Tags: Tankersley | Scully | job | economy

Washington Post's Tankersley Looks at Middle Class

By    |   Monday, 22 Dec 2014 07:52 AM

Jim Tankersley, economic policy correspondent for The Washington Post, appeared on C-SPAN's Washington Journal Dec. 21 to discuss a series Tankersley has written on the struggles of the middle class in the United States as the economy stagnates in the aftermath of the financial crisis episode of 2008.

The story of stagnation, which this writer has labeled "snagflation," is a familiar one. The purpose of this article is to look at the policy ideas Tankersley proposes versus this writer's default hypothesis that the financial system is broken and nothing can be done for anyone but the "too big to fail" banks.

Scully began by asking Tankersley about Ed Green, the face of the story, whom Tankersley called "an amazing man" who used to have a comfortable lifestyle as a union bus driver in New York City. But after he moved to North Carolina to be near his ill mother, he was unable to find comparable employment, so he and his wife have strung together a number of part-time jobs that amount to about 110 hours of work per week.

Tankersley said it is typical for American families to work two more days per week than they did in the 1970s, but they're making less per hour. Tankersley summed up the circumstance with this sentence: "The American economy has stopped delivering." He found that while the economy is still growing, household income has totally stagnated when adjusted for inflation.

Scully posted a fascinating map that illustrates the peak economic times of counties across the country, and it shows 80 percent of counties peaking at least 15 years ago, which Tankersley called "just crazy." He observed that the counties that have done best recently have benefited from the fracking boom. Los Angeles peaked 25 years ago, and he referred to a companion piece on the Rust Belt, where a town peaked in 1969. (This writer grew up in a town in central Pennsylvania that peaked in the 1920s, and never recovered from the Great Depression.)

The series started and ended in Downey, Calif., site of a plot of land Tankersley called "a perfect metaphor for what America's been waiting for for the last 25 years." It's an old rocket plant where the Apollo rockets and the space shuttles were built and once employed 25,000 people in good-paying jobs. The town held out for many years for a comparable employment opportunity but finally decided to bulldoze the plant and replace it with a shopping center.

Tankersley did not use the phrase "Creative Destruction," but he summarized the circumstance as one where the country has been waiting for poor-performing, obsolete industries to be replaced by more dynamic industries, and with the exception of fracking, it hasn't happened.

Scully played a clip from remarks of Rep. Tom Price, R-Ga., probable incoming chairman of the House Budget Committee, who blames policies of the Obama administration for harming prospects for economic growth. Price, who is a physician, blamed the Affordable Care Act, which creates an incentive for employers and workers to move to part-time employment to escape the business mandates of the Act.

Scully asked Tankersley for his suggestions, and Tankersley responded that the first thing to do is to stop focusing on recent events deemed to cause the crisis and focus instead on the longer term, which was marked by two earlier recessions that were followed by weak rebounds. He argued that policy thinking needs to be reframed to focus on talent. He contended that at the same time that people at the bottom are struggling to acquire needed skills, people at the top are too concentrated in industries that don't contribute to the well-being of the economy, specifically finance and lobbying, but rather have contributed to the decline in job creation.

Tankersley ended up calling for more state and federal leadership "to get a strategy, in particular, to free up people to do better things to create better jobs." From this writer's vantage point, this sounds like a call for an "industrial policy." In the meantime, the governing policy is to double down on support for legacy too big to fail banks.

(Archived video can be found here.)

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Robert-Feinberg
Jim Tankersley, economic policy correspondent for The Washington Post, appeared on C-SPAN's Washington Journal to discuss a series Tankersley has written on the struggles of the middle class in the United States as the economy stagnates in the aftermath of the financial crisis episode of 2008.
Tankersley, Scully, job, economy
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2014-52-22
Monday, 22 Dec 2014 07:52 AM
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