The Covid Recession and American Capitalism

The Daily Escape:

Upper Buttermilk Falls, Ithaca NY – June 2021 iPhone photo by Wrongo

The following chart appeared in the NYT on Tuesday in an article claiming that the recession is over. The unfortunate reality is that the COVID recession was artificially induced by a shutdown of the economy. But it may now be transitioning into a longer, systemic recession caused by poor economic policy. Take a look at the chart:

While economists say that, by traditional definitions, the Covid recession didn’t last very long, we are still down 7 million jobs from pre-pandemic levels, even while personal income is back to pre-Pandemic levels. So, how can the recession be over?

And why are lawmakers in Republican states calling for an end to unemployment benefits when so many remain out of work? Zandar says we should start by looking at Tennessee’s official job posting website:

“There are more than 250,000 jobs available in Tennessee right now, but….Only 3% of the jobs posted — about 8,500 as of Friday evening — pay $20,000 [per year] or more. The federal poverty line for a family of three is just under $22,000.”

Of the 8,500 jobs on the state of Tennessee’s official job board, about 8,250 pay $10 an hour or less, which is a poverty level wage even in Tennessee. But Tennessee’s governor Lee has decided to stop accepting CARES Act money in July, saying he didn’t want to pay people to sit at home.

As Ezra Klein said in the NYT: America doesn’t fight poverty, it runs on it.

“The American economy runs on poverty, or at least the constant threat of it. Americans like their goods cheap and their services plentiful and the two of them, together, require a sprawling labor force willing to work tough jobs at crummy wages. On the right, the barest glimmer of worker power is treated as a policy emergency, and the whip of poverty, not the lure of higher wages, is the appropriate response…”

More from Klein:

“Vast numbers of Americans are kept poor for a reason. Any whiff of labor organization, or worker solidarity is ruthlessly annihilated in order to maintain millions of Americans working for single-digit hourly wages, or slightly higher wages, but no benefits whatsoever. We demand it, because we know corporations will just break our backs with higher prices if we give in. Either way, we’re the ones who pay, and it’s never the billionaires.”

Klein mentioned a report, “A Guaranteed Income for the 21st Century,” that would guarantee a $12,500 annual income for every adult and a $4,500 allowance for every child. It’s what wonks call a “negative income tax” plan — unlike a universal basic income, it phases out as households rise into the middle class.

The team estimates that its proposal would eliminate poverty while costing $876 billion annually.

To give a sense of scale, total federal spending in 2019 was about $4.4 trillion, with $1 trillion of that financing Social Security payments and $1.1 trillion supporting Medicaid, Medicare, the Affordable Care Act and the Children’s Health Insurance Program. As Paul Campos says:

“$876 billion represents less than the growth in the personal fortunes of America’s 651 billionaires over the course of the 16 months of the COVID pandemic. Not, mind you, anything like those fortunes themselves, but merely the growth in the personal fortunes of 651 people over the past year and a third.”

A simple annual wealth tax on the incremental gain in wealth of obscenely rich Americans would by itself pay for somewhere between a third and half of the cost of eliminating poverty in this country, via straightforward wealth redistribution.

So why don’t we get rid of poverty by giving people without money, money? Because we haven’t adjusted psychologically and politically to the fact that the developed economies produce so much wealth that getting rid of poverty could be a minor problem of distribution, one that merely requires a social commitment to doing it.

Instead, we tell the people at the bottom of wage distribution: “This is America. If you don’t like being poor, you can always do something about it, like not being poor.” And many of us go back to eating our dollar menu cheeseburgers and thinking to ourselves “I don’t know anybody *that* poor”.

Except that if you think about it, you know plenty of people who ARE that poor. And apparently, many of us want to keep it that way, just in case we end up rich someday.

America’s $21 trillion American economy has been captured by its oligarchs and their political servants who say we can’t eliminate poverty because that would be socialism, and socialism makes the baby Jesus cry.

So, 50 million Americans continue to wake up dirt poor every day.

Facebooklinkedinrss

Saturday Soother – December 1, 2018

The Daily Escape:

Yukon Grizzly before hibernation – 2014 photo by Paul Nicklen

Quite the week. We had barely digested Thanksgiving dinner when we heard about Russia seizing three Ukrainian Navy vessels in the Azov Sea. We learned that Paul Manafort lied to Robert Mueller, and that his lawyer reported everything that occurred between Manafort and Mueller to the White House. Then, we heard that Trump’s former in-house lawyer, Michael Cohen has admitted to lying to Congress, and is now cooperating with Mueller. Who knows what it all means?

But, the big story this week was that we learned that life expectancy in the US fell to 78.6 years, a 0.3 year decline from our peak. From CNN:

Overdose deaths reached a new high in 2017, topping 70,000, while the suicide rate increased by 3.7%, the CDC’s National Center for Health Statistics reports.

We are witnessing social decay in America. This is consistent with what Angus Deaton and Ann Case called “deaths of despair” in 2017. The WSJ has a detailed breakdown, and also points out how other countries are continuing to show progress:

Data the Centers for Disease Control and Prevention released on Thursday show life expectancy fell by one-tenth of a percent, to 78.6 years, pushed down by the sharpest annual increase in suicides in nearly a decade and a continued rise in deaths from powerful opioid drugs like fentanyl. Influenza, pneumonia and diabetes also factored into last year’s increase.

