The job reports for June are in and the news is not good. In fact, it’s bad. Unemployment has climbed to a steep 9.5 percent – the highest level in 27 years. Meanwhile, part-time employment is growing among those who were previously full time. As cumulative income diminishes, it translates into less saving, higher interest rates and less money circulating in the economy.
If these storm clouds have a silver lining, it is that employment usually is (hold your breath) “a lagging indicator.” This factual tidbit must be a mighty comfort to those who don’t know where their next paycheck is coming from.
I received my first lesson in macroeconomics from my Uncle Don, a truck driver who could handle 18-wheelers as if they were Volkswagens. We were at a summer block party and the economy was in an awful rut. In between hamburger bites, he turned to me and asked if I knew the difference between a recession and a depression. No, not really. Well, he said, a recession is when your neighbor is out of work – a depression is when you’re out of work!
With the economy stuck in neutral, these trying times are, for many, a depression. The stimulus packages were supposed to restrain joblessness; instead earmarked for relief and infrastructure projects (the latter always the last to have any measurable benefits) it has proved to be more package than stimulus. What’s needed is a healthy dose of tax credits and incentives to send a blast of oxygen into a gasping respiratory system revving up the economic engines.
Instead, Congress, blindsided by its own ignorance, is too busy scheduling an increase in the minimum wage that will inevitably leave more unskilled workers unemployed. Since Inauguration Day, the economy has been ideologically hijacked with the banking system and then the auto industry being nationalized. Meanwhile, national health care, the holy grail of the reformers, along with a takeover of the student loan business, is being feverishly pursued. In Washington, European style socialism, strangely enough, is becoming grotesquely fashionable.
With the printing presses working overtime, you can sense an uneasiness settling in, perhaps unexpressed, but real and fraught with rising tension. Washington is spending, and planning to spend, unprecedented sums of taxpayer money and the enormity of it all rattles the nerves. Capitalism, most people realize, has worked. Things may need to be tinkered and adjusted; bad elements squeezed out, but people don’t want the baby thrown out with the bath water.
Over the next 10 years, federal deficits will reach a mind-boggling $1 trillion or more annually to finance the new statism! One, I imagine, is compelled to ask, is government taking over General Motors (dubbed by some as “Government Motors”) really the way to go? Is bailing out the auto industry so that overcompensating unions can continue to build cars too expensive for consumers to buy sensible? One doesn’t need to be a policy maker to answer these questions; just a parent to know that rewarding bad behavior just produces more of it.
In Manhattan there is an electrical billboard monitoring our national debt. A gnawing anxiety takes hold watching the numbers (all 12 of them) race upward almost faster than the eye could follow – like one of those digital stopwatches at track and swim meets with the tenths and hundreds of seconds flying by. These mind-blowing numbers will be trillions of leeches feasting on the labor and inheritances of our children and grandchildren if we don’t endeavor to increase our harvest or harness our profligacy.
Government largesse is cramping, if not crippling, the prospect of an early economic resurgence. But even bad policy can’t straitjacket American dynamism completely. Most likely, there will be a recovery sometime next year. But the real question is how deep will it be and how sustained? If present circumstances continue, the boom years of the 1980s and ’90s will always be a memory, never a reality. New spending means new debt that will ultimately shackle opportunity, challenge our creditworthiness and make America a less desirable place for the world’s capital.
Governed by experience, minds can change, and should, when circumstances justify altering course. The enchanting and transcendent idea that we should leave the world better than we found it has, at its very core, a profound veneration for the dignity and worth of human enterprise. Its warrant compels us to see our lives not merely as an island but, rather, an isthmus solicitously connecting, through the corridors of time, one generation with the next. Such a sentiment lifts history above farce and invests it with the grace of duty, obligation and commitment.
Implicit in that proposition is that we can make a difference, that the future can be shaped for the better, that life has a purpose beyond the immediacy and self-gratification of our own lives and that our happiness is somehow bound up with that truth. If it weren’t so, we would not find satisfaction, or joy, in living, working and sacrificing for our children. To bequeath the next generation with the values and ideals that have sustained us, and those before, is to give them roots; freeing them from the despotism of indebtedness will also give them wings.