Beinhart's Body Politic

'It's the economy stupid"

by Larry Beinhart, January 24, 2008

It’s official.
Talk of recession.
We might or might not be in one. If we’re not in one, one might or might not be coming. But we are officially talking about it.

Most of the talk is warm and reassuring. Which is a good trick, considering the subject. According to NPR, the Wall Street Journal, the Washington Post, and the New York Times, the economy is just fine and dandy, it just needs a few twitches and tweaks. Monetary policy! That’s the answer! The Fed will cut the interest rate. George Bush will come in with a new stimulus package (tax cuts, tax cuts, make my tax cuts permanent!) and Nancy Pelosi (the Queen of Effective Politics) will come out with her version (tax cuts, tax cuts!). And it will be fixed.
The general public is much more concerned. We were concerned even before this talk of recession.
Why do regular folks feel different than the pros?

Because they live in different economies.

The politicians, the pundits, and the economists live in, or serve the people who live in, a world that’s awash with money. Trillions of dollars are floating around, growing and growing.

But the average person makes about $75 dollars less a week than back in 1973 (source: Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense [and Stick You With the Bill] by David Cay Johnston). The price of gas and heating oil has doubled in the Bush years, medical costs have gone up about 80 percent, education costs more, local taxes are up, pensions have disappeared, Social Security is threatened, and, worst of all, we don’t expect our children to do better than we have done.