Author Topic: Our Miserable 21st Century  (Read 8376 times)

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Our Miserable 21st Century
« on: February 22, 2017, 12:39:10 PM »
Interesting article...

https://www.commentarymagazine.com/articles/our-miserable-21st-century/

Quote
Our Miserable 21st Century
From work to income to health to social mobility, the year 2000 marked the beginning of what has become a distressing era for the United States

NICHOLAS N. EBERSTADT / FEB. 15, 2017

On the morning of November 9, 2016, America’s elite—its talking and deciding classes—woke up to a country they did not know. To most privileged and well-educated Americans, especially those living in its bicoastal bastions, the election of Donald Trump had been a thing almost impossible even to imagine. What sort of country would go and elect someone like Trump as president? Certainly not one they were familiar with, or understood anything about.
Whatever else it may or may not have accomplished, the 2016 election was a sort of shock therapy for Americans living within what Charles Murray famously termed “the bubble” (the protective barrier of prosperity and self-selected associations that increasingly shield our best and brightest from contact with the rest of their society). The very fact of Trump’s election served as a truth broadcast about a reality that could no longer be denied: Things out there in America are a whole lot different from what you thought.

Yes, things are very different indeed these days in the “real America” outside the bubble. In fact, things have been going badly wrong in America since the beginning of the 21st century.

It turns out that the year 2000 marks a grim historical milestone of sorts for our nation. For whatever reasons, the Great American Escalator, which had lifted successive generations of Americans to ever higher standards of living and levels of social well-being, broke down around then—and broke down very badly.

The warning lights have been flashing, and the klaxons sounding, for more than a decade and a half. But our pundits and prognosticators and professors and policymakers, ensconced as they generally are deep within the bubble, were for the most part too distant from the distress of the general population to see or hear it. (So much for the vaunted “information era” and “big-data revolution.”) Now that those signals are no longer possible to ignore, it is high time for experts and intellectuals to reacquaint themselves with the country in which they live and to begin the task of describing what has befallen the country in which we have lived since the dawn of the new century.

II

Consider the condition of the American economy. In some circles people still widely believe, as one recent New York Times business-section article cluelessly insisted before the inauguration, that “Mr. Trump will inherit an economy that is fundamentally solid.” But this is patent nonsense. By now it should be painfully obvious that the U.S. economy has been in the grip of deep dysfunction since the dawn of the new century. And in retrospect, it should also be apparent that America’s strange new economic maladies were almost perfectly designed to set the stage for a populist storm.

Ever since 2000, basic indicators have offered oddly inconsistent readings on America’s economic performance and prospects. It is curious and highly uncharacteristic to find such measures so very far out of alignment with one another. We are witnessing an ominous and growing divergence between three trends that should ordinarily move in tandem: wealth, output, and employment. Depending upon which of these three indicators you choose, America looks to be heading up, down, or more or less nowhere.

From the standpoint of wealth creation, the 21st century is off to a roaring start. By this yardstick, it looks as if Americans have never had it so good and as if the future is full of promise. Between early 2000 and late 2016, the estimated net worth of American households and nonprofit institutions more than doubled, from $44 trillion to $90 trillion. (SEE FIGURE 1.)


Although that wealth is not evenly distributed, it is still a fantastic sum of money—an average of over a million dollars for every notional family of four. This upsurge of wealth took place despite the crash of 2008—indeed, private wealth holdings are over $20 trillion higher now than they were at their pre-crash apogee. The value of American real-estate assets is near or at all-time highs, and America’s businesses appear to be thriving. Even before the “Trump rally” of late 2016 and early 2017, U.S. equities markets were hitting new highs—and since stock prices are strongly shaped by expectations of future profits, investors evidently are counting on the continuation of the current happy days for U.S. asset holders for some time to come.

A rather less cheering picture, though, emerges if we look instead at real trends for the macro-economy. Here, performance since the start of the century might charitably be described as mediocre, and prospects today are no better than guarded.

