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August 03, 2012 12:58 PM Working For the Clampdown

By Ed Kilgore

I’ve already noted today that a tiny uptick (which looks worse thanks to rounding-up) in the unemployment rate in July will give conservatives the talking point they need to ignore the surprisingly strong new jobs numbers. But even as most progressives dismiss the significance of the unemployment figures, Jon Chait raises a point we dare not forget: U.S. elites are exhibiting a dangerous tolerance for persistent high unemployment:

In the years since the collapse of 2008, the existence of mass unemployment has stopped being something the economic powers that be even pretend to regard as a crisis. To those directly impacted, the economic crisis is an emergency, a life-altering disaster the damage from which will endure for years. But most of those in a position to address it simply have not seen it in such terms. History will record that the economic elite has viewed the economic crisis from a perspective of detached complacency.
Two events from the last week have underscored this disturbing reality. The most widely covered was the Federal Reserve’s announcement that, despite a weakening economy, it still would not take steps to stimulate growth. The Fed may not like mass unemployment, but it dislikes inflation even more, and in its calculus, the hypothetical prospect of the latter outweighs the immediate reality of the former.
Here’s a second case, smaller but even more telling. The Obama administration has tried to prevail upon Edward DeMarco, the acting director of the Federal Housing Finance Agency, to offer lower mortgage rates to underwater home owners through Fannie Mae and Freddie Mac, which he controls. What interests me is not the proposal itself, nor even DeMarco’s obstinate refusal, but an editorial in the Washington Post applauding DeMarco for refusing to implement the program.

I’d add to Jon’s argument another oft-forgotten aspect of the split between elite perceptions of the economy and those of regular folk: even if you are lucky enough to have a job, it is the very common habit of employers to exploit periods of high unemployment by treating their employees badly on a broad range of everyday issues. Want a raise? Look for it somewhere else if you can. Your immediate supervisor is breaking all the rules at your expense? Better hope you have a union.

This practice of utilizing and then systematically increasing job insecurity affects many millions of people—but not so much high-level managers and professionals. And it is reflected more broadly in the economic meta-message to working people of the conservative movement and the GOP: stop your grousing about the wealthy and their privileges and consider yourself lucky to get a paycheck. Even among progressive elites, this constant clampdown on workers who aren’t “free agents” is often ignored or reduced to an abstraction. The kind of economy we are enduring now is most definitely a tragedy for the chronically unemployed, but let’s not forget it also enables a work-place power-shift that grinds down dignity and snuffs out hope for many people who may never actually lose, and cannot dare leave, their increasingly unsatisfactory jobs.

Ed Kilgore is a contributing writer to the Washington Monthly. He is managing editor for The Democratic Strategist and a senior fellow at the Progressive Policy Institute. Find him on Twitter: @ed_kilgore.

Comments

  • boatboy_srq on August 03, 2012 1:31 PM:

    Just two words here: jobless recovery.

    This situation is not new. The behavior pattern described has been in place since at least 2003, if not substantially sooner. This was supposed to be the Big Issue of the 2004 cycle, but Swiftboats got in the way.

    We're still waiting for someone in the MSM to pick up on that.

  • Mimikatz on August 03, 2012 1:32 PM:

    I don't think the elites regard is with complacency so much as viewing it as an opportunity to clamp down further. How else to explain the totally misguided and counter-productive (from the majority standpoint) drive for austerity and shredding the safety net that we see now? Will any of these Congresspeople meet with regular people during their month-long recess? Not bloody likely, at least on the GOP side. They will just raise money from fat cats who are doing very well.

  • low-tech cyclist on August 03, 2012 1:34 PM:

    it is the very common habit of employers to exploit periods of high unemployment by treating their employees badly on a broad range of everyday issues. Want a raise? Look for it somewhere else if you can. Your immediate supervisor is breaking all the rules at your expense? Better hope you have a union...[t]he kind of economy we are enduring now is most definitely a tragedy for the chronically unemployed, but letís not forget it also enables a work-place power-shift that grinds down dignity and snuffs out hope for many people who may never actually lose, and cannot dare leave, their increasingly unsatisfactory jobs.

    Thanks for saying this, Ed, because you're right - it's too often overlooked.

