The stock exchange tells us nothing about the real economy or, more importantly, the economic reality for 90-99% of Americans. But a big crash does tell us that the rich are getting spooked.
They called it a correction, which might seem euphemistic for something that seems so catastrophic. Yet it is, in fact, a correction, because the value of stocks had been inflated due to the huge amounts of cash pumped into the banks and financial houses and large corporations and the exuberance of the wealthy in light of their continued tax cuts and success in shrinking government.
The value of stocks was certainly no indication that anyone else was doing well. And the crash is no catastrophe for the rich, at least not in the sense one might think. They will continue to be rich. They will not have to cut back on luxury items or even staples, like most of us have. They have no worries about losing their homes to foreclosures or their jobs. But they are worried about the possible collapse of the European economy as a result of defaults in Spain, Italy or Greece. They are also worried about sluggish domestic growth, which is ironic since they have caused this problem by prohibiting any government spending and by immiserating the public to the point that we either cannot afford to spend or are scared to. The debt reduction deal virtually guarantees a double dip recession, or at least a continuation of the status quo, as it forces the poor and the working and middle classes to bail out the state at the same time they are struggling with job loss, declining wages, increasing healthcare costs and possibly losing their homes.
The stock exchange tells us nothing about the real economy or, more importantly, the economic reality for 90-99% of Americans. But a big crash does tell us that the rich are getting spooked.
They call it a correction, which might seem euphemistic for something that seems so catastrophic. Yet it is, in fact, a correction, because the value of stocks had been inflated due to the huge amounts of cash pumped into the banks and financial houses and large corporations and the exuberance of the wealthy in light of their continued tax cuts and success in shrinking government. The crash merely brings their value back down to something more realistic.
The value of stocks was certainly no indication that anyone else was doing well. And the crash is no catastrophe for the rich, at least not in the sense one might think. They will continue to be rich. They will not have to cut back on luxury items or even staples, like most of us have. They have no worries about losing their homes to foreclosures or their jobs. But they are worried about the possible collapse of the European economy as a result of defaults in Spain, Italy or Greece. They are also worried about sluggish domestic growth, which is ironic since they have caused it by prohibiting any government spending and by immiserating the public to the point that we either cannot afford to spend or are scared to. The debt reduction deal virtually guarantees a double dip recession, or at least a continuation of the status quo, as it forces the poor and the working and middle classes to bail out the state at the same time they are struggling with job loss, declining wages, increasing healthcare costs and possibly losing their homes.
Meanwhile, employment is at an anemic 58% overall and much lower for African Americans and Hispanics. This is in marked contrast to the official (and misleading) unemployment statistics of 9-11%. “Unemployment” only counts people who have worked and are currently looking for work, thus ignoring single mothers and teenagers entering the workforce for the first time, as well as the millions of Americans who have simply given up looking, since there is so little available.
58% employed means that 42% of adult Americans are not working. Most of them are also not earning, which begs the question: How are they surviving?
The answer: by the skin of their teeth. Not only is it taking longer to find a job now than it did during the Great Depression, but poverty and hunger are also reaching record levels. The number of people on food stamps has also reached record levels. In March 2009, the number of people on food stamps reached record levels at 31 million. Now, we’re at 45.8 million. And even this figure is deceptive as only about 67% of the eligible people actually apply, according to the OB Rag.
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| (From the OB Rag) |
Great Recession and Schools
Anyone who reads this blog has seen plenty of evidence that poverty is the primary influence on academic achievement. Obviously, with a protracted recession, we will be seeing this reflected in our own students. Many of us are already seeing the effects. I have had an increased number of homeless students and students telling me that they cannot afford basic supplies because of financial insecurity at home. I’m also seeing the effects in terms of declining high school readiness and academic skills and increased stress and anxiety among my students.
One thing that is seldom discussed is that children make up a large chunk of those who receive food stamps. According to the OB Rag, in 2009, when the last USDA survey was done, 48% of all SNAP participants were children, while a 2009 study (Estimating the Risk of Food Stamp Use and Impoverishment During Childhood) figured that 49% of all children will receive food-stamp benefits sometime before they are 20 years old. Thus, an increase in food stamp use means an increase in childhood poverty and a decrease in childhood health and academic success.
