You might remember that James Baldwin book from the sixties – The Fire Next Time – where the title comes from the old spiritual Mary Don’t You Weep – “God gave Noah the rainbow sign, no more water, the fire next time.” The second time won’t be nice. Justice is coming. And of course the Students for a Democratic Society used the same title for their short-lived Chicago newspaper – and the final issue was just “Fire!” The sixties were quite a time. But Baldwin, speaking on issues of race in America at the time, was onto something beyond race:
We are controlled by our confusion, far more than we know, and the American dream has therefore become something much more closely resembling a nightmare, on the private, domestic, and international levels. Privately, we cannot stand our lives and dare not examine them; domestically, we take no responsibility for (and no pride in) what goes on in our country; and, internationally for many millions of people, we are an unmitigated disaster.
But other than that, things are just peachy. Still, as a people controlled by our confusion and unable to examine our own lives, as we dare not, because of what we might see there, there comes a time when it becomes increasingly hard to be confused. The nation is in trouble and things will just not get better:
In a grim sign of the enduring nature of the economic slump, household income declined more in the two years after the recession ended than it did during the recession itself, new research has found.
Between June 2009, when the recession officially ended, and June 2011, inflation-adjusted median household income fell 6.7 percent, to $49,909, according to a study by two former Census Bureau officials. During the recession – from December 2007 to June 2009 – household income fell 3.2 percent.
The finding helps explain why Americans’ attitudes toward the economy, the country’s direction and its political leaders have continued to sour even as the economy has been growing. Unhappiness and anger have come to dominate the political scene, including the early stages of the 2012 presidential campaign.
Yes, the economy has been growing, leaving most people behind. Corporations are recording record profits, with vast cash reserves – on the order of two trillion dollars sitting idly on the sidelines – while household income is falling off a cliff. If corporations are people, as Mitt Romney and recent case law insist, then people are doing just fine – as are those who own and run these corporations, and those who bet millions each second of the trading day on just how fine these corporations are doing. That would be the now-famous One Percent. The other ninety-nine percent, the flesh-and-blood folks, are losing most everything, slowly but surely – or rapidly in some cases.
And that means that Occupy Wall Street protests, the rising up of the Ninety-Nine Percent as they fashion it, is spreading across the country:
Protesters targeting Wall Street across the nation remained peaceful on Sunday ahead of more demonstrations planned this week as the widespread gatherings against joblessness and “corporate greed” spawned heated rhetoric among U.S. politicians.
A few thousand protesters occupied the lawn at Los Angeles City Hall over the weekend, with as many as 600 people camping overnight, organizers said.
In true Hollywood fashion, actor Danny Glover, broadcaster Keith Olbermann, professor Cornell West, and talk show host Tavis Smiley stopped by the protests, organizers said.
No, no photos – those of us who actually live in Hollywood seldom head downtown. Los Angeles City Hall is what’s on Joe Friday’s badge when they roll the credits on the old Dragnet show – no more than that. But there were Wall Street protests way out here, of all places. Ours just had palm trees in the background.
And of course the unhappiness and anger wasn’t all on one side:
In an appearance on CBS’ Face the Nation, the millionaire and former CEO of Godfather’s Pizza restaurants stood by comments made last week that protests are “anti-American,” and suggested that they were coordinated by unions and other organizations to take the focus away from President Obama’s failed policies.
“Did you really mean that, literally, that they’re just jealous?” Asked host Bob Schieffer. “Couldn’t it also be that these people don’t have a job, they don’t know where to turn, they don’t see any answers to the problems they have and you think it comes down to jealousy?”
“Bob, yes I do, because it’s class warfare,” answered Cain.
Yes, the black man said those people are all just losers, jealous of folks who made something of themselves. He has no sympathy for these so-called protesters because his parents “never played the victim card” – they never hoped “that rich people could lose something so they could get something.” And he was there with Newt Gingrich, who said that a “bad education system” that taught “really dumb ideas” was to blame for the protests. In short, these were stupid people who knew nothing.
And then Cain dropped by CNN:
Presidential candidate Herman Cain said Sunday that he didn’t believe racism was a major factor holding minorities back in America, asserting instead that African Americans had a level playing field on which to advance economically.
He’s black. James Baldwin was black. That’s all they have in common, and see this comment at the Angry Black Lady Chronicles:
I didn’t honestly think Herman Cain could be any more repugnant, but saying that racism is all in the heads of African-Americans is just ludicrous to the point of self-parody, involving what people think about black CEOs running for the GOP White House ticket.
The cognitive dissonance is staggering to me. Herman Cain was in college during the civil rights era in the 60s. When federal civil rights laws were codified, Cain benefited from them on the way to his lofty perch as Godfather’s Pizza CEO. At no point have I ever heard of Cain saying he was going to pass up civil rights programs or not take advantage of them because he thought the playing field was level. He admits in the interview that educational and economic disparity still exists, and then blames poor minorities for it. How does one escape a hell like that, you wonder?
