Economy insight

Okay -- maybe I begin to get it. For the last couple of years, economic surveys have reported that a majority of Americans feel positive about their own financial position, but think "the economy" is going to hell. (That link is a couple of years old, but current opinion research largely agrees.)

Yes -- there has been inflation, but, in general, wage growth has been exceeding price increases to consumers for months so we ought to feel better. And housing has become insanely expensive. But most of us, most of the time, aren't really in the market for housing. So what's the beef?

Today the shrunken San Francisco Chronicle passed along some local data that might be a contributing cause of our discontent. In much of the city, too many neighborhood businesses have not come back from the pandemic. 

Businesses in most S.F. neighborhoods are still struggling to bring back customers. ...

Four years after the beginning of the pandemic, consumer spending in most San Francisco neighborhoods still hasn’t recovered to anywhere near pre-pandemic levels, according to city data.

Citywide, sales tax revenue from April to June this year was down 34% compared to the same period in 2019, adjusting for inflation. In over half of neighborhoods, revenues are down more than 25% compared to before the pandemic, according to a Chronicle analysis of city data.

Actually my home turf, the Mission, is doing a little better than the city at large, down only 25 percent. But it is dotted with empty storefronts like the one pictured above, steps from my house. It sure doesn't feel as if small businesses are thriving.

So, even if we're personally doing okay, we are constantly visually reminded that something is amiss.

It's a mystery ...

 Kevin Drum points out:

Compared to a year ago, eggs are down 9%! Apples are down 13%. Seafood is down 3%. Coffee is down. Citrus fruits are down. White bread is down. Peanut butter is down. Lunchmeat is down.

And this has all been happening while average wages have gone up 4% in the past year. You'd think all of this would be of some interest to news consumers ...

 

It's certainly of interest to me. I was looking to buy eggs and encountered this in the supermarket. But noting how well things are going in the economy seems out of reach to too many of us much of the time.

On the one hand, there are all kinds of signs, like the egg prices, that inflation is controlled. Pretty much anyone who wants a job can find one judging by the "HIRING" signs in storefronts. And the stock market is booming; that's not everyone's preoccupation, but for those who benefit, this signals good times.

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Yet people's confidence in being able to maintain their standard of living is not much higher than it was in the midst of the Great Recession of 2008.

The political implications of these mixed experiences and feeling are truly weird:

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In all the states where the choices for president will likely determine who wins, most voters think their local state economy is doing fine. And at the same time, they believe that the American economy, the whole country's economy, is doing poorly. This seems schizophrenic, but I don't doubt the survey research.

And it seems too simple to assume, as I've heard some say, this is just prosperous Republicans whining because they don't like Joe Biden. Sure, researchers find plenty of GOP folks who are happily jamming flights to go on vacations and buying boats while complaining about this president.

But the intense sense of economic precariousness isn't entirely politically partisan. The best explanation I can come up with is that we're still living a hangover from the pandemic. It turned out that we could not assume that our lives would just chug along uninterrupted; we, whatever our politics, could find ourselves thrown off by a microbe. What a shock! We're shaken and our feeling of expected safety will take a long time to recover, if ever.

We think inflation is terrible because prices are higher than we remember

I'm usually a fan of Paul Krugman. He's a humane commentator on our condition who often gets reality right. But he made an argument today in his NYTimes newsletter (link may not work as it is a newsletter, but there it is) which completely misses the point of what people are talking about when we complain about inflation.

 

He observes that he gets huge push back when he observes that inflation is coming down. He earnestly discusses the various measures of inflation; there are several and they serve different analytical and policy purposes. He assures the reader that he is not gaming the system when he chooses which measure is relevant in which context. I believe him.

 

Krugman asserts:

The question of what’s happening to inflation is, or should be, a purely technical issue.

But probably most of us don't think any of this makes any sense because we know it requires more of our dollars than it used to once to go about our daily business. I am going to a warehouse store later today; I know that I'll spend 15-20 percent more dollars than I would have in 2019.

The pandemic has left a rift in our consciousness. There was before; there is after. Everything costs more. That's what inflation means in common understanding.

"Inflation" is not whether some measures favored by economists are going up -- and are currently going down. Inflation in every day life means that prices are higher (some much higher) than "before." We simply won't notice the trend line until the disruption is further in the past -- when the meaning of "before" changes. Might that be this year?

I hope so.

When the home place dwindles

Monica Potts. a senior politics reporter for the data journalism website FiveThirtyEight, grew up Clinton, Arkansas, a tiny town in the Ozark Mountains which has no economic reason for continuing to exist. She had a mother whose primary aim for her children was for them to escape out of this dead-end place. Potts did escape. She attended Bryn Mawr College near Philadelphia on scholarships and became employable and acculturated to the contemporary American world. Neither her talented sister Ashley, nor her dearest childhood friend Daria made it out. The former was killed in a teenage auto accident; the latter became addicted, lost her children, was often jailed, and endured without hope.

The Forgotten Girls: A Memoir of Friendship and Lost Promise in Rural America tells the stories of these women of Clinton, movingly and painfully. The women are not caricatures, but readily imaginable, appealing individuals who had very little chance in life. 

Because Potts really is a data journalist, her accounts of life incidents -- church services, high school team sports, parties with boys who drank, jobs found and lost -- are interspersed with demographic data.

When she gets to explaining the central feature of these young women's lives, that their expected destiny was to bear children early and often, you get both the vignettes and the sociological facts:

My friends began to wear "promise rings" in middle school, public signs of their pledge to remain virgins until they were married. Because some of them already had serious boyfriends, they dedicated these "promise rings" to their boyfriends, sort of as pre-engagement rings. In other words, we were thinking about marriage at thirteen and fourteen -- before we were thinking about high school. ...