The recovery from the crash of 2008—which unleashed the worst recession since the Great Depression—has been singularly slow and weak. According to the Bureau of Economic Analysis (BEA), it took nearly four years for America’s gross domestic product (GDP) to re-attain its late 2007 level. As of late 2016, total value added to the U.S. economy was just 12 percent higher than in 2007. (SEE FIGURE 2.) The situation is even more sobering if we consider per capita growth. It took America six and a half years—until mid-2014—to get back to its late 2007 per capita production levels. And in late 2016, per capita output was just 4 percent higher than in late 2007—nine years earlier. By this reckoning, the American economy looks to have suffered something close to a lost decade.


But there was clearly trouble brewing in America’s macro-economy well before the 2008 crash, too. Between late 2000 and late 2007, per capita GDP growth averaged less than 1.5 percent per annum. That compares with the nation’s long-term postwar 1948–2000 per capita growth rate of almost 2.3 percent, which in turn can be compared to the “snap back” tempo of 1.1 percent per annum since per capita GDP bottomed out in 2009. Between 2000 and 2016, per capita growth in America has averaged less than 1 percent a year. To state it plainly: With postwar, pre-21st-century rates for the years 2000–2016, per capita GDP in America would be more than 20 percent higher than it is today.

The reasons for America’s newly fitful and halting macroeconomic performance are still a puzzlement to economists and a subject of considerable contention and debate.1Economists are generally in consensus, however, in one area: They have begun redefining the growth potential of the U.S. economy downwards. The U.S. Congressional Budget Office (CBO), for example, suggests that the “potential growth” rate for the U.S. economy at full employment of factors of production has now dropped below 1.7 percent a year, implying a sustainable long-term annual per capita economic growth rate for America today of well under 1 percent.

Then there is the employment situation. If 21st-century America’s GDP trends have been disappointing, labor-force trends have been utterly dismal. Work rates have fallen off a cliff since the year 2000 and are at their lowest levels in decades. We can see this by looking at the estimates by the Bureau of Labor Statistics (BLS) for the civilian employment rate, the jobs-to-population ratio for adult civilian men and women. (SEE FIGURE 3.) Between early 2000 and late 2016, America’s overall work rate for Americans age 20 and older underwent a drastic decline. It plunged by almost 5 percentage points (from 64.6 to 59.7). Unless you are a labor economist, you may not appreciate just how severe a falloff in employment such numbers attest to. Postwar America never experienced anything comparable.


From peak to trough, the collapse in work rates for U.S. adults between 2008 and 2010 was roughly twice the amplitude of what had previously been the country’s worst postwar recession, back in the early 1980s. In that previous steep recession, it took America five years to re-attain the adult work rates recorded at the start of 1980. This time, the U.S. job market has as yet, in early 2017, scarcely begun to claw its way back up to the work rates of 2007—much less back to the work rates from early 2000.

As may be seen in Figure 3, U.S. adult work rates never recovered entirely from the recession of 2001—much less the crash of ’08. And the work rates being measured here include people who are engaged in any paid employment—any job, at any wage, for any number of hours of work at all.

On Wall Street and in some parts of Washington these days, one hears that America has gotten back to “near full employment.” For Americans outside the bubble, such talk must seem nonsensical. It is true that the oft-cited “civilian unemployment rate” looked pretty good by the end of the Obama era—in December 2016, it was down to 4.7 percent, about the same as it had been back in 1965, at a time of genuine full employment. The problem here is that the unemployment rate only tracks joblessness for those still in the labor force; it takes no account of workforce dropouts. Alas, the exodus out of the workforce has been the big labor-market story for America’s new century. (At this writing, for every unemployed American man between 25 and 55 years of age, there are another three who are neither working nor looking for work.) Thus the “unemployment rate” increasingly looks like an antique index devised for some earlier and increasingly distant war: the economic equivalent of a musket inventory or a cavalry count.

By the criterion of adult work rates, by contrast, employment conditions in America remain remarkably bleak. From late 2009 through early 2014, the country’s work rates more or less flatlined. So far as can be told, this is the only “recovery” in U.S. economic history in which that basic labor-market indicator almost completely failed to respond.

