By Barbara Ehrenreich
But hard times are no more likely to abolish class inequality than Obama’s inauguration is likely to eradicate racism. No one actually knows yet whether inequality has increased or decreased during the last year of recession, but the historical precedents are not promising. The economists I’ve talked to– like Biden’s top economic advisor, Jared Bernstein–insist that recessions are particularly unkind to the poor and the middle class. Canadian economist Armine Yalnizyan says, “Income polarization always gets worse during recessions.” It makes sense. If the stock market has shrunk your assets of $500 million to a mere $250 million, you may have to pass on a third or fourth vacation home. But if you’ve just lost an $8-an-hour job, you’re looking at no home at all.
All right, I’m a journalist and I understand how the media work. When a millionaire cuts back on his crême fraîche and caviar consumption, you have a touching human interest story. But pitch a story about a laid-off roofer who loses his trailer home, and you’re likely to get a big editorial yawn. “Poor Get Poorer” is just not an eye-grabbing headline, even when the evidence is overwhelming. Food stamp applications, for example, are rising toward a historic record; calls to one DC-area hunger hotline have jumped 248 percent in the last six months, most of them from people who have never needed food aid before. And for the first time since 1996, there’s been a marked upswing in the number of people seeking cash assistance from TANF ( Temporary Aid to Needy Families), the exsanguinated version of welfare left by welfare “reform.” Too bad for them that TANF is essentially a wage-supplement program based on the assumption that the poor would always be able to find jobs, and that it pays, at most, less than half the federal poverty level.
Which is why any serious government attempt to get the economy going again–and I leave aside the unserious attempts like bank bailouts and other corporate welfare projects–has to start at the bottom. Obama is promising to generate 3 million new jobs in “shovel-ready” projects, and let’s hope they’re not all jobs for young men with strong backs. Until those jobs kick in, and in case they leave out the elderly, the single moms and the downsized desk-workers, we’re going to need an economic policy centered on the poor: more money for food stamps, for Medicaid, unemployment insurance, and, yes, cash assistance along the lines of what welfare once was, so that when people come tumbling down they don’t end up six feet under. For those who think “welfare” sounds too radical, we could just call it a “right to life” program, only one in which the objects of concern have already been born. (Emphasis added.) Much More - A Must Read Article
In today’s Washington Post, an article was posted that suggests President-Elect Obama will work to shore-up America’s entitlement programs - and that, in my opinion, equates to a cut in services. As explained in the Op-Ed, Social Security and Medicare are eating-up too much of our GDP:
Obama Pledges Entitlement Reform
President-Elect Says He’ll Reshape Social Security, Medicare ProgramsBy Michael D. Shear, Washington Post Staff Writer
President-elect Barack Obama pledged yesterday to shape a new Social Security and Medicare “bargain” with the American people, saying that the nation’s long-term economic recovery cannot be attained unless the government finally gets control over its most costly entitlement programs.
That discussion will begin next month, Obama said, when he convenes a “fiscal responsibility summit” before delivering his first budget to Congress. He said his administration will begin confronting the issues of entitlement reform and long-term budget deficits soon after it jump-starts job growth and the stock market.
But he framed the economic recovery efforts more broadly, saying it is impossible to separate the country’s financial ills from the long-term need to rein in health-care costs, stabilize Social Security and prevent the Medicare program from bankrupting the government. Much More
President-Elect Obama has suggested that Americans will have to make sacrifices, which I agree with, but his message rings hollow when wee see that Bank of America is receiving another 20 billion dollars in TARP funds because of their mistake of absorbing Merrill Lynch. The Merrill Lynch acquisition was a mistake - not made by the taxpayers, but by Bank of America’s belief that they could grow larger and establish a larger monopoly than they already have; why should the average American sacrifice when mistakes made by the banking and financial institutions are being funded by our money? This is nothing more than a further transfer of wealth to America’s wealthy, and I find it absolutely disgusting!
Ronald Reagan is known for his failed “trickle-down economics” - which is code for making the rich wealthier. “Trickle-up Economics” is another matter, and if the government spent half a trillion dollars in increasing Social Security benefits that actually matched inflation and aiding those who are below a certain income level, with a clause that 80% of the money was spent on American made products, this economy would take off like a rocket if it ran in tandem with rebuilding our failing infrastructure and creating more jobs. It is also imperative that we stop outsourcing American jobs. Ford Motor Corporation recently announced that their Ford Fiesta will be made in China, a staggering slap in the face for those who work for Ford. Several foreign auto makers manufacture their cars in the United States, and until President Bush ruined the economy, they made huge profits. Why are our corporations forsaking the American public by outsourcing everything they can instead of figuring out how to make quality products in our own country as foreign auto companies have demonstrated can be accomplished - and with great success? The answer is the the unmitigated greed of corporate America.
Globalization Now: The North American Auto Industry Goes Southby Richard D. Vogel
Recognizing this critical relationship between labor costs and profitability in modern capitalist production is a key to understanding globalization — setting up runaway plants and offshoring production in order to exploit cheap labor markets is a primary means of reducing aggregate labor costs and securing higher profits for the owners of capital.
The second salient fact of globalization is that value is added to a commodity at each stage of a production chain, no matter where the operation takes place, allowing capitalism to suppress the aggregate labor costs of commodities by developing global production chains that exploit the cheapest labor available regardless of international boundaries.
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