Just a reminder of reality for the many:
But Mr. President what does real prosperity look like?
There is a fair amount of talk lately that the severity of the current economic downturn will produce new generation of depression-era babies, people terrified into thrift and frugality by the hard times. The Wall Street Journal noted earlier this year that, “U.S. household debt, which has been growing steadily since the Federal Reserve began tracking it in 1952, declined for the first time in the third quarter of 2008. In the same quarter, U.S. consumer spending growth declined for the first time in 17 years.” And nothing gotten better since.
But where does this fiscal chastity lead us? What replaces the frenzied consumer spending that gave the economy its gallop over the last 20 years? Responsible, within-your-means purchases, unaffected by the $150 billion in advertising spent annually selling us stuff?
That sounds like 1952, and, frankly, Americans are just not going to go for it, because the modern manifestation of life liberty and the pursuit of happiness is the ability to go to the mall. That was the whole point of expanding the middle class, so they could add the economic clout to the economy.
The problem, of course, is that, while they were propping up the economy over the last couple of decades, those middle class workers were not reaping their fair share of the benefits. In fact they were getting screwed by the financiers we’re now forced to rescue. Since the 1970s, American workers have become more productive without getting paid for those increases in productivity. And it was those very people who went into debt to maintain their standard of living and who kept the economy going as long as it did.
So while we’ve been wracked with angst about the failures of the financial system, it is really the slow collapse of the wage economy that may be most responsible for getting us into the ugly position we now find ourselves. The coming fight over the Employee Free Choice Act in one obvious place to have this discussion, but that is likely not the way it’ll go down. Simply on the symbolic merits, EFCA should fly through the Congress; we know it won’t. I sense — and I could be wrong about this — that the administration is presently more willing to spend its political capital trying to reassure Wall Street than passing the EFCA. But they should not let the political theatrics obscure the fact that there is another sector that is really too big to fail. The people who will rebuild the economy are workers with enough money in their pockets to take care of all their needs without going into huge debt. That is a sustainable standard for living that could drive support a sustainable economy.
Update: reader gordon suggests going to read Shared Prosperity