Phil Gramm hasn’t apparently noticed, but we’re now pretty deep into an economic downturn – whether or not it officially qualifies as a recession yet or is simply on the way to becoming one.
But two things are especially striking about this particular iteration of our economic malaise. One is that we never quite seem to have had the boom we were supposed to get in between this bust and the last one. Gross domestic product, the key single indicator of economic health used to measure the state of the economy, has done reasonably well since the downturn that began in 2000. So has the stock market, and so, especially, have the one percent or so of the richest Americans, who have lately transitioned from being ridiculously rich to obscenely rich.
Most of the rest of us, on the other hand, may be excused for wondering when the good times hit, ‘cause we somehow missed it. It’s funny (hah-hah, right?), but in the go-go late 1990s, some economists were wondering whether Alan "The Second Coming" Greenspan and Robert "Token Wall Street Pseudo-Democrat" Rubin hadn’t actually killed the business cycle forever, with only good times to come for generations on end. Ironically, the subsequent decade may be considered to have posed the same question, only with a very different meaning. Given the absence of any serious recovery content in the latest alleged recovery, maybe the business cycle is dead – only not with permanent boom, but permanent bust, instead.
In truth, though, we may come to look upon years like 2004 or 2005 as the good ol’ days. That’s because the second unique thing about the present downturn is the depth of down to which we may now be turning. I’m sure somebody was relieved when George Bush recently informed the country that the economic fundamentals are solid, but it sure wasn’t me. Hard as it is to imagine that this president could get something wrong or speak, uh, somewhat less than candidly, my fear is that conditions are quite the opposite of those the cheerleader-in-chief portrayed. I remember well the recessions of the 1970s, 1980s and 1990s. This one doesn’t feel anything like those. It seems a lot bigger. My fear is that the bottom may be falling out. My fear is that it’s the fire this time.
I’m not an economist (not that economists so very often know what the hell they’re talking about either), so I will readily admit that I don’t have a lot of expertise on this question. But I will say one thing with confidence, however, even as a economics dilettante (in political science we call those people ‘angry voters’). And that is that there are incredible signs of economic thin ice almost anywhere you turn today. The national debt has never been higher. Consumer debt has never been higher. Savings have never been lower. The trade deficit has never been higher. The dollar is spectacularly weak. Foreclosures are mushrooming. Quality jobs are disappearing in droves. People are working longer to maintain the same standard of living, or often less. Employers are economizing, among other ways, by cutting healthcare benefits. Real estate values are plummeting. Sure, it’s a great time to be a bankruptcy lawyer or a repo man, but probably most of us would agree that keeping people in those two fields well employed isn’t worth the trade-off of having an economy in the toilet.
George Bush has laughingly admitted that he got "gentlemen’s C’s" when he was in college (those are what the rest of us, whose daddies don’t endow library wings at Ivy League schools, refer to as F’s ), so perhaps that explains his misreading of the economy. For us folks not laughing quite so hard at his little riff out of the "Humor for Plutocrats" textbook, the real question, given the above-referenced indicators, is what in the world would it take for the Boy Wonder to finally say that the fundamentals of the economy are not sound? Does China have to start actually mailing him a monthly rental invoice for use of the White House? Does real estate have to lose fully half its value, rather than ‘merely’ 25 percent? Does the dollar need to become even more worthless than the 1930s Deutschmark for him to be concerned ("Get your wheelbarrows while they’re hot, ladies and gentlemen, right over here!")? Or must low-hanging billionaires have to painfully downscale their lifestyles into those of impoverished multi-millionaires before he could perceive the hurt?
You wanna talk fundamentals, George? Let’s talk about some really fundamental fundamentals. And, no, I don’t mean yields-per-acre, pork belly futures or worker-productivity-to-energy-input ratios, dude.
There’s no question that America has historically been an industrious, innovative and hard-working country. We still are today, though the hard-working part has gotten simultaneously more hard, less rewarding, and less driven by desire for advancement than need for survival. Perhaps the paradigmatic moment of our time was Clueless George on the campaign trail in 2004, gushing over a woman he met who said she worked three jobs to keep afloat. For Bush, it was an ‘only in America’ moment – completely oblivious, as he seemed to be, that this represents almost nobody’s vision of the good life. Well, almost nobody. One imagines that Dick Cheney was smiling in the wings of that event, thinking to himself: "Once we get all of them doing that, our work here will be done!". Nowadays, no industrialized country in the world has workers who put in more hours per year than the US. None has such a glaring absence of economic support programs as America does, either.
But we’ve worked hard here, historically, like the good Protestants we are, and we’ve been technologically innovative and admirably determined in achieving our far-reaching aspirations. That’s all good stuff, but just the same, though, there’s been an undeniable dark side to the phenomenal success of the American economy. We’ve worked hard to produce a lot, true, but we’ve also – in a word – stolen a lot as well.
