❄ PLAIN TALK [VII]: IMPOVERISH THE PEOPLE?
❄ This post, and other PLAIN TALK posts on this blog, describe in plain language the current Republican Party aims and methods. In this post I observe the growing US inequalities in wealth and income, and their especial severity among vulnerable sectors. And I wonder how it can be that Republican policies seem so poorly designed to prevent such effects. ❄
If a political partys dispositions lead to effects, if preoccupations lead to neglects, if a sense of how the world works brings favoring friends and denying resources to the others, if imperatives of electoral strategy exclude the peoples interests, if ends overwhelm means, is that party responsible and accountable for the consequences of its strategy?
Please come back a step with me. What I have just written implies questions about cause and intention. Can we attribute to a political partys strategy outcomes that it would vocally and emphatically deny? Consider jobs and joblessness. The formal unemployment rate—and even more the index of those wishing jobs, and wishing full-time jobs, they cannot find—remains high. Republicans repeatedly point to unemployment, denounce Democratic policy initiatives as job-killing, and invoke the private sector as the only job creator. Strategy implies deliberate purpose. Is it thinkable that joblessness could be a Republican Party aim, and therefore part of its strategy? Or should we take Republican proffers at face value? To deny them credence means to accuse them of deceit.
But consider what we know. We know that the Republican chief in the Senate has declared his first political aim to be to oust Obama in the 2012 elections. We know—and Republican strategists know—that there has been a strong correlation between voter satisfaction with the countrys economic performance and their readiness to support an incumbent president: hence that once-famous vulgarism of James Carvills, its the economy, stupid. [Note 1] We know that Republicans have opposed, delayed, or at best reluctantly supported, White House policies to counter the effects of joblessness, including unemployment extension and public works. And we know that the Republican emphasis on savings and refusal to tax translates to public job losses, Federal and state, in large numbers.
Polite talk would have it, then, that Republican policies appear to be inconsistent in their expressed concern for jobs. Plain talk would put it differently: that Republicans cynically turn a blind eye to the effects of their policies, bent on Obamas ouster. Or perhaps Republican strategists take comfort in knowing that the Lord moves in mysterious ways, and that He may so value a Republican White House in 2013 that He permits the suffering of His people to grow and harden.
It is tempting to argue backward from measurable facts, in the following way: if there have been large-scale (and therefore more evident, less disputable) changes in social facts, and if the evidence of these social facts has been displayed over a number of years, they will at least pose problems that invite causal accounts, and may additionally give us reasons for judging some accounts to be more sound than others. We can also ask whether Republicans share the view that these facts point to problems, to be addressed and ameliorated, or only to simple realities, neither requiring nor amenable to deliberate action by the State.
Recent studies of the United States have shown that inequalities in distribution of income and wealth have grown in recent decades, with greater wealth concentrated in relatively fewer hands. Studies of the effects of the Great Recession in the United States show that economic losses among Hispanics and African-Americans have been much greater than among others.
Savings have evaporated and houses have been lost. The number affected, and the degree of loss, is high. Given current joblessness even more, almost certainly, will be affected.
Edward N. Wolff summarizes his study of US household inequalities:
The percentage increase in net worth (also that of non-home wealth and income) from 1983 to 2007 was much greater for the top wealth (and income) groups than for those lower in the distribution. Moreover, the average wealth of the poorest 40 percent declined by 63 percent between 1983 and 2007 and, by 2007, had fallen to only $2,200. All in all, the greatest gains in wealth and income were enjoyed by the upper 20 percent, particularly the top 1 percent, of the respective distributions. Between 1983 and 2007, the top 1 percent received 35 percent of the total growth in net worth, 43 percent of the total growth in non-home wealth, and 44 percent of the total increase in income. The figures for the top 20 percent are 89 percent, 94 percent, and 87 percent, respectively. [Note 2]
And for the Great Recession:
I also updated the wealth figures to July 1, 2009 on the basis of changes in house and stock prices. My estimates indicate that while mean wealth (in 2007 dollars) fell by 17.3 percent between 2007 and 2009, median wealth plunged by 36.1 percent. The results show a fairly steep rise in wealth inequality, with the Gini coefficient swelling from 0.834 to 0.865 and the share of the top 1 percent advancing from 34.6 to 37.1 percent. I also estimate that 16.6 percent of homeowners were underwater with greater mortgage debt than the value of their homes. [Note 3] >
A Pew Research Center study issued in mid-2011 reported that
[I]n percentage terms, the bursting of the housing market bubble in 2006 and the recession that followed from late 2007 to mid-2009 took a far greater toll on the wealth of minorities than whites. From 2005 to 2009, inflation-adjusted median wealth fell by 66% among Hispanic households and 53% among black households, compared with just 16% among white households.
