How is it that the economy is in recovery, but working people are worse off than ever? The reason may be that the health of the economy is measured by statistics that have little to do with the well-being of humans. When news-mongers mention “the economy,” they’re really talking about markets and not people. Government and the mass media give us a snapshot of economic conditions that crops most of the image, and we’re just starting to catch on to the true picture.
This explains why it’s a “jobless recovery,” as the mass media sometimes refer, oxymoronically, to our current condition. Government and the media measure the health of labor markets mainly with statistics involving eligibility for unemployment compensation. Much less important are factors like actual income or the surplus of human capital. The unemployment rate declines but more people are idle. The number of new claims for unemployment in a given month is down by 100,000 from the previous month, and that’s an improvement in the economy. If this were a disease, we’d still be deteriorating, but at a slower rate.
Commerce, another indicator cited by the experts, is measured with an assessment of the output of goods and services, but little or no consideration is given to the distribution of those goods and services among the populace, the costs to the natural environment, or the size and consequences of the unpaid tab for them. The health of the economy, according to the experts, is a simple function of cash flow and has no relation to the magnitude of public and private debt. You max your credit card, you can consider yourself in tough shape economically. Government and bankers max theirs, they just increase their limits. It’s good for the economy if if keeps money flowing through their sticky fingers.
Also missing from conventional equations is the displacement of paid workers by machines and slaves, not to mention the fitness of the workforce for work. Illiteracy, infant mortality, addiction, itineracy, blight, mental illness, incarceration, nationalism, suicide and other symptoms of social failure are altogether missing from the economic equation, notwithstanding that each and every one is intimately involved–as both cause and effect–in poverty and joblessness.
Prices on the New York Stock Exchange, considered a key indicator of the health of the economy, are reported several times a day on TV and radio, even though only a small fraction of the audience owns stock, and the great bulk of corporate equity is held by the richest 10 percent of the population. When stock prices declined by 25 percent in 2008, government was quick to intervene, making good most of the “losses” with taxpayers’ money. No help is forthcoming for the millions of workers in foreclosure, however.
If economists could factor in the real-life parameters of economic health, odds are that the stats would indicate not recovery but profound depression and catastrophic failure. In fact, when you factor out all the missing quantities, you’re left with this equation: health of economy = wealth of rich people. An economy in recovery is an economy in which rich people are getting richer.
Notice the disequilibrium inherent in this sort of calculus. As a smaller and smaller group of people comes into possession of a greater and greater portion of economic resources, the dispossessed, indebted majority grows in numbers and desperation. Is there a tipping point, at which the masses are forced to repudiate debt, confiscate wasted and misapplied capital, and punish the tiny, overprivileged minority who impoverished them? It can’t happen here, as we used to say.