Posts Tagged ‘insecurity’

Protest_Credit_Crisis

Let’s leave aside for a moment whether the participants were the right ones to call on (I would have turned to plenty of better commentators, who have read both Marx and contemporary scholarship on Marxist theory, to offer their opinions) or even whether they get Marx right (very little, as it turns out).

What’s perhaps most interesting is that the New York Times felt the need at this point in time to host a debate on the question “was Marx right?” and, then, that most of the participants admit that Marx did in fact get a great deal right.

The problem is, of course, that at this point in time mainstream economics (in either its neoclassical or Keynesian varieties) is not a particularly good guide for analyzing or proposing solutions to the key economic problems of soaring inequality, massive unemployment, and generalized insecurity of a broad mass of the population in the United States and in other high-income countries. So, I suppose it’s not surprising people continue to turn to Marx for ideas about how to make sense of the economic contradictions that caused the Second Great Depression and the new contradictions that right now are preventing a full recovery of capitalism.

In the end, what is key to Marx is not this or that prediction (of which, as it turns out, there is very little in the texts, although there certainly are lots of tendencies that critics are hard put to ignore or effectively counter) but, instead, the idea of critique. Because what Marx set out to do over the course of the three published volumes of Capital was provide the cornerstones for a far-reaching critique of political economy. And the method of that critique—a two-fold critique, of mainstream economic theory and of capitalism as a system—is what endures, precisely as a challenge to what passes for serious economic analysis today.

Marx, then, was surely right about one thing:

if constructing the future and settling everything for all times are not our affair, it is all the more clear what we have to accomplish at present: I am referring to ruthless criticism of all that exists, ruthless both in the sense of not being afraid of the results it arrives at and in the sense of being just as little afraid of conflict with the powers that be.

Chart of the day

Posted: 27 November 2013 in Uncategorized
Tags: , , , ,

WashPo-survey

According to the Washington Post,

American workers are living with unprecedented economic anxiety, four years into a recovery that has left so many of them stuck in place. That anxiety is concentrated heavily among low-income workers. . .

More than six in 10 workers in a recent Washington Post-Miller Center poll worry that they will lose their jobs to the economy, surpassing concerns in more than a dozen surveys dating to the 1970s. Nearly one in three, 32 percent, say they worry “a lot” about losing their jobs, also a record high. . .

Lower-paid workers also worry far more about making ends meet. Fully 85 percent of them fear that their families’ income will not be enough to meet expenses, up 25 points from a 1971 survey asking an identical question. Thirty-two percent say they worry all the time about meeting expenses, a number that has almost tripled since the 1970s.

Paul Klee, “Tightrope Walker” (1923)

The United States is becoming a nation of increasing financial insecurity.

According to a new survey by the Consumer Federation of America (pdf), more Americans find themselves living paycheck to paycheck, forced to reevaluate their expectations for retirement, and falling further behind in terms of their retirement savings.

Clearly, in the midst of the Second Great Depression, more and more Americans are being forced to walk a financial tightrope.

The United States is a country in which a growing portion of the population is subject to economic insecurity.

There are many ways of measuring the economic insecurity of the U.S. population. One of them is to calculate Best Economic Security Tables and determine the percentage of the population that falls below that line.

What Jacob Hacker and his colleagues have done is somewhat different: they have calculated the share of Americans experience a major drop in their available family income—whether due to a decline in income or a spike in medical spending—and who lack an adequate financial safety net to catch them when they fall. It’s what they call the Economic Security Index.

According to their latest report [pdf], more than 1 in 5 Americans during the Second Great Depression saw at least a quarter of their available household income vanish without a sufficient financial cushion, a sharp increase from 14.3 percent in 1986. Thus, in 2010, roughly 62 million Americans were economically insecure.

Even more: among those losing a quarter or more of available income and lacking an adequate financial safety net, the typical (median) drop reached a record 46.4 percent in 2009. This means that half of those counted as insecure saw their available income decline by more than this amount between 2008 and 2009. In short, not only are more Americans experiencing large declines in their economic standing; the depth of those drops has also become greater.

