Good news. Just found out author Jared Bernstein can join us for a short time. Help me welcome Jared, a progressive economist at the Economic Policy Institute (EPI) here in Washington, D.C. Jared can discuss anything from "guns vs. butter," to "how the capitalists killed capitalism"—and make it understandable.
Economics is scary. Or boring. Or both. Say the word and watch people yawn.
But what’s going on around us right now—the U.S. mortgage crisis, skyrocketing oil and food costs, tanking wages and disappearing health care and retirement benefits, to name a few of our current traumas—makes the need for understanding a few fiscal fundamentals critical for most Americans.
So how do we dislodge people from watching "American Idol" long enough to see that the reason they are having trouble paying bills, affording health care or sending their kids to college is not because they are only working two jobs instead of three. Rather, there’s something really wrong with the way our nation’s economy is being run. And it’s in their interest—and the interest of all of us—to understand why.
Progressive economist Jared Bernstein takes a crack at making economics comprehensible and even (sort of) fun, in Crunch: Why Do I Feel So Squeezed? (And Other Unsolved Economic Mysteries). The book treats a single topic like "The Health Care Squeeze" in bite-sized chapters you can read while waiting for dinner to heat up in the microwave. And for those who can’t make it through each chapter’s four or five short pages, Bernstein handily sums up the main points of each in a single "Crunchpoint" graf.
Bernstein goes right to the heart of the matter in his first chapter: "If the Economy is Doing So Well, Why Do I Feel So Squeezed?"
We in the union movement long have been saying the economy is not working for America’s workers and their families. Yet, what the public is told is another story. As Bernstein writes:
Raise the issue of the squeeze, and many economists and policymakers will excitedly (and correctly) remind you that the stock market is kicking butt!…productivity is soaring!…unemployment’s historically low!…inflation’s down!
But as Bernstein points out, there are more pertinent facts behind these feel-good phrases, and most are only a mouse-click away. Such as:
- …the typical working-age household’s income was down 5 percent, or $2,400, from 2000 to 2006.
- After falling steeply in the late 1990s, the share of the population that’s officially poor rose from 11.3 percent in 2000 to 12.3 percent in 2006.
- Over the business cycle from 2001 to 2007, real wages were up 2.3 percent, compared with 18 percent for productivity….
- While inflation has been moderate since 2000…the costs of some of the key components of the middle-income market basket—health care, child care, college tuition, housing—have been growing much faster than the overall average of all prices taken together.
(Kevin Phillips, most recently the author of Bad Money, goes even farther, saying that inflation and other federal economic indicators have been progressively "Pollyanna-ed" by recent administrations of both flavors, meaning our current inflation is more like 6 percent or 7 percent, rather than the 2 percent cited.)
In short, writes Bernstein:
The name of the problem is economic inequality, and it’s been on the rise for decades.
Yet, with the complicit assistance of the corporate media, the nation’s economics debate has become "scarily unhinged," Bernstein said at an EPI book talk earlier this week. He cited the example of ABC News anchor Charles Gibson who moderated a recent debate between Sens. Hillary Rodham Clinton and Barack Obama. Both support an increase in the tax on capital gains (which essentially is cash earned on investments) to help fund critically needed programs. But Gibson framed the question to them as though a boost in the capital gains tax would sucker-punch the middle class. In fact, says Bernstein, the wealthiest top 10 percent make 90 percent of capital gains—making it a tax on the wealthy, not the middle class.
But few watching the debate would know that fact.
If people can get one thing from Bernstein’s book, it’s that the "economy" doesn’t just spin in neutral gear, fairly distributing economic growth. There are puppet masters holding the strings, and what they have that we don’t is power.
More so than in any recent period, those who hold a privileged position in the economic power hierarchy, the players who sit down at the poker table with a stack of chips reaching to the ceiling—the CEOs and the holders of large capital assets—are able to steer the bulk of growth their way. Then, using their political connections, they’re able to ice the cake with a nice bit of after-tax redistribution, as regressive changes in the tax code funnel even more resources their way.
Crunch is clearly written and the most accessible of books on bread-and-butter economics around. Give copies to your neighbors, friends, in-laws. It may not stand alone as a Mother’s Day present, but tuck it into the flowers and surprise Mom.
Because the more people who know why we’re being squeezed, the greater the chance they won’t vote to perpetuate Bush administration policies this election. And voting for Sen. John McCain would do just that.
At the EPI talk, Bernstein made a scary prediction: The first thing McCain would do after taking office is to go after Social Security and Medicare. Privatizing either or both would be a disaster for working people in this nation.