An explanatory ethnographic paragraph follows in a footnote:

In 2019, the most recent year available at the time I was writing this book, CDC numbers showed Arkansas had the highest number of teen moms per capita ... In general, the rates of teen pregnancy are highest for Black and Latina girls, but because there are more white girls in the population, the numbers of young mothers in each group are nearly the same.

For me, this mildly pedantic approach worked well. Potts is a worthy narrator for these women's lives; they are her people. These lives could have been her own if not for some lucky accidents. If you care about women's realities, this is a book to cry over.

• • •

I had an additional, more personal reaction to this book. I, too, grew up in a place losing its economic reason for being. In my earliest days, Buffalo, New York, was shaped by echoes of its honorable role in the World War II era, a center of industrial production, automotive and aerospace, and chemical factories. But all that was aging out, decaying, dying. And what would be left?

A child doesn't understand when purpose is draining out of her home place. But, especially for an unconventional young person (lesbian in my case), there's a nagging feeling -- a feeling that suggests that the assumptions which the adults hold about the place have become inaccurate. Maybe even dangerous. And that probably it is better to look for more promising places.

Potts' description of how loss of economic purpose in her Arkansas home place changed how people related seems so familiar to a Buffalonian of the 1950s and 60s. Here's how she observed it:

... The young people I spoke to in high school took it for granted that they would have to move away to find jobs, whether they wanted to or not. And when high school graduates move away, rural hometowns experience continued population loss. ...

... People who returned to Clinton with degrees often filled the same roles their parents had: they were dentists, doctors, lawyers, business owners, and teachers. They went to the same churches they's grown up in and lived much as they had growing up. A few of them returned with the idea that they would improve people's lives here, but most came back because they liked Clinton and because their families had been successful here and still lived here. Few thought anything in town needed to change, so nothing much ever did. They thought of themselves as town leaders, and they were well off enough to weather any storms Clinton suffered. But this small group of town elite were the exceptions: most the people who stayed in town were the worst off, with the least prospects.

When the majority of high school graduates don't start their adult lives in their rural birthplace, they don't buy homes there, get married, have children, and enroll them in their alma maters. They don't start jobs and businesses, volunteer, or bring back the expertise they've acquired elsewhere. The result is a smaller property tax base, fewer kids in schools, fewer jobs, and other signs of decline. Fewer people come in with new ideas and new money and earning power -- the dynamism that drives city life. These towns are less likely to have robust civic institutions or services to help people. All these factors affect health, well-being, and life expectancy. ...

... Clinton, like many small towns in rural America, was the kind of town you could get stuck in.

Yes! That's how it was for a long season in the Rust Belt too. 

This kind of decline isn't limited to rural areas. What were once the thriving cities of the Midwest have also undergone this loss of dynamism. Some, like Pittsburgh, have found new purpose; in that instance, a healthcare empire. Others, like Cleveland and Buffalo, not so much so.

No wonder we live amid the politics of grievance. The need for broader dispersion of prosperity and consequent purpose isn't just about Potts' sad Arkansas. For too many places and people, hope is still in short supply. Especially for the women.

As we await a Nor'easter on Martha's Vineyard ...

Much of this summer tourist island is shut down or hunkered down for the New England winter. But the characteristic post-pandemic economic dislocations persist here too. 

I was greeted by this sign while looking for bird seed at the feed store.

What we feel doesn't agree with the numbers

There's all sorts of evidence that the U.S. economy is humming along happily. Many economic indicators say we've recovered from the terrible bottom this fictional entity plunged to during the pandemic. People are working and earning. Heather Cox Richardson wrote last week:

The December jobs report from the Bureau of Labor Statistics showed that job growth continues strong. The country added 223,000 jobs in December, and the unemployment rate went down slightly to 3.5 percent. The last two years of job growth are the strongest on record, and the country has recovered all the jobs lost during the pandemic. According to the White House, 10.7 million jobs were created and a record 10.5 million small businesses’ applications were filed in the past two years.

On Monday the Wall Street Journal reported that median weekly earnings rose 7.4% last year, slightly faster than inflation. For Black Americans employed full time, the median rise was 11.3% over 2021. A median Hispanic or Latino worker’s income saw a 4.8% raise, to $837 a week. Young workers, between 16 and 24, saw their weekly income rise more than 10%. Also seeing close to a 10% weekly rise were those in the bottom tenth of wage earners, those making about $570 a week. The day after the Wall Street Journal’s roundup, Walmart, which employs 1.7 million people in the U.S., announced it would raise its minimum wage to $14 an hour, up from $12.

All true, but, somehow, many of us find it hard to believe these are good times. 

Economist Paul Krugman has noticed the disjunction between the statistics and what we believe. He asked in the NYTimes, Will Americans Even Notice an Improving Economy?

Political observer Brian Beutler knows something is out of kilter:

The reality of our strong economy has not defined perceptions of it, which have tended to resemble doom-laced political reporting and outright propaganda, rather than raw data gathered by government agencies and other researchers. A huge percentage of Americans believes that the country is in the midst of a recession. [It's not.]

It shouldn't be surprising that the various information media -- even if they aren't in tank for the Republicans -- should overestimate the bad economic news. That's what attracts an audience.

Here in San Francisco, I find it not surprising that people feel the economy sucks. We've been living a tech boom for a decade, so big layoffs in the sector feel scary and novel (and crummy for the people laid off). A young man in our household is part of the collateral damage of tech retrenchment. He'll be able to find another job, but it's tough that he has to.

Further, this city has not fully recovered from the pandemic bust. Downtown S.F. still has North America’s weakest pandemic recovery, reports the Chron.

