We dont need a stimulus but a paradigm shift
|February 19, 2008||Posted by Jeffery J. Smith under Progress Report, The Progress Report|
We dont need a stimulus but a paradigm shift
Checks for $600 Won’t Fix Our Economy
We trim and append this 2008 article from “The Hightower Lowdown” of March, edited by Phillip Frazer and the author who is a national radio commentator, writer, public speaker, and author of the new book, Swim Against the Current: Even a Dead Fish Can Go With the Flow. Posted on AlterNet on March 28.
By Jim Hightower
Washington’s “stimulus” package is a $168 billion fig leaf. Our rulers are shipping billions of dollars from our public treasury to you and me, so well spend it on further enriching Wal-Mart’s wealthiest investors and further stimulating China’s massive export economy. But spending these onetime government checks (including some $50 billion that Bush insisted on doling out to corporations) will not correct the basic imbalance in our economy.
You don’t have to be in Who’s Who to know what’s what. For most Americans, the kitchen-table fundamentals are nothing to cheer about. As a fellow in Missouri recently said to me, “If these are good times, why aren’t I having one?”
The stock market is not the economy, and economic growth is not the same as economic health. For years, stock prices have been buoyant and the Gross Domestic Product has been growing like a teenage boy, increasing by more than a third from 2001 to 2007. These two indicators have become the Holy Duo for defining American prosperity.
The GDP’s rising tide has not lifted most boats — and many boats have been swamped.
Since the mid-1970s, the richest one-tenth of 1% of Americans have seen their wealth jump astronomically, and others in the top 1% have also done well. The next rung of families, those in the top 10%, has done less well, but has still enjoyed real income gains. Everyone else — the remaining 90% of the American people–have not even kept up with inflation, instead experiencing a drop in their real income.
The best year for the bottom 90percenters was 1973, when the average taxpayer reported $33,000 in income (in today’s dollar value). By 2005, that average had fallen by about $4,000. In other words, after three decades of explosive growth in GDP, America is prosperous, but Americans are not!
Middle-class families have tried to cope by straining themselves. First, as the wages of working men fell (the median income for a man in his 30s today is 12% below that for a man the same age three decades ago), women entered the workforce in big numbers. Today, nearly 70% of moms with school-age kids work outside the home, almost double the number in 1970. There’s been a rise in families that split the workday in half — one parent is at work while the other is on child duty, then they switch. They’re known as “DINS”: double income, no sex.
Second, families have tried to cope by putting in longer hours. We now typically work two weeks more each year than people did 30 years ago (also, Americans today average about a month and a half more on the job each year than our European counterparts).
There are only so many moms and so many hours to throw at the problem, however, so the past decade has seen the surge of a third way of coping with declining income: debt. And people are putting their medical bills on their credit cards. Overall, consumer debt has risen nearly 90%in the past 10 years and now tops $2.5trillion.
The subprime-mortgages cost 1.6 million people their homes last year, and more will lose homes this year.
The US lost another 279,000 manufacturing jobs in 2007, reducing that key middle-class job sector to less than 10% of America’s workforce for the first time since such records have been kept. Wall Street banks announced plans to eliminate 40,000 middle-class jobs. And Detroit automakers said they would cut tens of thousands of workers this year, replacing them with new hires paid only about $14 an hour — half of the previous wage.
For the past 30 years, Washington’s plutocratic policies “decoupled” the benefits of growth from any notion of shared prosperity. What America needs fundamentally is less “tinkle-down” and more “percolate up”. Think of what could be done if we treated people not as consumers but as producers!
JJS: Think what could be done if we treated people not as producers but as people, as workers and players both! Hightower goes on to call for more jobs (that he and other pundits would not have to do), citing the need to fix bridges, modernize railroads, and insulate homes. But if aliens from space were to land and do the work, thatd be as good or better.
As a normal person consumed by politics, he naturally blames our rulers making deliberate unfair decisions. While that is a factor, it overlooks the larger reality of poverty accompanying progress always, everywhere, as Henry George noted over a century ago. If we are to share prosperity, lets, but we cant do that by artificially making more work.
The well-placed few dont amass fortunes by working harder or investing smarter but by lobbying smoothly and directing not wages nor profits but societys surplus into their own private pockets. Jobs and housing — needed as they are — wont redirect that surplus; what will are taxes, not on income or sales or buildings but on land, especially downtown commercial sites, coupled with dividends from surplus public revenue to everyone. Thats how a rising tide lifts all boats.
Jeffery J. Smith runs the Forum on Geonomics.
Basic Economic Questions
The Crash of 2007-8 is underway
The Maldistribution of Wealth
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