The net result is we have an economy that’s supposedly expanding smartly while our well-being and financial security are collapsing.
Gross Domestic Product (GDP) and other metrics of economic activity don’t measure either broad-based prosperity or well-being. Elites skimming financialization profits by expanding corporate debt and issuing more loans to commoners while spending more on their lifestyles boosts GDP quite nicely while the security and well-being of the bottom 90% plummets.
Under the hood of “recovery” and a higher GDP, life has gotten harder and more insecure for the bottom 90%. The key is not to look just at wages (trending up, we’re assured) or inflation (near-zero, we’re assured) but at aspects of daily life (lived experience) that cannot be captured by conventional economic / financial attempts at quantifying the economy.
How do we quantify the cost of the financial anxiety provoked by huge insurance deductibles or staggering healthcare bills? What matters isn’t just whether the patient or their family has to declare bankruptcy because they can’t afford the enormous co-pays: what matters is the debilitating stress caused by having to decide between risking an operation and bankrupting the family or foregoing the operation and hoping for a miracle. Or how about the eventual cost of foregoing healthcare except in emergencies due to having to pay cash for any care due to the high deductibles?
Small stresses add up, leading to chronic stress and a host of debilitating consequences. Consider the daily commute to work, which has become longer and more stressful due to increasing congestion and the limits of public transport infrastructure that hasn’t been improved or expanded in decades. Why New York City Stopped Building Subways (via Mark G.) Unlike most other great cities, New York’s rapid transit system remains frozen in time: Commuters on their iPhones are standing in stations scarcely changed from nearly 80 years ago.
Then there’s financial insecurity. Where is the measure of financial insecurity? How do we quantify the erosion of secure pensions and stable home prices? The average Social Security monthly benefit for 2019 is $1,462, which isn’t enough to rent a studio in many urban areas, and tens of millions of lower-income retirees receive considerably less than this princely sum.
The family home remains the mainstay of middle-class wealth, but its value is now determined by credit bubbles and busts and the relative burdens of property taxes. In the pre-financialization / pre-neoliberal era, house prices tended to rise by a modest percentage over time, more or less the equivalent of a savings account drawing interest as the homeowner paid down the principal and accrued equity. Now every homeowner has been transformed into a gambler who must time the market swings when buying or selling. One mistake can wipe out decades of paper gains. How do we quantify this erosion of the reliability and safety of homes’ market valuations?
Everyone with their retirement savings in a 401K or IRA is also now a gambler whether they accept that reality or not.
But the security of stock market gains is illusory:
The other factor is the concentration of stock ownership in the politically powerful hands of elites.
Fed goosing and corporate buybacks are not solid foundations.
This happy story of the
As I noted in Burnout Nation, the precarious nature of employment and rising workloads are reducing well-being across the board. Again, the tools to accurately quantify the internal states of security and well-being are not the equivalent of measuring GDP: much of the data comes from self-reporting, which is skewed by Americans’ belief that everybody should be upbeat and positive, so we tend to report what others want to hear.
The net result is we have an economy that’s supposedly expanding smartly while our well-being and financial security are collapsing. As I often note here: we optimize what we measure, and if we measure what doesn’t really matter then we’re optimizing the wrong things.
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