Dislocated in America
R.J. Matson/Post-Dispatch
Vice President Joe Biden was on “The Daily Show” Tuesday night, being grilled, ever so lightly, by host Jon Stewart on why unemployment was so high and the Obama administration’s $787 billion stimulus package seems to be producing so few jobs.
“As I sit here,” Mr. Stewart asked, “I can’t figure how tell if you guys are Jedi masters who are making 10 chess moves ahead, or if this whole thing is kicking your asses.”
Mr. Biden chuckled, “I think we’re in between.”
He went on to say that job growth traditionally lags behind growth in GDP by 12 to 18 months. By the first quarter of next year, he predicted, the stimulus program will begin producing jobs and “and not just make-work jobs. We’re trying to build a new platform for the 21st century.”
President Barack Obama has scheduled a “jobs summit” next month to sell this concept and perhaps take some of the heat off House Democrats who face reelection next year. Republicans are shamelessly exploiting the crisis that began on their watch, but that’s the nature of the political game.
The problem is that this is not a game. What may be occurring is a seismic shift in the American economy, one that could leave as many as one in four Americans permanently unemployed or so drastically underemployed that he or she can’t make ends meet.
That’s the situation today. The greatest economic crisis since the Great Depression has resulted in the greatest social dislocation since the Great Depression.
- Since December 2007, 8.2 million Americans have lost their jobs. Unemployment reached 10.2 percent in October, the highest since April 1982. Many economists forecast the jobless rate will stay above 10 percent well into the second quarter of 2010. And that only counts those who are actively seeking jobs; by some estimates, the real unemployment rate may be as high as 22 percent.
- On Thursday, the Mortgage Bankers Association reported that 14 percent of American homeowners — a record high — were having trouble paying their home loans in the third quarter of the year: 9.6 percent were delinquent and another 4.5 percent already were in foreclosure. A year ago, only 9.7 percent of mortgages were in trouble. Between August 2007 and August 2009, 1.8 million families lost their homes to foreclosure and foreclosure proceedings had begun on another 5.6 million homes.
- On Tuesday, the U.S. Department of Agriculture reported that 49 million Americans — including almost one of every four children — lived with hunger last year. With unemployment growing, it’s safe to assume the problem is even worse this year.
- The Federal Reserve reported this month that consumer borrowing fell $14.8 billion in September, a record eight straight months of decline. This is not necessarily a bad thing; for years economists bemoaned the nation’s spendthrift ways. But the economic good times Americans enjoyed in the 1990s and early 2000s were built on credit; a thriftier America will leave a lot of people out of work.
All of this comes on top of decades of jobs lost to mechanization, computerization and globalization, all of which led to a drastic decline in the American manufacturing base and declining union membership in the private sector. The service and retail sectors boomed, but those jobs usually don’t come with the wages and benefits of manufacturing jobs. The tech sector has blossomed, but you can’t get in there with a lousy education. The health care sector has grown to become 16 percent of the economy, creating a lot of jobs but also — as you may have heard — a cost explosion.
For decades, kids have been warned to prepare themselves for college if they wanted a job, but high school dropout rates still are increasing, and only 37 percent of the U.S. work force has at least a bachelor’s degree. Their median income in 2007 was almost $47,000, according to the Census Bureau. Meanwhile, the median for someone who had attended college but failed to get a four-year degree was nearly $33,000, and the median for a high-school graduate was nearly $27,000.
Today, as college-educated workers get laid off, they often replace less-educated workers at theirs, as long as the better-educated worker is willing to work for less. Younger workers find it hard to move up because their older colleagues are putting off retirement. Even the competition for low-wage jobs is fierce, as immigrants — both legal and illegal — compete with under-educated native-born Americans for work.
What emerges is a Darwinian landscape where the well-born and well-entrenched thrive; the fortunate and the well-prepared get by and everyone else competes desperately to make it.
Poverty, as the conservative Heritage Foundation reminds us, is a relative thing. “While real material hardship certainly does occur, it is limited in scope and severity,” the foundation reported. “Most of America’s ‘poor’ live in material conditions that would be judged as comfortable or well-off just a few generations ago.”
True enough. In the 1950s and 1960s, few homes had air conditioners or color TVs and got only three or four channels on television; clothes were hung on clotheslines to dry, and most phones were black, with cords. Meals were eaten at home, not at fast-food places. A blue-collar worker could support a family while mom stayed home with the kids.
It worked because there was hope of better. It worked because most folks remembered worse and never had known any better. It worked because people didn’t have a sense they were being kicked around by forces beyond their control. That’s no longer the case.
Government regulation and spending only eased the economic dislocation caused by the Great Depression; as late as 1940, unemployment was still at 14.6 percent. It took World War II to end it.
It will take a similar, if not so bloody, shared sacrifice to end the current economic dislocation. The stimulus bill and Mr. Obama’s “jobs summit” won’t do it by itself. Growth without jobs is not recovery.
We must end disparities in medical care and get costs under control. We must get the financial plunderers under control and get credit moving for small businesses. We must keep Americans in their homes under responsible terms. We must hold more parents and schools responsible for their children’s education and make college affordable. And we must do all of this without exploding the deficit.