The level of economic distress (however measured) that is being experienced by a growing number of Americans can no longer be denied. It is a sign of how current economic arrangements have failed them, even as those same economic institutions and policies continue to enrich those at the very top.

 

Almost half of all Americans, or 45 percent of the U.S. population, do not earn enough to cover their basic expenses. They live in a state of economic insecurity.

A new report by Wider Opportunities for Women [pdf] documents the extent to which large numbers of Americans—including those who played by the rules and managed to find jobs, form household, and raise children—are living on the edge. They simply do not earn enough to pay ever-increasing housing, food, health care, and other expenses.

A lot depends, of course, on the structure of the household (whether they are one or two adults, and whether or not the households include children), and the gender, racial, and ethnic identity of household members. The report calculates a series of Best Economic Security Tables for all such households.

But I want to focus on one dimension of the study: the difference between 1-worker and 2-worker households.

As you can see from these figures, Americans who live in households with two adults and two children are forced, in order to have an income that achieves economic security, to have the freedom to send both adults into the labor market. And, even then, minimum-wage jobs ($30,624) will only put them slightly above the federal poverty level ($22,050) and the economic security index ($67,933) is still above the median family income ($61,933) in the United States.

The situation is even worse for households led by single mothers, Blacks and Hispanics, and those with only a high school education.

The fact is, the United States is a country that has created a situation of economic insecurity for 45 percent of its citizens.

The Rockefeller Foundation refers to Americans’ growing economic insecurity. For me, it’s a matter of relative immiseration.

A recent study [pdf] by Jacob S. Hacker et al., financed by the Rockefeller Foundation, demonstrates two important changes in the United States: first, that the economic insecurity of American families is greater than at any time since 1985; and, second, economic insecurity is increasing as a long-term trend.

They define economic insecurity in terms of major losses in income, large out-of-pocket medical expenses, and insufficient financial assets to buffer the losses in income and unforeseen medical expenses. And the results are extraordinary:

While the economic insecurity measure does capture some of what is going on right now—a sense of loss and fear for the future, a race to the bottom for a large part of the population—it refers to its opposite, economic security, as the normal state of affairs.

My problem with the term, and what it measures—losses of income, unforeseen expenditures—is that it fails to capture the relative state of what people are forced to endure when they rely on selling their labor power and purchasing commodities (including, but not limited to, health care) in order to survive. It misses out on the growing gap within the United States—the gap between profits and compensation, between wages and productivity, between living standards for the majority and the total wealth being produced, and so on.

In other words, it sidesteps the relative immiseration of working-people, which has been taking place since at least the mid-1970s. Restoring economic security, in the sense of Hacker et al., does not solve the problem of immiseration, which is both a condition and consequence of the current crises of capitalism.

David DeGraw has assembled a report (part 1 of 2) on how the “Economic Elite Have Engineered an Extraordinary Coup, Threatening the Very Existence of the Middle Class.”

It’s what I’ve been arguing for quite a while now: that, apart from (but also in part as a result of) the current crises, there has been a steady immiseration of the U.S. working-class.

The devastating numbers across-the-board on the economic front are staggering. I’ll go through some of them here, many we have already become all too familiar with. We hear some of these numbers all the time, so much so that it appears as if we have already begun “to normalize the unthinkable.” You may be sick of hearing them, but behind each number is an enormous amount of individual suffering, American lives and families who are struggling worse than they ever have.

DeGraw goes through the numbers, with links to the original sources. The upshot is, for the past 30 years or so, the balance has slowly but steadily shifted in favor of capital and against working people. The current crises are both a result of that shift (since the financial bubbles are at least in part a consequence of a worsening the distribution of income and wealth) and one more cause of that shift (since the current crises, and the policies enacted to “save” the system, are enhancing profitability but lowering living standards for the vast majority).

The fact is, neither the mainstream media, which fails to connect the dots, nor mainstream academic economists, who are obsessed with defending their models and pinning the blame on one or another financial enterprise, are helping us make sense of these changes. They are merely serving to normalize the unthinkable. It’s people like DeGraw and Elizabeth Warren who are putting the pieces together and sounding the alarm. The question is, who is listening? And when will we do something about it?