And out in the 'hood, Mission Street sure doesn't look like it is experiencing a vibrant recovery.

Maybe the vacancies and boarded up storefronts are just normal urban churn, but it sure feels as if something died and has not yet been replaced.

There's no local election this year in which to take out our sense of gloom and doom on our office holders. But 2024 could be something of a local earthquake if the powers-that-be can't help the city feel as if it is humming again.

Solution looks pretty simple to me

Times econ columnist Peter Coy passes on a chart that we might all keep in mind while the Republican Congress plays games about letting the government pay its bills:

 

If we're worried about having enough money to pay the government's bills, we know where to find it. There are people who have more wealth than they need. Elizabeth Warren had it right: we should be taxing wealth. Not to the extent of confiscating it, but enough. "Enough" is a concept which capitalism (organized anti-social greed) destroys. We need to retrieve it.

• • •

And no, this has nothing to do with the "debt ceiling" which is an arbitrary piece of nonsense generations of legislators have allowed to infest our law-making processes. They voted (or didn't) to incur some bills under budgets they passed. The United States has historically most always borrowed to pay its bills and this hasn't sunk the country yet. Our vast economic engine has made the country a good bet for lenders who need a safe place to park money. Republicans are willing to trash that by reneging on our promises to pay --- for what purpose? Perhaps an appearance on Fox or approval from Victor Orban? 

Do your damn jobs!

The residue of Brexit

Six years on, The Guardian revisits Brexit, Britains' messy divorce via referendum from the European Common Market and the project of a united Europe. The article is long and detailed but paints a convincing picture of Brexit failure.

On 23 June 2016, Geoffrey Betts, the managing director of a small office supplies business in Marlow, Buckinghamshire, had high hopes for his firm, and the British economy, when he voted for Brexit. 

“I thought we would be like … ‘here we go, here we go. We are going to become the most competitive country in Europe and we are going to be encouraging business.’ Now I think: ‘What have we done?’” 

His firm, Stewart Superior, has survived, but not without major restructuring and huge efforts to get around obstacles that Brexit has put in the way of the export side of the business.

For a lot of people in Britain, Brexit isn't working out as they were promised and had hoped. Add in the global pandemic, and the economy became mired in doldrums.

I've been convinced that the flat out insane vote for Brexit was the product of a creaky, elitist, oblivious political system that had delivered the poisonous Iraq war and a generation defining economic crash during the 2000s, but couldn't provide constructive leadership or widely shared prosperity to many Britons. (Yes ... that has all too much in common with the conditions that elected Donald Trump in the same year.)

Six years after the referendum which took the UK out of the EU, the economic case for Brexit is proving increasingly difficult for its supporters – including inside the Conservative party – to make. 

The impression was that there would be no downside. We would thrive outside Europe’s bureaucracy which was strangling our companies with red tape. The huge benefits of the single market – trading freely across borders, with common standards – were never highlighted by Vote Leave, and rarely by the crudely alarmist Remain camp, either. 

Only now, with the worst of the pandemic (probably) behind us, and ministers unable to blame Covid, is Brexit reality being laid bare. Next year the OECD calculates that the UK will record the lowest growth in the G20 with the exception of Russia whose economy is being drained by its war on Ukraine.

Going it alone attracted a slim majority of British voters in 2016. It now seems the Boris Johnson's Conservative Party may finally pay a price for the drag that Brexit is exerting on British well-being. Last week the Tories lost two special elections in areas they had controlled.

But, as in the United States, the damage inflicted on the national edifice by an impulsive vote by frustrated people will be hard to recover from.

What's really behind inflation?

There are plenty of opinions, some conflicting.

This may not be the most judicious take on why food and gas prices are rising, but it is a certainly part of the story. Big businesses are raising prices because they know they can. Pandemic battered consumers find no alternative but to pay up.

Business leaders are admitting that corporations are using the narrative of hyperinflation as an excuse to raise prices on you and increase profits for themselves. ... The largest corporations in America have never made more money. ... Corporations are seizing the opportunity to engage in massive profiteering because they can.

The Republican Party is there for the one class it always coddles: plutocrats.

Christopher Ingraham of  The Why Axis thinks he knows what these high profits should mean:

What it says to me is that firms have plenty of wiggle room to create better conditions for their employees — they can clearly afford the higher pay, more generous benefits and more flexible arrangements that workers are increasingly demanding.

The Washington Post's super smart (really, pay attention to her), plain-speaking business columnist Catherine Rampell believes she knows how to describe the current inflation:

The main reason price growth is up has to do with constrained supply not keeping up with booming demand. That is, the pandemic has resulted in worker shortages, supply-chain disruptions and other bottlenecks in the United States and abroad. These problems are happening at the exact same time that cooped-up consumers are eager to buy even more stuff than they did pre-pandemic.

... Arguably, recent U.S. fiscal policy may have exacerbated this dynamic: Biden and the Democrats enacted stimulus payments and other government transfers earlier this year, which gave consumers more cash to spend. Now consumers are spending that cash.  

...Aside from some vague rhetoric about Democrats’ “big spending” habits, though, those checks are not really what Republican politicians are criticizing Biden for. Perhaps with good reason: The spring stimulus checks were extremely popular, including among Republican voters. ...  So they’re peddling “war on Halloween” hokum instead.

The chair of the Republican National Senatorial Committee (the fundraising arm of GOPer campaigns) Florida Senator Rick Scott announced to the Wall Street Journal: "This is a gold mine for us." 

You can always be sure -- the current Republican Party doesn't care who gets hurt, as long as they hold power.

There's a sucker born every minute

The independent mini-markets that mostly sell a few edibles and booze to the neighborhood have begun displaying new signage. 

