Barbara's Blog

Clitoral Economics

With all the talk about how to stimulate it, you’d think that the economy is a giant clitoris. Ben Bernanke may not employ this imagery, but the immediate challenge–and the issue bound to replace Iraq and immigration in the presidential race–is how best to get the economy engorged and throbbing again.

It would be irresponsible to say much about Bush’s stimulus plan, the mere mention of which could be enough to send the Nikkei, the DAX, and the curiously named  FTSE and Sensex tumbling into the crash zone again. In a typically regressive gesture, Bush proposed to hand out cash tax rebates–except to families earning less than $40,000 a year. This may qualify as an example of what Naomi Klein calls “disaster capitalism,” in which any misfortune can be re-jiggered to the advantage of the affluent.

But even the liberal stimulus proposals have me worried—not so much for their content as their rationale. Most liberals want a stimulus package that includes an increase in food stamp allotments and an extension of unemployment benefits, which are both screamingly obvious measures. Currently, the food stamp allotment amounts to about $1 per meal, and when four Democratic congresspersons tried living on that for a week last May they ended up even crankier than if they’d had to sit through a week-long filibuster by Tom DeLay.

As for unemployment benefits: They last just 25 weeks in most states and end up covering only a third of people who are laid off. If ever there was a time to create a real working system of unemployment compensation, it is now. Citigroup has announced plans to eliminate 21,000; investment banks in general will shed 40,000. The mortgage industry is in a state of melt-down; and Sprint – how did they get into this?—will lay off 4000 full-time employees as well as 1600 part-time and contract workers.

The economic rationale for more a progressive stimulus package, which we hear now several times a day, is that the poor and the freshly unemployed will spend whatever money they get. Give them more money in the form of food stamps or unemployment benefits and they’ll drop more at the mall. Money, it has been observed, sticks to the rich but just slides off the poor, which makes them the lynchpin of stimulus. After decades of hearing the poor stereotyped as lazy, stupid, addicted, and crime-prone, they have been discovered to have this singular virtue: They are veritable spending machines.

All this is true, but it is also a form of economy fetishism, or should I say worship? If we have learned anything in the last few years, it is that the economy is no longer an effective measure of human well-being. We’ve seen the economy grow without wage gains; we’ve seen productivity grow without wage gains. We’ve even seen unemployment fall without wage gains. In fact, when economists want to talk about life “on the ground,” where jobs and wages and the price of Special K are paramount, they’ve taken to talking about “the real economy.” If there’s a “real economy,” then what in the hell is “the economy”?

Once it was real-er, this economy that we have. But that was before we got polarized into the rich, the poor, and the sinking middle class. Gross social inequality is what has “de-coupled” growth and productivity from wage gains for the average household. As far as I can tell, “the economy,” as opposed to the “real economy,” is the realm of investment, and is occupied by people who live on interest and dividends instead of salaries and wages, aka the rich.

So I’m proposing a radical shift in rhetoric: Any stimulus package should focus on the poor and the unemployed, not because they spend more, but because they are in most in need of help. Yes, when a parent can afford to buy Enfamil, it helps the Enfamil company and no doubt “the economy” too. But let’s not throw out the baby with the sensual bubble bath of “stimulus.” In any ordinary moral calculus, the baby comes first.

Far be it from me to make the revolutionary suggestion that babies are more important than profits. My point is just that our economy–with its dizzying bubbles, wild lending sprees, reckless downsizings, and planet-wide hyper-sensitivity – has gotten too far disconnected from ordinary human needs. We could take the current crisis as an opportunity to fix that, at least in part, by shoring up government support for the needy and the dislocated. Or we can wait around and watch while the appropriate imagery gets nasty, as this ghostly creature, “the economy,” starts acting like a nymphomaniac junkie in withdrawal.