Obviously this Angry Black Lady is just jealous of him, or something. Things are just peachy, except for all the total losers whining all the time. At least that’s the idea from the conservative right, the social-values right, and their party, the Republicans. It’s almost as if they are admitting that they represent the One Percent – and the other ninety-nine percent had better back off, right now. The idea seems to be that a majority of the losers in this so-called Ninety-Nine Percent eventually will realize just who their betters in our society are, and just who should be in control of things, and just who deserves their respect and admiration – and vote to keep their functionaries in office, protecting and nurturing that fabulous One Percent. It has worked so far, election after election. And James Baldwin was a gay black man who spent far too much time in Paris and the South of France. He could never run an empire of pizza franchises.
And this will be our national discourse for now, as things won’t be getting better, as they actually cannot get better:
The Bush administration screwed up our economy so badly that it wasn’t possible to fix it. The hole that they created was so big that it was not politically possible to fill it. The Obama administration should have asked for a substantially bigger stimulus bill, but it wouldn’t have mattered even if they’d succeeded in getting one, which they wouldn’t have. The hole in the economy was so large that even if the administration had known how big it was, they couldn’t have devised a way to spend enough money to fix it. … With better information, things could have been done better and our current situation would be modestly improved, but the damage was really so severe that there was no escaping a prolonged period of pain.
The sad thing is that we could fix our problems and Europe could fix theirs. We could all fix this if the solutions weren’t so easy to demagogue. But they are.
That’s one reaction to, and a concise summary of, a long piece by Ezra Klein in the Washington Post, where he looks back, in painful detail, at the Obama administration’s response to our Great Recession and explains why it wasn’t enough, and why it couldn’t be enough. Among other things, Klein explains why the Obama administration did so little about mortgage debt even though it was clear from the beginning that debt was a key difference between this recession and every other postwar recession:
On first blush, there are few groups more sympathetic than underwater homeowners or foreclosed families. They remain so until about two seconds after their neighbors are asked to pay their mortgages. Recall that Rick Santelli’s famous CNBC rant wasn’t about big government or high taxes or creeping socialism. It was about a modest program the White House was proposing to help certain homeowners restructure their mortgages. It had Santelli screaming bloody murder.
“This is America!” he shouted from the trading floor at the Chicago Board of Trade. “How many of you people want to pay for your neighbor’s mortgage that has an extra bathroom and can’t pay their bills? Raise their hand.” The traders around him began booing loudly. “President Obama, are you listening?”
And Kevin Drum points out that this was how the Tea Party was born:
And it’s an important point: one way or another, taxpayers are always going to be on the hook for any kind of debt relief. They can be on the hook directly, by shoveling dollars to homeowners so they can pay down their mortgages, or they can be on the hook indirectly by bailing out all the banks that would fail if courts were allowed to unilaterally slash the principal on underwater mortgages via cramdown. Taxpayers aren’t going to be happy about this either way, and like it or not, that constrains the responses available to politicians.
Economist Carmen Reinhardt gives Obama a lot of credit for what he did. “The initial policy of monetary and fiscal stimulus really made a huge difference,” she says. “I would tattoo that on my forehead. The output decline we had was peanuts compared to the output decline we would otherwise have had in a crisis like this. That isn’t fully appreciated.” The combination of the stimulus bill, the auto bailout, and the bank rescues really did make a big difference.
But it wasn’t enough.
And Drum knows why:
Partly that was because of political timidity. Partly it was because of genuine disagreements over which policies were likely to work best. And partly it was because we didn’t know how truly bad things were in early 2009.
Yes, the Obama folks, Jarrod Bernstein and Christine Romer, were working in the dark, as Klein explains:
To understand how the administration got it so wrong, we need to look at the data it was looking at. The Bureau of Economic Analysis, the agency charged with measuring the size and growth of the U.S. economy, initially projected that the economy shrank at an annual rate of 3.8 percent in the last quarter of 2008. Months later, the bureau almost doubled that estimate, saying the number was 6.2 percent. Then it was revised to 6.3 percent. But it wasn’t until this year that the actual number was revealed: 8.9 percent. That makes it one of the worst quarters in American history. Bernstein and Romer knew in 2008 that the economy had sustained a tough blow; they didn’t know that it had been run over by a truck.
But Drum says they did well enough:
Despite everything, Team Obama actually did pretty well. Maybe 70-80% as well as anyone could have done. Housing was their single biggest area of failure, but even there, taxpayer and congressional resistance to bailing out “reckless” borrowers constrained them more than critics usually admit.