This will be enormously painful, and anyone who says otherwise is a fraud. The trick will be to spread the pain fairly.
Obama was also silent as hundreds of rockets rained down on southern Israel. Was that upsetting? For someone concerned about Obama’s credibility, what is left of your own after writing that nothing Hamas does could warrant a military response such as the recent one?As for the homeless being displaced for a day: Perhaps this is difficult to accept, but the United States *needs* a celebration for its new president. Some might even suggest we deserve to have this celebration. The homeless are not the only ones being pressured so that the “rest” of the country can celebrate secure in the knowledge that our new president is as safe as we can make him on this day.
You may reach me in the cardiac ward at Mo Baptist. I am sure I will be having a heart attack soon after seeing the Post quote the Heritage Foundation.
During the recession of the mid 70’s I was employed, but barely. Far from home. I was certainly “the working poor”. I lived paycheck to paycheck and usually didn’t make it to the next paycheck. I remember walking to work for three days one month when I couldn’t afford gas. Remember having a half dozen eggs and half loaf of bread to last a few days till the check came. Then it was always try to beat the Sheriff to the bank on payday. But, you know, I never felt poor. I just didn’t have any money. I was ambitious and knew I would make it and I did. I don’t think people have that outlook today.
While Obama, Biden & Company may be trying to position the country for the 21st Century, they are ensuring the 21st Century will be the end of the American era. Their energy policies will make life less comfortable and more expensive; their health plan will not bring costs under control and will provide less care. The mounting debt will ultimately bring inflation of Carter ere levels. Their environmental, Affirmative Action and other regulations are ensuring employers will go elsewhere. Meanwhile, college educated people take jobs away from high school graduates who take jobs away from teenagers. I was speaking to someone today at a well-known and hated brokerage today. She said they are advising clients that today is the chance of a lifetime to corner markets as competitors stumble. I was talking with a man in an industry, in which I have a big investment. He said his new business model is buying out undercapitalized competitors. He said his new fund will be buying businesses from people who will sell if you simply agree to take over their lease payments. He says his only problem is trying to pick the best ones there are so many. Consolidation does not expand employment, it contacts it through synergies. It seems all these policies for the 21st Century may be creating oligarchies, not the utopian dream of full employment.
“Government regulation and spending only eased the economic dislocation caused by the Great Depression; as late as 1940, unemployment was still at 14.6 percent. It took World War II to end it.” Uh-oh, I forgot that [some] people still buy into this. Me thinks you have it completely backwards - gov-reg is what’s wreck(ing/ed) the country. The egalitarian wars of today just further drain what’s left. You think the gov spends / gives money; it doesn’t - it moves it from those that are productive to others by force.
The term “economic dislocation” is interesting. Jobs and all other resources have finite limits. The U.S. added 128 million people in 50 years (more than 50% of this increase was due to fertility). During the next 40 years, projections show that the U.S. population will increase by another 131 million, so this round of “economic dislocation” is only a warm up.
Ah, “spread the pain fairly”. I graduated from High school, spent a chunk of money and lost earnings on a college education, bought aa house I could afford, plugged every spare nickel into paying down the mortgage and now I should do without the things I have eaarned to buy insurance, training, houses ( twice the size of mine) for those who made other decisions. “Fair”?
This editorial is a perfect example of why your paper is dying. Who wants to read this nonsense? Pointing out the obvious and not prescribing any solutions other than “spread the pain fairly”….a 4th grader could do better.
I was more or less with you until “spread the pain fairly.” As others have mentioned, I worked hard to get where I am. I’m supposed to feel guilty for wanting nothing more than to keep what I earned? You gotta love it when someone expects to be propped up, then has the amazing nerve to say others are selfish for not wanting to hand them a free ride. College is more affordable and accessible now than at any time in history. Those who think a high school education is good enough have only themselves to blame when they end up on the street.
Now, legal plunder can be committed in an infinite number of ways. Thus we have an infinite number of plans for organizing it: tariffs, protection, benefits, subsidies, encouragements, progressive taxation, public schools, guaranteed jobs, guaranteed profits, minimum wages, a right to relief, a right to the tools of labor, free credit, and so on, and so on. All these plans as a whole—with their common aim of legal plunder—constitute socialism. * * * But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime. - Frederic Bastiat
In the Carboniferous Epoch we were promised abundance for all,
By robbing selected Peter to pay for collective Paul; But, though we had plenty of money, there was nothing our money could buy, And the Gods of the Copybook Headings said: “If you don’t work you die.” *** Then the Gods of the Market tumbled, and their smooth-tongued wizards withdrew
And the hearts of the meanest were humbled and began to believe it was true
That All is not Gold that Glitters, and Two and Two make Four And the Gods of the Copybook Headings limped up to explain it once more. *** As it will be in the future, it was at the birth of Man There are only four things certain since Social Progress began. That the Dog returns to his Vomit and the Sow returns to her Mire, And the burnt Fool’s bandaged finger goes wabbling back to the Fire; *** And that after this is accomplished, and the brave new world begins When all men are paid for existing and no man must pay for his sins, As surely as Water will wet us, as surely as Fire will burn, The Gods of the Copybook Headings with terror and slaughter return! - Kipling
The lamestream media lied, the economy died.