Economic storm clouds brewing

Harold Meyerson, a columnist for the Washington Post, observes that the coming recession (notice how certain everyone is that there is going to be one?) will be different from the ones in the recent past. In the recent past, a few technical adjustments by the Federal Government and the Federal Reserve were good enough, because the economy was fundamentally sound.

Not this time. Mr. Meyerson cites the following reasons for our economic weakness:

- American incomes have remained stagnant since the 1970’s. We made up for it by having both spouses work, and by drawing on rising home values. Now home values are dropping and “there are no more spouses to send into the workplace.” And wages are still flat.

- The financial sector mirrors that of 1929: it is deregulated, as the banks have become the victim of their own complex and “deliberately opaque” financial products.

In his article, Mr. Meyerson proposes several remedies, but I’m not holding my breath. The Republicans want to cut corporate taxes, the Democrats are talking about FDR-style programs to build green industries, strengthening the ability of service-sector employees to unionize, and re-regulating financial institutions.

At the same time, Erik Eckholm of the New York Times reports that here in Ohio, where recession has become a way of life, workers in the southeastern counties find jobs so scarce that men in their 40s are forced to move in with their parents, because even with two jobs, they are making half of what they had before. In these counties, 32% live below the poverty level (about $20,000 for a family of four), and 56% live with incomes less than twice that. Meanwhile, our factories are in Mexico and China, and our mom and pops have been swallowed up by Wal-Mart. On the same day, the Columbus Dispatch reports that Nationwide Insurance will cut 200 jobs now, and later cut or shuffle up to 1,000 jobs; and Chillicothe will be closing a paper factory, losing 160 jobs. And last year’s inflation rate was the highest since 1990, while workers’ average weekly earnings dropped another 0.9%.

Our economy, as well as our society, is spinning out of control. Tip O’Neill, Speaker of the U.S. House of Representatives in the 1970s, used to say that “all politics is local.” Well, here’s a news flash: all economics is local! If the economy does not help those who are willing and able to work to put rooves over their heads, food on their tables, and warm clothing and heating in the winter, it is not working.

Six years as a pocket of continuous recession should satisfy anyone that the Feds don’t care about us. We need a government that responds to our needs and will act in our interest! We need a Republic of our own!