Since 2014, there has finally been a measure of improvement in the work rate—but it would be unwise to exaggerate the dimensions of that turnaround. As of late 2016, the adult work rate in America was still at its lowest level in more than 30 years. To put things another way: If our nation’s work rate today were back up to its start-of-the-century highs, well over 10 million more Americans would currently have paying jobs.

There is no way to sugarcoat these awful numbers. They are not a statistical artifact that can be explained away by population aging, or by increased educational enrollment for adult students, or by any other genuine change in contemporary American society. The plain fact is that 21st-century America has witnessed a dreadful collapse of work.

For an apples-to-apples look at America’s 21st-century jobs problem, we can focus on the 25–54 population—known to labor economists for self-evident reasons as the “prime working age” group. For this key labor-force cohort, work rates in late 2016 were down almost 4 percentage points from their year-2000 highs. That is a jobs gap approaching 5 million for this group alone.

It is not only that work rates for prime-age males have fallen since the year 2000—they have, but the collapse of work for American men is a tale that goes back at least half a century. (I wrote a short book last year about this sad saga.2) What is perhaps more startling is the unexpected and largely unnoticed fall-off in work rates for prime-age women. In the U.S. and all other Western societies, postwar labor markets underwent an epochal transformation. After World War II, work rates for prime women surged, and continued to rise—until the year 2000. Since then, they too have declined. Current work rates for prime-age women are back to where they were a generation ago, in the late 1980s. The 21st-century U.S. economy has been brutal for male and female laborers alike—and the wreckage in the labor market has been sufficiently powerful to cancel, and even reverse, one of our society’s most distinctive postwar trends: the rise of paid work for women outside the household.

In our era of no more than indifferent economic growth, 21st–century America has somehow managed to produce markedly more wealth for its wealthholders even as it provided markedly less work for its workers. And trends for paid hours of work look even worse than the work rates themselves. Between 2000 and 2015, according to the BEA, total paid hours of work in America increased by just 4 percent (as against a 35 percent increase for 1985–2000, the 15-year period immediately preceding this one). Over the 2000–2015 period, however, the adult civilian population rose by almost 18 percent—meaning that paid hours of work per adult civilian have plummeted by a shocking 12 percent thus far in our new American century.

This is the terrible contradiction of economic life in what we might call America’s Second Gilded Age (2000—). It is a paradox that may help us understand a number of overarching features of our new century. These include the consistent findings that public trust in almost all U.S. institutions has sharply declined since 2000, even as growing majorities hold that America is “heading in the wrong direction.” It provides an immediate answer to why overwhelming majorities of respondents in public-opinion surveys continue to tell pollsters, year after year, that our ever-richer America is still stuck in the middle of a recession. The mounting economic woes of the “little people” may not have been generally recognized by those inside the bubble, or even by many bubble inhabitants who claimed to be economic specialists—but they proved to be potent fuel for the populist fire that raged through American politics in 2016.

III

So general economic conditions for many ordinary Americans—not least of these, Americans who did not fit within the academy’s designated victim classes—have been rather more insecure than those within the comfort of the bubble understood. But the anxiety, dissatisfaction, anger, and despair that range within our borders today are not wholly a reaction to the way our economy is misfiring. On the nonmaterial front, it is likewise clear that many things in our society are going wrong and yet seem beyond our powers to correct.

Some of these gnawing problems are by no means new: A number of them (such as family breakdown) can be traced back at least to the 1960s, while others are arguably as old as modernity itself (anomie and isolation in big anonymous communities, secularization and the decline of faith). But a number have roared down upon us by surprise since the turn of the century—and others have redoubled with fearsome new intensity since roughly the year 2000.......


To see the rest of part III and part IV please click link...

https://www.commentarymagazine.com/articles/our-miserable-21st-century/
In a boat at sea one of the men began to bore a hole in the bottom of the boat. On being remonstrating with, he answered, "I am only boring under my own seat." "Yes," said his companions, "but when the sea rushes in we shall all be drowned with you."