As the news about the global economic downturn goes from bad to worse, we’re at a point where government inaction is not a palatable option. Something needs to be done, and countermeasures against further slippage into recession need to be implemented with all deliberate speed. Most other countries in the grip of this recession are doing the same, and now, it seems, the United States is poised to spend an amazing amount of money to prime the pump to revive the economy. And since private enterprise is doing everything in its power to weather this storm the only way it knows how (i.e., by cutting overhead, reducing spending, and laying off employees), the importance of government action is magnified, because it’s seemingly the only option left.
President Obama’s proposed $825 billion stimulus package is currently running through the sausage mill of Congress, but this time, it’s supposed to be an “earmark free” bill. But that’s not stopping Republicans from bloviating about pork in the bill that allots money for family planning (Contraceptives!) and the NEA (Robert Mapplethorpe! “Piss Christ!” One of the Guys!). Those amounts are small compared with the money directed at improving the infrastructure of many agencies in the federal government — which, like the Social Security Administration for example, have not upgraded their central computer system Since the last days of the Carter Administration.
If pork = any kind of government spending, then the Republicans ought to stop acting holier than thou on this stimulus package and remember the heady days when they were in full support of blowing billions on war and war related organizations like Kellogg, Brown and Root. You remember Kellogg, Brown, and Root, right? You know, the company Dick Cheney was president and CEO of before appointing himself the vice presidential candidate during George W. Bush’s campaign for the White House? The same company that’s been overcharging the American taxpayer for services provided to American soldiers serving in Iraq — just to name one example? I know, there’s a thing called “the loyal opposition,” but it seems the Republican leadership has very little they can really oppose, so they are going after those golden oldies of the cultural wars:Á‚ birth control and controversial artists. What was that line Obama used about setting aside childish things? Clearly it has fallen on deaf ears.
However, believe it or not, harping on Republican blah blah is not what I wanted to focus on. Rather, I’ve been fascinated by the elements of policy that will be woven into the economy once Obama gets the stimulus package through Congress, and what that entails for both Big Money and Main Street. And as we know, Big Money, Main Street, families and individuals are all roughly in the same economic boat that is leaking quite badly. However, it’s the worker whose going down with the ship first.
So, how did we, the average wage earner, get to where we are now? Part of the problem is that our paychecks have been decreasing while the amount of work we do on the job has been increasing. According to labor economist Sylvia Allegretto at UC Berkeley, from 1947 to 1973, as our collective productivity rose, so too did our incomes. Sounds fair, doesn’t it? You do more work, you should get paid more. And between 1947-1973 that’s pretty much what happened: wages kept pace with output — and then the party was over. From 1973 to the present, worker productivity increased over 80%, but the amount of money paid for all that extra work was a little over 12%. As global capitalism started to flourish after the Cold War, wages declined as outsourcing and downsizing labor increased. What bridged the economic gap in the U.S.? You got it: credit. Taking on more and more debt to maintain middle-class dreams, Americans spent oodles of money funded through a combination of credit cards and tapping into home equities. Add to that the fact that banks were more than eager to offer credit because they were repackaging that debt and selling it off as securities to global and domestic investors who thought the party was going to go on for a long, long time. Then, of course, we got that Batman “Pow” in the face, and, well, here we are; broken, bruised, but not quite out for the count.
On the campaign trail and during his inaugural speech, Obama talked about major investment in infrastructure, green technologies, science, and even technology. On the surface, this all sounds wonderful, but what does it really mean for the average working stiff? It’s possible that jobs in the emerging green sector won’t require long-term training as many of the products created will need people who can do the heavy lifting of installations, construction, and the like. In the medical field, doctors and nurses aren’t the only ones who will benefit. As the field becomes reformed, and more and more people have access to health care, the number of blue- and white-collar jobs will also increase. Add to that the graying Boomer population, and you’re going to have decades where the health industry is going to be in a growth mode.
However, one of the major shifts in our economy will be its morphing from a consumer economy (fueled in large part to the availability of easy credit) to an economy where our exports drive the economic engines — this according to Tom Abate of the San Francisco Chronicle. “Consume less, export more” is the headline and the pith of the article. This all sounds promising for larger corporations, whose business models take into account the global marketplace. But what if you’re a small business owner whose clientele is local? How can you “export” into the global market when your customer base is in the same geographic location you’ve set up shop in? For small business owners, hearing the clarion call to “consume less” sounds like the death knell for those businesses. And what about workers as the economy evolves? Government can help by funding community colleges and universities to develop curricula to train individuals for jobs in the growth industries. This may also mean colleges and universities undergo their own transformation to better serve the employment needs of their students.
In the here and now, however, people have to eat, pay their rent/mortgage, support their families, and the like. What are people doing in the interim? The New York Times has a story about so-called “safe jobs” that many are flocking to. In finance, people are hunting for jobs that pay less, but offer two-year employment guarantees. As more people enroll in community colleges (for retraining, and because it’s cheaper than a four-year institution), the need for part-time college professors has increased (less pay, no benefits, but there’s a good chance of lining up fairly steady work depending where you live). If you’re talented in math and science, teaching those subjects in a public school is a job that’s been in demand for years. In blue collar fields, commercial trucking and welding are in demand in some regions of the country. These are not the sexiest jobs, but if you can find one, it’s work.
Last week I wrote that even if Obama was just another white guy in the long line of presidents, this would still be an historic moment. Looking at what lies ahead of us, and the wrenching pain many of us will endure as our economy evolves into … well, something else, it’s clear we’re witnessing the beginnings of a new era where the economic competition of global capitalism and the American Dream Billy Joel alluded to in the song “Allentown” (i.e., Every child had a pretty good shot/To get at least as far as their old man got) are colliding in ways we have yet to feel their full force. I’m just glad that someone with vision is in the White House now.