Recession Becoming Permanent?


When the proportion of a nation’s population that can’t afford food without welfare nearly doubles overnight, that country is in crisis. When that explosion of dependency plateaus and stays there for years, the system needs changing.

The Congressional Budget Office just issued a grim graphical picture of a declining nation that has just experienced not a “tough patch” but a social revolution that looks like a permanent step backwards. After 15 years of a steady 20-25 million Americans using food stamps, between 2008 and 2011, that number exploded to 40 million and continues to rise, with further rise projected to the 45 million-level, perhaps followed by a decline by 2020 to “only” 37 million – still 10-15 million more people than the pre-2008 norm!

Food Stamp History (CBO)

Note that all the “good” news in this story is an estimate of a possible future tipping point. The actual data just keep getting worse, not continuing bad or improving slightly, but getting worse. If the data were stable and level, the real-life situation for American society would be worsening because having this huge percentage of the population continuing to be   unable to feed itself  a for years is far more serious than the same number needing emergency help: this is the picture of a permanently depressed and unproductive tenth of America. But reality is worse: as a measure of the health of U.S. society, the size of the food stamp group as well as its current and projected expansion show either a nation in decline or a nation dysfunctionally divided.

Need I point out the contrast between this and the simultaneous explosion in the stock market, the wealth of the super-rich,  and corporate profits…or the other critical contextual issue–that the absolute number of Americans with full-time jobs is declining?

The healthy, economically secure portion of the U.S. population is shrinking, and the dependent group is expanding. The social foundation of national power and the reality of “the American way of life” are being gutted from both ends, with only a irresponsible and gluttonous 0.1% fringe group experiencing clear success even by some self-centered, short-term definition of the word. What will happen when one of their fancy limousines hits a pothole and loses a tire?

The super-rich do not appear to be thinking about the potholes they may encounter as they redefine themselves as the enemies of the American people, however. Instead, they remain committed to continuing the transfer of wealth from the public into their own hands. Once having discovered that it can take whatever it wants without risk, what elite has ever voluntarily handed the money back to the rightful owners? As long as Washington gives billionaires a blank check, they will happily grab all the money they can get. Wealth has a way of making a person bizarrely short-sighted. How many billionaires are worried about what will happen to national infrastructure as society is punished by austerity for everyone except those who can afford to pay? The “pothole” a billionaire encounters may be a leaking nuclear power plant…Perhaps they will all just fly to the Cayman Islands.

This attitude on the part of those who benefit most

Governance is a function of resources and control. The sweet spot for good governance is the rule of law; all ideologies and economic systems are vulnerable to abuse.

Governance is a function of resources and control. The sweet spot for good governance is the rule of law; all ideologies and economic systems are vulnerable to abuse.

from the American way of life that they have no responsibility for helping to preserve it is pushing the American system of governance away from the democratic center toward the extremist periphery by transforming a system that had been generating a rising middle into a dangerously bimodal, two-class structure of a ballooning mass of poor and a tiny elite of the unimaginably rich. Whatever the specific form of governance that results (e.g., monopoly capitalism, fascism, revolutionary dictatorship), mass disillusion and instability are predictable unless the trend away from egalitarianism is reversed. Stability, especially for a population that has experienced rising egalitarianism and democracy, rests not just on the rule of any law but the rule of law that is perceived as just. The rule of just law is visibly receding in the U.S. and the billionaires may not like the new world they are creating.

American society is getting squeezed from both ends: the rich are impoverishing society at large, while a new underclass of formerly successful and hard-working citizens is being manufactured at the bottom. As for the majority that remains in the middle, rising elite demands for austerity (for everyone but themselves), the end of reliable retirement packages, declines in job security, evaporating job benefits, and wages that have essentially been flat for 3-4 decades are taking their toll.

Whether the U.S. can survive like this or not may be debatable, but two things are clear: the recession is not over; it is getting worse…and so is the distortion of a society that had been getting more egalitarian for half a century and is now headed in the opposite direction.

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