We stole from indentured servants from the beginning. We stole from Native Americans within minutes of landing here, and never stopped until we’d grabbed all the land and resources we wanted, leaving them casinos and poverty in return. We harnessed yokes around Africans and imported them as if they were agricultural beasts of burden, and continued to do so for centuries. We built our economic accomplishments on the backs of near-slave immigrant laborers, from Chinese coolies to Mexican wetbacks, along with Irish, Italian, German, Jewish and a whole lot of other nationalities in-between. We stole fully half of Mexico following a trumped-up war no less bogus than the current one in Iraq, then we did the same for Hawaii, Cuba, the Philippines and more. We broke the backs of labor movements in order to enrich a few owners while grinding ‘human resources’ into impoverishment and early death. We exploited the entire continent-and-a-half of Latin America, installing local dictators in country after country who got personally wealthy by doing the oppressive and murderous dirty work for American resource extraction corporations. We assigned to women endless domestic chores without the slightest compensation, nor political power, nor even ownership of family wealth.
These are the obvious thefts – and there is no more accurate word for it – by which we’ve massively enhanced our wealth over a period of centuries. But there are less obvious ones as well. We have raped the environment for precisely the same purposes. You can get a lot wealthier a lot faster by not concerning yourself (or even paying compensation for) the environmental destruction caused by manufacturing, mining, drilling and more, than you would by having to be responsible for those very real costs of your enterprise. Economists like to gently refer to such factors as ‘externalities’. That’s a polite way to describe a process by which the rich get even richer through offloading the costs of their business to you and me, and keeping the profits for themselves.
Not content with any of that, however, we’ve also lately been engaged in other, new and improved, more subtle forms of national wealth theft. Rampant consumerism based on little plastic cards is quite effective, leaving costs to others, like our children. So is – as exhausted consumerism now heads for the ditch – turning our houses into piggy banks to keep an economy artificially afloat, until that can no longer be sustained either. Or running incredible trade deficits, or radically deflating the value of our currency to keep sales of American goods abroad halfway viable. Another nice trick you can do is run up the national debt and leave that to your kids as well. You can also ignore your infrastructural repair and development needs so people can party on now, instead of paying the taxes necessary to keep the economy strong for the next generation. Talk about eating your young. One of the best of all these games over last decades has been the uninhibited agenda of economic globalization which has now managed to successfully export American white collar jobs to India, right behind the blue collar ones that previously went to China. That was supposed to make us all richer, remember? Some people indeed are. Those without jobs, or working for half what they used to make, aren’t in that small group however.
What all of these ploys have in common is that they are all methods allowing one to live larger than we’re rightfully entitled to. Slavery is the most obvious example. You wanna live the good life? The most basic formula ain’t that hard to figure out. Kidnap some dude from a less technologically developed part of the world, terrorize him with overwhelming force and psychological violence to go along with the real kind, then watch as he plows your field while you sit on the porch sipping Mint Juleps. Then, repeat. This is the most obvious example, yes, but really no different in principle from ripping off your own kids with tax ‘cuts’ unaccompanied by spending cuts, which drive up the national debt and hand the next generation the bill. Plus interest. Or stealing in the form of externalizing costs for remediating environmental destruction while the eco-evildoers go off scot-free with grossly inflated profits (indeed, in some cases, these would be non-existent profits, were the real costs to have been factored in). And so on, and so on.
The work of Reaganism-Bushism is nowadays finally beginning to be recognized for what it is. Americans have not felt such economic insecurity since the Great Depression. Whether the epiphany will come in time for them to finally recognize and give leave to the kind folks who dismantled the Good Times of previous generations, is unclear. A very possible scenario is that McCain barely wins in November – on the strength of fear, racism and the usual Rovian smear tactics – literally just months before economic anxiety finally crests over into newfound consciousness and rage. That would feel like a giant version of 2005, when Americans were frightened into re-electing the Little Tyrant, and almost immediately began to regret their choice. This was truly another paradigmatic moment, as Bush did his usual blustering performance, bragging about his mandate and the political capital he now planned to start spending. As he quickly found out when he tried to rip-off the Social Security system, and as his job approval ratings continued to sink until just about nobody other than a few crackers in the Texas Hill Country still thought he was doing a good job, the only mandate he had actually garnered was to be someone other than the cartoon caricature of a would-be president that Rove had turned John Kerry into (with the latter’s ample assistance).
If McCain once again drags the spent and stinking carcass of kleptocratic robber baron public policy across the finish line in November, while the economy continues to deteriorate, he’ll have only two choices on coming to office. One would be to abandon his party once and for all in a sort of reverse version of the U-turn Francois Mitterrand famously executed, moving from socialism to mixed economy capitalism during the 1980s. McCain might actually relish that notion. He probably hates the crap he’s had to take from the bastards who rule his party nearly as much as the rest of us do. Plus he may know he’s a one-term president no matter what, so what’s he got to lose? And we know that he admires Teddy Roosevelt most of all the former presidents, and such a move would be right out of TR’s playbook.
His other choice would be to continue to hew closely to right-wing orthodoxy while the ground disintegrates below our feet. This would surely please Grover Norquist and all the billionaires whose massive earnings are maybe off by ten percent lately (boo-hoo, fellas), but if he did this my guess is that the rest of the country might well turn on him with some caged-animal ferocity raging behind bared teeth. For reasons which still entirely elude me (though which nowadays probably have a lot to do with simply waiting it all out), the public massively disapproves of the Bush administration, but does nothing about it. My gut tells me, however, that having their hopes quashed once again as things get worse, and the guy they’ve just reluctantly chosen president continues the same destructive policies of doing nothing but making the rich richer, is a bridge too far. At the risk of mixing metaphors, I wouldn’t want to be John McCain on the day that particular dam breaks.