    I wish there was a political party in this country that would unambiguously stick up for the interests of people in those sorts of situations. One can hardly blame blue-collar whites for voting Republican on cultural issues when the Dems have so routinely failed to fight for them on workplace issues.

    And yeah, I know: the Republicans are even worse. But the media's hiding that from them, so you can't expect them to absorb that message. If Dems want white working class votes, they've got to be there for the working class.

  • IrishCC on August 03, 2012 1:39 PM:

    You are so right! This is exactly what is happening to the Caterpillar workers in Illinois right now. In spite of record profits and big raises for management, they are demanding workers agree to a six year pay freeze. Six years! Workers have been on strike for two months and Caterpillar simply refuses to come back to the table.

  • Anonymous on August 03, 2012 1:42 PM:

    It's happening all over the developed world. Steve Randy Waldman, Depression is a choice.

    ...the preferences of developed, aging polities ó first Japan, now the United States and Europe ó are obvious to a dispassionate observer. Their overwhelming priority is to protect the purchasing power of incumbent creditors. Thatís it. Thatís everything. All other considerations are secondary.

  • castanea on August 03, 2012 1:45 PM:

    "I wish there was a political party in this country that would unambiguously stick up for the interests of people in those sorts of situations."

    These sorts of comments drive me crazy because they run counter to the reality of American politics.

    It isn't the fact that political parties don't "stick up for the interests of people" that is the problem, it is that the people themselves don't vote in their own self interest.

    If many Democrats used to stick up for the people in the past, but fewer do so today, it is because the electorate itself has shown politicians what it expects in return for its votes.

  • Fess on August 03, 2012 1:52 PM:

    While we often think of lowest wage workers being the focus of this employer abuse, it's also common in the middle income ranges. This is from an LA Times article published last April

    They called it the zombie walk.

    After midnight, when the coffee and Red Bull had worn off, Sari Gennis and her co-workers would take a brisk stroll to make it through their graveyard shift. For four months straight, often seven days a week, a team of visual effects artists worked 12-hour shifts to complete the 3-D conversion of movie blockbuster "Titanic."

    Sony Entertainment is not a nice employer. They evidently think so little of home life that they're OK with their employees seeing their spouses and kids maybe 1 hour a day for weeks on end. Most middle management employees are on a (modest) salary, so there isn't even any extra monetary compensation for those 12 hour days, 7 days a week.

    The rest of the article is about visual effects workers trying to unionize.

    http://articles.latimes.com/2012/apr/20/business/la-fi-ct-visual-effects-workers-20120420

  • kdbart on August 03, 2012 2:11 PM:

    Points for The Clash reference in the title.

  • Equal Opportunity Cynic on August 03, 2012 2:14 PM:

    Fess: Almost always, employers trying to get more out of staff by pressuring them to put in extended overtime are just penny wise and pound foolish. There's research showing that all these excess hours don't really benefit them at all. But a lot of corporations get by with stupidity, and there's not always a better-managed competitor poised to run over them.

    Still, it's important to fight the perception that these death march management styles are accomplishing anything.

  • Shane Taylor on August 03, 2012 3:17 PM:

    Thank you, Ed. Well said. My impression is that too many progressive elites (particularly those who might pass for "liberaltarian") have accepted some of the more dubious assumptions of the Milton Friedman right. The result is a rhetorical erasure of the private exercise of power. The economists Samuel Bowles and Herbert Gintis came up with a clear, coherent account of how power is acquired in private exchange:

    http://agonisticliberal.com/2011/09/05/command-economies/

    Though, for the people described here, it's probably obvious...

  • Peter C on August 03, 2012 3:18 PM:

    High unemployment is a feature, not a bug. It helps the 1% (by keeping labor costs down) and it puts the general populace on edge (decreasing the President's popularity).

    Stalling the recovery has been the overarching goal of the Republican Party ever since TARP passed. TARP make the 1% whole again. If Obama and the Democrats had been allowed to FIX all of the economic disaster caused by Bush, the Republican Party would be history.

    Consequently, they've done everything possible to sabotage the economy. They've cancelled infrastructure projects at the state level (the ARC Tunnel and High-speed Rail). They've laid-off people in the public sector. They've insisted upon 'austerity'. They've precipitated a debt crisis by courting with default. They filibustered everything until they gained the House, when just refusing to bring it up would suffice. They've threatened the Federal Reserve (which is already disposed to help the 1% at the expense of its other mandate). It's been active sabotage, plain and simple.

