The Dismal Decade

The GOP likes to talk, a lot, about personal responsibility and the value of hard work. At the close of the first decade of the twenty-first century, it is difficult to ignore the facts that give lie to these concepts. We The People did work hard and productivity soared between 1999 and 2009, just like every other decade since WWII. But what else happened during that same time frame? Neil Irwin's article at The Washington Post explores.

Middle-income households made less in 2008, when adjusted for inflation, than they did in 1999 -- and the number is sure to have declined further during a difficult 2009. The Aughts were the first decade of falling median incomes since figures were first compiled in the 1960s.

The graphs at the linked article provide a stark illustration of things gone wrong. There was net zero job creation during the decade, again a first. Reagan's trickle down economics sold us an empty promise that cutting taxes on the wealthy, and on Corporations, would result in those same noble industrial giants investing that wealth in America, creating a flood of jobs and a rising tide that floats all boats. A great concept except that it ignored the rapacious greed of those at the top. And in a fit of stupidity that has almost no equal, We The People thought we should keep up with the McGuire's and build our own McMansions and drive constantly-new vehicles (which were also consistently less efficient and ostentatious), which leveraged our idling incomes to the hilt. It was a heady decade that introduced the greed-based concept of interest-only mortgages which appealed to people who wanted more house and ignored the substantial risks.

The end result is that we were fleeced from the top by greed and avarice. To compound the problem, We turned the clippers on our selves to finish the fleecing by trying to outspend the one's who really had money. That was, of course, Reagan's grand plan for the Cold War which worked admirably. America spent and spent and the USSR tried to keep up and eventually collapsed into bankruptcy. We The People played the role of the USSR in the past decade. Imagine how much more pliable We are now that we feel grateful to simply have a job? We know that we're losing, but we still have our noses above water right? Too bad about your former neighbor who apparently went under and moved out as his house was foreclosed, and your brother-in-law whose successful start-up went bust because he couldn't get loans to expand when he needed to. At least it wasn't you.

"A big part of what happened this decade was that people engaged in excessively risky behavior without realizing the risks associated," said Karen Dynan, co-director of economic studies at the Brookings Institution. "It's true not just among consumers but among regulators, financial institutions, lenders, everyone."

I'm going to use my soapbox here for a moment and point out that I exclude myself from the above. My modest (tiny even) house is paid for, as are my vehicles. I have no debt. I did not try to spend what I did not have to live high off the hog. I have savings (considerably less than a few years ago to be sure). Some of you may be in the same situation, having chosen wisely and responsibly, and to you I offer my congratulations and my admiration, as well as my shared sympathy for the woes we suffer for having been responsible, and yet face similar consequences as those who created the mess. In Aesop's Fables, the grasshopper eventually understood the error of his ways and, presumably, suffered the consequences. I wonder if We The People understand our part in our failure?