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In the best of times, it’s a good thing to be in the ten percent. Not so much, in the worst of times.
It is the best of times, it is the worst of times.
In August, Bloomberg Business mentioned, matter-of-factly, “There’s no doubt that the U.S. economy is in a boom.” The New York Times echoed, in November, “The economy is booming, with more people working at higher pay.” The belief that the economy is “booming” has become so well established among the well established that it is now presented not as an argument, but as an aside requiring no supporting evidence. Most economists “never thought the economy could grow this fast,” gushed former Federal Reserve Governor Kevin Warsh in October.
And yet, in this same country, in November, General Motors — the throbbing iron heart of industrial America — announced it was closing five manufacturing plants in the U.S. and Canada, it was killing off several passenger cars – including the Chevrolet Impala – and eliminating the jobs of 14,000 people. This followed a similar downsizing by Ford. The economy is booming, but people are not buying cars? Really?
On the other hand, U.S. consumer confidence rose to an 18-year high in October, driven by what CNBC called “a robust labor market, suggesting strong economic growth could persist in the near term.” A happier country than this surely cannot be imagined.
And yet, in this same country, we learned in November that life expectancy declined again in 2017, according to a bleak series of government reports that showed a nation still in the grip of escalating drug and suicide crises. Appalling increases in so-called “deaths of despair” — from suicide, drug overdoses, and alcoholism — are driving the longest sustained decline in expected life span in a century.
On the other hand, the government estimated the unemployment rate in September to be a mere 3.7 percent of the workforce, the lowest rate seen since 1969, in the eighth year of declining unemployment. At the same time, average earnings rose eight cents over the previous month. “More evidence,” trumpeted the White House, “of a booming United States economy and a strong labor market.”
Yet when the Urban Institute interviewed 7,500 people across the country this fall, they found that 40 per cent of adults reported having had difficulty providing their family with a basic necessity — food, shelter, healthcare or utilities — in the previous year. Wait, what? In the best of all possible economies, large numbers of Americans are going hungry?
How could all these things be true of the same country at the same time? Are we looking at real news on the one hand and fake news on the other? Republican news versus Democrat news?
No, it’s much worse than that. We are in fact reporting on two countries. In the country of the 10%, all is well. Incomes are rising, taxes are going down, health care is easy, and everybody is above average. Things are booming.
In the country of the 80%, however, hunger is a familiar sensation; getting sick means losing your home; a job, if you can get one, is a part-time living hell, and you need three to get by. This country, the country of the 80%, is every day more familiar with deaths of despair.
This is a country divided, being experienced in wildly divergent ways by people who have, and people who have not. And a house divided against itself, as Jesus Christ and Abraham Lincoln have pointed out to us, cannot stand.
Good stuff, Tom.
Quick question: from the WaPo article, there were 70,237 deaths from drug overdoses, and 47,600 deaths from drugs sold on the street, does that mean there were really more than 117,000 total deaths from drug overdoses?
In 1980, or thereabouts, I took this course on the Soviet Union, and we had to read Pravda everyday for the entire semester. What a learning experience that was.
The truth was in there, you just had to work your way around what my Professor called, “the Pravda massage.” After awhile, it became pretty easy, so much so that you could almost use Pravda as a go to source.
Is that a Pravda massage? Is the true number really 117,000? I swear, I sometimes think the Soviet Union was an open book compared to what’s going on now.
No, the 47,600 deaths from opioids sold on the street are part of the 70,273 total. The WaPo sentence was incredibly badly written, defies understanding. Guess they can’t afford editors any more.
Bezos lost 2 billion and change a couple of weeks ago, and it probably got him thinking, “hey, aren’t editors superfluous?”
Thanks Tom.
I work for a weekly newspaper with a circulation of about 350. We are all underpaid part-timers. I wouldn’t write a sentence like the one above. If I did, my editor would question the math.
Any assessment of our condition based on the GDP numbers is already doomed to misdiagnosis. Much that makes up the number is totally disconnected with positive trends or improvement in on the ground living conditions.
And it’s not just what data and how the data is measured, but then the overlay of bias and agenda in analysis can squeeze out any result you want.
There is some old joke about a statistician being asked to sight in a rifle. ( it went something like this) His first shot was a foot to the right, his second was a foot to the left. He decided the rifle was just fine, since on average, he was shooting bullseyes.
https://youtu.be/GgnClrx8N2k
All I really know about economics is that my father and mother raised three sons on Dad’s income alone. He was an army officer, which means, I guess, that we were middle class. We had a TV, a hi-fi on which we played a brand new music dubbed ‘rock and roll’, and a new-fangled contraption called a window air conditioner – it sounded like one of Dad’s M-48 tanks.
We took modest vacations to Rehoboth Beach in our new ’57 Chevy station wagon (except when Dad was transferred to Germany and we toured Italy in the Old Man’s Mercedes 220-S – he was a full bird by those latter years…but I digress).
My brothers went to good colleges and I attended an art ‘college’ in Baltimore, where I majored in intoxicants and minored in protesting. We worked summers and took part-time gigs during the school year to keep body and soul together, but Dad covered the tuitions and we all graduated debt-free.
My Dad retired at the age of 65 with a pension that exceeded my best yearly take…All on one income.
Things are different now. You older folks understand this. That’s all I know about economics.
A beggar mounted will ride his horse to death. Two men from the United States have recently died and they were two of the finest human beings to ever live. I know it is true, I read it in a newspaper