With talk that the economy may be on the rise, and unemployment numbers at their lowest in nearly two years, you would think optimism is at the highest levels in that same time period.
That would depend on how much you make, or made prior to the recession.
In major metropolitan cities all across America, the recession has created a dual identity status in the population. If you work in the financial sector (brokerage firms, banks, etc.), or work as a corporate official, the recovery is in full swing.
If you work in most every other field, recovery may still sound like the gold at the end of a rainbow you can’t seem to ever get to.
Unemployment numbers are skewed by this fact, along with the fact that people drop off the unemployment system every month, either out of hopelessness, or because their benefits have run out. Add this to the underemployed, and you have numbers outside the financial sector that are every bit as bad as the Great Depression.
In a recent article for The Nation, columnist Lizzy Ratner showed how wide the chasm has become between the haves and the have-nots in New York. The numbers are pretty staggering.
“African-American men lost jobs at four times the clip of their white counterparts; their unemployment rate jumped 9 points, to 17.9 percent, the largest increase of any group during the recession. At the same time, the median salary of managers and professionals leaped 9.5 percent, while non-managers and nonprofessionals saw their wages tumble some 4.3 percent. And according to the New York City Coalition Against Hunger, the city’s fifty-seven billionaires (including its billionaire in chief, Mayor Michael Bloomberg) increased their collective net worth by $19 billion between 2009 and 2010, while the number of New Yorkers visiting food pantries ballooned by 200,000 during roughly the same period. Call it the trickle-down recovery that has yet to trickle down.”
This is the fundamental problem with “trickle down economics”, it doesn’t trickle down to those most in need.
For those not familiar with this archaic economic principle, the concept is that if regulatory and tax principles are established to favor the wealthy that the wealthy will then benefit the needy by adding more jobs, enhancing benefit packages, raising wages, etc.
This principle may have had some validity generations ago, but it has absolutely no truth today, and it hasn’t since Reagan built his presidency on it, subsequently starting the shift in the economic truth that we are faced with today.
Give the wealthy more money, and all you do is give the wealthy more money. They, in turn, buy more wealth based items, such as investment portfolios, companies, etc., none of which benefit the needy.
Add to that the recent expansion in economic globalization, which is predominantly beneficial to the wealthy who trade in digital currency and commodities, and you have even less truth to the concept that money given to the wealthy somehow finds its way down to the needy.
Much to the contrary, the most stable economic principle is built on the theory that more money in the hands of base level consumers who will then spend it. The collective spending of the economic middle to lower class creates a flow of money, much like adding a pump to a fountain. As consumers buy more products and services, owners of those companies see more profit and demand, which actually does allow, even require, them to hire more employees, adding even more to the economic base and turning the power up on the pump.
The stimulus, the bailouts, TARP, they completely stabilized and saved the wealthy and the industries they work in. For the rest of the nation, the struggles continue because the consumer base in this nation is still unemployed or underemployed.
Donald Trump buying a yacht for a million dollars does not rescue the economy, David Stump, working at the factory, buying extra groceries, or going out to eat an extra time a week, along with the millions of others like him, do.
The question is when will wealthy conservatives, like the ones in our legislature, pull their heads out of their bank accounts long enough to realize it?