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It is time to stop looking at the US economy from Wall Street – Al Jazeera English

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4 years ago

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Crises have a way of turning existing cracks in political and economic systems into fault lines. They bring to light what has been hiding beneath the surface. This is why the ongoing novel coronavirus pandemic, the most serious global health crisis in a century, has exposed the many pre-existing weaknesses of the US economy and laid bare the nation’s failure to judge the economy by what actually matters: How it works for working and middle-class Americans. 

In a matter of weeks, the pandemic left 26 million Americans unemployed and food banks overwhelmed. As one in four workers in the country are not entitled to a single day of paid sick leave, COVID-19 also forced many Americans to choose between staying healthy and putting food on their tables. It brought to the surface the growing economic precarity of tens of millions of Americans which Wall Street, and many in Washington, have long been ignoring. 

While some economists and politicians, such as Treasury Secretary and former Goldman Sachs Executive Steven Mnuchin, claim that the American economy was doing just fine before the start of the pandemic, the truth is many Americans have been living on the verge of economic collapse long before COVID-19 reached the country. After the 2008 economic crash, Wall Street and big corporations rebounded quickly, but millions of Americans did not.  

The likes of Mnuchin get away with claiming the US economy was doing brilliantly before the outbreak because they judge economic success merely by the success and profitability of big corporations and not the economic stability and wellbeing of ordinary Americans, such as small business owners, warehouse workers and delivery drivers. 

If Mnuchin judged the health of the US economy by how well everyday people are coping, he would have seen that things were not so rosy on “Main Street” even before COVID-19.

 Long before the US recorded its first coronavirus-related death on February 29:

  • Nearly 60 percent of Americans had $1,000 or less in savings, meaning they had no safety net for an emergency. 
  • Half a million Americans were going bankrupt every year, due in part to medical bills. 
  • Just 35 percent of student loan debt holders were able to make regular payments and one in four Americans had already defaulted on their student loans. 
  • Half of Americans over the age of 55 had no retirement savings.

Had our economy been judged by these measures rather than stock gains on Wall Street, our political leaders would have understood that our economic ecosystem was already on the verge of collapse long before the beginning of this pandemic. 

The economic devastation the US is experiencing today is not solely caused by COVID-19. The long-ignored weaknesses of the economy have turned a public health crisis into an economic catastrophe. 

Earlier this year, I ran for US Senate in Texas. I ran as an unabashed progressive and spoke about the economic realities that most politicians from both political parties ignore in this state. Everywhere I travelled, people of different backgrounds asked me over and over again why no one cares about their struggle. They told me that they feel like they are fighting for their economic survival alone, without any support from the people who are in positions of power. 

Americans are not struggling with individual health or finance problems. They are in a collective struggle for economic survival in a country where the government refuses to take care of its own people. Today in the US, not only most of the wealth but also most of the political power is consolidated in the hands of a privileged few. Powerful players like the Koch Brothers and DeVos family are working to reset the rules and regulations that govern this economy to the detriment of everyday Americans. 

For too long the suffering of the masses has been ignored by their elected representatives. But there is opportunity in crisis. COVID-19 can eventually pave the way for a system that puts the wellbeing of ordinary Americans above corporate profits.

The coronavirus pandemic forced the nation to confront the vulnerabilities of the economy. It made it impossible for anyone to ignore the depressing fact that nearly one-third of all American workers are part of the gig economy, and have no job security or benefits.

It made it impossible to ignore that the majority of Americans are only one pay cheque away from going broke. It made it impossible to deny that the policies that progressives have long been fighting for – universal healthcare, paid family and medical leave, guaranteed employment, cancelling student debt, guaranteed housing, and bailing out working families in economic recessions – would have made this crisis more manageable. 

That is why we, progressive Americans, must seize this moment. We should not only support short-term fixes, like those outlined in the recent stimulus package, but also fight for more fundamental economic changes that would bring economic security and stability to the lives of working and middle-class families. 

Our real task in the face of this unprecedented public health emergency is to build an economy and government that works for all of us. To start this transformation, we should first change the way we measure the strength of our economy. We need to understand that the strength of our economy, and our nation, is dependent not on the profitability of large corporations, but the financial stability of the rest of us – the American people. 

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial stance.

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Economy

Statistics Canada reports wholesale sales higher in July

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2 hours ago

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September 13, 2024

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OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.

The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.

The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.

