America's Invisible Depression
(Why We Don't Get That) America's Been Ripped Apart by a New Great Depression
I've been writing about some pretty dystopian numbers lately. The most recent ones coming out of America. They're genuinely astonishing, heartbreaking, and alarming. Let me give you a little recap (feel free to skip it). Almost half of Americans struggle to afford a budget that includes the basics: food, housing, transportation, healthcare, childcare, and bills. 80% of Americans live paycheck to paycheck. 70% can't raise $1000 for an emergency. The majority have nothing saved for retirement. The average American has a negative net worth — he's never broken even his whole life long.
What do all those numbers say to you? They say three things to me, two of which I've already discussed. One, America's effectively a poor country now. Two, it's a caste society, composed of a tiny class of super rich who became ultra rich, an old poor, and a new poor, the people formerly known as the middle class. And the one I want to focus on in this essay.
America's been undergoing of what I'll call an Invisible Depression. Depressions are cataclysmic things, and America's is no exception. They rip societies apart, pit neighbor against neighbour, test democracy, norms, values, freedom. Sound like America recently to you?
And yet. An Invisible Depression. You don't hear America's plight put like that, do you? If I said to you, "America's having a new form of the Great Depression", you'd probably laugh at me. Where are the breadlines? Where are the hobos? The dust bowl farmers? "Dude! The economy's growing! The stock market's booming! Unemployment's down. Depression? Get a clue, bro!!", might come the rejoinder. And yet the faces, my friends, of America's invisible depression are everywhere around us, hidden in plain sight. I'll come to that. First, though, let me prove America's really having an Invisible Depression to you (and you can judge if I succeed or fail.)
Now, you wouldn't be alone in laughing at my idea that America's undergoing an invisible depression. Every single American pundit and economist would probably agree with you. But should they? They'd agree with you because the technical definition of a depression is a year or more of economic contraction. And hey — the economy's growing! — we can't be in a depression, brah! He doesn't even know how to count!! Grin. They rest their case. But they shouldn't, because that's a (badly) superficial interpretation.
The super rich now take the lion's share of economic growth — and they have done so for a long time. How much is "the lion's share"? Close to 100%, sometimes more than 100% — for example during the decade following the last financial crisis. Since when? Since the 1980s.
In fact, from the period from 1980 to 2014, the average American's share of the distribution of economic growth was negative, not positive. That means that the richest took more than 100% of gains for all those years, while the average person gained less than nothing. In plain English, that means: the average American was living through a depression for the last forty years..and still is.
Yes, really. Think about it with me for a second. If a depression is a "sustained period of economic contraction lasting a year or more"…and the top 1% or 0.1% in the economy are taking more than 100% of the growth in the economy…and sometimes more…what does that mean for everyone else? It means that everyone else is living through a depression. But that's precisely what happened in America for the last forty years.
Welcome to what I call the Invisible Depression. It's not a metaphor, it's not a symbol, it's not an allusion. It's very much the real thing, a bona fide economic depression, just like the 1930s. Which is why history seems to be repeating itself, but I'll come to that. Go ahead and pore over the concepts and numbers all you want — you don't need to be a PhD, anyone, and I mean anyone, has the math skills to be able to follow along and understand here.
(Sure, if you want to be technical, you can subtract the growth rate from that calculation. If the growth rate's two percent, the super rich can get away with taking just 98%, for example, but maybe you see how absurd this is getting. Rather than nitpicking, what you should see is this: how strikingly easy it is to prove America's invisible depression. And how iron-clad the logic is, too. You can't have it both ways, after all. Either a depression is a sustained period of contraction, or it isn't, and if it is, then the super rich taking all the economy's gains or more is a depression for everyone else.)
So where's the face of this depression? The breadlines and dust bowl farmers and so on? It's everywhere. It's in a suicide epidemic amongst middle aged men, who, bereft of hope, stick shotguns in their mouths, in a last desperate cry for support. It's in an opioid epidemic ripping through rusting towns and cities empty of opportunity, hope, chances. It's in young people who can't afford to start families of their own…so they're having less and less sex. It's in a middle class becoming a minority for the first time in history. And then making a classic sharp U turn to authoritarianism, at just the moment of its implosion. It's in farmers losing everything they have — and taking their lives on the land they've loved and nourished.
America's invisible depression is everywhere around us. It's in every weary heart, every lined face, every medical bankruptcy, every struggling family, each and every parent sleepless at night over their kids' futures. So why can't we see it?
Think about how simple the simple calculation I just did is. Growth. 100% or more to the super rich. That means that there's none left for everyone else. That's a depression. Could it be any simpler? Any more straightforward to prove America's really having a depression for most people? Not just "something like" a depression — but an actual, real, bona fide, textbook one?
Note how long this depression — a very real one — has been going on. If the super rich have been taking the economy's growth since the 1980s…it's been a very, very long depression indeed. And yet that's exactly the reality. That's how long most Americans' lives have slowly fallen apart — beginning with the loss of decent jobs, continuing with today's catastrophic failures of healthcare, retirement, childcare, and so on.