    "The single most important thing we want to achieve is for President Obama to be a one-term president," - Mitch McConnell This explains the past 4 years better than any other sentence.

    My parents reluctantly supported the Iraq war. They didn't think anyone would dare lie about something that important. They didn't think anyone would take the country to war for political and monetary gain alone. But Republicans don't have problems with daring. They would dare, they did dare, and they do dare. They take the big dare because the payoff is pallets of cash (which inexplicably disappear). They take the big dare, because they can use power to make elections less and less of a threat.

  • Sgt. Gym Bunny on August 03, 2012 3:35 PM:

    Good point about how the economy is crippling even people with jobs.

    Just this summer actually, my boss was supposed to retire but didn't. Why not? Because the Powers-That-Be hadn't even bothered to even start searching for the her replacement. The hiring chill technique: We'll save some dough not paying a salary and let the remaining lower-paid employees (schmucks) take up her previous duties. We're a small office (headcount 3), so being done one person down would make a significant difference to individual workloads.

  • Sgt. Gym Bunny on August 03, 2012 3:38 PM:

    edited version from the goobledy-gook above...

    Good point about how the economy is crippling even to people with jobs.

    Just this summer, actually, my boss was supposed to retire but didn't. Why not? Because the Powers-That-Be hadn't even bothered to start searching for her replacement. The hiring chill technique: We'll save some dough not paying a salary and let the remaining lower-paid employees (schmucks) take up her previous duties. We're a small office (headcount 3), so being down one person would make a significant difference to individual workloads.

  • emjayay on August 03, 2012 6:01 PM:

    There is a huge, huge difference for employers and employees between an unemployment rate at the frictional theoretical 4% or below, and anything above that. It is now twice that level.

    Any corporation or company of any sort has only one goal: profit. Unemployment at above frictional rates means no one get hired unless they already have done the job, so no training expense is necessary. Workers are treated like dirt in terms of pay and benefits and working conditions. Like workers in even a recently vastly growing business, the general purpose warehouses where the stuff you order online comes from.

    What makes the whole insidious system work is that anyone even one step up from the easily replaced bottom in any company buys the whole thing and plays along and happily screws anyone under them. If they weren't that kind of small minded amoral person they would not have the job they have. This includes government workers, who at the bottom level do not enjoy the sort of situation everyone imagines, in this sort of economy at least.

    This is why unions were created. But today of course everyone knows that most businesses can just pick up and leave with tax incentives and free freeway exits and bargain land or whatever in some non-union state, or just offshore the whole thing.

    The unemployment rate is way more than just a number.

  • low-tech cyclist on August 03, 2012 10:30 PM:

    castanea - "blame the voters" is the refuge of political incompetents. Any party that says the electorate sucks needs to solve the problem by finding a country with a better-quality electorate, and moving there. Just sayin'.

  • castanea on August 04, 2012 12:44 AM:

    On the contrary, "blame the voters" is the best explanation as to why our democracy is in decline.

    At any point in time, a critical number of members of the American middle class could stop voting for the party that has made bigotry, ignorance, unending tax cuts, and the belief in the existence of angels its litmus tests.

    Any politician who ignores the critical mass of ignorant members of the electorate will wind up riding his/her wave of idealism right into post-election unemployment.

  • James M on August 04, 2012 9:38 AM:

    Ed,

    Nice post but you might be guilty of plagiarism! Ever hear of a guy named 'Karl Marx'? He said the same thing you did (only better) over 100 years ago.

    For some reason Marx seems to have been banished from current intellectual criticisms of capitalism, but his explanation of how capitalism works (at least from the workers' point of view) is unmatched in my opinion. His concept of 'surplus value' has never been more true, and our current capitalist overlords are operating exactly as Marx predicted.

    Marx understood better than anyone that capitalism is designed to operate like a poker game: one person (or a small group) will eventually get all the chips, and that is exactly what will happen in any capitalist economy without government serving as an ameliorating force. This is what makes the anti-government rantings of working/lower middle class Tea Partiers so tragicomic.