recession – Unspoken Politics

It’s 1860 Again (Without A Lincoln)

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So, it’s an election year. The country is falling apart- both in the long-term crumbling of infrastructure, education, and health care, and the short-term of the COVID-19 epidemic killing thousands of Americans a year. The President, obsessed with “re-opening the economy” to prevent an (inevitable) massive recession just before the November election, is trying to rally people to engage in mass protest to attack sensible Democratic governors who are ignoring him and choosing to side with public health- and acting in regional cooperation (in the Midwest, West Coast, and Northeast regions to name a few) as states rather than taking advice from the federal government. Trump is seeing his authority slip through his fingers, and is thus stoking popular fury in an attempt to win it back. Whether this is just mass protest, which will spread coronavirus faster, or armed attacks, remains to be seen. What is clear is that the country has conclusively and thoroughly gone to Hell.

This isn’t the first election year that’s taken place in Hell. There was 1932, in the midst of the Great Depression. 1940 and 1944, while World War II was raging. 1968, as the Vietnam War was peaking and left-wing mass protest threatened to overwhelm a divided Democratic Party, which ultimately lost due to Nixon’s subterfuge and the racist Southern Strategy.

But this is 1860. As the prospect of an anti-slavery (or anti-expansion of slavery, which to slave owners were one and the same) candidate becoming President, states began to engage in furious rhetoric, voter suppression, and unilateral actions. A Civil War was the fallout of the election, which killed probably about 750,000 people by recent estimates. The country was falling apart, after decades of strife, compromise, and a rising and militant abolitionist movement- ultimately leading to the raid on Harper’s Ferry by John Brown, which drove the slaveholding states into an absolute fury and created a revolutionary situation.

The issue here is that the 1860 election also brought us Abraham Lincoln, one of the best Presidents we’ve ever had- a savvy politician, a strong leader, perhaps the most gifted public speaker in American political history. His strength made both the campaign season and the aftermath of the election a more optimistic time for abolitionists and antislavery states. Though from humble origins, he had by then been proven to be a masterful orator and campaigner who would transform America in his four years in office.

In 2020, we’ve got Joe Biden. Biden is not a great orator- he routinely forgets his train of thought and can barely read from a teleprompter. His leadership is lacking, as he largely disappeared from national view during the initial period of panic about coronavirus, ceding all media time to Donald Trump. And his entire career has been filled with terrible decisions (the Iraq War), racist politics (busing, the crime bill, the War on Drugs), and naked corruption (the bankruptcy bill, Hunter Biden’s $600,000 salary for a Ukrainian energy company during his vice presidency). He is not Lincoln. He’s not even George W. Bush. He has no leadership capability, and thus he might just blow this whole thing.

Screen Shot 2020-04-18 at 9.46.18 AM — Electoral College Predictions as of April 3rd

Biden holds about a five point lead, without having had to debate Trump or make any public appearances. He’s the most sheltered political nominee in history, with the exception perhaps of Reagan during his decline in 1984. Five points nationally is not much, as Hillary won by three and still lost all the key states. Swing state polls have things generally within the margin of error, especially Wisconsin. Biden looks like he will be fighting a defensive war to hold traditional Democratic states Clinton lost (Pennsylvania, Michigan, and Wisconsin). Talk of taking back Ohio or Iowa seem like a pipe dream. And Florida, which would make the Midwest results irrelevant, is filled with voter suppression, attempts to overturn a voter initiative to re-enfranchise ex-felons (which likely will confuse these people and many will not vote due to that confusion), and a crooked Republican governor who will do anything to keep his state red, despite sliding approval ratings in a time where most governors have had residents rally around them. The map is small, the margins are thin, the suppression is total (remember all the 2016 suppression happened in spite of a Democratic president). Biden isn’t Lincoln. And that’s a problem when the country is tearing itself apart.

One missed paycheck from mental health crisis

A new piece in The Atlantic examines the relationship between mental health and long-term unemployment. As they point out, it is a chicken-and-egg problem- does long-term unemployment cause more mental health problems, or are long periods without work a symptoms of existing illness?

That’s a tough relationship to investigate, but it does relate to issue that people with mental illness can have- a much lower tolerance for stress and loss. Losing a job is hard for everyone, but it can trigger a serious episode for someone living day-to-day with schizophrenia or bipolar disorder. Even two years of constant stability have not created any kind of illusion. I am still walking on eggshells. A very stressful set of situations, a few days without access to medication, these things can be the difference between being in recovery and being in crisis.

This piece also brings up another component of mental illness- economic hardship impedes growth and recovery. It’s not just those that work losing their job. Millions living with a diagnosis are on disability or otherwise living on a fixed income. The squeeze is bringing plenty of people to the brink, but mental illness just adds a whole set of other complications.

Every stressor that exists has its own extra, sinister side. And in an America that’s in year eight of a recession with no broad recovery for the most vulnerable, the stressors are many, multiplying, and always just a few wrong turns away.