Hillary’s Real MLK Problem

At first I took it as another, yawn, white rip-off of black culture and creativity: the Rolling Stones appropriating the Bo Diddley beat, Bo Derek sporting corn rows, and now Hillary giving Lyndon Baines Johnson credit for the voting rights act of 1965. If you had to give this honor to a white guy, LBJ was an odd choice, since he’d spent the 1964 Democratic convention scheming to prevent the Mississippi Freedom Democratic Party from taking any Dixiecrat seats. By Clinton’s standards, maybe Richard Nixon should be credited with the legalization of abortion in 1972.

But Clinton’s LBJ remark reveals something more worrisome than racial tone-deafness – a theory of social change that’s as elitist as it is inaccurate. Black civil rights weren’t won by suited men (or women) sitting at desks. They were won by a mass movement of millions who marched, sat in at lunch counters, endured jailings, and took bullets and beatings for the right to vote and move freely about. Some were students and pastors; many were dirt-poor farmers and urban workers. No one has ever attempted to list all their names.

There’s a problem too, of course, with the conventional abbreviation of the Civil Rights Movement into two names – Martin Luther King, Jr. and Rosa Parks. What about Fannie Lou Hamer, who led the Mississippi Freedom Democratic Party’s delegation to the 19464 convention? What about Ella Baker, Fred Hampton, Stokely Carmichael and hundreds of other leaders? The Great Person theory of history may simplify textbook-writing, but leaves us with no clue as to how change actually happens.

Women’s rights, for example, weren’t brokered by Betty Friedan and Gloria Steinem over tea. As Steinem would be the first to acknowledge, the feminist movement of the 70s took root around kitchen tables and coffee tables, ignited by hundreds of thousands of now-anonymous women who were sick of being called “honey” at work and excluded from “men’s” jobs. Media stars like Friedan and Steinem did a brilliant job of proselytizing, but it took an army of unsung heroines to stage the protests, organize the conferences, hand out the fliers, and spread the word to their neighbors and co-workers.

“Change” is this year’s Democratic battle cry, but if you don’t know how it happens, you’re not likely to make it happen yourself. A case in point is Clinton’s 1993 “health reform” plan. She didn’t do any “listening tour” for that, no televised town meetings with heart-rending grassroots testimonies. Instead, she gathered up a cadre of wonks for months of closed-door meetings, some so secretive that the participants themselves were barred from bringing in pencils or pens. According to David Corn of The Nation, when Clinton was told that 70 percent of Americans polled favored a single-payer system at the time, she responded sarcastically with, “Now tell me something interesting.”

She could have gone about things differently, in a way that wouldn’t have left 47 million Americans uninsured today. She could have started by realizing that no real change would come about without a mobilization of the ordinary people who wanted it. Instead of sequestering herself with economists and business consultants, she might have met with representatives of nurses’ organizations, doctors’ groups, health workers’ unions, and patient advocates. Then she could have gone to the public and said: I’m working for a major change in the way we do things and it’s going to run into heavy resistance, so I’ll need your support in every possible way.

But she did it her way, and ended up with a 1300 page plan that no one, on either side of the aisle, liked or could even comprehend – proving that historical change isn’t made by the smartest girl in the room, even if she shares a bed with the president. Similarly, she ignored the anti-war movement of this decade and alienated untold numbers of Democratic voters, feminists included.

I’d like to think that Obama, with his community organizing experience and insistence on firing people up, gets it a little better. But whoever is elected president this year, there won’t be any real change in a progressive direction without a mass social movement to bring it about – either by holding the president accountable or by holding his or her feet to the fire. And a mass social movement doesn’t begin at the top. It begins right now, with you.

Recession – Who Cares?

The soothsayers have slaughtered the ox and are examining the gloppy entrails for signs: Rising unemployment, a falling dollar, weak consumer spending, the credit crisis, a swooning stock market. Could there be something wrong here? Could we actually be approaching a, god forbid, recession?