I was a mildly astonished to see what some corner stores are peddiling now.

Yes, you can get your bitcoin at the same place you buy your lottery ticket. Somehow this doesn't increase my confidence in cryptocurrency. I assume the whole thing is a ponzi scheme to fleece the unwary.

Bitcoin enthusiasts will be displeased that I look for explanation of the bitcoin phonomenon to economist Paul Krugman:

... cryptocurrencies play almost no role in normal economic activity. Almost the only time we hear about them being used as a means of payment — as opposed to speculative trading — is in association with illegal activity, like money laundering or the Bitcoin ransom Colonial Pipeline paid to hackers who shut it down.

... If normal, law-abiding people don’t use cryptocurrency, it’s not for lack of effort on the part of crypto boosters. Many highly paid person-hours have been spent trying to find the killer app, the thing that will finally get the masses using Bitcoin, Ethereum or some other brand daily.

But I’ve been in numerous meetings with enthusiasts for cryptocurrency and/or blockchain, the concept that underlies it. In such meetings I and others always ask, as politely as we can: “What problem does this technology solve? What does it do that other, much cheaper and easier-to-use technologies can’t do just as well or better?” I still haven’t heard a clear answer.

... a long-running Ponzi scheme requires a narrative — and the narrative is where crypto really excels.

First, crypto boosters are very good at technobabble — using arcane terminology to convince themselves and others that they’re offering a revolutionary new technology, even though blockchain is actually pretty elderly by infotech standards and has yet to find any compelling uses.

Second, there’s a strong element of libertarian derp — assertions that fiat currencies, government-issued money without any tangible backing, will collapse any day now....

But hey, you can gamble in Bitcoin right at your corner store.

The education con game

Erudite Partner has taken on the scam which is so much of U.S. higher education. 

I left school owing $800, or about $4,400 in today's dollars. These days, most financial "aid" resembles foreign "aid" to developing countries—that is, it generally takes the form of loans whose interest piles up so fast that it's hard to keep up with it, let alone begin to pay off the principal in your post-college life. Some numbers to contemplate: 62% of those graduating with a BA in 2019 did so owing money—owing, in fact, an average of almost $29,000. The average debt of those earning a graduate degree was an even more staggering $71,000. That, of course, is on top of whatever the former students had already shelled out while in school. And that, in turn, is before the "miracle" of compound interest takes hold and that debt starts to grow like a rogue zucchini.

There's much more, especially explaining the strange trajectories of people whose expensive PhD's only qualify them to become poorly paid "adjunct" college teachers, shepherding masses of students through an education of dubious value. Read all about it.

Yet she doesn't give up on the idea of humane learning -- nor can any of us. 

Photo is from 2012, but the demand to "Cancel the debt" remains.

Post-pandemic economy comes into view

Just maybe, the last year's "Racial Reckoning" is having the material effect of putting systemic racism front and center of our descriptions of our reality. Consider this from Binyamin Appelbaum, lead writer on economics and business for the New York Times editorial board. 

He's writing about the 23 Republican governors who are cutting off the $300-a-week federal boost to unemployment benefits which was part of the recovery package passed by Congress. This mean spirited crew insists we must starve poor people back into taking low paying jobs, typical Republican policy.

... A lot of people are going to get hurt, and the pain will not be distributed randomly.

States administer unemployment benefits because racist Southern senators in the 1930s and the 1940s prevented the creation of a federal system. Almost a century later, Southern states still operate the stingiest unemployment programs. In recent years, for example, unemployed workers in New Jersey have been roughly five times as likely to qualify for jobless benefits as those in North Carolina. The benefits in New Jersey are larger and last longer, too. 

The legacy of the racism that infected so many of the New Deal’s achievements is particularly bitter for Black workers, who continue to live disproportionately in the states that provide the least aid to those who lose their jobs. During the last recession, only 23.8 percent of unemployed Black workers received benefits, compared to 33.2 percent of white workers, according to a 2012 analysis by the Urban Institute. Those who qualify for benefits also get less money. On average, the 11 former Confederate states replace just 40 percent of lost wages, compared to an average of 46 percent in the rest of the United States. 

The supplemental federal payments have temporarily lifted all boats, raising the average weekly payment in the stingiest state, Mississippi, above the pre-crisis average payment in the most generous state, Hawaii. But in the coming weeks, as blue states continue to accept federal funds while red states stop, the gap will yawn wider than ever. 

Although Americans generally agree that government should not act with racist intent, the unemployment safety net was designed with racist intent. And it continues to work in the way that it was designed, allowing Mississippi to badly serve Americans who live there. ...

This comes from the NY Times lead business writer, not some Occupy critic. Awareness of racial impact has moved to the center -- and the GOP is desperate to cancel it ... as well as to silence  the people who need the $300-a-week ...

• • •

Here's what these bigoted unemployment policies mean for the economy at large, also from the Times.

The chronic problem we face as we put Covid-19 in the rearview mirror is that the U.S. economy before the pandemic was incredibly dependent on an abundance of low-wage, low-hours jobs. It was a combo that yielded low prices for comfortably middle-class and wealthier customers and low labor costs for bosses, but spectacularly low incomes for tens of millions of others. This dynamic was first brought into stark relief by the discourse about “essential workers” during the worst of the pandemic. Now it will be highlighted by the frustrating, unequal outcomes of this Great Reopening.

If, in this summer interim, the remaining federal benefits for those without jobs pressures some employers to increase wages and offer a more full-time hours to their employees, then that is all to the good for them and the sturdiness of our economy. The good news for workers is that wages tend to be “sticky” and hard to reverse. ...

 If Congress won't vote the $15 minimum wage, workers of all races will force it themselves, insofar as they are able.

