BMBS

When you ride a Ferris wheel, you might wonder about the strength of the struts or the quality of the maintenance.  You can be forgiven, like the fair-goers in a small Australian town yesterday, for not thinking a light airplane would crash into you.  (No one was killed.)

Washington Post columnist Steven Pearlstein puts it succinctly:  “Take one financial crisis, fold in a federal budget crisis, add in a nasty recession and mix with two decades of rapid globalization, and what you have is a recipe for the deep economic insecurity now felt by much of the American middle class.

“What has been revealed is that the systems set up during an industrial era to provide health care, retirement income and support during economic downturns are inadequate for and ill-suited to our post-industrial, globalized economy. Not only do these systems no longer provide the economic security Americans crave, but they have reduced the efficiency and flexibility of labor markets, exacerbated the growth of income inequality and reduced the competitiveness of American companies.”

But the debate seems to be about turning backward.

Author Barbara Ehrenreich has documented how the wealthy and their political allies claim the rich are being demonized in these difficult times — a not-surprising thing as everyone else loses ground.  But she also points out how strong the defense of the wealth is, even among groups that traditionally sympathized with the poor.

In an essay in the Washington Post this weekend, she said:  “In fact, if you keep your ears open, you can hear the praises of the rich ringing out almost everywhere. Evangelical Christianity, for example, once harbored an ancient biblical bias in favor of the poor, but now, at least in its high-profile megachurch manifestations, it has abandoned the book of Matthew for a ‘prosperity gospel’ that counts wealth as a mark of God’s favor.”

She added:  “Nor should we forget those secular evangelists in the motivation industry who have advocated selflessly for the rich for years, as in these instructions from the 2005 bestseller ‘Secrets of the Millionaire Mind’: ‘Place your hand on your heart and say . . . ‘I admire rich people!’ ‘I bless rich people!’ ‘I love rich people!’ ‘And I’m going to be one of those rich people too!’’

The good news:  The American Human Development Project, a social research organizationm, has published an analysis of recent Census Bureau data that shows that the gap between men’s and women’s wages is closing.

The bad news:  It’s because men’s salaries are falling.

Median earnings for men, adjusted for inflation, fell by $2,433 — or 6 percent — from 2007 to 2010. Women’s earnings fell by just $253 in the same period, a drop of 0.9 percent.  As the New York Times reported, some of the recession’s steepest declines were in industries that tend to be dominated by men. Earnings in construction, for example, fell by 5 percent, the analysis found. Meanwhile, median earnings in health care and technical occupations, popular among women, increased by 3 percent.

But the main reason is that only a few are getting ahead in this economy.

The Washington Post reported the following:

Chinese officials, their nation’s growth linked to exports to Europe and the United States, joined the criticism, arguing that the ongoing sense of crisis showed the shortcomings of western-style democracy and culture.

“The issue is whether Europe can make a decision,” given the 17 parliaments that must approve an expansion to the euro’s bailout fund, Gao Xiqing, president of the state-owned China Investment Corp., said at an IMF panel discussion on Europe.

“You come down to the ultimate question: Can you pull it off?” Gao said. “Culturally, you need to change your way of living and change your way of spending.”

A Baylor University survey found that people who strongly believe in an engaged God who “has a plan for me” were much more likely to agree that “the government does too much” and that “able-bodied people who are out of work shouldn’t receive unemployment checks.”

According to a summary in the Christian Science Monitor, such people tended to earn less and be less educated than those who don’t believe God has a plan for them. By contrast, those who believe that God is more removed from day-to-day affairs – or who don’t believe in God at all – are more likely to reject small government and economic conservatism.

Bottom line, though, is that everyone needs an assist from time to time.

One of our two parties argues that Americans don’t want government services and, indeed, a recent ABC News/Washington Post poll found that 56 percent of Americans said they wanted smaller government and fewer services. Yet, as Cornell professor Suzanne Mettler reports, the vast majority of Americans have at some point relied on government programs — and valued them — even though they often fail to recognize that government is the source of the assistance.

According to Mettler:  A 2008 poll of 1,400 Americans by the Cornell Survey Research Institute found that when people were asked whether they had “ever used a government social program,” 57 percent said they had not. Respondents were then asked whether they had availed themselves of any of 21 different federal policies, including Social Security, unemployment insurance, the home-mortgage-interest deduction and student loans. It turned out that 94 percent of those who had denied using programs had benefited from at least one; the average respondent had used four.

When children show the same contradictions regarding support from their families, we call them spoiled brats.

Treasury Secretary Geitner went to Europe last week to offer the Europeans “some advice on fixing Europe’s sovereign debt and banking problems” (according to the New York Times).  One specific admonition to the finance ministers was to pump money into their economies now to try to avert a financial downturn, even as they work to reduce longer-term indebtedness.  He also encouraged them to “act decisively” and to “speak with one voice.”

The Euros tend to be diplomatic, but they had difficulty holding back the guffaws.  Said the Austrian finance minister:  “I found it peculiar that, even though the Americans have significantly worse fundamental data than the euro zone, that they tell us what we should do.  I had expected that, when he tells us how he sees the world, that he would listen to what we have to say.”

Matthew 7-3:  “And why worry about a speck in your friend’s eye when you have a log in your own?”

The Associated Press has reported that Americans’ wealth declined this spring for the first time in a year, as stocks and home values fell. At the same time, corporations increased the size of their cash stockpiles.

According to the Federal Reserve’s Flow of Funds report, household net worth dropped 0.3 percent to $58.5 trillion in the April-June quarter.  Corporations, on the other hand, held a record $2 trillion in cash at the end of June, an increase of 4.5 percent from the January-March quarter.

As the AP concludes:  When people feel poorer, they spend less. That slows growth. Businesses then respond by cutting back on hiring and expansion plans. It can become a cycle.

Pretty simple.

Various media have reported on a nationwide study that shows that tougher licensing laws for teenage drivers have reduced deadly accidents among 16- and 17-year-olds — but that it increased the fatal crash rate among 18-year-olds.  The “graduated driver license” programs are credited with a 30 percent drop in fatalities among new drivers.  When researchers looked at the impact on all young drivers, however, they found that 18- and 19-year-old drivers were dying a a higher rate.  Said a researcher:  “In fact, 75 percent of the fatal crashes we thought we were saving actually just occurred two years later. It’s shocking.”

Even if we’re still 25 percent ahead of the game, something’s wrong with this picture.