Posts Tagged ‘poverty’

U.S. billionaires have recouped all of their wealth—and more—during the Pandemic Depression. Meanwhile, since May, the number of poor Americans has grown by about 8 million. And the number of American workers applying for and receiving unemployment benefits continues at record levels.

According to Forbes,

Pandemic be damned: America’s 400 richest are worth a record $3.2 trillion, up $240 billion from a year ago, aided by a stock market that has defied the virus. 

When the Covid-19 pandemic began to sweep the world earlier this year, the wealth of U.S. billionaires plummeted in lockstep with the stock market. Yet, just six months after the market bottomed out—with hundreds of thousands Americans dead and the coronavirus still to be contained—the wealthiest Americans are doing better than ever. In other words, the pain, at least for the ultra-rich, was remarkably short lived.

Meanwhile, more and more American workers, who have lost their jobs or been furloughed, are attempting to survive on meager unemployment benefits. And many of them and their families—especially Black people and children—are now falling below the poverty line.

Part of the reason for this obscene growth in poverty is the expiration of the CARES Act’s $600 per week unemployment supplement. The other reason is that the number of American workers who are applying for unemployment benefits continues at elevated levels.

This morning, the U.S. Department of Labor (pdf) reported that, during the week ending last Saturday, another 898 thousand American workers filed initial claims for unemployment compensation. While initial unemployment claims remain well below the peak of about seven million in March, they are far higher than pre-pandemic levels of about 200 thousand claims a week.

The number of continued claims for unemployment compensation, while also below its peak, was still more than 25 million workers—a figure that includes workers receiving Pandemic Unemployment Assistance.*

To put this number in perspective, consider the fact that the highest number of continued claims for unemployment compensation during the Second Great Depression was 6.6 million (at the end of May 2009), and in the week before the Pandemic Depression began there were only 1.6 million continued claims.

In the meantime, at least 1,011 new coronavirus deaths and 59,751 new cases were reported in the United States yesterday. As of this afternoon, more than 7.9 million Americans have been infected with the coronavirus and at least 217.1 thousand have died—more than any other country in the world, grotesque outcomes that continue to receive barely a mention from Trump or anyone (aside from Dr. Anthony Fauci) in his administration.

Meanwhile, many colleges and universities that have attempted to reopen with students in residence are reporting hundreds of (and, in some cases, more than a thousand) novel coronavirus infections.

The result will be new waves of business slowdowns and closures, which in turn will mean millions more U.S. workers furloughed and laid off. Unless there is a radical change in economic policies and institutions, Americans can expect to see steady streams of new COVID-19 infections and deaths, initial and continued unemployment claims, and growing poverty in the weeks and months ahead.

As for those at the top: during the first six months of the pandemic, the United States added more than 29 more billionaires, increasing from 614 to 643. The Pandemic Depression has been a boon to their fortunes.

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*This is the special program for business owners, the self-employed, independent contractors, and gig workers not receiving other unemployment insurance.

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How many of you read Car and Driver magazine?

Not many of you, I presume. But maybe you should. At least the June 2020 issue.

It’s certainly a sign of our obscenely unequal times that a magazine better known for its reviews of foreign supercars and domestic muscle cars and for an editorial policy that courts controversy only when it attacks SUVs (in favor of minivans and cars) highlights the story of Oliver, Jason M. Vaughn’s family’s 260,000-mile Subaru in a piece subtitled “The Fear of Failure.”

Turning the key has become an act of faith. As the engine grumbles to life on this fine southwest Colorado morning, the yellow check-engine light comes on, as it has every day for the past four years, and the same questions swirl in my mind. Is this the day that tiny head-gasket leak turns into a gusher? Is this the day the catalytic converter chokes closed for good? Is this the day that one speck of sand too many works its way into that cracked CV-joint boot, causing it to seize up at some bend in the road and send me spinning into a ravine, not to be discovered until spring?. . .

I intimately know everything wrong with this car. I feel the squishy brakes and the engine straining to get up a hill, and I hear the ominous grinding sounds coming from under the right-front wheel well. But I can’t afford to do anything to ward off those looming disasters.

