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Once again: it's the economy, stupid
With all the economic news in the last few days, Simon and Rob just sent out this e-mail to NDN's list.
TO: NDN List
FROM: Simon Rosenberg
Re: Once again: it’s the economy, stupid.
A lot of attention this week has gone on two of the worst failures of conservative governance, the anniversary of Hurricane Katrina and the civil war in Iraq. But there is a third problem that is also beginning to rise up the agenda: the fact that economy is not working for most Americans. This administration seems almost indifferent to the fact that even as GDP and productivity have increased, the wages and incomes of most Americans have declined. And while the economic story is the most complicated of the three, its long-term damage to the country will be no less severe.
This week we’ve seen new data on incomes and wages. Yesterday the Census Bureau released figures that confirm deep economic problems for most Americans. The Bureau reported one of the smallest increases in median income on record for this stage in an economic recovery. Yet, even after this increase, median incomes are still 5.9% lower today than when President Bush took office. Even more worryingly, yesterday’s rise is entirely explained by gains for richer and older Americans. The median incomes of people of working age actually fell, by $275, over the last year. In short, our growing economy is not working for ordinary Americans.
Declining wages lie behind yesterday’s disappointing figures. As NDN’s Robert J. Shapiro said at the launch of our Globalization Initiative earlier this year “we’ve seen the strongest four-year growth spurt since the early 1970s – with no meaningful increases in real wages.” In fact, four full years into an economic expansion, real wages are actually falling for most Americans. If the economy begins to slow significantly there is a very real chance that this will be the first economic expansion in modern times with no real increase in American wages.
Put simply, most Americans are getting paid less than when Bush became President. This administration has the worst record on incomes and wages since World War II.
Does the administration have a plan to fix this? No. In fact, not only do they rarely admit the problem, they are actually deceitful in presenting the figures. Yesterday Bush’s budget director Rob Portman was quoted as saying “wages are rising” in America. The President himself, speaking on July 10th, said productivity gains were “leading to higher wages and a higher standard of living for our people.” Yet anyone who saw the front page headline of Monday’s New York Times – “Real Wages Fail to Match a Rise in Productivity” – knows that the Republicans are not being truthful with the American people over wages.
Most Americans aren’t gaining from this economy today. But long-term the situation looks even worse.
- America is borrowing billions of dollars daily from foreign governments to fund our huge current account deficit.
- The debt is up more than $2 trillion, passing the bill onto our children.
- Nothing has been done to prepare for the retirement of the Baby Boomers.
- Healthcare costs continue to rise, while the number of insured falls.
- The Doha round has failed, the cost of the war in Iraq grows ever larger, more Americans live in poverty, and the price of basic goods continue to go through the roof.
All of this represents an historic failure of economic stewardship. Progressives have an obligation to help Americans do better. And we all have an obligation to hold the administration to account for its three biggest failures of governance: Iraq, Katrina, and the economy. Next week NDN will be releasing a report which will give an overview of the administration’s economic failure. We are doing our bit to put the economy – and the issue of declining wages – on the agenda. We hope that everyone in our community will help us put these conservative failures front and center in the run in to November’s elections.