The
United States economy is cruising for a
bruising. Inflation keeps ticking up thanks
to, among other things, rising inflation. The
job market is not performing as expected, and
unemployment rates are ticking up. Private
sector employment shed 22,000 jobs last month,
while forecasters thought that private sector
employment would increase. The government
shutdown will cost jobs, and that man who
lives in the House
that Enslaved People Built says
he will lay off or fire more people each day
that the government is shut down. And health
care costs are rising, which is one of the
reasons Democrats held firm on dealing with
health care as a condition to keeping
government open. Bottom line, our economy is
precarious.
Implosion
may be a strong term. Economic indicators
suggest we might experience stagflation, which
means economic stagnation, combined with
inflation. We might experience a mild
recession, which means two quarters of
negative economic growth. We might experience
a deep recession or even a depression. But we
know that the economy will not generate
growth, stable inflation and rising employment
unless something changes. That means that the
majority of us will suffer. People will lose
jobs and perhaps also their homes, businesses
will close, and wealth will disappear.
Uncertainty will make it challenging for both
individuals and businesses to make decisions.
Even
in recession, though, there are winners,
people who find opportunity in economic
distress and maximize it. During the 2008
recession, I remember meetings some young men
in an Atlanta suburb who made thousands by
packing and storing the belongings of evicted
people. During COVID I met women who started
catering businesses after they lost their
restaurants. There is opportunity everywhere,
though many have neither the resources nor the
resilience to take advantage of those
opportunities. Structurally, there are always
“high rollers” who are gainers. This is
important because we should look at these
structural gainers as possibilities for
taxation, not exploitation. In other words, if
you are going to benefit from other people’s
pain, you should have to pay for it.
Who
are some of the winners when the economy
implodes? The greatest gainers are those who
are cash rich. People or corporations who used
advantageous tax policies to stack cash in the
past. It’s now cash they can invest in hard
times. They can buy up foreclosed homes,
distressed businesses, abandoned assets and
more. They can even steal assets as those who
leave property or resources on the table are
not always legally equipped to protect their
stuff. While this Congress is not likely to
protect these people, especially given the
near shuttering of the Consumer Finance
Protection Bureau (CFPB) and the current
hostility to government regulation.
Economic
instability benefits the wealthy. It also
benefits speculators, who short stocks, bonds
or currencies and profit when markets lose
value. Further, there are the hedge fund
investors called “vulture investors” who buy
the debt of a failing business and then
benefit when the business recovers. They are
called vultures for obvious reasons – they
thrive on the death, or failure, of some
businesses.
The
others who benefit are those who are
politically well-positioned. Banks lobbied for
their bailouts during the 2008 recession, and
they got them because they were perceived as
“too big to fail”. This administration, the
man who lives in the HEPB is notorious for
self-serving, double-dealing economic policy.
Count on him, and his grifting family, to
figure out ways for them to gains when the
rest of the country loses. Consider their
dealings in bitcoin and cybercurrency as an
example of their perfidy.
When America has a cold, Black
America has a fever, so while many will be
affected by an economic implosion it will hit
Black America most severely. The wealthy, the
powerful, and the well-positioned gain, while those already on the
margins, particularly Black communities, pay
the steepest price. Indeed, recession-induced
instability is partly responsible for the
rapid gentrification of some Black communities
after the 2008 recession. In addition to job
losses, then, there are also housing losses
that reshaped communities.
Black
women, backbones of the Black community, are
especially hard-hit. The much-reported fact
that Black women lost more than 300,000 jobs
in the past several month trickles down to
students whose tuition may be unpaid, families
who spiral down to instability, and
communities in crisis.
Economic
crisis benefits some people. We must do
whatever we can to help those who have been
further marginalized, but from a policy
perspective, we must also target the winners
and demand that they do their part to
ameliorate the pain that economic implosion
causes.