The personal and household goods subsector fell 2.5 per cent to $12.1 billion.

In volume terms, overall wholesale sales rose 0.5 per cent in July.

Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.

This report by The Canadian Press was first published Sept. 13, 2024.

The Canadian Press. All rights reserved.

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Economy

B.C.’s debt and deficit forecast to rise as the provincial election nears

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3 days ago

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September 10, 2024

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VICTORIA – British Columbia is forecasting a record budget deficit and a rising debt of almost $129 billion less than two weeks before the start of a provincial election campaign where economic stability and future progress are expected to be major issues.

Finance Minister Katrine Conroy, who has announced her retirement and will not seek re-election in the Oct. 19 vote, said Tuesday her final budget update as minister predicts a deficit of $8.9 billion, up $1.1 billion from a forecast she made earlier this year.

Conroy said she acknowledges “challenges” facing B.C., including three consecutive deficit budgets, but expected improved economic growth where the province will start to “turn a corner.”

The $8.9 billion deficit forecast for 2024-2025 is followed by annual deficit projections of $6.7 billion and $6.1 billion in 2026-2027, Conroy said at a news conference outlining the government’s first quarterly financial update.

Conroy said lower corporate income tax and natural resource revenues and the increased cost of fighting wildfires have had some of the largest impacts on the budget.

“I want to acknowledge the economic uncertainties,” she said. “While global inflation is showing signs of easing and we’ve seen cuts to the Bank of Canada interest rates, we know that the challenges are not over.”

Conroy said wildfire response costs are expected to total $886 million this year, more than $650 million higher than originally forecast.

Corporate income tax revenue is forecast to be $638 million lower as a result of federal government updates and natural resource revenues are down $299 million due to lower prices for natural gas, lumber and electricity, she said.

Debt-servicing costs are also forecast to be $344 million higher due to the larger debt balance, the current interest rate and accelerated borrowing to ensure services and capital projects are maintained through the province’s election period, said Conroy.

B.C.’s economic growth is expected to strengthen over the next three years, but the timing of a return to a balanced budget will fall to another minister, said Conroy, who was addressing what likely would be her last news conference as Minister of Finance.

The election is expected to be called on Sept. 21, with the vote set for Oct. 19.

“While we are a strong province, people are facing challenges,” she said. “We have never shied away from taking those challenges head on, because we want to keep British Columbians secure and help them build good lives now and for the long term. With the investments we’re making and the actions we’re taking to support people and build a stronger economy, we’ve started to turn a corner.”

Premier David Eby said before the fiscal forecast was released Tuesday that the New Democrat government remains committed to providing services and supports for people in British Columbia and cuts are not on his agenda.

Eby said people have been hurt by high interest costs and the province is facing budget pressures connected to low resource prices, high wildfire costs and struggling global economies.

The premier said that now is not the time to reduce supports and services for people.

Last month’s year-end report for the 2023-2024 budget saw the province post a budget deficit of $5.035 billion, down from the previous forecast of $5.9 billion.

Eby said he expects government financial priorities to become a major issue during the upcoming election, with the NDP pledging to continue to fund services and the B.C. Conservatives looking to make cuts.

This report by The Canadian Press was first published Sept. 10, 2024.

Note to readers: This is a corrected story. A previous version said the debt would be going up to more than $129 billion. In fact, it will be almost $129 billion.

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Economy

Mark Carney mum on carbon-tax advice, future in politics at Liberal retreat

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3 days ago

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September 10, 2024

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NANAIMO, B.C. – Former Bank of Canada governor Mark Carney says he’ll be advising the Liberal party to flip some the challenges posed by an increasingly divided and dangerous world into an economic opportunity for Canada.

But he won’t say what his specific advice will be on economic issues that are politically divisive in Canada, like the carbon tax.

He presented his vision for the Liberals’ economic policy at the party’s caucus retreat in Nanaimo, B.C. today, after he agreed to help the party prepare for the next election as chair of a Liberal task force on economic growth.

Carney has been touted as a possible leadership contender to replace Justin Trudeau, who has said he has tried to coax Carney into politics for years.

Carney says if the prime minister asks him to do something he will do it to the best of his ability, but won’t elaborate on whether the new adviser role could lead to him adding his name to a ballot in the next election.

Finance Minister Chrystia Freeland says she has been taking advice from Carney for years, and that his new position won’t infringe on her role.

This report by The Canadian Press was first published Sept. 10, 2024.

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