Timothy Geithner said today that, while the economy is showing signs of recovery, unemployment will probably continue to rise.
Is this news?
Correct me if I’m wrong, but it has been my understanding that the interests of workers and investors have almost always been opposed—that is, stocks become more valuable as public companies make greater profits, and a fairly typical way to raise profits is to downsize, that is, fire current employees … in some cases, these are employees deemed “redundant”; in others, these are employees replaceable by vendors, often overseas.
About a week ago, I heard someone on the radio saying that consumer spending has been high now for the past two months, which is to say that, except for big ticket items that require big-ticket loans—hard to get for some time now—people have continued to shop, just as we’ve been so well conditioned to do. (Wal-Mart, for instance, has been virtually recession-proof.)
What people had stopped buying were stocks, favoring instead actual goods and services, and who can blame us? Besides, now that most employers have replaced pensions and in-house retirement plans with 401(k)s and the like, and with big-end employers dropping redundant employees and viewing more and more of their employees as expendable, is it no wonder then that the rank-and-file workers (or former workers) have been stuffing their 401(k)s less and less?
Banks and auto companies and others, for all I know, have long been propping up the illusion of profits in large part by trimming expenditures—typically in the form of workers’ paychecks. Remaining employees were often urged, with a certain level of snide bathos, to “do more with less.”
So, isn’t it to be expected that a good share of America’s “economic recovery” means a recovery for investors—not so much for workers? and won’t attendant crackdowns on bad loans, foreclosures, and stricter conditions for credit mainly benefit the well off, while the working middle class and poor are … well … having to do even more with even less?
Then, later, this afternoon, while channel-surfing, I caught a bit of the 2006 documentary Maxed Out: Hard Times, Easy Credit, and the Era of Predatory Lenders, which, given my persistent state of being chin deep in debt, I owe myself to watch through someday. The bit I saw convincingly depicted the ways, nefarious but entirely legal, the better off are able to relieve the worse off of their money by exploiting the poor’s ignorance, trust, basic decency, and fear—and, having done so, to view the poor with contempt, anger, and smug self-justification for their supposed stupidity and laziness.
The part of the film I saw emphasized that it has been the high-risk borrowers—those for whom repayment at a (usually high) rate of interest is both hard and, increasingly, as fees and interest accumulate, improbable—who have provided lenders with a good 50 percent of the lenders’ profits. Mostly, these profits occur in the ways lenders are able to sell bad debt to collection agencies, but I also imagine that these borrowers, naïve in the ways of money and credit, are also less likely to be diligent in keeping an eye on their accounts, while also being less likely to seek legal escapes such as bankruptcy, either out of ignorance or out of a high sense of duty to repay a debt—even to the point of personal catastrophe.
Hasn’t a big bone of contention about those drafting recovery plans been how much (if at all) to help poor workers and to either protect their jobs or provide needed services in the absence of gainful employment—or, now anyway, savings? The recovery money—and forget for a second the fatuous ways that this money is being generated … out of thin air—is mainly aimed at CEOs and the big investors, isn’t it? And it is in these people’s interests to cut employment even further, to restore some appearance of profit, right?
After slavery, poor workers—mostly migrant or otherwise short-term employees—were encouraged to owe—and owe big—to the company store and/or to accept scrip, instead of legal tender, for payment. As time progresses, especially for the better paid workers, this system has been elaborate to the point of invisibility—but it appears that it’s been quite a while since productive labor has provided anyone with a way out of poverty and debt.
I’m a reasonably intelligent man, but, sometimes distressingly, I’ve never been money wise, partly because I have not educated myself in this area and partly because the pursuit of money has never been my particular talent or my idea of living well. I’m unlikely to change now, much to my loss, perhaps. Still, I’ve wised up enough to recognize that the cards are stacked against me and others like me, and to recognize that the media and economic savants largely sway me to identify needs antithetical to my own as requiring my preeminent consideration and self-sacrifice.
The more I come to understand the current crisis, the more it seems to me that the rot is widespread and old, old, old, going back over a hundred years, and, more often than not, masquerading as cleverness, diligence, equal opportunity, and free choice.