ECONOMIC RECOVERY -- WALL STREET VERSUS MAIN STREET
BY JULIANNE MALVEAUX
When Federal Reserve Chairman Alan Greenspan testifies before Congress, I am
never sure whether he is articulating his economic wisdom or his hopes and
dreams. However, I am certain that his perspective is skewed toward Wall
Street, and away from Main Street, and I always count on him for a reality check
on how the other half (Wall Street, if you are wondering) lives. He told
Congress that there are signs of economic recovery, and you couldn’t wipe the
glee off those Republican faces that now feel justified in the tax cut they made
a year ago. I’m cashing my Greenspan reality check at the Bank of Hard Knocks,
because his good news has yet to trickle down to people who aren’t working, just
waiting for Congress to offer the same support to Main Street that it has
already provided for Wall Street.
The unemployment rate data are telling. After overall unemployment spiked
at 5.8 percent in December, it was down to 5.5 percent in February. In December,
black unemployment was 10.2 percent, now it is down to 9.6 percent. The 2:1
relationship between black and white unemployment remains, and the paltry 66,000
increase in payroll employment is nothing to celebrate. Still, Greenspan sees
signs of recovery. Tell it to the unemployed. Better yet, ask them to cash his
reality check. They can’t. The Bank of Hard Knocks, though open for business,
doesn’t have the collateral to cash reality checks.
While consumer confidence is back up to pre-9/11 levels, individuals are
still being laid off – at least 20 percent of whom who are not eligible for
unemployment because of their part time status, according to the National
Employment Law Project. Industries expected to be hardest hit by 9/11 --
travel, tourism, entertainment – have not taken the beating for which they were
prepared (Linda Levy Grossman, executive director of the Helen Hayes Awards said
recently in the Washington Post: "I think the hemorrhaging stopped. I was
expecting some sort of significant drop . . and it did not happen."), but their
relative health hasn’t helped workers much.
Hundreds of thousands of passengers fly out of Washington’s National Airport
over the past six months, and the airport is back to around 70 percent capacity,
but I have not heard any airline announcements that the thousands of workers
they laid off are being rehired. Indeed, while United Airlines barely avoided a
mechanics’ strike, they may still be on the brink of bankruptcy. Of course,
that is not affecting management pay or bonuses. Exactly who is benefiting from
this “economic recovery”?
While the Enron debacle has rattled many people’s faith in the stock market
and how stocks are rated and traded, Greenspan and the Fed still measure this
country’s economic viability by the “exuberance” of Wall Street, basically
leaving the roughly 50 percent of Americans who do not own one piece of stock
out of the United States’ economic picture. And when one is left out of the
picture, one is also often left out in the cold. Increases in the number of the
unemployed coupled with bitter fights on Capitol Hill as to how and to whom to
extend unemployment benefits; a coast-to-coast-to-coast rise in food pantry
visits (Hawaii, too, experienced greater food security last year) and those
statistics we’ve all seen and heard about families having to work 120 hours per
week to afford a two bedroom APARTMENT in California’s Bay Area all mean that
while the stock markets are smoothly sailing, people who work in the supermarket
often can’t even afford to shop there. For stocks it’s smooth sailing, for
others, it's sputter along.
Greenspan and his minions have mostly focused on Wall Street in their
attempt at economic analysis. That’s not new. The people at the bottom were
just a small part of the 10-year economic expansion, they took the biggest hit
in the recession, and now aren’t part of the recovery. That is all, I suppose,
to be expected. But it would see that our perspective ought to change, if only
slightly, in recognition of the tremendous sacrifices that September 11 imposed
on a nation. We’ve been told that we need to come together in the wake of this
tragedy, and six months after the fact, we have had commemorations, tears, and
new resolve. Too bad our economic resolve is so fully focused on Wall Street
that Main Street is being ignored and the side street has simply left our
nation’s radar screen.