[rad-green] Record Inequality and Corporate Profits Are What Media Call a ‘Strong Economy’

*https://fair.org/home/record-inequality-and-corporate-profits-are-what-media-call-a-strong-economy/
<https://fair.org/home/record-inequality-and-corporate-profits-are-what-media-call-a-strong-economy/>*

*FAIR          NOVEMBER 19, 2019*

Record Inequality and Corporate Profits Are What Media Call a ‘Strong
Economy’
*BY JOSHUA CHO*

[image: Record Inequality and Corporate Profits Are What Media Call a
‘Strong Economy’]
<https://fair.org/home/record-inequality-and-corporate-profits-are-what-media-call-a-strong-economy/>


[image: CNBC: The Hard Data Says the US Economy Is Just Fine]

*Who are you going to believe, “hard data” or your lying eyes
(CNBC, 10/7/19
<https://www.cnbc.com/2019/10/07/the-hard-data-says-the-us-economy-is-just-fine.html>)?*

Last month, *CNBC *(10/7/19
<https://www.cnbc.com/2019/10/07/the-hard-data-says-the-us-economy-is-just-fine.html>)
reassured us that fears of a potential recession are “overblown,” because
the “hard data” shows that the “US economy remains strong.”

If you’ve been keeping track of corporate media coverage of the US economy
over the past several years, you might have noticed a contradictory
pattern. You’ll find that corporate media make ubiquitous references to a
“strong economy,” while simultaneously providing many reports on the
increasingly impoverished and precarious working class alongside the
continuously rising fortunes of the rich.

Last month, a *New York Times* report (10/20/19
<https://www.nytimes.com/2019/10/19/business/economy/workers-strike-economy.html>)
exemplified this seemingly bizarre practice when it wondered why so many
workers are striking when we apparently live in such a “strong economy,”
because the piece also discussed how “today’s strikes are fueled by a
deeper sense of unfairness and economic anxiety.”

Even though corporate media are now warning us not to be too complacent
because of a potential imminent recession and slowing GDP growth (*CNN*,
8/18/19
<https://www.cnn.com/2019/08/18/politics/recession-white-house-economic-advisers-larry-kudlow-peter-navarro-cnntv/index.html>
; *Wall Street Journal*, 10/30/19
<https://www.wsj.com/articles/u-s-economy-grew-at-1-9-rate-in-third-quarter-11572438761>),
references to a “strong economy” and an “economic recovery” from the Great
Recession still abound.

*Three years ago, *the *New York* *Times *(12/2/16
<https://www.nytimes.com/2016/12/02/business/economy/jobs-report.html>)
remarked that former President Barack Obama was handing off a “strong
economy” to President Donald Trump, even as it noted that “tens of millions
of Americans understandably feel that the recovery has passed them by.” Two
years later, *Times* columnist David Brooks (11/29/19
<https://www.nytimes.com/2018/11/29/opinion/american-economy-working-class.html>)
led off a column by declaring, “We’re enjoying one of the best economies of
our lifetime.”
[image: LAT: The economy is thriving — but that may not be enough to get
Trump reelected]

*LA Times (5/3/19
<https://www.latimes.com/politics/la-na-pol-trump-strong-economy-jobs-recession-polls-20190503-story.html>)*

This year, the *Los Angeles Times* (5/3/19
<https://www.latimes.com/politics/la-na-pol-trump-strong-economy-jobs-recession-polls-20190503-story.html>)
pondered the two “great conundrums” of the Trump presidency: “How does his
approval rating stay so bad when the economy is so good, and what might
that forecast about his prospects for reelection?”

