Commentators still talk about the Great Recession as if we’re still in it. But according to semi-official statistics from the National Bureau of Economic Research (NBER) the recession ended in June 2009.
In fact, the “official” recession lasted only 19 months. Over that period, US economic output declined by around 5%. But the economy has been growing for 32 months now, and has now surpassed its 2008 peak.
In the realonomy where most Americans live it sure doesn’t feel that way.
Why not? Because while the economy has taken off, the realonomy has been left behind. Jobs and wages are still below 2008 levels. Economic growth is feeding into corporate profits and CEO pay, not into ordinary people’s paychecks.
It’s also not going into government budgets — and government is where the money is needed most. You may feel like you’re struggling, but America’s state and local governments are struggling too.
The obvious solution is for state and local governments to tax the windfall profits and pay that are right now going to the richest people and corporations in America.
America has to take the attitude that “we’re all in this together.” To see what things look like when people don’t help each other out, just look at Europe. It’s obvious that most Greeks and Germans, Portuguese and French just don’t feel like they’re all in it together. Some Europeans would rather see “other” Europeans on the street than see “their” bankers not get paid. The result is chaos — and suffering.
In America, there’s no “us” versus “them.” There’s just us. Our bankers, our CEOs, our unemployed and our poor. It’s our children who need teachers and our elderly who need carers. When Americans resist taxes on the rich to pay for schools for the poor, what they’re saying is: “why should one person have to pay for another person’s children?”
Why? Because in America, there’s no “us” versus “them.” There’s just us.
Or at least that’s the idea. But over the last forty years in America — and more than ever over the last four years — the rewards of the American economy have been diverted more and more to a small segment of society.
How they’ve done that is a long story. It involves the intentional destruction of unions, the use of free trade treaties to undermine workers, aggressive lobbying of government to change the rules of the game in favor of big business, and the dramatic expansion of international tax havens. In any case, however it’s been done, it’s been done, and it has resulted in a dramatic rise in inequality in America.
Those who have benefited from dramatic income gains over the past forty years can’t be blamed for seizing their opportunities. On the other hand, they can be blamed for being so aggressive in protecting their expanded fortunes.
The simple truth is that America needs higher taxes on higher incomes, more government providing more services, and jobs — lots of jobs. If the private sector won’t provide those jobs, the public sector should. We certainly need more people to work in schools and nursing homes, and there certainly are lots of people willing and able to work. Put two and two together and we might just mend our broken economy.