Here is hollowed-out America, an economy of ever-greater financial
wealth piling up in the hands of the few while tens of millions of wage-earners
can't afford what was available to everyone, even the working class, in
previous eras.
America is being hollowed out, but since we don't measure what actually
matters, the decline has been deep-sixed by the government and media. As I explain in my new book Will You Be Richer or Poorer?, there are a number of
reasons why what's important --social capital, for example--doesn't get
measured.
The most obvious reason is that
it's politically inconvenient for those in power for the hollowing out of
America to be quantified. To conceal the decline, institutions only measure what can be
massaged to appear positive. These statistics include inflation (Consumer Price Index,
CPI),the unemployment rate, Gross Domestic Product (GDP), and hundreds of
financial numbers: net wealth, bank loans and so on.
Everyone
knows from experience that big-ticket expenses such as healthcare (see chart
below), childcare, rent, college tuition, etc. have been rising at double-digit
rates, whileshrinkflation has reduced the
quantity and quality of goods even as price has remained unchanged.
In other words, the official statistics are gamed to appear positive even
as the nation is being hollowed out. People sense the
disconnect but since what actually matters isn't measured, there are few
objective indicators of the decline we all experience in everyday life.
The second reason is that it's
difficult to measure intangible forms of capital such as social
mobility and shared purpose. People are feeling increasingly insecure
financially, but how do we measure this with any accuracy? We can track the
number of people working second jobs in the gig economy, those with uncertain
work schedules, etc., but even households with above-average incomes and
conventional white-collar jobs are financially precarious in ways that don't
lend themselves to easy quantification.
And so
while we're constantly told the American consumer is in good shape, with
manageable debt and rising incomes, in the real world auto loan defaults are
soaring, 40% of those suffering from cancer are wiped out by the co-pays, and
superficially middle-class households are one layoff away from default and
insolvency.
As a result, we're like the
blind men touching different parts of the elephant and drawing completely
erroneous conclusions about the size and nature of the animal. Much of what we
measure is misleading (i.e. cheerleading), and what can't be easily measured is
dismissed as unimportant. Even worse, we conclude that since we can't measure
it easily, it doesn't exist.
America is being hollowed out
even as we're constantly hectored that all is well. We're told
saving $10 on a pair of poorly made shoes is a tremendous benefit of
globalization and neoliberal policies, but does a couple hundred dollars in
savings on poorly made stuff (which is itself offset by an unmeasured decline
in quality and durability) offset the fact that a huge swath of American
households can no longer afford to rent their own apartment or house, much less
buy a house?
Does this
modest reduction in the cost of consumer goods offset the upward-spiraling cost
of healthcare that is bankrupting small business and households? Does it offset
the stagnation of wages for the majority of wage-earners? Does it offset the
insecurity of work and benefits? Does it offset the decline of competition and
the subsequent domination of profiteering monopolies and cartels in the
American economy?
The U.S. Only Pretends to Have Free Markets From plane tickets to cellphone
bills, monopoly power costs American consumers billions of dollars a year.
These are the forces hollowing
out America: the relentless rise of the cost of big-ticket essentials while
wages stagnate for the bottom 80%; the normalization of profiteering monopolies
and cartels who buy tax breaks and regulatory capture in our pay-to-play political system; the decline of social mobility; the erosion
of shared purpose and social capital; the silencing of dissent and independent
thought; the erosion of financial security as everyone is forced into risky
casinos of speculative financialization; the erosion of the rule of law as the super-wealthy
are more
equal than everyone else; the criminalization of poverty; the decline of small business
formation; the erosion of well-being and health; and so on in a long list of
landslides in everything that matters that we don't dare measure.
Most
perniciously, America is being hollowed out as local enterprises that
reinvested profits back into their own communities have been wiped out by
monopolies and cartels drawing upon unlimited credit lines of cheap money
supplied by the Federal Reserve and other central banks, a system that
guarantees the top few will collect whatever "wealth" is being
generated by globalization and financialization: The 1% grabbed 82% of all wealth created in 2017 (and
2018 and 2019...).
Here is hollowed-out America, an economy of ever-greater financial
wealth piling up in the hands of the few while
tens of millions of wage-earners can't afford what was available to everyone,
even the working class, in previous eras: to buy a family home, however modest;
to be able to afford to have children; to build meaningful capital; to have a
positive social role in the community; to have a say in the political system;
to have the opportunity to become self-employed without gambling the entire
family's capital on the venture; access to the ladder of social mobility and
access to the shared capital of a functional government and infrastructure.
The whole
point my book Will You Be Richer or Poorer? is to contrast the
happy story reflected by what we do measure-- an endless increase in financial
wealth--with the disturbing account of what we're losing or have already lost
that we don't dare measure lest it reveal how little is left of America's
non-financial wealth.
Here's your 2% annual
inflation:
My recent books:
Will You Be Richer or Poorer? Profit, Power and A.I. in a
Traumatized World (Kindle $6.95, print $11.95) Read
the first section for free (PDF).
Pathfinding our Destiny: Preventing the Final Fall of Our
Democratic Republic ($6.95 (Kindle), $12 (print), $13.08 ( audiobook): Read the first section for free (PDF).
The Adventures of the Consulting Philosopher: The Disappearance
of Drake $1.29 (Kindle), $8.95 (print); read the
first chapters for free (PDF)
Money and Work Unchained $6.95 (Kindle), $15
(print) Read the first section for free (PDF).
