Yves here. It’s worth keeping tabs on the various elements of elite disconnect with the lives of those they regard as the masses. An obvious one has been the economy, where pundits insist the meal is the menu, and because their preferred measures of labor market health look perky, and inflation has moderated significantly, those who dare say that the natives are unhappy with Biden policies are wrong and/or trying to foment discontent.
Never mind that even if food prices aren’t increasing by much in the US these days, they’ve risen by so much that many still have not adjusted to the higher baseline. Housing is not to barely affordable for many. Health care is too pricey and getting more so. And that’s before getting to health care shrinkage via service degradation, such as substitution of less-trained medical professionals for MDs.
A simple alternative metric that shows Biden has done squat for those towards the bottom of the food chain: the percentage of Americans with less than $400 at hand for an emergency is 37%, back at the same level as in 2019, before Biden came to office. That is up from 32% in 2020, during the Covid stimulus period.
Oh, and that factoid does not factor in that you’d have to have $488 now to match the purchasing power of $400 in 2019.
In a bit of synchronicity, Bloomberg columnist John Authers points out this morning that US small business are in a particularly dour mood, and inflation is a big reason why. From his People Are Angry to the ‘Anti-Core’ Over Inflation:
Exhibit A is the usually very useful survey of small business optimism conducted by the National Federation of Independent Business. It’s been running a long time and has a good history as an economic leading indicator. Very few small business owners are bleeding-heart liberals, but this hasn’t compromised the survey in the past. Yet it certainly looks like that’s happening now. Somehow or other, their optimism has just dropped to a lower level than it ever touched during the worst of the pandemic. Indeed, it hasn’t been this low since December 2012, when they had to digest the surprisingly comfortable reelection of Barack Obama:
Other than that, pessimism has only been greater during the Global Financial Crisis, and — much more briefly — the dire days of 1975 and 1980 when the US was dealing with both economic recessions and humiliating international reverses (in Vietnam and Iran). Pessimism was never so deep during the Gulf War, or in the wake of the dot-com bubble, or even the pandemic. Reviewing history, we find that the election of Donald Trump led in swift order to the greatest optimism on record. Greater than the late 1990s? Really?
Nobody doubts that small business leaders are sincerely pessimistic, or that their negativity about prospects brings with it the risk of a self-fulfilling prophecy. If they hold off investments or hiring because of the grim outlook they foresee under Biden, that will be bad for the economy. But would they really think things were this bad if they weren’t viewing them through the polarized lens of 2024’s politics?
Then there’s the issue of US inflation….
The Bureau of Labor Statistics doesn’t regularly publish a measure for just food and energy. However, they have indexes for both categories stretching back to the late 1950s…Rather than attempt any subtle rebalancing, I produced an “anti-core” index of food plus energy by just adding the two indexes together. I’m sure there are better statistical ways to do this, but there are also many worse ways of gauging just how painful inflation feels to consumers.
This is how year-on-year inflation of this measure has moved since 1961. It’s been hugely variable, but the spike in the summer of 2022 was quite something. Indeed, it was the worst anti-core inflation in 42 years; it was higher even than during the horrors of the oil crisis of the 1970s. This is how bad it looks:
It’s not surprising that a spike of that severity would leave a mark and create a lasting stain on popular confidence in the current administration. However, it’s also important that this measure continues to be very erratic, and has been negative for several months now. Not only is the rate of inflation down, but prices themselves are actually falling. Will President Joe Biden get some credit?
So while Les Leopold’s idea is helpful, it’s still scratching the surface of what needs to be done.
By Les Leopold, the executive director of the Labor Institute and author of the new book, “Wall Street’s War on Workers: How Mass Layoffs and Greed Are Destroying the Working Class and What to Do About It.” (2024). Read more of his work on his substack here. Originally published at Common Dreams
President Joe Biden trails former President Donald Trump by 20 points in the key swing states of Arizona, Georgia, Michigan, North Carolina, Nevada, Pennsylvania, and Wisconsin when people are asked who “is best able to handle the economy,” according to a recentWall Street Journal poll.
