As I See It: The Great Disconnect
June 26, 2006 Victor Rozek
There is a reason why programmers don’t write code on typewriters: disconnecting software from a computer strips it of its utility. Without a machine to run it, the code might still be elegant, but it would no longer be relevant. And no matter how inspired and dedicated the programmer, without that essential connection, the results will be less than favorable.
The same can be said for the economy. Like software disconnected from a computer, the economy has become disconnected from the people operating within it, and the results are increasingly unfavorable. In an economic sense, we think we’re typing on a computer keyboard, but we’re not. We’re banging away on a typewriter and no matter how hard we work, it’s not doing us much good.
There is an Alice-in-Wonderland gap between what is being reported about the economy and what most people know to be true. On the surreal employee side of the looking glass, the traditional relationship between work and reward is distorted, and cause has been disconnected from effect. The GDP may be up Alice, but real wages are falling. Productivity is growing, but living standards are down. The national debt stands at over $8.3 trillion, but we just continue cutting taxes–not for those who need tax relief, for them we cut services. In short, what is happening in the economy bears little or no relation to what is happening to the average worker.
Corporations may be reporting record profits, but if you look closely, they’re not all based on sales. Much of what passes for income comes from eliminating jobs, jettisoning pensions, and cutting health care benefits. In other words, corporations are taking value that belonged to their employees, claiming it as their own, and calling it profit–which is like someone picking your pocket and bragging that they got a raise. Inflation figures are dutifully reported, but conveniently omit the rising cost of food and fuel–a neat trick, like describing the ocean and neglecting to mention that it is wet and salty. ExxonMobil’s $36 billion in profits are heralded as an indicator of a booming economy, but booming for whom? It’s best you don’t remember, Alice, that just six years ago oil was selling for $18 to $20 a barrel and now it sells for $72.
It’s all so contradictory and irrational that like the Queen of Hearts you have to believe six impossible things before breakfast in order to pretend all is well in our economic Wonderland.
“The strange paradox of our times,” writes William Greider, “is that despite America’s fabulous wealth, most people’s lives are shadowed by economic anxieties and real confinements. . . ” That’s another way of saying that the economy no longer serves the people working in it. If the traditional goal of pooling labor, engaging in trade, and creating economic growth was to improve the lives of those participating in the economy, that outcome is now in jeopardy.
As a workforce, we’re no longer competing for the highest paying jobs, we’re competing to become the low-cost providers. Globalization may be responsible for increasing trade, but it also stripped labor of its negotiating power, which has contributed to per capita income falling four years in a row. As for trade, the word seldom appears in print without its companion noun, deficit. Just in the month of April, the trade deficit spiked to a staggering $63.4 billion. While everything from dice to DVDs makes its way into this country, America’s two enduring exports are weapons and jobs. Yes, we get a flood of cheap goods as a result of trade but, as Greider says, “someone should ask working people whether they would choose cheaper prices at Wal-Mart or better incomes for themselves.”
Greider notes that one in six manufacturing jobs has been lost since 2000; a figure that includes 39 percent of the jobs in communications equipment manufacture, and 37 percent of the jobs producing semiconductors. “The losses,” Greider points out, “are explained as free-market ‘efficiencies'” (Yes, losses are efficiencies in Wonderland, Alice), but really it’s just a term used to disguise “the global relocation of American production.” And it’s not just manufacturing. MSNBC reported that the information technology sector lost 403,300 jobs between 2001 and 2004.
For those still working, there is a permanent and pervasive downward pressure on wages and, as a result, Americans are forced to borrow more. In fact, for the first time since 1933, household savings are now negative, which means that the majority of Americans are surviving by either withdrawing their savings or living on credit. The economy still creates jobs, but they are largely low-wage, service-sector jobs that cannot sustain families who enjoy eating regularly and prefer living indoors. It hardly matters that 4.5 million new jobs are created if you personally need three of them to pay your bills. Jared Bernstein, a senior economist at the Economic Policy Institute says “[we have] an economy that’s doing fine, until you consider the people in it.”
Bernstein calls it the YOYO economy, which stands for You’re On Your Own. It’s a one-size-fits-all solution to every problem encountered by working Americans. You and 46 million other folks can’t afford health care? You’re on your own. Been working for a pension your company decided not to give you? You’re on your own. Your job was shipped overseas? You’re on your own. Expect to get Social Security after paying into the system for a lifetime? Well, open a private account and invest in the companies that nick other people’s pensions, because you’re on your own. It’s an economic approach propagated by those not only hostile to the curative potential of government, but hostile to poverty; hostile to the notion that government could exist for the benefit of anyone other than those who don’t need it.
To adjust to the disconnected economy, people are doing some strange things. I personally know three couples that are unofficially divorced and although they live apart, they pretend to be married because one spouse or the other needs medical insurance. In another instance, a man buried his mother on his rural property and continued cashing her Social Security checks. When the scheme finally unraveled, he told authorities that after working a lifetime and taking care of his mother’s medical expenses, he was broke. He had an old backhoe, but no cash. A woman who works at the local recycling center told me there has been a noticeable increase in people breaking into the facility a night and rummaging through the paper recycling bins looking for personal information that would facilitate identity theft.
Perhaps it’s time to quit following the rabbit down the hole.
Tom Payne said “a long habit of not thinking a thing wrong, gives it a superficial appearance of being right, and raises at first a formidable outcry in defense of custom. But the tumult soon subsides. Time makes more converts than reason.”
The defense of custom, of the status quo, is perhaps the greatest enemy of change, but time and evidence of systemic economic abuse and corruption are creating legions of converts dedicated to the proposition that reform must reinstate the primacy of people over profit. In Greider’s words, “Reform must re-establish this fundamental principle: The economy exists to support society and people, not the other way around.”
Payne would agree. “Those who want to reap the benefits of this great nation,” he said, “must bear the fatigue of supporting it.” I suspect Payne meant this to apply to everyone, not just those who don’t qualify for the next round of tax cuts.