Our failure to adequately address the Great Recession wasn’t really rooted in the Obama administration – it was rooted in the fact that virtually no one, faced with an economic crisis, ever has the guts to truly unleash the proper amount of firepower. It’s a very human problem, but for now anyway, humans are all we have. So a human response was what we got.
Henry Blodget at Business Insider is not so cheerful:
The Obama administration drastically underestimated how bad the economy was and drastically overestimated its ability to do something about it. As a result of this, President Obama over-promised and under-delivered on the single most important challenge of his Presidency (so far). Also as a result, President Obama gave the Republicans ammunition to argue that his stimulus “failed,” when, in fact, it helped matters considerably (just not enough to fix everything).
And after all the pretty charts Blodget offers, it comes down to this:
Could the Obama Administration have fixed the economy in four years had they had done something different? In my opinion, no.
You can only do what is politically possible, as Klein notes:
That isn’t to say that this time couldn’t have been different or that next time won’t be. But it is no accident that these crises so often turn out the same, in so many countries, with so many types of governments, who have tried so many kinds of responses.
In general, the policies that are vastly better than whatever you are doing are not politically achievable, and the policies that are politically achievable are not vastly better. There were many paths that could have been taken in January 2009, and any one would have made this time a bit different. But not different enough. Not as different as we wish.
And Klein sees what the administration felt they had to do:
But the administration insisted on optimism. There was talk of “green shoots” and the “recovery summer.” Events in Greece and in oil markets were chalked up to bad luck rather than the predictable aftershocks of a financial crisis. The promised recovery was always just around the corner, but it never quite came. Eventually, the American people stopped listening. A September poll showed that 50 percent of Americans thought Obama’s policies had hurt the economy.
Things are not just peachy. And the protests are spreading, even if, as Baldwin said, we are a people controlled by our confusion and unable to examine our own lives, as we dare not, because of what we might see there.
But Robert Stein liked the Klein piece:
As discomforting as that may be, there is one heartening sign in this, if not for the economy, at least for American journalism. We have been given this compelling analysis not by a graybeard of the media establishment but a twenty-seven-year-old former blogger doing the homework that politicians hope that thinking voters will never see.
And at the top of that web page you’ll find a quote from Harry Truman – “The only thing new in the world is the history you don’t know.”
Maybe now we are examining the history we don’t know, or didn’t know. But that too can be disheartening. There’s David Leonhardt in the New York Times with The Depression: If Only Things Were That Good – saying that that if we expect the economy to eventually rebound the way it did after the Great Depression of the thirties, we’re mistaken. You see, after World War II, which finally ended the Depression once and for all, we had a huge pool of savings that people were eager to put to use, and a strong potential export – the rest of the world had pretty much been bombed into ruin. And we didn’t need to import goods from Japan or China, and we didn’t need to import oil from OPEC – we had all we needed here. And that is not the case now – not at all. Our massive debt will be a drag on growth for as far as the eye can see, and our trade balance is now always negative, and the price of oil, most of which comes from elsewhere, constrains economic growth.
And then Leonhardt adds this:
Three giant industries – finance, health care and housing – now include large amounts of unproductive capacity. Housing may have shrunk, but it is still a bigger, more subsidized sector in this country than in many others. Health care is far larger, with the United States spending at least 50 percent more per person on medical care than any other country, without getting vastly better results…. The contrast suggests that a significant portion of medical spending is wasted, be it on approaches that do not make people healthier or on insurance-company bureaucracy.
In finance, trading volumes have boomed in recent decades, yet it is unclear how much all the activity has lifted living standards…. Wall Street has captured a growing share of the world’s economic pie – thereby increasing inequality – without doing much to expand the pie. It may even have shrunk the pie, given that a new International Monetary Fund analysis found that higher inequality leads to slower economic growth.
The common question with these industries is whether they are using resources that could do more economic good elsewhere. “The health care problem is very similar to the finance problem,” says Lawrence F. Katz, a Harvard economist, “in that incredibly talented people are wasting their talent on something that is essentially a zero-sum game.”
And in this matter, Kevin Drum thinks housing will recover and healthcare is not that much of an issue:
There’s unquestionably some waste, both in human and economic terms, and this really is a misallocation of resources. At the same time, the big reason we pay more for healthcare than other countries is simply because we pay doctors more, we pay hospitals more, we pay insurance companies more, and we pay pharmaceutical companies more. I happen to think this is a bad thing, but it’s not as if the money falls through a sieve and disappears. It all stays in the economy and gets spent one way or another.
But there is that other matter:
And then there’s high finance, which as near as I can tell, really has turned into a huge leech on the economy. If I had to guess, I’d say that upwards of a quarter of all financial activity today is actively damaging to the economy, and reforms like Dodd-Frank will have only the slightest impact on that.
And thus the protests and demonstrations across the country – the fire next time that turned out to be this time – and Herman Cain is no James Baldwin.