Some states did better than others; all could do more

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Matt Yglesias posted this map to show that most states contribute hardly any assistance to families with children living in dire poverty. And it does do that. But it shows something else as well: how political differences between states meant different effects on poor people.

TANF (Temporary Assistance to Needy Families) is the Clinton-era successor program to what used to be called Aid to Families with Dependent Children, more commonly known as welfare. In the 1990s, legislators of both parties decided they could force those lazy ladies raising kids on a pittance of government assistance to work for their benefits. And also that they should limit families' eligibility to collect any help at all after a period as short as two years. Bureaucratic hoop was intertwined with bureaucratic hoop; many women and families just fell out of the system altogether and got nothing. In good economic times, some of these parents caught on in the most precarious of bad jobs; in bad times, they fell out of the labor force. We see some of them living on the streets today.

The sum the federal government gave the states to pay for TANF was set in the 1990s, and as far as I know never increased. It never was generous and is worth far less today. In any case, the welfare "reform" law was written so that, if states wanted to, they could divert TANF cash to their general funds. So what the map really shows is that most states (yes, the usual suspects) did just that, effectively pocketing a federal windfall nominally meant to help poor people.

How much poor women and their kids were hurt by "reform" came to depend on the political balance of forces in each state. The few dark blue states on the map above reacted to welfare "reform" with policies that were more generous to recipients. To some extent, this came about because poor women fought back. In California, for example, organized welfare recipients won the right to count education at community colleges and in technical programs as "work" for the purpose of keeping eligibility. This seems merely sane, but the 1996 law was so punitive toward those needing assistance that it took battles to win.

No wonder, after 25 years of these sorts of policies, we are ready for President Biden's American Families Plan in some form. It's time for this country to give parents and children a hand. 

• • •

It took a few years for a clear picture of the effects of the 1996 welfare law to play out. $2.00 a Day: Living on Almost Nothing in America by social scientists Kathryn Edin and H. Luke Shaefer offers a lively description of the subsequent extreme poverty into which many families fell.

We need Biden's "American Jobs Plan" and probably much more

I can't get over the picture of our current employment situation described in recently compiled economic statistics. It's becoming all too clear who is being left behind in our effervescent post-pandemic recovery.

In March, for example, the overall economy added back 916,000 jobs. Only 7,000 went to workers with high school diplomas but no college degree. [My emphasis.]

... Horrigan’s research has shown that both minority females without college degrees and white males without college degrees are having the hardest time finding work again.

... The problem for policymakers, Madowitz says, is there’s been a lot of thinking in the past decade about how to help men in blue-collar industries, but there’s been little thinking about how to help women in the service sector who suddenly might need to change careers.

This isn't the most intuitive graph, but it highlights what's amiss:

People with college degrees, and even with 2 year college experience, are getting back to work.

People without college are not yet getting call backs. Many such people were "essential workers" during pandemic lock downs, doing work that kept society going. But similar workers who were forced out during shut downs are not yet finding new and renewed employment.

Dems went big and they won

Many of us aren't conditioned to expect much from Democratic administrations, even ones we've worked hard to elect. But this American Rescue Plan, as they are calling the bill that Democrats -- without a single Republican vote -- passed out of the Senate yesterday is a BFD.

People are hurting. Some of us have had a "good pandemic" -- able to work from home online, not spending much, merely feeling some social isolation. But so many have seen jobs disappear and/or are stuck at home with kids who aren't getting educated. I see them in the line around the block at the Mission Food Hub each week; I wave at them in doorways when I deliver boxes for elders and families who can't even go out to pick up for themselves.

The American Rescue Plan is a true something. It takes the condition of the least among us seriously.

It includes checks of $1400 for people who make less than $75,000, making up the difference between the $600 the last coronavirus relief measure provided and the $2000 the former president demanded. But that is just the tip of the iceberg. The bill provides federal unemployment benefits of $300 a week until Labor Day to supplement state benefits. It provides $350 billion for state, local, and tribal governments, which will prevent further job cuts and enable services to continue. It provides $130 billion for schools, as well as support for rent payments and food. With its expansion of child tax credits, subsidies for childcare, expansion of food assistance, lowering of costs under the Affordable Care Act, and rental assistance, the American Rescue Plan could cut child poverty in half by the end of this year.

Its benefits should begin helping low-income and moderate-income people immediately, injecting money into the economy to help us recover from the economic effects of the pandemic, even as we are starting to get vaccinated to emerge from the pandemic itself.

The bill is a statement about the role of the government. Rather than trying to free individuals from the burdens of supporting an active government by cutting taxes and services—as Republicans since Reagan have advocated-- this bill uses government power to support ordinary Americans. It is a return to the principles of the so-called liberal consensus that members of both parties embraced under the presidents from Democrat Franklin Delano Roosevelt, who took office in 1933, to Jimmy Carter, who left the White House in 1981. ... [My emphasis.]

Sure, it's not perfect. It does nothing about the minimum wage which is stuck at $7.25/an hour. On Twitter this afternoon I was already seeing what seems a solid prescription for activism: 

1) see whether recalcitrant Democratic Senators can be corralled to vote for any increase in the minimum such as $12/an hour;

2) get the $15 minimum on state initiative ballots -- in practice it wins; 

and 3) where we've got a chance to win Senate seats in 2022 (off the top that's WI, OH. PA, and NC), get commitments to $15 during the campaigns.

But let's give Senate Dems some credit. They did some of what we elected them to do; victories build for further victories.

