Friday, March 27, 2009

Just Who's Economy Is It Anyway?

Above is the L train at the Lorimer Street station just a stop away from Graham Avenue in Williamsburg, Brooklyn where I get off to go home. This could be the train at any hour. It is almost always packed with hipsters and other folk all the time.
The Port Authority Metropolitan Transit Authority (MTA) which runs the subway system is looking at a huge budget deficit created by the recession at the same time that ridership of the subway, train, and bus systems are at all time highs. The NY State Legislature is deadlocked in a battle between the interests of urban straphangers and suburban commuters over who is going to bear the brunt of paying for the deficit. As could be expected, the legislature punted the whole problem back to the MTA board which said that they will raise fares and cut service if the State Legislature doesn't come up with a plan. So now, a situation which is already hard on so many people is about to get much harder.

There are similar situations in cities across the USA. Vital public services are being cut back at the very time when they are needed most.
And as the financial industry is receiving shiploads of public money that make the Pentagon and its contractors green with envy, I have to ask, who's economy is it?
It certainly doesn't belong to the legions of poor stiffs trying harder and harder to get to their underpaying jobs that make someone else rich. It doesn't belong to the young. It doesn't belong to the old either. It certainly doesn't belong to unskilled labor. But, it doesn't belong to skilled professionals either, who have long endured a transformation into wage earners. It doesn't belong to "independent contractors," many of whom are simply wage earners without any benefits or unemployment insurance. It doesn't really belong to lower and middle management either, who have the rotten job of being enforcers. Does it really belong to the shareholders, who get shut out of corporate decision making as the price for getting fatter dividend checks? I doubt it.
So, as wages across the board have stagnated or declined for the last 30 years creating a consumer economy dependent on individual credit to make up for the shortfalls in pay; as tax codes and government policy for the last 30 years have been rewritten to redistribute wealth -- reverse Robin Hood, robbing from wage earners and giving it to the rich, -- as barely 1% of the population benefitted out of all proportion over the last 30 years while the remaining 99% are still waiting for that "trickle down" (talk about "let 'em eat cake!") I have to ask that awful old socialist question again,

Who's economy is it?

The great Shrill One says in his column today that maybe the Masters of the Universe weren't quite as brilliant as we all thought they were.  The magic of that complex shadow world of of loan securitization that they created turned out to be smoke and mirrors.  He credits the Obama administration with finally coming up with some tough and thorough regulations to police it, but he suggests that what really should be considered is dumping that whole black magic that got us into this mess.
I agree with him and with Kevin Phillips that the financial industry has gotten way too big over the past 30 years, making both political parties and much of government beholden to them.
Maybe it's time to call the Republican's bluff and let some of those "too-big-to-fail" banks fail and go into receivership; ie nationalization.


Anonymous said...

"where I get off to go home"

Or vice-versa? (Mwahahaha, couldn't resist! ;-D)


I generally enjoy "the great Shrill One" (that's a new one on me!)...

...except when he disagrees w/ that fellow I voted for. You know, 67 days? Maybe we could give a LITTLE longer, before trashing him?

Counterlight said...

Well, I do agree with you about piling onto Obama so early, and Krugman was wrong about that once before as I recall.

I also wonder if Obama is having to work within political constraints. Even so, the change in policy direction is very real and very substantial.