Everything New is Old Again
Do you ever get that feeling that when you look back at your life it is not a singular narrative, but a string of disjointed events that make absolutely no sense when strung together? A change happened sometime after Ronald Reagan’s presidency when empty consumerism became the point of the economy. Yet, I still remember when Fed Chairman Paul Volker, chomping his cigar at the beginning of Reagan’s presidential term raised interest rates to double digits topping out at 20%. The argument at the time was raising the fed funds rate was the only way to control inflation and that the related consequence of high unemployment was not too high. The theory was that business needed the relief so that they would have spare cash to invest again. Investment caused the economy to grow and whether workers had cash or not was inconsequential.
I was raised by depression era parents, in a working class town. The rhythm of life in Kaukauna in the 1950s was controlled by the mill whistle at Thilmany’s. My parents were used to doing with little or with nothing. My dad used to tell a joke about when he was a kid you could go to the drugstore and you could buy a whole lunch bag overflowing with candy for a penny. We were astounded. But, of course he explained, nobody had a penny.
I had a row of peas and a row of green beans that were mine in my parents’ garden. In the fall the kitchen was totally given over to canning. Meal making went out the window, but our compensation was the homemade bread that we would have for dinner. So hot out of the oven you could barely hold it and yet so good. Nothing I’ve had since comes close.
My courageous Aunt Gerry would make two trips up north, one to Door County to buy cherries for pie. We would take turns with the cherry pitter poking the hard stones out of the inedibly bitter fruit. No one but Mom got to touch the pie crusts. We ended up with a freezer full of pies to last us the coming year. Aunt Gerry’s second trip was to the upper peninsula where she bought (gasp) margarine and smuggled it back across the Michigan Wisconsin border. It was illegal at the time to sell margarine in the dairy state.
That all sounds unbelievably romantic now, doesn’t it? But, few of us have the resources to live that way anymore, as many of us are finding out in the era of COVID.
Sometime in the 1990s the economic argument was turned upside down and the only way to save the economy was through empty consumerism. People joked about doing their part and borrowed to spend, spend, spend. That conversation is being upended now that conservative economists have embraced austerity, particularly personal austerity where like Goldilocks all of the nation’s problems are caused by the precariat spending too little or too much or just spending wrong.
Note: Hourly compensation is of production/nonsupervisory workers in the private sector, and productivity is for the total economy.
Source: Lawrence Mishel’s analysis of unpublished total economy data from Bureau of Labor Statistics, Labor Productivity and Costs program, and Bureau of Economic Analysis, National Income and Product Accounts public data series.
http://www.epi.org/publication/ib330-productivity-vs-compensation/
The financialization of the economy changed everything. A major component of gross national product now consists of the cost of money, a large portion of personal expenses consists of servicing the debt that must be incurred for a small family to maintain a modest lifestyle. In the above graph we can see that productivity gains stopped going to workers around the same time Reagan took part in his major union busting activities. The area between productivity and hourly compensation is the money that people would have earned if this rift hadn’t happened, the money that was replaced by borrowing. This is the economy that is fractured under safer at home measures.
A few years ago the house I grew up in was torn down. No trace of Dad’s garden remains. Although, baking bread and gardening are lovely and I encourage them, its time to imagine what we want the future to look like. This might take more work than nostalgia, but like bread too hot to hold it might be worth it.