It's big, it's bad, and political choices still matter

Until I read Adam Tooze's Crashed: How a Decade of Financial Crises Changed the World, the economic upsets of early 21st century global capitalism had mostly registered with me through the Wall Street melt down that confronted Barack Obama on taking office in 2009 and the grinding Great Recession of Main Street America that fed the resentments of his detractors. Somehow the Obama administration never seemed willing or able to turn its economic policies to the needs of ordinary citizens.

Oh, I knew that what seemed to begin with casino-gambling with home mortgages by the sleazier elements of US finance had somehow nearly brought down the whole world economy -- I read books that sought to decode what they had been doing. (Gillian Tett's was a good one.) And I encountered a Spain in 2013 where the economy was still somehow leveled by the backwash of these shenanigans. And I even knew all this somehow fed those pratfalls by English-speaking democracies in 2016: Brexit and electing Donald Trump.

But until I read Tooze -- he's an erudite Brit who has landed teaching history at Columbia -- I lacked a global picture to put all this together. Crashed does that. It's a masterly account of intricate financial systems and above all their dysfunctional politics. If you suspect any discussion of global capitalist economics is no more than a morass of high falutin jargon, you are usually not wrong -- but Tooze draws a path through vast swathes of human activity and suffering, of myopic leadership and occasional brilliance. I found it fascinating,

This is how Tooze introduces the grand scale of his subject matter:

The events of 2003, 2008, and 2017 are all no doubt defining moments  of recent international history. But what is the relationship among them? What is the relationship of the economic crisis of 2008 to the geopolitical disaster of 2003 [Iraq invasion] and to American's political crisis following the election of November 2016? What arc of historical transition do those three points stake out? What does that arc mean for Europe, for Asia? How does it relate to the minor but no less shattering trajectory traced by the United Kingdom from Iraq to the crisis of the City of London in 2008 and Brexit in 2016?

... the idea that was so prevalent in 2008, the idea that this was basically an American crisis, or even an Anglo-Saxon crisis, and as such a key moment in the demise of American unipolar power, is in fact deeply misleading. ... It pleased people around the world to imagine the hyper power was getting its comeuppance. ... Contrary to the narrative popular on on both sides of the Atlantic, the eurozone crisis is not a separate and distinct event, but follows directly from the shock of 2008. ...

Unexpectedly -- to rest of the world and possibly also to elements of the US political elite  -- the Obama administration and most critically the central Federal Reserve Bank, proved quite adept at saving floundering wealth institutions. Their prescription -- a sophisticated application of "print money" and give it away to rich people -- broke with academic economic orthodoxy, and succeeded. Ordinary citizens remained screwed -- but hey, at least the whole capitalist economy didn't grind to a halt.

However unprecedented and effective the Fed's actions might have been, even for those politicians whose support for globalization was unfailing, its practical implications were barely speakable. Though it is hardly a secret that we inhabit a world dominated by business oligopolies, during the crisis and its aftermath this reality and its implications for the priorities of government stood nakedly exposed. It is an unpalatable and explosive truth that democratic politics on both sides of the Atlantic has choked on. 

... America's crisis fighting exhibited massive inequity. People on welfare scraped by while bankers carried on their well-upholstered lives. But though the distribution of costs and benefits was outrageous, at least America's crisis management worked. Since 2009 the US economy has grown continuously and and least by the standards set by official statistics, it is now [pre-pandemic in 2018] approaching full employment.  

By contrast, the eurozone [the European Union countries that share a currency], through willful policy choices, drove tens of millions of its citizens into the depths of a 1930s-style depression. That tiny Greece, with an economy that amounts to 1-1.5 percent of EU GDP, should have been made the pivot of this disaster twists European history into the image of bitter caricature.

And then there's China, whose burgeoning capitalist command economy might also have been dragged down amid these flailings and which both wavered and grew exponentially. Nobody's financial elites look like geniuses in this telling

Until I read Tooze, I had no idea that Obama's foreign travels were usually more about trying to nudge bankers and global financial elites toward what the US thought was economic stability than about arms control, or recovering from the global opprobrium which George W Bush's wars had seeded, and or even climate change. It's an enlightening perspective.

None of this suggests happy prospects for economic justice, democracy, or even truth as Europe and America have known it.

It was the current president of the European Commission who announced in the the spring of 2011: "When it becomes serious, you have to lie." At least one might say, he knows what he is doing. If we believe Jean-Claude Juncker, a posttruth approach to public discourse is simply what the governance of capitalism currently demands.

In the 19th century, economics was sometimes labelled "the dismal science" because it was the study of why human beings would always lack for our basic needs, for food, clothing, and shelter. Modern global capitalism has proved capable of building the components for those needs beyond the wildest dreams of pre-capitalist economists, though it usually flunks the equitable distribution part of the problem.

The crux of Tooze's argument about the unfolding of the crisis of 2008 is that it turns out that contingency, accidents, and politics still matter despite the enormous scale and complexity of financial systems interwoven with modern states. It's possible that global capital has stamped out the possibility of democracy and we didn't notice. But also it's possible that's wrong.

There are ways of describing the operations of these systems that void the presence of politics. But if a history such as this has any purpose, it is to reveal the poverty of such accounts. Political choice, ideology and agency are everywhere across this narrative ... Success and failure, stability and crisis, can indeed pivot on particular moments of choice. ...

Not a bad thought as we enter a different, hopefully better, US political era ...

I can understand why people think Trump should have won

How could it be that the election we have just survived was as close as it seemed? (It wasn't actually very close in truth; Biden won by about 6 million popular votes, but the crazy Electoral College system made the contest seem closer than it was.) This chart from Kevin Drum points me to one reality. 

For middle income people in this country, the four Trump years were pretty good. After the long trough that economic life was mired in during much of Obama times, by 2016 income was finally inching up. If you weren't alienated by Trump's misogyny, racism, corruption, cruelty, and generally embarrassing lunacy, what wasn't to like?

