Thursday, June 19, 2014

Here On The Ground: Where is My Goddam Recovery?

From the AP last week comes this gem: US job market recovers losses yet appears weaker. According to the authors, "The U.S. economy has finally regained all the jobs lost during the 'Great Recession.'" Great news. Now for the bad news, "Three generally low-paying industries account for more than one-third of the job gains in the recovery: restaurants and bars; temporary staffing; and retail..." So to summarize: The "recession" is over, the jobs are back! Unfortunately, most of the new jobs are at Walmart. In the process of this so-called "recovery," US median income has dropped $3300 below what it was prior to the "recession"; which if one adjusts for (supposedly nonexistent) inflation, means Americans are earning quite a bit less than they were before. It seems the conversion of the US economy to an executive-and-slave model is now almost complete.

Notice that the word "recession" is set in quotes when used above. This is intentional. It is my firm contention that the so-called Great Recession is not a recession at all. The term "recession" implies a temporary slowdown in an economic system, and I would propose that what we're experiencing is not a temporary dip, but the start of an inexorable decline.

"The recovery is well under way." How many times have you heard that statement in the news recently? The Robber Barons and their all-too-willing mouthpieces love to regurgitate the Great Lie hoping we'll swallow their deceit whole hog. "Unemployment is down, the housing market is bouncing back." This is the story we're being told by the newsbots. I don't know about you, but that story does not quite comport with what I see around me. I see a whole lot of empty storefronts on the main drag. I see the supermarket cashiers looking far older than they used to. I see a large number of friends and acquaintances -- well-educated, middle-aged men and women with 20 years' or more experience -- unable to find jobs in their respective fields. They must think we're chumps.

We live in a time when the most dispensable workers -- the corporate raiders, the high-volume traders, the hedge fund managers -- are compensated in the billions of dollars while the truly indispensable workers -- farmers, road builders, people who actually produce the things we need -- can barely earn a subsistence wage. What kind of society is this? Clearly something is very, very wrong here. It's my contention that the decline is now well under way and well overdue. What is so startling though is how obvious the reasons for the decline are -- they're plainly hung out in the open, for all but the most deluded to see. Let me outline three of the primary reasons why I think the US economy is already half in the bag:

1. You can only export so many jobs to China before it affects the domestic economy. It's unreasonable and untenable to expect every person in the US to be an engineer, stockbroker, or biotechnologist. Large numbers of people are entirely unsuited to these vocations. And many of the otherwise suitable candidates are prevented from employment by the education-for-elite-only system that exists here. And so the Titans of Silicon Valley lobby the federal government to admit more foreign-born engineers, while at the same time the products those engineers design are being built back in their home countries.

2. Big banks and wealthy individuals can only horde so much wealth before it begins to affect the liquidity of everyone else. It's quite a simple principle: every economic system depends on money flowing through it. Everyone benefits when the bucks are flowing, Robber Barons and common folk alike. I don't know why economists continually attempt to obfuscate this simple fact, although I suspect it's related to their desire to keep their jobs. When the holders of the cash don't spend it -- such as by refusing to pay their workers a living wage, or by workers not buying things because they're fearful about the future -- the entire economy slows or fails.

3. The cost of energy, which is baked into everything, can only increase. The entire "modern" world you see around you is totally and utterly based on the availability of low-cost energy -- everything from the skyscrapers to the online booksellers. Unfortunately (in more ways than one), our energy is almost 100% sourced from fossil fuels: petroleum, coal, natural gas. These are all non-renewables, which is to say that the cost of producing them can only go in one direction (yes, up). Again I don't understand what the big mystery is about this. Excepting price fluctuations attributable to varying market conditions, the real cost of energy continues to increase. Although runaway energy price increases have thus far been averted due a combination of industry tricks and softened demand, the overall direction of change has, and can only be, upward. This ain't rocket science, people. The cost of commodities dependent on energy (i.e., everything) will continue to rise at the same time that fewer people can afford them. This further weakens an already seriously compromised economic system.

So if you have been wondering lately why this "recovery" you've been hearing so much noise about hasn't helped you make this month's rent, take heart, so has everybody else. The real question of course is not when (or if) will the economy will recover, but how should we respond to these great changes, which are happening now, all over the world? For now, I'm going to leave that question for a future musing.

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