It’s the Quality of Life, Stupid

You don’t have to be a Trotskyite or even a Socialist to notice that after the fall of the Soviet Union and the end of the Cold War, something very strange has been going on in the U.S. economy. It’s morphing into what looks a lot more like a laissez faire than a fair shakes economy, replete with permissiveness for no-holds-barred business behavior. It’s been uprooted from the Keynesian "mixed" economy philosophy that guided decades if unprecedented prosperity after World War II, with its dastardly “liberal” regulatory checks on business excess and its populist government intervention in the free market. But we've since privatized the free market of common good in the name of efficiency.

That’s a gross over simplification of a very complex reality, of course. Shameless hyperbole. But it has some basic truth to it, and it came to mind this morning when I read the front page New York Times article about the “slight increase” last year in median household income. I imagine more than a few neoclassical economists view this as a vindication of the regressive tax cuts and other questionable economic policies that have defined our existence over the past six years. (Photo above depicts a young John Maynard Keynes, 1883-1946)

But if you read past the headline and the perfectly factual first paragraph, you get to the real story about the Census Bureau’s new data. It’s totally misleading because the modest rise in household income is due to the fact that more family members in each household are entering the workforce to make ends meet. Personal income hasn’t risen at all.

Instead of supporting the myth of prosperity in a growing economy, the statistics reveal how miserable the lives of so many Americans have become in a new landscape of double working parents, lousy public schools, vanishing pensions, and crippling health care costs that are passed on directly to the backs of the lucky people who still have insurance.

Even a growing salary isn’t growing when the employee’s health insurance premiums jump and benefits decline, boosting out of pocket costs. I learned this the hard way earlier this year, when United Health Care sent a letter saying customers like me were going to enjoy “greater value” in their benefits following the company’s recent merger with Pacific Health Systems. Then I learned that our beloved pediatrician and several other doctors treating my ailments were no longer on contract. They’d refused to be paid at the significantly lower rates for their services that the combined healthcare giant offered after the merger. Tough luck.

Nobody should complain that higher gasoline prices are hurting the American quality of life, because the skyrocketing cost of fossil fuel is finally forcing thick-skulled policy makers to move in the direction of seriously thinking about alternative energy and rational mass transportation systems. Hopefully, that will result in progress, after 30 years of denying the lessons of the first two oil crises.

But the news from the Census Bureau goes to the heart of the problem festering away in our economy. There’s a deception behind the data about household income is “rising,” just as there is a deception in the claim that the U.S. economic recovery is based on greater industrial “productivity.” The middle class job force has been left out of this phony productivity-driven prosperity. Strident complaints about the damage perpetrated on white-collar workers by global outsourcing (or sending welll paying jobs overseas) may exaggerate the effects of unavoidable economic displacement, but they cannot be dismissed out of hand. Whether you love globalization or not, the American Everyman is feeling the pinch, and it’s starting to hurt badly.

There was more upbeat news from the Census Bureau: The growth in the number of people living in poverty leveled off in 2005. Only one in eight Americans now lives in poverty, defined as having an annual income under roughly $10,000 for an individual or $20,000 for a family of four. As if that’s something to be proud about for the world’s sole surviving superpower. Where did those trickle-down benefits from the Bush Administration’s supply-side economy policies go? To the astonishing rise of CEO compensation, or to the Wal-mart masses? (Poverty map above is from 2000, but the ugly picture hasn't changed much since then)

Another dry Census statistic to consider: 46.6 million Americans had no health insurance last year, or nearly 16 percent of the population. It was a small increase in terms of percentage points from 2004, but a devastating blow to the lives of those involved. The rate of uninsured grew for the fifth consecutive year, despite the opportunities for improvement one might expect from the so-called economic turnaround. I don’t know how to close this dispatch without sounding like some sort of rabid anti-American, pro-Terrorism hooligan to the electronic ears of the with-us or against-us Establishment. But it seems increasingly clear where the American quality of life is going behind the deceptively rosy economic statistics. Diminished expectations, lower income, more debt, more latchkey kids home alone because of the dearth of affordable childcare, greater rates of death and morbidity among the healthcare have-nots, so many more working hours at stagnant wages to sustain the miracle of productivity growth, and after scurrying around trying to retain the semblance of our former prosperity, no time to think about all this.

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