To many pundits this makes no sense. During the Biden administration unemployment has been near all-time lows, wages have been rising, and, after a spurt, inflation has been falling. The Wall Street Journal poll also showed that most people say they personally and their states are doing well economically.
Robert Reich, who I greatly respect, tells us not to worry. “There’s always a time lag,” he wrote recently in his newsletter, “between when the economy turns positive and when voters begin to feel more positive about an administration.” He estimates it will take another three to four months for the voter vibes to catch up with the good economy, just in time for the election.
If a corporation takes taxpayer money, it should not be laying off taxpayers.
Economist Paul Krugman blames the disconnect on partisanship: Republicans believe that when a Democrat is in the presidency, the economy must be doing poorly. He urges progressives to celebrate the Biden achievements. “The truth is,” he warns, “the U.S. economy is a remarkable success story. Don’t let anyone tell you that it isn’t.”
Well, I’m about to do just that.
I fear that Reich and Krugman may be underestimating a devastating economic problem that the Democrats have ignored for more than a generation: mass layoffs. And this is a problem that will not go away by November.
In January, 90,309 jobs were cut, according to the Challenger Report. In the high-tech sector, 260,000 workers lost their jobs in 2023, and another 57,000 so far this year. Approximately, 4 million workers have been laid off since Biden came into office.
But wait! Aren’t those job-loss numbers dwarfed by the 14.8 million new jobs created since the Biden inauguration? Won’t that jobs boom soon sink into public consciousness, just as Reich is predicting?
Not likely. That’s because there’s a big difference between finding a new job because you want to and scrambling to find a job because you’ve been laid off. If your factory shuts down in rural Pennsylvania, for example, finding a new job could feel like hell on Earth as you, and a thousand of your former co-workers, scramble for the last jobs at the Dollar Store or Walmart.
You’re not about to reward those in power for the pain and suffering caused by being laid off due to no fault of your own.
In addition to the financial loss, the damage done to laid off workers’ health is considerable. Studies show that:
- Losing your job is the seventh most stressful life event, more stressful than divorce, a sudden and serious impairment of hearing or vision, or the death of a close friend.
- Recovery from the psychological trauma takes two years on average.
- Even for those without preexisting health conditions, the odds of developing a new health condition after being laid off rise by 83% in the first 15 to 18 months.
- Fetal development in pregnant laid off workers can be impaired.
- The risk of suicide, drug addiction, and depression increases.
The U.S. Department of Labor recognizes that “being laid off from your job is one of the most traumatic events you can experience in life.”
If Biden wants to gain more support, he should take a page from Donald Trump and intervene directly to stop mass layoffs. When Trump stepped in and prevented Carrier Air Conditioning from moving a plant to Mexico in 2017, it was widely popular. Finally, a politician stopped a layoff!
Why did Carrier give in? Because of the leverage inherent in the power of the presidency. As the CEO of United Technologies, Carrier’s parent company, put it: “I was born at night, but not last night; I know that 10% of our revenue comes from the U.S. government.”
The federal government awards approximately $700 billion per year in federal contracts. What if the Biden administration added one simple clause: “No compulsory layoffs.”
If corporations with federal contracts want to lay off workers, they should have to buy them out. Layoffs would need to be voluntary. The logic is simple: If a corporation takes taxpayer money, it should not be laying off taxpayers. If that’s too much of a restriction, corporations are free to refuse federal contracts and government subsidies.
That would get the attention of working-class voters.
The blowback from corporate America, of course, would be fierce. Biden would be viciously attacked and accused of every socialist sin imaginable. It would take real nerve to let corporations know that they can’t take our tax dollars and then destroy our jobs.
Franklin D. Roosevelt knew exactly what to say in 1936 when faced with these kinds of attacks during his first term as president:
We had to struggle with the old enemies of peace—business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.
They had begun to consider the government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob.
Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me—and I welcome their hatred.
I should like to have it said of my first administration that in it the forces of selfishness and of lust for power met their match. I should like to have it said of my second administration that in it these forces met their master.
The country may again be ready for that fight. But are the Democrats?