As better pundits sometime point out, presidents are only marginally responsible for good economic times. Events beyond their control can throw economic life into a tailspin -- note the chart doesn't include what has happened to median income since the pandemic. We won't fully know for awhile yet how bad a hit most people have taken. 

Meanwhile, whatever else pollsters missed, they always showed that people gave Trump good marks for "the economy." 

I've seen a suggestion somewhere (and am embarrassed to have lost the citation), that political journalists are scarred by their own position as precarious survivors in a dying industry. The thing we called "the economy" doesn't look good to them, as media outlets consolidate and jobs in their profession disappear. So it was hard for them to fathom that for many people, especially white mid-career and older ones, good times were back.

It's going to be very hard for Joe Biden and the Dems to promote economic health (equitable and greenish, we hope) if a Republican Senate can block every move. All the more reason to try to elect the two Democratic challengers in the run-off on January 5 in Georgia. I'll start back on the phones this week. Want to join me?

City response to COVID is not alright

When the coronavirus first emerged among us, it would have felt churlish to berate over-burdened public health bureaucracies for their errors and omissions. But it has been six months now. Lydia Chavez and Hayden Manseau of Mission Local have looked into what we can all sense about San Francisco's neglect of the Mission neighborhood. Their reporting is judicious, intelligent, and scathing,

... fuzzy math [is] being deployed to measure how the city is doing in its battle against Covid-19. The city’s seven-day average case rate for the week of Sept. 7 per was 6.8 per 100,000 residents. ... The city’s seven-day average case rate for the same week in September was 2.3 for white residents, 4.71 for Asian Americans, 6.5 for Blacks and 16.4 for Latinx ... In a transmissible virus, researchers said, it’s dangerous to allow the impact on segments of the population to be diluted by tossing them in with everyone else. Those harder-to-reach but persistent cases become all the more important to stop the spread of the virus.

... The numbers the city publishes to keep the city informed on how we are doing paint an overly optimistic picture. But perhaps worse is that the city’s strategy to rid San Francisco of Covid-19 appears to be less urgent in the communities that it knows are high risk.  That model leaves everyone vulnerable. 

There's some good news amid the criticism.

... San Francisco has had a remarkably low death rate, but here too, the racial disparities are apparent: Of the 99 Covid-19 deaths, Asians comprise 31 percent of the deaths, compared to their 34 percent of the population; Latinx, 27 percent, compared to their 15 percent of the population; Whites, 17 percent, compared to their 40 percent of the population; and Blacks, 8 percent, compared to their 5 percent of the population.

Because the death rate has been so low, the city has been able to focus on cases, but testing has not been aimed at the most impacted populations.

The powers-that-be have excuses for their omissions.

... Resources are still limited but, as the Health Department likes to point out, San Francisco now tests more than most cities. Most of those tests are done at the city’s SoMa and Embarcadero testing sites, where the positivity rates are at 1 to 2 percent, according to sources. ...The sites are available by appointment only and easily accessible if you have a car. Both are also accessible by public transportation, but that requires extra time 

... Stefan Baral, a Johns Hopkins University epidemiologist, said that testing sites around the country are “set up for those who can take a few hours off from work compared to the people who are more shift workers.” This testing approach disadvantages people who are carrying the greatest burden during lockdown, he added. 

... Covid strategies across the country, said Baral ... “focus on the protection of the wealthy.”

The experts consulted by Mission Local think the city's future with the pandemic looks threatening.

Despite the solid citywide average, pandemic fatigue and a sagging economy, San Francisco cannot let its guard down, epidemiologists say.  

“If we are seeing an overrepresentation of cases in one group, the logical next step is to tailor interventions to match that need,” said [Tomi] Akinyemiju, [a professor in Population Health Studies at Duke University specializing in epidemiologic methods.] 

Akinyemiju envisions what will happen without such tailored interventions: “Cases will continue to spread in those groups, the healthcare system will be taxed because many individuals in the most impacted groups don’t have access to healthcare, and we will continue to see Covid transmission throughout the city.”

The Mission neighborhood and the city of San Francisco are extraordinarily fortunate to have Mission Local producing quality local journalism in this time of media contraction. If you care about knowing about the 'hood, throw them some cash!
 

It is time for reparations

Nikole Hannah-Jones lays out what is owed. What follows is an abbreviated excerpt; do read it all.

Wealth begets wealth, and white Americans have had centuries of government assistance to accumulate wealth, while the government has for the vast history of this country worked against black Americans doing the same.

... Wealth, not income, is the means to security in America. Wealth — assets and investments minus debt — is what enables you to buy homes in safer neighborhoods with better amenities and better-funded schools. It is what enables you to send your children to college without saddling them with tens of thousands of dollars of debt and what provides you money to put a down payment on a house. It is what prevents family emergencies or unexpected job losses from turning into catastrophes that leave you homeless and destitute. It is what ensures what every parent wants — that your children will have fewer struggles than you did. Wealth is security and peace of mind. It’s not incidental that wealthier people are healthier and live longer. Wealth is, as a recent Yale study states, “the most consequential index of economic well-being” for most Americans. But wealth is not something people create solely by themselves; it is accumulated across generations.

... Brown v. Board of Education did not end segregated and unequal schools; it just ended segregation in the law. It took court orders and, at times, federal troops to see any real integration. Nevertheless, more than six decades after the nation’s highest court proclaimed school segregation unconstitutional, black children remain as segregated from white kids as they were in the early 1970s. There has never been a point in American history where even half the black children in this country have attended a majority-white school.