Americans used to be the world's richest people, my friends. Today, they are broke, poor, and desperate, living shorter, poorer lives every single year. That's not hyperbole — those are cold, hard facts. How else would that massive, epic transformation have occurred, if not via a decades long depression? How else would such a rich country effectively grow poor? The truth is that America's invisible depression has gone on so long that the world's richest country became the world's first poor rich country — its people were unable to ever really build wealth of their own (the majority of Americans now have a negative net worth, remember.) This depression has thundered on like a great dust storm for decades, until the foundations of American prosperity and democracy turned to sand.
But here's the truly weird thing. Nobody in a position of power or leadership seems to have noticed America's invisible depression at all. They still don't. Maybe you yourself think I'm being hyperbolic. And yet if I can prove it beyond a shadow of a doubt in one paragraph, even one sentence, in fact — if the rich take 100% or more of the economy's gains, then it's a depression for everyone else — and hopefully you can understand it…then why doesn't anybody who's responsibility all this is seem able to notice or care or get it?
Why don't American politicians and economists or pundits or thinkers seem to be able to reason even this simply and clearly? The answer can only be, I think, that they are more attached to statistics than reality. I often say they are Soviet now — more wedded to defending badly failed ideologies than having a painful encounter with reality.
(Hence, they look at the aggregate numbers — the economy's growing, the stock market's booming, hooray! — and applaud and cheer. But the aggregate numbers don't tell us very much these days, precisely because society is fragmenting. It is fragmenting into extremes of all kinds. Rich and poor, left and right, regressive and progressive, and so forth. In times of fracture, of breakdown, of collapse — what good are aggregates? By definition, they don't tell us much. Looking at the aggregates of a volcano, you might well conclude all was well — when in fact it's raining down in shuddering fiery chunks across the land.)
America's thinking class doesn't appear to know how to think anymore about the most basic aspects of its political economy or society. They can't seem to see the greatest transformation in American society in nearly a century — an invisible depression, that tore American life apart. But that doesn't mean you or I should follow their lead.
America's new depression is a strange paradox. It couldn't be more visible, if you look with your own two eyes. When I take the train, for example, from New York to DC, it's like touring a devastated country. There's the part where a jail's followed by a casino's followed by a neglected city. But taking the train from Paris to Amsterdam or Madrid to Barcelona is nothing like that. It's pleasant, mostly. Sure, you can call that a trivial example. Is it? My point is simple: if you spend any time outside DC, Manhattan, or maybe LA, America's depression isn't so invisible if you spend time in Baltimore, Detroit, Flint. It's shouting from every abandoned town centre, from every boarded up mall, from all those addicts and homeless people sleeping rough in every town.
Yet America's depression seems completely invisible to its elites. Precisely because they never seem to leave their comfortable cloisters. If you spend your life inside the Beltway — America's never been doing better. There's a shiny new line on the DC Metro. McMansions are rising by the dozens. But America isn't just Fairfax County or Westchester or Rye, my friends. That's probably why America's elites won't truck with the idea that America's a depressed country whatsoever. If you raised this idea with any of its pundits — an Ezra, a Jake, a Chris, a Nate — they'd look at you like you were crazy. If you ran the math above by them, they'd look for endless ways to wriggle out of it — instead of simply conceding that what the numbers say might just simply be…true.
So America's depression goes on being this weird paradox of invisible, yet the most visible thing of all. It's forbidden to mention, it's never discussed, it's never even thought about it. Any trace of the very possibility of the existence of such a thing has been cleansed away from the American mind. Because for it's thinking class to admit that America might be in a depression is also to mean that their ideas and positions and stances have mostly failed. Led nowhere. Were fruitless. Who'd want to admit that? I don't blame them, really. (Or do I?) But if the most visible thing in a society is made to be invisible — won't that society end up being a tense, upside-down, confused, fractured, maybe even deluded, place?
That brings me to the final stark and terrible confirmation of America's invisible depression. It's the most powerful kind of confirmation, too — an existence proof, when the real world itself is our lab. What happens to depressed economies? Well, just think about the textbook example: Weimar Germany. Depressed economies turn to authoritarianism and fascism. It's a pattern as old as Athens and Rome, in fact. When people begin to go hungry — they turn to strongmen, to protect them from the imaginary monsters they come to fear are coming for them. Hence, the most shattering confirmation of America's invisible depression is it's stunning, bleak, suicidal turn to authoritarian-fascism, as a salve for all its wounds.
America is three things now. It's effectively a poor country. And it's a poor country because it's been in a depression — an invisible one — for almost all our adult lifetimes. Yes, really. That's how long the super rich have been taking all the growth or more, and a lack of growth is what a depression is. Hence, a depression for the rest, which is 99% of America. And it's becoming what depressions produce, too — a failed democracy. A democracy which has collapsed into authoritarianism, fascism, extremism, theocracy.
And yet America got it right during the last depression, too. Instead of letting itself implode — it pioneered a New Deal. Which is just what it needs, now, too. Which is why Elizabeth Warren is so necessary, urgent, and vital. Last time, America got a little lucky, a little wise, and a little brave. Can it repeat that miracle?
Umair
June 2019
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