Tuesday, September 21, 2010

An Un-Commons Recovery

On Monday, the announcement came out that the recession officially ended last summer. The chatter online was that the “egg-head” economists are out of touch with the economic woes of people on the ground; and setting aside the technicalities about how the National Bureau of Economic Research determines what constitutes a recession and when it comes to an end, there is wisdom in our skepticism about the recession’s “end.” There’s also a commons angle to the ‘cognitive dissonance’ created by news of economic recovery in spite of our real-life experience of job losses, foreclosures and troubles making ends meet.

The sad fact is that the recovery isn’t something that’s being held in common.

The economic growth over the last year has not only been “anemic,” it’s also been highly targeted. The rich have rebounded very quickly in this “recovery” but the rest of us are still struggling.

The number of people with more than $1 million in assets grew by more than 17% last year, thanks to the surge in the stock market; but the U.S. poverty rate rose to 14.3%. At the beginning of this year, companies had the highest share of assets in cash since the early 1960s because they were sitting on cash instead of using it to hire back workers and create new jobs. In fact, FedEx announced last week that it was planning to cut 1,700 jobs, even though its “first-quarter net income doubled”.

But this isn’t new. Over the last two decades, the economy has been structured to benefit a few, while the rest of us tread water or go under. The New York Times created this chart that shows job growth (or losses) following the end of a recession. It’s not just a coincidence that the recessions of the 70s and early 80s were followed by major job growth, but the more recent recessions were jobless. The trickle-down economic theory of the 80s -- which justified de-regulation, attacks on unions, and tax cuts for the rich -- fundamentally re-structured our economy in a decidedly Un-Commons direction.

It's time to re-think and re-structure our economy so that the recovery doesn't continue to be privatized for a few, but can instead strengthen our Commons.

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