Temple University Press author William DiFazio (Ordinary Poverty) addresses the inequalities of current economic crisis in this blog entry
“I ain’t got no boom,” a young, new mother responded to my question on how she was doing as a result of the economic boom of the Clinton years. As I described in Ordinary Poverty the economic boom of the 1990’s had bypassed the poor in Bedford-Stuyvesant, Brooklyn and the United States. We now know that the economic bubbles of 2000 and 2007 would burst and the “new economy” would never really happen, it was a fiction, the economists and finance capitalists were wrong and now instead of endless prosperity we have a world crisis in capitalism and the whole country has “no boom.”
While the President and his cabinet focus on bailing out the banks and the auto industry the massive inequality in the United States is ignored. Like the Titanic the captains of the economy ignore the iceberg of inequality and the number of poor locked in steerage is swelling as more and more middle class people join them destined to sink with the economy. This inequality is an important cause of the current crisis in capitalism; 70% of the US economy is based on shopping but Americans cannot consume as they did in the past because for almost forty years wages haven’t kept up with prices even with the supposedly low inflation rates and only massive debt gave them the appearance of still being middle class. With credit closed to the middle classes more of them are becoming poor, Ordinary Poverty is now about them as well. The supposedly “lazy” poor also worked harder at lower and lower wages, including people on welfare. They are forced to cheat because the welfare grant is insufficient for the poor to live on. The welfare grant in New York State for the last eighteen years is $291 per month for a family of three; though Governor Paterson has proposed a 10% increase the first in almost two decades but it’s too little too late. The current crisis in capitalism has made the lives of the poor more difficult as soup kitchens and food pantries are increasingly overwhelmed by an increasing client base. St. John’s Bread & Life, where much of Ordinary Poverty takes place is feeding almost 1,300 people a day and has a rotating, monthly clientele in its food pantry of 15,000 people. Thus, as more and more people show up for meals and donations decline St. John’s Bread & Life is increasingly in debt. The homeless population is exploding, moving into tent cities, like the Hoovervilles of the Great Depression and in RV’s, once recreational vehicles for a summer vacation are now permanent housing for people who once were middle class. These newly poor are college educated, newly unemployed or underemployed many who of them have walked away from their foreclosed houses.
As the crises escalated the first African American President was finally elected but President Obama as he spends trillions of dollars trying to bail out the banks, AIG and the automobile industry, barely has an extra dollar to spend on the poor. He also acts as if the growing inequality of the last forty years has had no part in this crisis. After all, since Moynihan wrote The Negro Family Study, in 1965 and he explained that poverty was a racial and psychological problem, the result of the “tangle of pathology” of the deteriorating Negro family structure and that it was not the result of the failures of American capitalism to provide jobs with above poverty wages to tens of millions of American workers. Of course, now we know that Moynihan was wrong though he served as the source of conservative ideology on poverty. In reality welfare was a cheap solution to the labor force problems in the United States and legitimated the refusal of corporations to pay higher wages. Instead it replaced workers with technology and by shipping jobs to developing countries where non-union workers were paid the lowest wages and given no benefits. For American workers instead of higher wages, credit cards and debt were exchanged for an imagined higher standard of living. If the labor market inequality that has plagued the poor, the working and middle classes was taken seriously by President Obama, Citibank, AIG, Bank of America and General Motors who have been bailed out by the government would not be allowed to lay-off workers or cut wages and benefits. Instead, both the corporate and government solution is to save business by firing workers and cutting the wages of those who still have their jobs. If they really understood the place of inequality in all of this they would raise wages and benefits so that a real economic stimulus would be accomplished. Instead, Obama’s economic experts Geithner and Summers increase inequality because wages cannot be raised, yet they want consumers to spend as if wages don’t matter which just increases their debt and causing more and more poverty, does. These once middle class people now show up at soup kitchens and food pantries. Obama’s solutions are just the newest version of Finance capital’s mantra that the financial profits of the rich are based on the increased debt of ordinary people. As a result of the continuation of capitalism real politics, dressed up with Obama’s “Yes we can,” ideology and with no real change results in more and more middle and working class people sinking into poverty, which continues to become evermore ordinary and now they too have only “a little food and cold storage.”
Filed under: american studies, economics/business, political science | Tagged: african american, AIG, banks, bedstuy, brooklyn, depression, economy, finance, obama, poverty | 1 Comment »