you have the resources to do that. But what about when we don’t? What about when you don’t have a big family or a church that is that safety net for you? There is no resource beyond my job. If I don’t hustle and make the money, then we’re homeless. We need universal basic income and Medicare for all.
I quit school about two months before I graduated. Then I got my G.E.D. and started university after I already had two kids and started going through a divorce. Things happened, and I had to withdraw from school. And that left me owing money to a university. I haven’t been able to pay that money back.
My 19-year-old son has special needs, and he has been in long-term care with the state. He is secure, thank God. Definitely a factor in returning custody to the state for his care was that I needed to guarantee that it wasn’t all on me. He needed more than what one single person could provide.
When the coronavirus hit, the state was either going to cut off visits or send him home to quarantine. And so they sent him home. I’ve been able to spend a lot of time with him and so that’s been really nice.
I already worked from home before this. The biggest change is impressing upon my 18-year-old daughter the importance of social distancing. That has been the toughest part. I live in northwestern Alabama. We’re a red state. Being careful is for Democrats and snowflakes. So I’ve seen a lot of misinformation, a lot of people posting memes about how this is no worse than the flu.
My daughter’s prom was two weeks into quarantine. She dressed up. The cat was her date, and we took pictures.
My daughter is talking about maybe going into the military so that she has some stability and free college so she doesn’t take on that loan for school. She’s talking about waiting a little bit to go to college. I just want her to have meaningful work and when she gets sick she can go get health care.
I would just really love for her to have a better country than what we have right now.”
She is talking about an improved social safety net, and the promise of America being fulfilled, not obfuscated and complicated, not elusive and exclusive.
How countries succeed or fail dealing with the coronavirus epidemic has much to do with how they have chosen to prioritize the social safety net in the lead-up to the outbreak, or not.
Neil Peart astutely points out that We can go from boom to bust/ From dreams to a bowl of dust. That kind of seesaw-like existence is no way to run the “best”country in the world. Ω
keywords: social safety net, capitalism, progressive economics