As a result of these declines, the typical black household had just $5,677 in wealth (assets minus debts) in 2009; the typical Hispanic household had $6,325 in wealth; and the typical white household had $113,149. [Note 4]
Bob Herbert wrote repeatedly in The New York Times opinion page calling attention to unemployment rates by race and wealth. For example, he quotes from a report on US household income and employment in 2009 Q4 (divided into deciles by annual household income) by the Center for Labor Market Studies at Northeastern University:
The highest group, with household incomes of $150,000 or more, had an unemployment rate during that quarter of 3.2 percent. The next highest, with incomes of $100,000 to 149,999, had an unemployment rate of 4 percent.
Contrast those figures with the unemployment rate of the lowest group, which had annual household incomes of $12,499 or less. The unemployment rate of that group during the fourth quarter of last year was a staggering 30.8 percent. Thats more than five points higher than the overall jobless rate at the height of the Depression.
The next lowest group, with incomes of $12,500 to $20,000, had an unemployment rate of 19.1 percent.
These are the kinds of jobless rates that push families already struggling on meager incomes into destitution. [Note 5]
When underemployment is taken into account, the differences are even more keen:
[Source: Center for Labor Market Studies, Northeastern University. February 2010. Footnote below. [Note 6] ]
We return to the beginning. It is one thing to argue that the Great Recession was caused in major part by Republican failure to watch and regulate economic policy during the Cheney-Bush years, an argument that is wholly sound, and something quite different to argue that the Republican Party, during and after Cheney-Bush, intentionally aimed to impoverish the most vulnerable in American society. I do not go there. I have no smoking gun, and the charge is so severe that a smoking gun would be needed to make such an assertion. (By contrast, the evidence that Republicans in many jurisdictions are creating impediments to voting by constituencies which strongly overlap the most vulnerable is strong, as Ive argued elsewhere. Since their argument about fraud is so specious I have no problem, in that context, shouting Smoking gun!)
On the other hand, impoverishment of the most vulnerable is a tracable consequence of Republican policies, even if those policies may have been undertaken for quite different reasons. Perhaps deregulation, favoring corporations, tax relief for the wealthy, following corporate lobbyists on the environment and climate change, privatization, disbelief in the economic arguments for education and social guarantees, inexplicable war-making, resistance to counter-cyclical policies in times of recession and depression, and unreadiness to extend unemployment benefits are just a consequence of ignorance, or habit, or the persuasiveness of right-wing ideology, or an expression of self-interest. None of those explanations is flattering, but they are certainly less of an indictment than to charge that class disdain and implacable meanness are engines of Republican political strategic.
[Note 2]: Edward N. Wolff, Recent Trends in Household Wealth in the United States: Rising Debt and the Middle-Class Squeeze—an Update to 2007, Levy Economics Institute of Bard College, Working Paper No. 589. March 2010. http://www.levyinstitute.org/pubs/wp_589.pdf
[Note 3]: Ibid.
[Note 4]: Twenty-to-One: Wealth Gaps Rise to Record Highs Between Whites, Blacks and Hispanics, Pew Research Center: Social and Demographic Trends, 26 July 2011. http://pewsocialtrends.org/2011/07/26/wealth-gaps-rise-to-record-highs-between-whites-blacks-hispanics/
[Note 5]: Bob Herbert, The Worst of the Pain, The New York Times, 8 February 2010. http://www.nytimes.com/2010/02/09/opinion/09herbert.html , citing Northeastern University. Center for Labor Market Studies, Northeastern University, Labor Underutilization Problems of U.S. Workers Across Household Income Groups at the End of the Great Recession: A Truly Great Depression Among the Nations Low Income Workers Amidst Full Employment Among the Most Affluent. February 2010. See also http://www.clms.neu.edu/publication documentsLabor_Underutilization_Problems_of_U.pdf The Jobless and Wageless Recovery from the Great Recession of 2007- 2009: The Magnitude and Sources of Economic Growth Through 2011 I and Their Impacts on Workers, Profits, and Stock Values, Center for Labor Market Studies. May 2011.
[Note 6]: Ibid., February 2010. Table 3.
[Political Design 2011.08.05. Post A32. An archive through April 2010 is at http://www.learnworld.com/blog/design.html This blog: http://design.learnworld.com]