There is currently some debate (as well as denial, pessimism, and wishful thinking) around whether or not the US economy is in (or at least heading for) an economic recession. The simple economic metric for recession is two consecutive quarters of declining GDP — which we’ve met. However, many acknowledge that this is a crude measure, suggesting that the complexity of today’s economy requires other factors be taken into consideration.
Some sectors of the economy are doing quite well, as indicated by the soaring profits of many large corporate entities. Yet at the same time, Middle America and the retail sector continue to struggle with persistent and puzzling inflation. (Visit any local shopping mall and count the disguised empty storefronts.)
On the wishful/hopeful side, it is argued that economies are always subject to boom-and-bust cycles — and that natural forces like demand, supply, and competition will eventually balance things out. Moreover, that the Federal Reserve, with its seemingly one tool in the toolbox (interest rates) can adjust the heat of the economy to keep things chugging along, business as usual.
However, the above is premised on a stable social, economic, and ecological reality that persists over time — ignoring the routine disclaimer that comes with all investment advice: “Past behavior is no predictor of future performance”. What happens then when the underlying social, technical, and economic fundamentals have changed?
The fact is, reality is in constant motion, changing to varying degrees on all dimensions. Some changes are cyclical, others are linear (one-way): resource depletion, extinction of living systems, advancing knowledge and technology, social beliefs, tastes, and values.
In regard to the title of this article, in this country especially, there exists a particular linear change that threatens to destroy the country as we’ve known it. It is the ever-increasing concentration of wealth and power in ever-fewer hands. While we apply our attention, money, and organizing to a myriad of social, political, and ecological causes, in the background, the wealth and power continue to gravitate ever upward to the top.
The one-wayness of the latter comes from the mutual dance of wealth and power: wealth buys power, power begets more wealth. And both increasingly thwart any possibility of stopping the process.
I’m afraid we’ve passed the critical point and it’s now a runaway process. The signs are myriad: Biden’s/Democrat’s inability deliver on most of their glowing campaign pledges, persistent inflation and inability to reign in corporate excess, inability to deliver on decent common sense issues like healthcare for all, affordable quality education, ending extortionary student loans. Not to mention a quarter to a third of the country so confused, desperate, and angry that they’ll follow a deranged Pied Piper down to Hell.
Historically, all great empires eventually pass away. The sad thing in our case is that we are watching it happen, and could turn it around rather simply (i.e. simple in the practical sense, not the political). Tax people (corporate or flesh-and-blood) in proportion to the benefits received, through a progressive wealth tax. Does it not make sense that those who benefit most from an economic system ought to pay back in proportion to keep that system healthy?
Yet today we have the reverse. The wealthy are reluctant to give up even a penny accumulated wealth, so the tax bill (or the austerity) has to be borne by those lower on the economic ladder.
There is a legend that a monkey can be captured by placing a banana in a jar with an opening too small to let the monkey extract its fist while clutching the banana. Yet it is rendered helpless because it cannot let go of its “treasure”, despite the consequences.
Is there a parallel here? If so, unfortunately, “Welcome to the forever recession”.