That’s because Vaughn’s family is like many American households, who don’t have any emergency savings and therefore can’t cover a surprise $400 expense without borrowing money or selling something. Or they can’t come up with the money at all.

Oliver, purchased new in 2004, is also like many other cars on U.S. roads, in being old (at 11.8 years old, the average age of the 278 million vehicles on American highways has never been higher). One reason is because

many Americans—in a time of stagnant wages combined with soaring consumer debt and a high cost of living—can’t afford to replace their old beaters. Or if they can get another vehicle, they’re only able to replace it with another beater.

As for Vaughn, he and his wife were both laid off from their respective, “and not very lucrative jobs,” last year and they can’t afford to keep up on the current maintenance, much less fix all the stuff on the car they’ve been putting off.

That’s why Vaughn identifies so much with Linda Tirado, the author of the 2014 book, Hand to Mouth: Living in Bootstrap America, an account of what it’s like, day after day, to work, eat, shop, raise kids, and keep a roof over your head without enough money. One of the lessons Vaughn highlights is the predicament of the poor working-class:

One of the hardest ironies of all for the working poor is the often unspoken truth that in America, you usually have to already have money to even get an opportunity to make money. And simply moving someplace with better jobs and higher pay isn’t really an option when you’re broke.

To keep Oliver running, Vaughn has taught himself some basic maintenance and repairs (via YouTube videos, of course) and resorted to cheap fixes that betray “more than a twinge of desperation”—all in the hope that the Subaru can last another 100,000 miles. The fact is,

We’ll probably need another 100,000 miles out of Oliver whether we can properly care for him or not.

That makes a lot of sense. It’s exactly the predicament more and more working-class drivers and their cars find themselves in as economic inequality, already grotesque, continues to soar in the United States.

Clearly the problem of inequality is so serious and so widespread that it has forced its way into a Hearst-owned automotive enthusiast magazine, squeezed between articles on the new Porsche 718 Cayman GT4 (price as tested: $118,600) and a golden-wheeled, Kar Tunz-modified Lamborghini Urus (price: $277,904).

Now, tell me, is there a better illustration of what life is like in the United States in the age of inequality?

 

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I cringe when I listen to or watch these interviews. But here it is, with the Real News Network.

The interview was based on my recent blog post, “Economics of poverty, or the poverty of economics.”

I also want to recommend a recent piece by Ingrid Harvold Kvangraven [ht: ms], who argues that

The interventions considered by the Nobel laureates tend to be removed from analyses of power and wider social change. In fact, the Nobel committee specifically gave it to Banerjee, Duflo and Kremer for addressing “smaller, more manageable questions,” rather than big ideas. While such small interventions might generate positive results at the micro-level, they do little to challenge the systems that produce the problems.

For example, rather than challenging the cuts to the school systems that are forced by austerity, the focus of the randomistas directs our attention to absenteeism of teachers, the effects of school meals and the number of teachers in the classroom on learning. Meanwhile, their lack of challenge to the existing economic order is perhaps also precisely one of the secrets to media and donor appeal, and ultimately also their success.

Exactly!

It’s the revenge of neoclassical economics, as reflected in this year’s prize in economics, which focuses attention on poor people’s “bad” decisions and away from the structural causes of poverty.

As I argued the other day on Twitter, it’s like saying the climate crisis will be solved by individuals turning off lights and recycling their garbage. Not bad things to do, certainly. But, together, all those individual efforts make up only 1-2 percent of the solution. The climate crisis cannot be solved unless and until we direct attention to the real, structural causes. Here, I’m thinking not only of the fossil fuel industry, but also the way the rest of contemporary capitalist economies are organized around the use of fossil fuels—in the production of goods and services, cars as well as digital information. Such a system generates enormous profits, which flow to a tiny group at the top, and continues to destroy the commons, where most of us live and work.

It’s that system that needs to be radically transformed. And as long as economists are lauded for focusing on technical issues around the margins and not on the real causes—of Third World poverty, global warming, and much else—the discipline of economics will continue to be impoverished.