Where’s Our Bailout?

Almost overlooked in this morning’s extraordinary headlines about government intervention to protect the nation’s financial system from collapse was the failure of the House of Representatives on Thursday to act on a $50 billion stimulus package for the rest of us.

The legislation would have included $20 billion or so for infrastructure projects, plus additional funding for the food stamp program, the Low-Income Home Energy Assistance Program and state Medicaid subsidies.

This stimulus effort was resisted by the White House and by congressional conservatives, one of whom—House Minority Whip Roy Blunt, R‑Mo.—groused that “bailing out the states on their Medicaid problems or providing $25 billion worth of infrastructure spending are not stimulative and everyone knows that.”

“Everyone knows that?” No. What “everyone knows” is that when ordinary people have good jobs—whether they are created by private investment or public investment—they are able to buy the houses, cars and other goods and services that help keep the economy afloat. In particular, a program of spending public dollars on a range of job-producing activities—from fixing roads and bridges to “greening” our public buildings with renewable energy and conservation—would go a long way toward stabilizing the faltering middle class of this country. What “everyone knows,” or ought to realize, is that doing nothing to interrupt the falling dominoes of spending cutbacks at the federal, state and local levels is a recipe for continued economic erosion.

President Bush today addressed the nation and called for bipartisan support for a bailout plan for Wall Street. But there was nothing in his speech that answered the question that is probably on the minds of millions of Americans who are struggling on Main Street: “Where’s our bailout?”

Even as Sen. John McCain has been forced to backtrack on his repeated assertions that the economy’s “fundamentals” are strong, conservatives still seem determined to stand back, arms folded, as the fortunes of working-class families continues to erode.

The misery index, which we’re resurrecting to bring home the extent to which ordinary people are struggling in today’s economy, has risen. Wednesday, the Labor Department reported a new inflation rate of 5.4 percent for the 12 months ending in August. The unemployment rate for August was 6.1 percent. So the misery index (unemployment plus inflation) is now 11.5 percent—worse than any month since June 1991, more than 17 years ago.

Behind our ad in The New York Times this week on “the dream gone bad” is a fact sheet that spells out the financial pain since 2000: the decline in inflation-adjusted median household income, the increase in the poverty rate, the lost jobs, the growing wealth gap between average workers and CEOs.

This is an even more serious issue in the African-American community, as outlined in a report released Thursday by the Economic Policy Institute. The report, “Reversal of Fortune,” concludes that while African Americans as a whole experienced “increasing employment, higher wages and a historic drop in the poverty rate” in the 1990s, since 2000 “wage growth for the median black worker has stagnated, incomes and employment have declined and poverty has increased.”

The economic gap between African Americans and the rest of the nation is widening again after showing signs of narrowing in the 1990s. Yet, a serious discussion about closing this gap appears to be off the table, as Bennett College President and economist Julianne Malveaux points out in this interview. In the 1970s, targeted efforts such as the Comprehensive Employment and Training Act were designed to help provide job opportunities that were not being provided by the private sector. Conservatives, hell-bent to implement their trickle-down strategy of tax cuts for the rich—with no strategy for making sure that anything would actually trickle down to communities where joblessness was rampant—used examples of corruption and mismanagement as an excuse to kill the program.

Today, the conservative argument about the economic gap between whites and blacks in America is more or less reduced to “blacks need more education.” African American students suffer disproportionately from poor schools. But the EPI study shows that when the economy as a whole works for working people, the African-American community is poised to benefit as well.

The debate we need on the economy, not just for the African-American community but for everyone, has to span these issues: investing in our communities so that all of our communities are equipped to prosper, empowering our workers so that they are able to secure good wages and benefits and are not forced into a race to the bottom, and making full employment the central objective of government economic policy.

We, the working people of this country—black, white, yellow and brown—are also too big to fail. We need to see the recovery plan for us.


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