Kicking the economy for the heck of it

The partial (but substantial) government shutdown has been 24/7 news in the United States. One can approach the impasse from a Constitutional perspective, or discuss the role of government, or how the country should manage its budget and deficit. However, I will shift to a different focus.

The government shutdown is both an immediate and long-term hit to the already tepid economy.

An important thing to realize is that in the neoliberal age where everything is globalized and competition is more level than ever, being the only country with a federal government on time-out is a huge disadvantage. Complex economies are not divided into a purely public and a purely private sector. The Los Angeles Times reports that furloughs and paralysis are already rippling through the private sector– because plenty of private companies require public subsidies, operate out of government-owned buildings or land, or have the government as their major customer.

With regards to the high-tech industry that is so coveted and lucrative, the United States is the only research power that just stopped a lot of its research, or made future funding delayed indefinitely. As scientists explain in a AskScience reddit thread, the shutdown means that grants will be delayed, as will second and third-year funding. If you do field work that can only be done in a certain annual window, funding needs to be guaranteed well in advance. User 99trumpets states from experience that “Anybody who has submitted a proposal for a new grant should (IMHO) have a fallback plan in mind for other support for 2014” and says from the 1995 shutdown “We were in the 3rd year of a three-year NSF grant and the Year 3 funding normally would have been released in October. Even though the shutdown ended in January, we did not finally get our funds till THE FOLLOWING JULY.” After a 2012 presidential campaign that emphasized economic competition with China, having the huge portion of research that requires government funding on hold just means the new innovations and patents will come from them. And if the US gains a reputation as being unreliable, many projects may look for other nations for aid.

A while back, I discussed the important of “industrial production and capacity utilization” in judging economic health. Essentially, what portion of a nation’s economic bits are actually being used, versus standing idle? Idle tools and buildings just depreciate and become outdated, so an inefficient use of them has long term production and employment effects. Well, with this shutdown there is a lot of buildings that are shuttered, transport and tools left unused, and as the effects spread the private sector will replicate what was seen immediately with things like the National Parks. But this isn’t connected to the huge global recession that is still causing turmoil in Europe. This is an unforced error, unique to one country. Everybody else doesn’t have this handicap. Japan will not close down a portion of their office space in order to be fair.

And finally there’s the cutting in food assistance to pregnant women, and other parts of the welfare apparatus, which compounds a collapse in consumer spending. Needy people will shift more (or all) of their money towards food and rent, at the expense of everything else. Also a millionish government workers will have a similar shift.

So besides the idea of fixing the budget or restoring honor and accountability to Washington (heh), there’s the simple fact: any shutdown is an economic hit that didn’t need to happen. You can shift funding, rebalance budgets. But you can’t flip the ‘off’ switch in a bottling factory at any point. If you just do it in the middle of things, it’s going to be a disaster because everything is sensitive and the processes are complex.

When an economy sinks a revolution

The revolutionaries who ousted long-time President Hosni Mubarak demanded bread and social justice, but after two-and-a-half years of military and Muslim Brotherhood rule, the government has made little progress towards those goals.

Al Jazeera English has a comprehensive feature on the economic problems that Egypt has faced in the aftermath of the 2011 revolution. The issues are myriad, mostly rooted in bad debt and low international confidence in the Egyptian pound or their ability to pay back loans. It does raise the question of how a political revolution can keep itself intact, given that some economic hardship is guaranteed.

Economist Ahmed Ghoneim sums up the issues when he says “[Morsi’s administration] was only thinking of politics, not the economy.” While the Muslim Brotherhood had persisted as a political entity for over eighty years, they were unable to address fundamental problems and have ministers that were both loyal to the Brotherhood and skilled at their job. Ultimately that political support begins to dry up, as the unemployment rate, GDP per capita growth rate, and currency value begin to worsen.

Revolutions like those in Egypt also suffer from what could become a self-fulfilling prophecy. The chaos and danger of large-scale protests, police and military action, and political upheaval can be deadly to tourism and foreign financing. The feature describes the shop owners, travel agents, and museum guides without clients, and large loans from the IMF and other Islamic countries being difficult to secure due to risk and a lack of backing from large banks. If there are economic roots in the 2011 upheaval, they are difficult to solve in the aftermath. Cutting corruption and getting new diplomatic ties can help, but it may not be enough.

I think of how many Latin American and African revolutions have been reversed when economic progress was promised, then not delivered. While a lack of democracy and civil rights are a key reason that revolutions happen, demand for bread and jobs are just as powerful reasons- if often implicit.

The lack of focus and direction in Egypt’s post-revolution economy was where Morsi’s political skills withered. The kind of things a good economic minister does are not politically popular. They are not the things you win elections running on- tax increases, harsh adjustments to please foreign lenders- but they are how you solve systemic problems. Hopefully a new administration will understand that.

There is a quote attributed to various great leaders, that a society is three missed meals away from anarchy. Ultimately it comes down the basics. If it gets bad, it doesn’t matter who’s in power, or what they believe or promise.