... The Fair Housing Act prohibited discrimination in housing, but it did not reset real estate values so that homes in redlined black neighborhoods whose prices were artificially deflated would be valued the same as identical homes in white neighborhoods, which had been artificially inflated. It did not provide restitution for generations of black homeowners forced into predatory loans because they had been locked out of the prime credit market. It did not repay every black soldier who returned from World War II to find that he could not use his G.I. Bill to buy a home for his family in any of the new whites-only suburbs subsidized by the same government he fought for. It did not break up the still-entrenched housing segregation that took decades of government and private policy to create. Lay those redlining maps over almost any city in America with a significant black population, and you will see that the government-sanctioned segregation patterns remain stubbornly intact and that those same communities bore the brunt of the predatory lending and foreclosure crisis of the late 2000s that stole years of black homeownership and wealth gains.

... Making employment discrimination illegal did not come with a check for black Americans to compensate for all the high-paying jobs they were legally barred from, for the promotions they never got solely because of their race, for the income and opportunities lost to the centuries of discrimination. Nor did these laws end ongoing discrimination any more than speed limits without enforcement stop people from driving too fast. These laws opened up opportunities for limited numbers of black Americans while largely leaving centuries of meticulously orchestrated inequities soundly in place, but now with the sheen of colorblind magnanimity.

With Covid-19, black Americans face a financial catastrophe unlike any in nearly a century. Black Americans had already lost the largest share of their wealth of all racial groups as a result of the last recession and have struggled the most to recover. They are the only racial group whose household median income is less than it was in 2000. Today already more than half of black adults are out of work. Black businesses are withering. Their owners were almost completely shut out of the federal paycheck-protection program — just 12 percent of black and Latino business owners who applied for the small-business loans received the full amounts they requested, according to a Global Strategy Group survey last month. Nearly half the respondents said they would most likely shutter permanently within six months. Black children are expected to lose 10 months’ worth of academic gains because of school closures, more than any other group, and yet they attend the schools with the least resources already, schools that will have even fewer resources as states slash spending to make up for budget shortfalls. One in five black homeowners and one in four renters have missed at least one home payment since the shutdowns began — the highest of all racial groups.

Race-neutral policies simply will not address the depth of disadvantage faced by people this country once believed were chattel. Financial restitution cannot end racism, of course, but it can certainly mitigate racism’s most devastating effects. If we do nothing, black Americans may never recover from this pandemic, and they will certainly never know the equality the nation has promised.

So we are left with a choice. Will this moment only feel different? Or will it actually be different?

... It is time for this country to pay its debt. It is time for reparations.

And when our political leaders dither and plead poverty, it's up to all of us to remind them they are lying. What's the wealth of a nation for but to assure the well-being of its people? There's only one morally acceptable answer -- and that's the meaning of the cry that Black Lives Matter.

This is not the economy we left behind in March

Welcome to the "omni-crisis." To an extent that's hard to take in, we are living in a different, and far less prosperous world and city.

Noah Arroyo, writing for San Francisco Public Press reports:

Construction sites are coming back to life throughout San Francisco, but the surge in activity may not last long.

Builders pulled 334 permits last week, up from zero 10 weeks earlier as the coronavirus shutdown took effect. That puts construction activity at about 58% of normal. In the year leading up to Mayor London Breed’s mid-March order for construction to cease, City Hall received about 580 permit applications a week.

If you look around, it's obvious that some projects are chugging along -- but also that something is wrong.

For the first time in years, there are "For Rent" signs in Mission District windows.

This month the median rent for a one-bedroom apartment in San Francisco dropped 9.2% from a year earlier, to $3,360, according to apartment-listing site Zumper. It was the biggest decline since 2015.

That's still too much for an awful lot of us. And some of the techies whose affluence drove up property values and rents have figured out they can work from home anywhere, including locations that are much cheaper than the City by the Bay. This won't help a lot of people who are here and trying to stay.

In April, almost 6% of city tenants were unable to pay rent because of financial hardships related to the COVID-19 pandemic and local order to shelter in place, according to an internal survey by the San Francisco Apartment Association. A study by the California Policy Lab found that nearly 18% of the city’s workforce filed for unemployment insurance benefits between March 16 and May 9.

Folks who aren't working aren't going to be able to pay the rent which landlords who acquired their properties at inflated values need to stay in business.

That is, everybody is screwed.

Meanwhile, small quirky retail businesses along Valencia Street are trying to figure out how to make a buck in a diminished retail environment.

Annika Hom has that story at Mission Local. These places are precarious at best. Lisa Sherratt, at Serendipity is a sole proprietor.

Pre-pandemic, Sherratt made between 50 and 100 sales a day, she said as she arranged the store’s brightly colored cards on the shelves. On Monday, she made 10. 

“It used to be perfectly profitable,” Sherratt said.

It’s not only sales that have set her back.  Already, Sherratt missed April and May’s rent. Her landlord cut her June rent by 75 percent and asked her to pay just under half of July’s. Still, she’s uncertain of the store’s future. She is currently the store’s sole employee. 

“Today I am paying $20 an hour for a babysitter and I am not earning anything,” Sherratt said.

We're properly pre-occupied by the horror and the glimpse of opportunity for real change let loose by local and national revulsion at George Floyd's murder. Humanity is enhanced when Black lives matter. And we're still captured within the unabated coronavirus emergency, even though the Quitter in Chief has gone out to lunch on disease response. All this amid this crashed, still not fully revealed, diminished economy.

At BuzzFeed, Tom Gara brings forward a useful description for this new world we inhabit: this is the "omni-crisis" -- three waves of pain and of potential breaking over us concurrently. No wonder we feel dazed. Anxiety is appropriate.

And then there's that election coming up in November ...