The Grand Illusion
On average, the statistics would seem to indicate that the U.S. economy is doing better. Inflation dropped below 5%, the lowest rate in two years, and unemployment decreased to 3.5%, a fifty-year low. Wages are up overall, and housing prices are beginning to ease.
So why does a record sixty-nine percent of the American public hold negative views about the economy both now and in the future?
Because those optimistic figures don’t tell the whole story. While overall income in the U.S. has risen over twenty-five percent since 2000, median household income has risen only seven percent, and wages for working class earners have barely stayed ahead of inflation. Income for the top one tenth of one percent of earners, by contrast, has jumped forty-one percent, and corporate profit rates and revenues are at an all-time high, a factor that created more than half the current inflation. So, for the fortunate few, the economic situation is looking good.
As for the rest of the U.S., higher interest rates have reduced the ability of average Americans to afford rent or mortgage payments, to buy car, or to pay off credit card balances. The price of natural gas for home heating has more than doubled since this time last year. The average price of a home in the U.S. has increased by thirty-five percent in just the last five years, while the average mortgage rate has more than doubled since 2020, a combination that effectively increases the cost of buying a house by almost 2 ½ times.
The overall prices of goods in America have increased by 67% (even after adjustment for inflation) since 2000. Less than half of all Americans can afford to pay an unexpected cost (medical, car repair, etc.) without going further into debt or simply being unable to pay.
At the same time, the U.S. has the lowest life expectancy of any high-income country in the world, the poorest access to health insurance, the longest working hours, and the least parental leave and paid vacation. Also, by the way, we have reached the point where firearms are the leading cause of death for children and teenagers.
Those factors might just explain the disconnect between the favorable statistics and the way most people feel.
Our corporate masters have gotten overly greedy again and will kill the goose that laid the golden egg. This isn’t new and oddly enough, seems to show limited collusion. If there was significant collusion, there would be a better balance to keep the system going.
It seems like this is a cycle though. Roughly 90-100 years ago the same kind of things were happening. But we have been going down the slippery slope since the 80’s and the era of “Greed is good”. The acceleration increases with new laws and changes in regulation.
But what can be done? Is it tax increases for the very wealthy and corporations? Is it more laws requiring more benefits or making health insurance available to all? Is it more regulations?
In many ways anything would improve life in the US, but every change has its powerful opponents and not many have a large groundswell of support. It used to take a tragedy or a disaster to make change happen but now things make the news and then we move on to the next disaster without fixing anything. Short term greed rules the day.
I wish these problems could be solved for awhile by one of the heroes from Lee’s books. Unfortunately, the only magic today is large amounts of money.
A look at box store or grocery shelves (Walmart, Target, even large upscale regional groceries like Wegman’s) shows a lot of items available pre-pandemic still erratically if not permanently missing. There may be some quality decline in the selection available, too.
I recall the quality decline if not the bare spots on shelves during the Carter era inflation, too.
Some manufacturers have long played games to hide increases in their costs or profits. Candy bars have for decades cycled from normal size to “larger size, same price”, to higher price (tolerated with the larger size), back to the smaller original size (but still the higher price). Some other products seem to have a similar shell game going on, although concentrated detergents might in part have the point of less energy wasted transporting water.
Supply chains are still messed up; and whether or not the goods are produced domestically, there are some domestic jobs involved for goods sold domestically, even if mostly in transport and retail. And in many restaurants, a lot of the older wait staff retired recently – which has happened a lot in many other somewhat tedious jobs too after the peak of the pandemic; even if not dead or long-term health-challenged, many who were at least marginally able to choose decided that their time was worth more than a salary.
Unemployment is misleading if there are more people without jobs that are not seeking jobs. Less people willing to work means less productivity which affects the economy even for those who are willing to work.
As for the previous poster, regulations are not all bad but for sure not all good; they always have a cost, and if the cost in either liberty or dollars is higher than the value, they’re not worth it. Added inefficiencies that exceed their value take away more from the poor and middle class than it does from the rich or corporations, since the rich and corporations can pass the costs on to others, not an option to economically lesser folk. Another cost: every regulation is an occasion for further favor-seeking from the regulators and corruption of the regulators. A smaller body of law and regulation would have far less corporate handouts and set-asides, because there would be less power and therefore far less attempt to bend it to serve corporate or other interests.
What government COULD do is sponsor and protect the independence of think tanks in which participation and licensing of practical developments would have some protection from anti-trust provisions (and the results would eventually become public domain in timeframes proportionate to the costs). Those and similar measures could provide a much lighter touch at leadership in desired areas, whether improvements in environmentalism or healthcare or product safety or domestic production or whatever was thought to be lacking. Give the real experts a chance to combine collaboration and competition to produce results.
The pandemic became an excuse to expect even greater public subsidies to both business and individuals, and none of those should exist for the long term; if they do, there are costs and consequences. There is NO magic free stuff, and there are not enough rich people even if they were taxed at 90% to provide magic free stuff enough to satisfy, given that the created demand for it will be to all intents infinite.
A real hero right now would be a pragmatic economics teacher that could persuasively explain why people needed to take the lead role in (lawfully) satisfying their own expectations.