The facts are pretty clear, and Rana Foroohar of Time magazine does an excellent job of laying them out for us.
The recession ended some time ago, and real growth is now back. Even unemployment is down significantly. Job growth has been relatively strong. There has also been something of a real estate recovery.
Yet Foroohar and most others would agree that "something is very, very broken in our economy." Most of the jobs created in our new economy pay less than $15 an hour. For the past 10 years, wage growth has been essentially zero. The number of jobs created is nearly back to what it was before the recession, but the quality of those jobs is not. In an economy driven by consumer spending, people not having money is a big problem.
When it comes to housing, there are actually only a few areas of the country that have seen a true real estate recovery. Additionally, student loan debt is out of control. It is now greater than even credit card debt and auto loans.
Most would also agree that structural changes are responsible for what is going on, not simply the Great Recession. Most of these changes have been occurring for decades. As Foroohar explains, technology is now eliminating jobs from the economy rather than adding them. Also, too many good jobs from the past will not be coming back. The long-term unemployed have either aged or have lost skills and likely will never find work.
This situation represents a major problem for the future of our country, and there is every reason to believe that it will continue to grow worse. Foroohar is pretty short on answers, and I certainly have no solutions. It does, however, explain the anger and fear that besets our country today. People know instinctively that something is just not right, and the only response they have is to lash out at those in power.
Unfortunately, our politicians seem more interested in casting blame and stirring up these fears than really tackling the problem. The upcoming congressional elections have only made things worse.
My own inclinations come from a liberal economic philosophy. I believe we ought to put people to work. Our country needs strong infrastructure programs, and our people need jobs. My own state of Maryland has seen serious damage to our economy with the loss of so many government jobs in the recent belt-tightening. Those who believe that government jobs are not real jobs don't recognize what an important part of our economy the government is. Our neighboring state of Virginia, a much more conservative state, has also seen damage to its economy because of the loss of government jobs.
I would add two additional concerns that prevent real solutions to our economic difficulties. The insistence of Wall Street on believing it has all the answers and that an unfettered economy is the solution to all our problems is simply mistaken and arrogant. A failure to recognize how dependent the economy is on the little guy who buys the products of industry was a cause of the depression. A failure to address the problems of the poor and middle class skews the economy and adds to inequality. Such an approach does not aid either the rich or the poor.
Second, gridlock in Washington makes progress on anything impossible. We must find a way to break this logjam. The inability to even begin discussing real tax reform in Congress, a change everybody seems to want, is indicative of this malaise.
While I have no solutions, there are a couple of things I do know. First, stakeholders are going to have to accept the fact that this is a real problem that needs attention. I'm not sure that all parties accept that fact at this point. The attitude that as long as the wealthy continue to prosper, things are fine is not nearly good enough.
Second, the best minds on both sides of the aisle need to sit down with the best minds around the country and hammer out a deal that will address inequality, unemployment, stagnant wages, taxes, etc. A grand bargain is needed that is designed to help all of us, not just the rich or the poor.
At our best, government has rallied in times of crisis to address the needs of the people. There must be a few left in Congress who can forego politics and reach across the aisle to begin this process.
