Before I discuss what I believe to be happening, I would like to start by addressing what we consider a recession to be. A recession is when for at least 6 months there is a drop in real Gross Domestic Product (GDP), income, employment, manufacturing, and retail sales.
Growth has slowed even as we are still at very low interest rates. Any increase in rates would most likely put the brakes on the current economy. Income has shifted up and people that aren’t at the very top seem to be worse off year by year if actual inflation is factored in. More and more people are becoming partially or under-employed. Even more are discouraged by the poor quality of jobs and the relative poor pay and have stopped working. Someone that is working as little as 1 hour a week is considered “employed” even if only “part-time”. Someone that has given up searching for work because they feel the options are so poor is considered out of the work force. So they are not considered unemployed either.
As for manufacturing almost every day there’s some story of a large American corporation shutting down its American plant. Very rarely do I read about anything new or innovative opening up manufacturing in The United States. I also have a hard time believing there’s a healthy future for retail sales as more and more Americans can’t afford even life’s necessities. It is hard to image these people having much of any discretionary income if they are struggling to just keep a roof over their head, food in their stomachs, pay for some form of transportation, and a cellphone.
What I believe is happening is the numbers are being skewed by the few at the top doing so very well. Something doesn’t seem quite right and my education and personal experiences are telling me we should be investigating this further. If we started examining factors such as per capita income, percentage of employed people, inflation adjusted income, discretionary income, general well-being, or any other relevant factors by quartiles (groups of 25%) or deciles (groups of 10%), I believe an entirely different story would unfold on the graph.
I’m not sure anyone is even keeping track of those kind of numbers. I believe a large portion of the American economy is already in what I will call a ghost recession. Things at the bottom have looked bleak for way longer than 6 months. So from the perspective of those on the bottom there has been an ongoing recession for some time already.
Its one of those things that our current government doesn’t want to look out for because if everyone openly knew and discussed how bad off at least 50% of the people were the government might have to actually do something about it.
It makes me think of the game monopoly. If 4 people are playing then essentially what is happening is one person, the top 25%, is winning and the other 3, the bottom 75%, are loosing. Yes, incomes may be going up and construction going on for all but 3 of those people are headed straight for broke/bankruptcy. So depending on what numbers you look at the picture might look rosy, but if you look at the entire picture of 3 out of 4 are constantly loosing ground and headed towards being completely broke and living out of the system on the street then that picture doesn’t look quite so rosy. I think it time our government started taking a more realistic and in-depth look at what is really going on economically. For example why are we giving taxes breaks to the wealthiest, so they can jockey for who has the most billions of dollars when essentially an overwhelming number of people in the working class are doing worse and headed for poverty and now destined to pay higher taxes?
Without anyone in the middle we will be a third world country, by definition. Awhile ago there was research out of MIT that The United States economy is already acting as a third world economy for the bottom 50% of the people. That is 1 out of 2 people. Since those findings were released things have seemed to only have gotten worse. So not only were those findings bad we also seem headed further in the wrong direction as a country.
Chris Madsen is a writer and activist based in the great state of Hawaii. He frequently writes from the unique perspective of his Pacific home. His opinions are his own.
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