Where Are the Little Guys?
Something is off about the news of our economic “recovery” — and I don’t just mean the fact that unemployment reaches 10% just as the Dow climbs over 10,000. That’s troubling, but it’s not hidden.
In Monday’s New York Times, Paul Krugman put his finger on part of the problem: “while the wheeler-dealer side of the financial industry, a k a trading operations, is highly profitable again, the part of banking that really matters — lending, which fuels investment and job creation — is not. Key banks remain financially weak, and their weakness is hurting the economy as a whole.” In other words, the part of the financial industry that grabs the headlines is trumpeting their success, the less visible part that actually fuels recovery is not. (See “The Banks Are Not All Right.”)
This week’s Economist elaborates on the problem: “Big public firms have relatively easy access to loans and equity once again…. But only a quarter of America’s listed companies can tap bond markets. Beneath them is a mass of small and medium-sized firms that collectively employs about half of American workers and is heavily reliant on banks.” (See “Slim Pickings, No Appetite.”)
Not only is the economy split, so are our minds. That is, we know about the problem with unemployment and we see the soaring profits on Wall Street – but how do we connect the two? We know that some are thriving – they are at the top of the heap, the biggest, the richest, the most profitable firms. But who is left out? Who are the losers in this “recovery”?
These articles provided the context for an article in The Wall Street Journal that threw me for a loop in August: “Halting Recovery Divides America in Two.” At first I thought they were thinking, as I was, about the gap between the rich and poor, the investors in hedge funds and the unemployed, homeowners and the dispossessed. But the article quickly made clear that they had a different division in mind: “At one extreme of Corporate America is a cadre of companies and banks, mostly big, united by an enviable access to credit. At the other end are firms, chiefly small, with slumping sales that can’t borrow or are facing stiff terms to do so.” (See “Halting Recovery”)
I see now the article was a precursor to these more recent accounts of the slow recovery at the lower end of the economy. At first, though, I thought, how could they think that the normal reader would not have the same mistaken assumption I did? What America “divided in two” could they possible assume we had in mind? Do their readers never think about the poor except as a drag on the economy, or the unemployed except as a loss of consumer power?
Now I understand the unspoken assumption: at the top are the ones that matter. Everyone else is split off. Down below are the unemployed, the small firms or family businesses, the dispossessed, those struggling with medical or education bills, the middle class – you and me.
As we struggle towards recovery, it’s hard to keep the little guys in mind.