In recession-related bad news of the day, the U.S. poverty rate has hit a fifteen year high, and the overall number of people living in poverty - about 44 million - is the highest it's ever been, at least since the Census began collecting poverty data in 1959. I suspect that political partisans on both sides will, after agreeing that this unfortunate milestone is in fact a result of the recession, make pinning the blame on the other side their first priority. Democrats will reiterate their long-standing assertion that it was Bush-era policies that led to the recession, conservatives will argue that Obama's supposed remedies haven't prevented it from getting worse - and neither will really consider the probable reality that if it is even reasonable to blame this situation on our politicians, both parties deserve some of it.
I don't have much patience or sympathy for liberal rants about greedy Wall Street speculators and the like. More than anything else, the crash was the result of a credit market that due to a combination of regulatory fiat and monetary mismanagement put cash on loan into the hands of a lot of people that weren't in a position to pay it back. Even if the government had regulated Wall Street out of building their junk pyramid of credit default swaps and other dodgy financial instruments atop it, there was still a mountain of bad debt accumulating at the center of the economy. At worst, greedy bankers merely found a way to take that crap and make a profit by recycling it into a slightly different form of crap, one in which the eau de impenetrable financial jargon made the odor slightly less offensive. They made a bad problem worse, but they did not create it. As for the Democratic agenda, well - with a painful debt-induced fiscal crisis pretty clearly on the way, I don't think shoveling massive amounts of money out the door to be spent on ill-conceived pork projects in the name of economic stimulus or enacting a massive and massively flawed new entitlement like Obamacare were the best ideas. Billions of dollars later the stimulus has not stimulated - the economy is actually worse off now than the Obama administration claimed it would have been had nothing been done - and Obamacare has already gone up in price before even taking effect.
However, I don't find the Republican claims that the way things were prior to the government tampering of TARP, the stimulus, etc. was reflective of the natural order of the free market, and that Barack Obama is some kind of uniquely pernicious socialist interloper, any less risible. The American economy has, both directly and indirectly, been shaped by government policies, many of them dumb ones, for a long time. George Bush was as much a promoter of the idea that people should own their own homes and look at them as investments and not just places to live as anyone, and did nothing to alter the market-distorting Clinton-era policies that led to the housing bubble. And no party that, when they had control of the government, started two optional, ill-planned, and unfunded foreign wars in addition to doing its own share of irresponsible domestic spending, deserves a platform to complain about the fiscal irresponsibility of the other side.
In some sense, grim news like this is just the market adjusting to actual reality. Much of the wealth that fueled the pre-recession economy turned out to be illusory. It therefore stands to reason that some of the gains that had been made against poverty also turned out to be illusory. As a society, we were not producing enough tangible wealth to support our lifestyle, from the rich investment banker making hundreds of thousands of dollars trading financial phantasms on down to the struggling lower middle-class family that stretched to buy a house they couldn't really afford. Our leaders, in their eagerness to buy us off with extravagant promises on the one hand and their reluctance to insist that we pay anything like the real price for anything we wanted on the other, enabled this overstretch, and continue to do so. This is not a failure of one political party or ideology or the other - it's a failure of the entire system, the whole nexus of government, high finance, and big business, and the Democrats and Republicans are both too much a part of that system to recognize it. While I don't agree with a lot of what the Tea Party types have to say, their inchoate anger does at least make a bit more sense to me when viewed in this light.
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9 months ago