Recession (Yeah, I said it)

I was struck dumb in the car today while I was heading off to meet Karthika for dinner for the last time before she heads off to her conference in Denmark (you best be bloggin' from there, lady!) when I heard the NPR commentators still debating whether or not we're in a recession.

Let me help, guys. We're in a recession.

Hell, I'm worried that we might heading for a depression.

I've just got a few thoughts on how to survive this. I am most likely preaching to the converted, but let's just talk.

A couple of weeks ago, I stopped in to visit the ladies I worked with all summer at BUST. I talked to one of the publishers about what we do to save money. And she noted that every little thing we cut hurts someone.

I'm living on graduate assistant salary and a bit of freelance money right now, so I'm used to being broke. But there are certain things that I will not cut out of my budget.

I will not stop buying comics. Because creative people are often the first ones to be cut loose in this kind of crisis. And let's face it, Hollywood will survive if I don't buy the Dark Knight DVD the first day it comes out. But Air may not be around next month if I don't buy it now. I've already seen the Minx label die and people I care about lose a source of income, and so I will keep buying. Not to mention, comic shops are one of the few small businesses that still exist and haven't been sent to the edge of extinction by superstores.

On the same token, I'll keep getting my magazines. I'll subscribe to things I tend to buy off the newsstand, since it both saves money for me AND puts the money straight into the pockets of the magazines trying to stay alive. Particularly small ones like my beloved BUST and BITCH, which we already saved once this year, and Mother Jones and The Nation.

I will buy my clothes from the local boutiques, even if it's off the sales racks, rather than from H&M and Target, even though those are cheaper. Because the people, often women, who run the local shops, are dependent on these shops for their living, and because those people are the same ones who keep vibrant local communities alive.

I will try to buy groceries from small locally-owned stores as well. Same reasons.

I will buy books, when possible, from local used bookstores rather than from Amazon.com. I can still get reading material cheap, and it'll be helping yet another local business stay alive.

I will not spend money on overpriced coffee-type things from Starbucks. If I need to drop $5 on a chai, I'll go again to the local chain.

I know none of this is rocket science, but I think it's important to think about it in the times when we're pinching pennies and trying to save because we don't know what the world is going to look like.

I ran a small bicycle shop for years and my parents still make their living from it. It's their only source of income, and it has been directly affected by companies like Schwinn deciding to sell bikes to Target and Wal-Mart. With the economy suffering, fewer people are going on vacation and renting bikes, and if people decide to buy from Wal-Mart instead of my mom and dad, they won't be able to cough up the $40,000 a year they pay for health insurance.

Yes, real people work in H&M and McDonald's and Starbucks and they need their money too. But we can think about where to spend our money and the things we really don't need. It's worth it to me, especially now, to spend a few more dollars to help people get through this mess.

Stimulating the Economy

Joseph Stiglitz provides several possible ideas for stimulating the economy. Unfortunately, they all make far too much sense for the Bush administration to implement.

Stiglitz suggests radical ideas like expanding the size of unemployment checks, federal assistance to state and local governments, and a bigger overall budget for education. You know, things that would actually help people. Crazy.

But of course Bush won't do this. Since he has imbibed deeply of the tax-cut kool aid, his policies exist primarily of creating and extending tax cuts. This will only help the rich. Some small tax rebate will provide a very brief respite for the poor and middle-class but will ultimately do nothing.

Given Bush's absolute lack of flexibility on everything, I see little reason to think that anything positive will come out of this administration in the next year as the economy continues to tank.

The Recession: The Decline of America?

I am extremely pessimistic about the state of the U.S. economy. I am really scared right now. I believe this is the greatest economic crisis we have faced since the 1970s. The other day, Bob Herbert claimed that the best way to help out Americans right now is to provide them good jobs with good wages. He's right of course, but we can we do that anymore? Ever since Reagan became president in 1981, the U.S. economy has been run by the rich for the rich. And the rich alone. Of course, big capitalists have always had a lion's share of control over the nation's economy. But the rise of unions after 1935 and the power sharing arrangements that dominated American industry after World War II ensured a seat at the table for workers. But with the help of Reagan, as well as all of his successors, companies were not only allowed, but encouraged, to send manufacturing jobs overseas. And so they did, crippling unions and making a ton of money for themselves.

Although the economic dislocation caused by factories closing caused a great deal of pain, for a little while, free trade seemed to help the majority of Americans consume more. The 1990s and first part of the 2000s were periods mostly marked by rapid economic growth, enormous increases in consumer spending, and an overall obliviousness to the long-term fragility of this economy. It seemed to me that the United States was becoming a national elite class based upon the labor of the world's workers. Commentators discussed the "post-industrial America," but this is of course completely wrong. We are not post-industrial; rather, we've just exported all of the nastiness of industrialization while retaining its benefits. We are as beholden to the Industrial Revolution as ever.

But I think I was wrong about my belief in the US as a nation of elites. Not totally wrong, but the phenomena was short-lived. A small number of Americans were getting insanely rich off the new economy, but millions more were spending like it. The housing market went through the roof. I watched homes in places I wanted to live rise beyond anything that I, as a professor, could ever afford. Consumer debt rose and rose and rose. After 9/11, rather than ask us to sacrifice, George W. Bush simply wanted us to spend more. Got to keep the American economy rolling along, despite the fact that it was being pushed by debt that more and more consumers could not afford to pay. Meanwhile, discussions of fiscal responsibility meant that laws that hurt lower and middle class consumers such as the bankruptcy bill passed while the rich continued to rake in the cash.

This massive debt combined with the Bush administration pursuing policies that strictly helped wealthy Americans, allowed the dollar to fall to record levels. All of a sudden, the U.S. economy became exposed for the chimera it was. Foreign companies and governments are buying up U.S. properties at a record rate. This control foreign governments now have over the U.S. economy is making pundits and politicians freak out, but this is the same activity the U.S. has engaged in around the world for decades. Now instead of being the imperial power, other nations are flexing their muscles in world markets more than we can.

And then there's oil. Our oil-driven economy is why I don't think very much of this can be fixed easily. We are so beholden to oil. And we do nothing about it. We still don't even want to recognize that this is a problem. The price of oil is just going to keep rising. Yet with the consumer choices we have made as a nation, combined with the nation's spatially dispersed infrastructure, we have little choice as individuals but to pay those prices and keep on driving. Real government leadership could help guide us to a new future but that certainly is not coming from this administration. It's not going to come from another Republican and it's really pretty unlikely to come from any Democrat, especially the likely nominee, Hillary Clinton.

Paul Krugman compares the present U.S. economic situation to that the economic crises that plagued Mexico and Argentina in the last couple of decades. I think that's not inaccurate. I wonder though if the U.S. will be able to pull out of it as easily as those nations did. We don't have any manufacturing jobs to fall back on anymore, making us utterly reliant on imports. The richest Americans, those who control the economy, are still making boatloads of money, and they are likely to continue with policies that help them alone so long as it is at all politically feasible. Oil prices will continue to rise. Americans have shown little interest in seriously cutting consumer spending. There is little reason for the dollar to regain much strength. Foreign entities, emboldened by oil wealth and/or industrial growth, will continue to control the American economy at greater rates.

And I am left to wonder, have we seen the best days of the United States pass us by? Am I part of the first generation of Americans to see the country worse off at their death than at their birth? Will we look back at the 1990s as the days when America was really great, when we could travel around the world, buy a home at a good price and expect to see a reasonable rate on our investment, when we oil prices were reasonable and we didn't have to worry about global warming?

I am afraid this may be so.