Wednesday, May 10, 2006

The economic doldrums

Today's editorial in The New York Times is worth reading. Here it is:

Editorial (New York Times, May 10)

Barely Staying Afloat

President Bush's advisers say that the administration should receive more credit for the state of the economy, which, over all, is growing at a strong clip. But voters don't base their opinions on aggregate statistics. They react to their own paychecks and benefits, weighed against their fixed costs, like housing, health care and gasoline. For all but the wealthiest Americans, the latter are rapidly outpacing the former.

In a time of plenty, more American workers are in danger of slipping into outright poverty. As Erik Eckholm reported this week in The Times, about 37 million Americans lived below the poverty line in 2004: $19,157 a year for a family of four. An additional 54 million lived between the poverty line and double the poverty line: $38,314 for a family of that size. They are the "near poor," and they generally receive little attention. But they are often one injury or layoff away from slipping into poverty themselves.

If the "near poor" feel insecure, they have good reason to. A group of academics found that during the 1980's, 13 percent of Americans in their 40's spent a year or more below the poverty line. In the 1990's, that percentage nearly tripled, reaching 36 percent. While workers once believed that pensions would provide for them in their old age, now they fret over underfunded 401(k) accounts. Houses are supposed to provide stability, but those with adjustable-rate mortgages are watching their payments rise, and some fear losing their homes.

The issue here is not handouts; it's about buffering against the shocks inherent in a fast-paced global economy. Perhaps one of the reasons President Bush is generally regarded as such a poor economic steward is that his administration has done little to make the most vulnerable members of the working class believe that any of the good news is directed at them.

Wednesday, May 03, 2006

Neil Young's new one is out

Neil Young's new album, Living With War, is available as a Web stream here. It's good, sort of a musical pamphlet or an op-ed piece -- angry, raw, disposable like a newspaper, but more vital and political than most of what's out there.

Tuesday, May 02, 2006

Rich man, poor man

Read this from the Rocky Mountain News

Rich-poor gap widens

By Paul Campos

Over the past generation, much mainstream economic thought has assumed that what is good for rich people is good for America. Naturally, this view has tended to transform university economics departments and business schools into cheerleaders for the Republican Party.

Ask professor Pangloss of the University of Chicago what we ought to do about capital gains or the inheritance tax or unions, and he will dazzle you with equations supposedly demonstrating that the political outcomes sought by the wealthiest Americans are also best for society as a whole.

That, at any rate, is the current economic orthodoxy. How well does it reflect reality?

Nearly 50 years ago, the economist John Kenneth Galbraith published The Affluent Society, in which he predicted that an increasingly wealthy America was in danger of producing "private wealth and public squalor." A few years later, Galbraith advised Presidents Kennedy and Johnson as they extended the post-New Deal state in ways that lessened the hardships of poverty for millions of Americans.

The America Galbraith lived to see - he died last week at the age of 97 - became an immensely rich nation. In real terms, the gross domestic product is now five times larger than when The Affluent Society appeared, which means that, when one accounts for population growth, the average American is nearly three times wealthier.

But "average" is a tricky concept; it's been noted that if you have one foot in a bucket of ice and another in a bonfire, a statistician will tell you that, on average, the temperature is fine. Over the past quarter-century, political power has shifted from Democrats to Republicans, with striking results for the average distribution of wealth.

Since the election of Ronald Reagan the wealth of the nation has more than doubled. Per capita, Americans are now 70 percent richer than they were in 1979. Where have these several trillion dollars of new affluence gone?

For poor people, the answer is clear: Essentially none of this wealth has come their way. Adjusted for inflation, the tenth percentile of after-tax family income is almost exactly the same today as it was in 1979 - about $13,500 (note this means that 30 million Americans live on even less). For the middle class, the situation is only slightly different. In 1979, the average middle-class family had an after-tax income of $38,000; today that figure is about $43,700, meaning that over the past quarter-century the average American family has seen its income rise by about $200 per year.

For our wealthiest citizens, by contrast, 25 years of Republican rule have made these very much the best of times. During this period, the average after-tax income of the top 1 percent of Americans has risen an astonishing 111.3 percent, from $298,900 to
$631,700 per year (again, all these figures are adjusted for inflation). In
other words, in absolute terms the poor are just as poor as they were a generation ago, while a middle-class family's annual share of the last quarter-century's worth of economic growth allows it to buy one extra tank of gas every three months.

Meanwhile, in relative terms, both groups are far poorer: indeed, compared to the rich, most Americans are now only half as well-off as they were during the Carter presidency.

Like his intellectual mentor Thorstein Veblen, Galbraith understood that, for all its pretensions to being a science, economics has much more in common with sociology. And, like Veblen, he recognized that economists who fail to appreciate this point are
particularly prone to confuse ideological commitment for scientific truth.

That so many of his academic colleagues ended up arguing that the increasingly vast gulf between America's rich and everyone else is actually a desirable state of affairs, did not, I suspect, surprise him.

Paul Campos is a professor of law at the University of Colorado. He can be reached at .

Monday, May 01, 2006

A new poem by Hank Kalet

A new poem, written last week and debuted at Friday's Evening of Music and Poetry in Cranbury:

By Hank Kalet

Her car was 12 years old,
as old as her son, but less reliable,
drinking gas and burning oil,

tires bald and the paint flaking off
the front left quarter panel.
Last month, it needed a new battery,

seventy-five dollars that she didn’t have
so it sat a week as she waited on her paycheck,
caught the bus or a ride from Jill,

or sometimes walked in the early morning dark
the four miles down a road busy even at that hour,
but at least it’s running now, though she knows

it’s just a matter of time before it
blows a gasket or the insurance bill comes due.

A night past

A good night with a small crowd. Steve Bates played a nice group of songs, Hank Kalet and Howard Zogott offered some stirring poems and Peter Wise of the Trenton Area Soup Kitchen reminded us why we do this.


About Me

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Poet, journalist, blogger, political columnist, professor of journalism and writing. I live with my wife, Annie, and my dogs in Central Jersey.