February 24, 2009

• Rich Get Poorer, Poor Disappear

  This from the Huffington Post.  As usual, Barbara Ehrenreich is right on. 

  Barbara Ehrenreich: Rich Get Poorer, Poor Disappear

  Rich Get Poorer, Poor Disappear

  Ever
  on the lookout for the bright side of hard times, I am tempted to
  delete "class inequality" from my worry list. Less than a year ago, it
  was the one of the biggest economic threats on the horizon, with even
  hard line conservative pundits grousing that wealth was flowing uphill
  at an alarming rate, leaving the middle class stuck with stagnating
  incomes while the new super-rich ascended to the heavens in their
  personal jets. Then the whole top-heavy structure of American
  capitalism began to totter, and -- poof! -- inequality all but vanished
  from the public discourse. A financial columnist in the Chicago Sun Times
  has just announced that the recession is a "great leveler," serving to
  "democratize[d] the agony," as we all tumble into "the Nouveau Poor..." 

  The media have been pelting us with heart-wrenching stories about
  the neo-suffering of the Nouveau Poor, or at least the Formerly
  Super-rich among them: Foreclosures in Greenwich CT! A collapsing
  market for cosmetic surgery! Sales of Gulfstream jets declining! Niemen
  Marcus and Saks Fifth Avenue on the ropes! We read of desperate
  measures, like having to cut back the personal trainer to two hours a
  week. Parties have been canceled; dinner guests have been offered,
  gasp, baked potatoes and chili. The New York Times relates
  the story of a New Jersey teenager whose parents were forced to cut her
  $100 a week allowance and private Pilates classes. In one of the most
  pathetic tales of all, New Yorker Alexandra Penney relates how she lost
  her life savings to Bernie Madoff and is now faced with having to lay
  off her three-day- a-week maid, Yolanda. "I wear a classic clean white
  shirt every day of the week. I have about 40 white shirts. They make me
  feel fresh and ready to face whatever battles I may be fighting ..."
  she wrote, but without Yolanda, "How am I going to iron those shirts so
  I can still feel like a poor civilized person?"

  But hard times are no more likely to abolish class inequality than
  Obama's inauguration is likely to eradicate racism. No one actually
  knows yet whether inequality has increased or decreased during the last
  year of recession, but the historical precedents are not promising. The
  economists I've talked to -- like Biden's top economic advisor, Jared
  Bernstein -- insist that recessions are particularly unkind to the poor
  and the middle class. Canadian economist Armine Yalnizyan says, "Income
  polarization always gets worse during recessions." It makes sense. If
  the stock market has shrunk your assets of $500 million to a mere $250
  million, you may have to pass on a third or fourth vacation home. But
  if you've just lost an $8 an hour job, you're looking at no home at all.

  Alright, I'm a journalist and I understand how the media work. When
  a millionaire cuts back on his crème fraiche and caviar consumption,
  you have a touching human interest story. But pitch a story about a
  laid-off roofer who loses his trailer home and you're likely to get a
  big editorial yawn. "Poor Get Poorer" is just not an eye-grabbing
  headline, even when the evidence is overwhelming. Food stamp
  applications, for example, are rising toward a historic record; calls
  to one DC-area hunger hotline have jumped 248 percent in the last six
  months, most of them from people who have never needed food aid before.
  And for the first time since 1996, there's been a marked upswing in the
  number of people seeking cash assistance from TANF (Temporary Aid to
  Needy Families), the exsanguinated version of welfare left by welfare
  "reform." Too bad for them that TANF is essentially a wage-supplement
  program based on the assumption that the poor would always be able to
  find jobs, and that it pays, at most, less than half the federal
  poverty level.

  Why do the sufferings of the poor and the downwardly-mobile class
  matter more than the tiny deprivations of the rich? Leaving aside all
  the soft-hearted socialist, Christian-type, arguments, it's because
  poverty and the squeeze on the middle class are a big part of what got
  us into this mess in the first place. Only one thing kept the sub-rich
  spending in the 00s, and hence kept the economy going, and that was
  debt: credit card debt, home equity loans, car loans, college loans and
  of course the now famously "toxic" subprime mortgages, which were
  bundled and sliced into "securities" and marketed to the rich as
  high-interest investments throughout the world. The gross inequality of
  American society wasn't just unfair or aesthetically displeasing; it
  created a perilously unstable situation.

  Which is why any serious government attempt to get the economy going
  again -- and I leave aside the unserious attempts like bank bailouts
  and other corporate welfare projects -- has to start at the bottom.
  Obama is promising to generate three million new jobs in "shovel ready"
  projects, and let's hope they're not all jobs for young men with strong
  backs. Until those jobs kick in, and in case they leave out the
  elderly, the single moms and the downsized desk-workers, we're going to
  need an economic policy centered on the poor: more money for food
  stamps, for Medicaid, unemployment insurance, and, yes, cash assistance
  along the lines of what welfare once was, so that when people come
  tumbling down they don't end up six feet under. For those who think
  "welfare" sounds too radical, we could just call it a "right to life"
  program, only one in which the objects of concern have already been
  born.

  If that sounds politically unfeasible, consider this: When Clinton
  was cutting welfare and food stamps in the 90s, the poor were still an
  easily marginalized group, subjected to the nastiest sorts of racial
  and gender stereotyping. They were lazy, promiscuous, addicted,
  deadbeats, as whole choruses of conservative experts announced. Thanks
  to the recession, however -- and I knew there had to be a bright side
  -- the ranks of the poor are swelling every day with failed business
  owners, office workers, salespeople, and long-time homeowners.
  Stereotype that! As the poor and the formerly middle class Nouveau Poor
  become the American majority, they will finally have the clout to get
  their needs met.

  • 1:22 pm
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