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If We’re Not In A Recession, How Come Our Food Banks Are Empty? |
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On July 9, McCain economic advisor Phil Gramm made these now famous comments about the state of the economy:
You’ve heard of mental depression.  This is a mental recession. We have sort of become a nation of whiners.  You just hear this constant whining, complaining about a loss of competitiveness, America in decline. We’ve never been more dominant.
Gramm’s words are insensitive in multiple ways. First, he implies that depression, which is a serious illness with a distinctive biochemical cause, is nothing more than griping about non-existent problems. He should apologize to the 35 million Americans who will suffer from the disease during their lifetimes.
While he’s at it, Gramm might also want to say that he’s sorry to the following people whose desperate economic situations he has minimized:
- The 2.5 million Americans who will have their homes foreclosed in 2008 (up 50% over 2007).
- The 3 million Americans who are without jobs since unemployment rose from 4.5 to 5.5 in the last year.
- The untold millions of hungry Americans who are driving up demand at regional food banks (Charlotte - up 16%; Seattle - up 25%; Pittsburgh - up 45%; and Tucson - up 39% - just to name a few.)
- The record 37 million Americans living under the offical poverty line for whom the spikes in gas and food prices are more than inconveniences - they’re back-breaking.
But as much as these numbers suggest a recession, Gramm’s unsympathetic analysis is technically correct. Despite the evidence that millions more are struggling this year, the 2008 economy does not fit the definition of recession. A recession is defined as a negative growth in the GDP over two consecutive quarters (the GDP being the total value of goods and services that are produced) - and the first quarter of 2008 actually showed a 1% increase.Â
Perhaps, then, it’s time to redefine the word “recession,” or even to throw it out and choose a new word altogether. The gross domestic product does not represent the welfare of the American people. It represents how much business America is doing. More to the point, it is a measure of how well American corporations are doing. And while they’re not having a particularly good year, American companies on the whole are still prospering.
The problem comes in that people like Gramm equate the success of American business with the economic health of the people. That’s why they fail to acknowledge the real economic difficulties that many Americans are facing. Their interest lies not in seing a roof over every head, food on every table, and health insurance in everybody’s pocket. They are focused on overall productivity and the bottom lines of our corporations and the millionaires who run them.Â
Tomorrow, the advance estimate of the second quarter GDP will be released. If growth is positive, the analysts will declare that the economy is turning around. If it is negative, they will still insist that we are not yet in a recession.Â
But the American people know better. A spade is a spade, and there’s no disputing the fact that times are tough and people are hungry. There’s a huge difference bewteen whining and telling the truth.  Â
