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In his Prison Notebooks, Antonio Gramsci wrote: “The crisis consists precisely in the fact that the old is dying and the new cannot be born; in this interregnum morbid phenomena of the most varied kind come to pass.”*

The world is once again living an interregnum. It is poised between the failed economic model of recovery from the crash of 2007-08 and the birth of a new model, one that would actually work for the majority of Americans.**

Morbid symptoms abound, including slow economic growth, persistent poverty, and obscene levels of inequality. Perhaps even more significant, especially at this point in the so-called recovery, when according to mainstream economists and policymakers full employment has been achieved, workers’ wages are actually declining.

According to the latest release from the Bureau of Labor Statistics (pdf), both real average hourly and weekly earnings for production and nonsupervisory employees decreased 0.4 percent from December to January. And, over the course of the past year (January 2016 to January 2017), real average hourly earnings for all employees failed to increase (remaining at $10.65 (in constant 1982-1984 dollars) and real weekly earnings actually decreased by 0.4 percent (from $368.66 to $366.32).

That’s what happened under the last administration, based on an economic model that is dying. And there’s nothing in the new administration’s proposed economic policies that promise any better. In fact, the likelihood is that things will stay the same or get even worse for most American workers in the next four years.

Only large corporations and wealthy individuals will likely gain from promised changes in business regulations and tax policies.

That’s a scenario that pretty much guarantees the appearance of even more morbid symptoms in this interregnum.

 

*The passage is from Notebook 3 (pp. 32-33), written in 1930, which appears in the second volume of the English edition of the full Prison Notebooks, edited and translated by Joseph A. Buttigieg.

**Nicholas Eberstedt [ht: bg], of the American Enterprise Institute, argues the current model failed around the turn of the century, with warning signs even earlier: “For whatever reasons, the Great American Escalator, which had lifted successive generations of Americans to ever higher standards of living and levels of social well-being, broke down around then—and broke down very badly.” David Brooks, as it turns out, concurs.

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Greece is a perfect example of how to turn a bad economic situation into something even worse. As Reuters reports,

Rescue funds from the European Union and International Monetary Fund saved Greece from bankruptcy, but the austerity and reform policies the lenders attached as conditions have helped to turn recession into a depression.

As a result, the poverty rate in Greece almost doubled (between 2008 and 2015), rising from 11.2 percent to 22.2 percent.

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And average (per adult) GDP has fallen below what it was three decades ago.

Meanwhile, IMF and European institutions are demanding further austerity measures (equivalent to 2 percent of gross domestic product) before agreeing on a new deal to aid Greece.

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Before the new Republican administration has a chance to implement its campaign promises and dismantle the social safety net, it’s useful to remember who in fact is assisted by the existing programs.

According to a new study by the Center for Budget and Policy Priorities, people of all races and ethnic groups who lack a bachelor’s degree receive significant help from the safety net. But white working-class adults stand out.

Among working-age adults without a college degree, 6.2 million whites are lifted above the poverty line by the safety net — more than any other racial or ethnic group. In addition, the percentage of people who would otherwise be poor that safety net programs lift out of poverty is greater for white working-age adults without a college degree than for other adults without a college degree.

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But we also need to remember how brutal U.S. capitalism is, before government programs are taken into account.

In particular, as can been seen in the table above, the poverty rate before taking income from government programs into account is more than three times higher among working-age adults without a college degree (30.4 percent) than among other adults (8.7 percent). And while poverty rates are lower for white adults without a college degree (24.3 percent) than for other adults without a degree (43.1 percent for Blacks and 36.2 percent for Hispanics), 1 in 4 white adults who lack a degree is poor before accounting for government benefits and tax credits.

The fact is, government anti-poverty programs are so important—for white, Black, and Hispanic Americans—precisely because capitalism in the United States generates so much poverty among its workers, especially those without a college degree.