From Yves Smith:

Americans take antidepressants at a higher rate than any country in the world. The average job tenure is a mere 4.4 years. In my youth, if you changed jobs in less than seven or eight years, you were seen as an opportunist or probably poor performer. The near impossibility of getting a new job if you are over 40 and the fact that outside hot fields, young people can also find it hard to get work commensurate with their education and experience, means that those who do have jobs can be and are exploited by their employers.

The 2017 data paint a dark picture of health and well-being in the US, reflecting the effects of addiction and despair, particularly among young and middle-aged adults. In addition, diseases are plaguing people with limited access to health care.

In the late part of the last century, and the early years of this century, there was a steady decline in heart-disease deaths. That offset a rising number of deaths from drugs and suicide. Now, we’re not seeing those heart-related declines, while drug and suicide deaths occur earlier in life, accounting for more years of life lost.

The worst aspect is that it never had to be this way. These drug and suicide deaths are “collateral damage” caused by the social and economic changes in America since the 1970s.

And we made most of those changes by choice.

Wrongo is reminded that last month, he learned that something similar had happened in Russia under Gorbachev. Under Perestroika, millions of Russians lost jobs. The government’s budget deficits grew. The death rate exceeded the birth rate. Nearly 700,000 children were abandoned by parents who couldn’t afford to take care of them. The average lifespan of men dropped to 59 years.

Are we in a slow motion disaster that could be similar to what Russia went through back in the 1990s?

We’ve become hardened. These American deaths are largely anonymous. When AIDS was ravishing the gay community in the 1980s, people were able to appreciate the huge number of deaths by seeing, or adding to, the AIDS Memorial Quilt, which eventually weighed more than 50 tons.

There is no equivalent recognition for these deaths of despair.

A traitorous American ruling class has sold out its middle and lower classes. If you doubt that, think about Wal-Mart. The Walton’s fortune was made by acting as an agent of Chinese manufacturers, in direct competition with US manufacturers. Doesn’t that seem like treason?

Relax, there’s nothing you can do about all of this today, the first day of December. Time to get what solace you can from a few minutes having a coffee, and a listen to a piece of soothing music.

Start by brewing a cup of Kona Mele Extra Fancy coffee from Hula Daddy Kona Coffee ($64.94/lb.). It has an aroma of dark chocolate, fruit and flowers. And shipping is free.

Now settle back and listen to a few minutes of George Winston’s “December”. Here are Part 1: Snow, Part 2: Midnight, and Part 3: Minstrels:

Those who read the Wrongologist in email can view the video here.

Facebooklinkedinrss

Saturday Soother – January 27, 2018

The Daily Escape:

Two Harbors, Lake Superior, MN – 2018 photo by Fhallopian

You may have missed the Op-Ed in the NYT by 2015 Nobel Laureate Angus Deaton, entitled “The U.S. Can No Longer Hide From Its Deep Poverty Problem”. In it, Deaton says this:

According to the World Bank, 769 million people lived on less than $1.90 a day in 2013; they are the world’s very poorest. Of these, 3.2 million live in the United States…

That’s $1.90 per DAY. Deaton asks:

Surely no one in the United States today is as poor as a poor person in Ethiopia or Nepal?

Well, only 3.2 million of us. That’s one percent of the American population. Deaton analyzes the World Bank’s study, and concludes that the minimum level per day should be higher in rich countries like the US. He quotes a study that says that the needs-based absolute poverty line should be more like $4/day in rich countries:

When we compare absolute poverty in the United States with absolute poverty in India, or other poor countries, we should be using $4 in the United States and $1.90 in India.

If we do that, there are 5.3 million Americans who are absolutely poor by global standards.

The time has come to ask a truly uncomfortable question: Will our society provide a role for people who for reasons of reduced mental or physical capacity, cannot contribute enough to earn their keep? There are millions of Americans who, by virtue of incapacity, or other challenges, are unemployable. They have no place in the workplace, and never will.

Most likely, you wouldn’t hire them, and neither will anybody else.

If the answer is we cannot provide them with a job to do, what is society’s responsibility to them? What is our individual responsibility?

Ponder that while you think about which beer you are going to buy for the Super Bowl party next Sunday.

Speaking of poverty (the intellectual kind), the State of the Union speech is next Tuesday. CNN tells us that Massachusetts Congressman Joe Kennedy will give Democrats’ response to Trump’s State of the Union:

Kennedy, 37, is seen as a rising star in a party that has many in the senior ranks well into their 70s.

So, prepare for your back to the future moment when another young Democrat named Kennedy spends a moment on the national stage. Americans trying to live on the same amount per day as Ethiopians, and Trump getting standing ovations from one side of the House on Tuesday; both can make you sick.

So, try to take your mind off of Davos, immigration, and poverty for a few minutes and prepare for a soother. Kick back and brew a hot steaming cup of Café Cubano by Don Pablo Coffee Growers and Roasters. Café Cubano isn’t from Cuba, it’s from Florida. But it is bold & complex, with a very smooth cocoa-toned finish, and says the brewer, never a bitter aftertaste. (2lbs/$13.99)

Now, click on the video below and watch a snowboarder glide peacefully through the woods and down a mountain of perfect powder near Steamboat, CO. He is accompanied by a rendition of “Clair de Lune” (Moonlight) by Claude Debussy. There is no moonlight in the video, but it is very relaxing:

Those who read the Wrongologist in email can view the video here.

Facebooklinkedinrss