The Economy, Recession and Ordinary Folks

Check out The Boom Was a Bust For Ordinary People, by Barbara Ehrenreich from this Sunday's Washington Post:

For years now, that strange stimulus-crazed beast, the economy, has been going its own way, increasingly disconnected from the toils and troubles of ordinary Americans...

So thoroughly is the economy decoupled from ordinary experience that according to a CNN poll, 57 percent of Americans thought we were already in a recession a month ago. Economists may complain that this is only because the public is ignorant of the technical definition of a recession, which specifies at least two consecutive quarters of negative growth. But most of the public employs the more colloquial definition of a recession, which is hard times. And -- far removed from whatever happens on Wall Street, the Nikkei, Dax, or the curiously named FTSE -- most Americans have been living in their own personal recession for years.

The economy, for example, has been expanding, at least until now, and growth is supposed to guarantee general well-being. As long as the gross domestic product grows, World Money Watch's Web site assures us, "so will business, jobs and personal income."

But hellooo, we've had brisk growth for the past few years, as the president has tirelessly reminded us, only without those promised increases in personal income, at least not for the poor and the middle class. According to a study just released by the Economic Policy Institute, real wages actually fell last year. Growth, some of the economists are conceding in perplexity, has been "decoupled" from widely shared prosperity....

Whether you like Ehrenreich or her politics or not, you can't deny that her diagnosis of our ailing economy and the insecure state of working and middle class people is right on target. While so-called experts are debating whether or not the U.S. is officially in a recession, many people haven't noticed a debate was ongoing because they are already living in a state of hard times.
Ehrenreich's prescription is government intervention:

Government intervention, whether short-term or long-term, needs to get to the heart of this problem by offering a hand to the poor and the unemployed. Until the House capitulated to Bush two weeks ago, Democrats seemed to be standing solidly behind a stimulus package that would include an increase in food-stamp allotments and an extension of unemployment benefits, both of which are screamingly obvious measures. Current unemployment benefits last just 26 weeks in most states and end up covering only a third of people who are laid off. Food stamps are in even shabbier shape, with an allotment amounting to about $1 per meal. Nothing could be more stimulating than putting money in the hands of those who will spend it quickly.

But you can't jump-start a car that lacks a working battery. We need less titillating talk about "stimulus" and more commitment to some fundamental repairs -- higher wages, a real safety net and a return to progressive taxation among them. The challenge isn't just to prop up stock prices but to rebuild an economy in which everyone shares the good times -- and no one is consigned to a permanent recession.

This is the point where Ehrenreich might lose some of people who, otherwise, would agree with everything else she says. (See comments section here). While some might agree that the country is experiencing hard times, they are fundamentally opposed to government intervention. Some commenters even go as far as to red-bait Ehrenreich with the boogaboo S-word--Socialism--in an attempt to discredit her and her powerful essay.

I say enough with ridiculous red-baiting. If you agree with Ehrenreich's diagnosis but fundamentally disagree with her prescription what would you offer as a solution?

Cross posted in An Ordinary Person.