To which the only sane response is: Who cares? According to a CNN poll, 57 percent of Americans thought we were already in a recession a month ago. Economists may complain that this is only because the public is ignorant of the technical – or at least the newspapers’ standard – definition of a recession, which specifies that there must be at least two consecutive quarters of negative growth in the GDP. But most of the public employs the more colloquial definition of a recession, which is hard times. If hard times have already fallen on a majority of Americans, then “recession” doesn’t seem to be a very useful term any more.

The economists’ odd fixation on growth as a measure of economic well-being puts them in a parallel universe of their own. WorldMoneyWatch’s website tells us that, for example, that “The GDP growth rate is the most important indicator of economic health. If GDP is growing, so will business, jobs and personal income.” And the latest issue of US News and World Report advises, “The key… for America is to keep its economy growing as fast as possible without triggering inflation.”

But hellooo, we’ve had brisk growth for the last few years, as the president always likes to remind us, only without those promised increases in personal income, at least not for the middle class. Growth, some of the economists are conceding in perplexity, has been “de-coupled” from mass prosperity.

Growth is not the only economic indicator that has let us down recently. In the last five years, America’s briskly rising productivity has been the envy of much of the world. But at the same time, real wages have actually declined. It’s not supposed to be this way, of course. Economists have long believed that some sort of occult process would intervene and adjust wages upward as people worked harder and more efficiently.

And what about the unemployment rate? The old liberal faith was that “full employment” would create a workers’ paradise, with higher wages and enhanced bargaining power for the little guy and gal. But we’ve had nearly full employment, or at least an unemployment rate of under five percent, for years now, again, without the predicted gains. What the old liberals weren’t counting on was a depressed minimum wage, impotent unions, and a witch’s brew of management strategies to hold wages and salaries down.

Now if those great and solemn economic indicators – growth, productivity and employment rates – have become de-coupled from most people’s lived experience, then there’s something wrong with the economists, the economy, or both. The clue lies in the word “most.” We have become so unequal as a nation that we increasingly occupy two different economies – one for the rich and one for everyone else -- and the latter has been in a recession, if not a depression, for a long, long time. Not all economists can bring themselves to admit this.

I suspect that America’s fabulous growth in productivity is another illustration of the disconnect between economic measures and human experience. It’s been attributed to better education and technological advances, which would be nice to believe in. But a revealing 2001 study by McKinsey also credited America’s productivity growth to “managerial innovations” and cited Wal-Mart as a model performer, meaning that we are also looking at fiendish schemes to extract more work for less pay. Yes, you can generate more output per apparent hour of work by falsifying time records, speeding up assembly lines, doubling workloads, and cutting back on breaks. Productivity may look good from the top, but at the middle and the bottom it can feel a lot like pain.

When employees are squeezed hard enough, then you have the possibility of a genuine recession as technically defined. People buy less, so growth declines, to the point where even the economic over-class has to sit up and take notice. This is happening in Japan, where a recent Wall Street Journal headline announces: “Growing Reliance on Temps Holds Back Japan’s Rebound: Firms Increasingly Add Part-Time Workers; Spending Power Lags.” The U.S., where consumer spending accounts for 70 percent of the economy compared to a little more than half in Japan, is even more vulnerable to a downturn in personal consumption.

What is this fixation on growth anyway? As a general rule of biological survival, any creature or entity that depends on perpetual growth is well worth avoiding, lest you be eaten alive. As Bill McKibben argues in his book Deep Economy, the “cult of growth” has led to global warming, ghastly levels of pollution, and diminishing resources. Tumors grow, at least until they kill their hosts; economies ought to be sustainable.

Apocalypse aside, the mantra of growth has deceived us for far too long. What it translates into is: Don’t worry about the relative size of your slice, just concentrate on growing the pie! Now, with a recession threatening even more suffering for those who are already struggling, may be the perfect time to get out the pie-cutter again. Too bad that the one leading Democratic candidate who promises to do so now appears to be on the ropes.