Wednesday, February 8, 2012

On The Way Up ... To The Next Step Down

In case you're still wondering, this was the meaning of  Clint Eastwood's silly Super Bowl half-time commercial: nothing.  Clint Eastwood himself has no meaning, and, as far as I'm aware, neither has anything he has ever said.    

But there are other people who have a lot to say, all the time. One such person is Ralph Nader.  I happened to catch a little snippet of him on C-Span's Book TV last weekend.  I didn't have the time to take in but a minute or two, so I don't know much about the context.  It matters little, though, as his comment needs no adornment, refinement, or elaboration. 

Mr. Nader told his audience that average real wages in America peaked in 1973, and have been in almost continuous decline ever since.  What the second part of that statement indicates is that even in those brief and few periods when wages showed some increase, the upturn has never fully closed the gap opened during the down-side slide.  Now, there is something of  clear and considerable meaning and consequence to all of us.

Like many of you, I have long been aware of the remorseless degradation of the value of work in this country, reflected in that statistic.  But Nader's citation reminded me of its relevance and importance to the current conversation about the improving economy.  Hence, I made a mental note to dig up some official documentation of the numbers for use in this discussion. 

To my good fortune, Noble Prize winning economist Paul Krugman, another person who always has a lot to say, and whose blog I read regularly, almost immediately short-stopped my need to research the matter.  On February 7th, Mr. Krugman posted a piece on his blog which not only precisely cited the data documenting the factual basis of Nader's comment, but also graphically described the collapse of certain social norms directly consequent to the devaluation of work and dissipation of employment opportunities generally. Take a look, especially at the second graph tracking the dismal collapse in wages, and we'll have a final thought on what it implies about the long hoped for incipient recovery.

The Krugman piece:

Wages and Values

Let me talk some more about the sudden fashionability of bemoaning the deteriorating values of working-class Americans, by documenting the points David Frum made.
So, as Pew says, there really has been a drastic decline in marriage rates among less educated Americans:
What could be causing that? Well, it could be some kind of cultural contagion from liberalism, or something; as Mike Konczal says, there’s kind of an odd absence of causal stories in the latest “values” thing.
But it could also be this, from EPI:
Should we really be surprised that young men, confronting the reality that they won’t earn anything near as much in real terms as their fathers did — and that they will be even further from having what society sees as an adequate income, because even Adam Smith acknowledged the importance of social norms in defining prosperity — don’t marry and raise families the way the previous generation did?


So, okay, by now what all this says to us in the context of the current day should be pretty clear.  It suggests very strongly that when and if the "recovery" does take hold, and indeed is completed, we still will not have even gotten back to where we were before the big dip.  To be sure, the super-rich will have continued to grow richer, just as they have all throughout this three or four decades long  period of overall national decline.  But it could well be that average workers will find their level of economic well-being topped out at a lower level than was enjoyed prior to the come back.  A great deal of basic structural change in our political and economic system will have to occur for that to work out differently in the future.  Discussion of those matters will have to wait for another time. 

For now, suffice it to say that instead of experiencing an overblown, ginned-up, Hollywood-styled half-time in some imaginary America versus The World - Economic Super Bowl, what we are really going through is more like intermission in yet another economic horror show double feature.

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