Radio commentary, March 13, 2010
In a business cycle update, the grinding slog of a recovery continues. Last week, we learned that the job market looked got a little less bad in February than it was getting for most of 2009. On Friday, we learned that the retail sector had a not-bad February. Broad composite measures of the state of the U.S. economy, like the Conference Board’s Coincident Index and the Chicago Fed’s National Activity Index (CFNAI), are basically getting back to the zero line after deep collapses. Most measures, however, are behaving rather weakly by historical standards. The recovery is far less robust than the strong bounces seen in the mid-1970s and early 1980s; it’s looking much more like the anemic upturns we saw in the early 1990s and early 2000s. This is entirely consistent with the pattern of post-financial crises economies, which I’ve personally analyzed based on some taxonomies provided by the IMF.
We may start seeing some job growth any month now, but the numbers are likely to be small—which is why the sort of stimulus plan (“18 Million Jobs by 2012”) that Bob Pollin discusses later in this show is so important. If we were to achieve something like normal recovery/expansion job growth, it would take five or six years to recover all the jobs we’ve lost since 2007—and even mounting an average-speed recovery looks like a stretch. Political reality—meaning what political hacks, orthodox pundits, big capital, and the portion of public opinion bamboozled by these powerful sorts want—is aligned against a new jobs plan. But it doesn’t hurt to make noise, or as much noise as people like us can make.
Actually, as I’ve been pointing out here for a while, elite opinion is rapidly lining up in favor of austerity, not stimulus. In a dreadful “news” piece in the Friday New York Times, correspondent Landon Thomas Jr. pivots off the Greek crisis to make some utterly bogus points about U.S. entitlement programs. The piece opens with a vignette of a Greek hairdresser who’s entitled to retire at 50 because of her daily exposure to noxious chemicals. The lesson drawn from this is that Greece will have to renounce this sort of thing if it wants to recover from its economic crisis. I don’t want to demean hairdressers or the risk of chemicals—I admire the former and worry about the latter—but there’s no doubt that the reporter and/or his editors decided to lead with this anecdote to bias the readers against generous social programs of any kind.
Sinister enough, but Thomas goes on to draw broader conclusions about retirement burdens facing the rest of Europe and the U.S. How many people are allowed to retire at 50 in the U.S.? Not many, except maybe except cops—but we’re supposed to revere cops, so they get a pass. To promote a bitter pill for Europe, Thomas quotes the work of Jagdish Gokhale for the Cato Institute, allegedly showing that a proper accounting for Greece’s future retirement burden would show that its debt burden is 875% of GDP, nearly eight times the present official accounting. Cato is a right-wing think tank that’s had it out for our Social Security system for years; almost nothing they say on this topic should be taken at face value. And Gokhale is a proponent of something called generational accounting, which tries to assign today’s debts to tomorrow children in the most sensationalistic ways. His 875% number is essentially an expression of how much Greece would have to set aside today to meet its pension obligations into an infinite future. No one has to do that. Tomorrow’s pensions can be paid by tomorrow’s taxpayers; they don’t have to be accounted for by today’s. But this technique can be used to scare people into submission.
Turning to the U.S., the Times corresondent compounds his sins by lumping together Social Security and Medicare into a single entitlements problem, a favorite trick of the austerity party. These are two entirely separate issues. Social Security has at worst a soluble problem, and may not have a problem at all. As I’ve been arguing for more than a decade, projections of the system’s purported bankruptcy assume depression levels of economic growth over the next 75 years, and also make preposterously gloomy demographic assumptions. No one ever questions these inputs, but almost everyone accepts the outputs. And the Medicare problem is a reflection of our insane health care financing system—a problem that Obamacare isn’t likely to fix. But all this worrywarting has the effect, deliberate or not, of trying to prepare the population for deep cuts in both programs. A Republican couldn’t get away with such cuts; it’s quite possible that a Democrat could. During the Clinton years, Monica Lewinsky saved us from Social Security privatization; Obama sadly doesn’t look like that kind of guy.
Gallup reports that the share of Americans who are satisfied with the way things are going in this country—a standard polling question with a long history—is now at 19%. Readings below 20% are rare in this putatively happy country, and occur mainly during periods of hard economic times.
When Barack Obama took office in January 2009, satisfaction stood at 13%. In the heady early days of his presidency, this measure rose steadily into the mid-30s last spring and summer. It’s not given back almost all that gain—with the decline mostly the result of a 30-point drop among Democrats. Independents are off by 14 points, and Republicans, who never joined in with Obamania, are off by just 4.
So it looks like serious disillusion is setting in. In the run-up to the election, I’d hoped that this inevitable disillusion—the product of the loopy hopes of the Obamamaniacs colliding with the president’s fundamentally centrist politics—might be productive. Productive of insight into the nature of the capital-s System—that inequality, insecurity, and imperial violence aren’t the result of particular personalities or parties, but are deeply embedded in the structures of American life. But it doesn’t seem to be working out that way so far.
Devolution on the left
It’s come clear to me that the sequence of Bush and Obama has been very bad for the left side of the political spectrum. I’m not talking about hardcore types like me, who find the whole setup to be rotten. But I’m thinking of what we might call left-liberals—people who’d really like a more egalitarian and less violent world, and who don’t embrace market solutions to social problems and invading small countries in the name of human rights. During the Bush years, it got too easy to make fun of his illiteracy and idiot religiosity, too easy to make jokes about Dick Cheney’s aim with a shotgun or the man-sized safe in his office, too easy to blame plutocracy and bombing runs on a gang of Republican troglodytes. God knows they are troglodytes. But in a lot of ways, Obama is a more sinister leader. He’s charming, smooth, literate, and sophisticated, the opposite of a dope given the outbursts of rage like Bush. Yet he’s doing as much as Bush to coddle Wall Street and prosecute imperial wars. But do we see the kind of opposition to that agenda coming from the more respectable left that we saw in the Bush years? No. We see apologetics. We see The Nation magazine publishing the inanities of Melissa Harris-Lacewell, who urges us to give Obama a chance. A chance to do what? To continue to do pretty much what he campaigned for. And to make space for Harris-Lacewell’s new column, the editors of the liberal weekly cut back the space allotted to Alexander Cockburn. Though I’ve had my disagreements with Cockburn over the years, particularly with his doubts on climate change, he’s a real radical who writes with style and wit. Reading him in the 1970s and 1980s was a major influence on me, and I still admire him a lot. This editorial decision is a symptom of the kind of devolution going on on the liberal left.
So what’s going to be left of the left? A toxic mix of Obama apologists and 9/11 truthers? I hope we can do better than that.