*Politico *(10/15/19
<https://www.politico.com/news/2019/10/15/warning-to-democrats-economy-points-to-a-trump-win-047021>)
and *Reuters *(10/15/19
<https://www.reuters.com/article/us-usa-election-forecast/barring-a-turnout-surge-strong-economy-favors-trump-in-2020-researchers-say-idUSKBN1WU2P7>)
advise us that election models are forecasting Trump’s likely reelection
based on “economic trends in key swing states” under his administration, as
*CNN *(7/5/19
<https://www.cnn.com/2019/06/01/politics/trump-economy-inequality-2020/index.html>)
proclaimed that the “strong economy” is functioning as Trump’s “safety
blanket” for his reelection chances. The *Financial Times *(5/8/19
<https://www.ft.com/content/8076f4fc-70a7-11e9-bbfb-5c68069fbd15>) declared
that “there is no doubt that the US is the strongest large economy in the
world,” even as it warned that “much of the growth surprise appears
temporary.”

The “strong economy” narrative is so thoroughly entrenched, the *Atlantic *(
8/5/19
<https://www.theatlantic.com/ideas/archive/2019/08/whys-it-so-awkward-to-say-the-economy-is-great/595408/>)
observed that even Democratic presidential candidates are wary of
mentioning “economic growth,” lest it sound like an implicit endorsement of
the Trump administration’s policies. However, following slower GDP growth
and recession forecasts, some Democratic presidential candidates, like Joe
Biden, are changing their campaign strategies by claiming that Trump is “
squandering
<https://thehill.com/homenews/campaign/467142-biden-accuses-trump-of-squandering-strong-obama-economy>”
the “strong economy” inherited from the Obama administration, reversing
their previous view of discussing the “strong economic data” as a “losing”
electoral strategy (*Reuters*, 8/22/19
<https://www.reuters.com/article/us-usa-election-economy/as-economic-warning-signs-flash-trump-democratic-rivals-recalibrate-messages-idUSKCN1VC0ZZ>
).

To the extent that there is a “debate” over the existence of a “historic
recovery” and a “strong economy,” it is largely restricted to whether the
economy was better under the Obama administration or under the Trump
administration, and over who “really” deserves credit for this allegedly
amazing economy.

The *Washington Post *has run several comparative articles (6/25/18
<https://www.washingtonpost.com/news/wonk/wp/2018/06/25/for-the-last-time-trump-inherited-a-good-economy-and-he-hasnt-made-it-better/>
, 5/7/19
<https://www.washingtonpost.com/politics/2019/05/07/how-trump-tries-obscure-strong-economy-he-inherited/>
, 8/20/19
<https://www.washingtonpost.com/business/2019/08/20/trump-v-obama-economy-charts/>)
arguing that Trump “inherited” the “strong economy” from Obama, even
wondering if this economy is “too good to be true?
<https://www.washingtonpost.com/business/economy/is-this-the-too-good-to-be-true-economy/2019/05/03/9f05aff0-6dbc-11e9-8f44-e8d8bb1df986_story.html>”
while noting that the “vital signs look solid.” *CNBC *(9/7/18
<https://www.cnbc.com/2018/09/07/how-trump-has-set-economic-growth-on-fire.html>)
declared that Trump has “set economic growth on fire,” praising a “economic
boom uniquely his” as a “tremendous achievement.” The *Wall Street Journal*
 (5/5/19
<https://www.wsj.com/articles/voter-approval-rising-for-trumps-handling-of-the-economy-11557061201>)
discussed how a poll found that “select groups of Americans” who disapprove
of his job performance are still willing to credit Trump for a “bustling
economy,” while *USA Today *(7/1/19
<https://www.usatoday.com/story/money/2019/07/01/president-trumps-support-strong-economy-boosting-it/1622227001/>)
discussed a survey that found that the “solid economy is doing little to
bolster support for President Donald Trump.” Some articles have pushed back
on the idea that Trump deserves the credit for the “strong economy,”
instead crediting the Federal Reserve and Congress, or a vague “broader,
global trend” (*New York Times*, 8/8/19
<https://www.nytimes.com/2019/08/08/business/economy/trump-stimulus-economy.html>
; *Wall Street Journal*, 11/8/17
<https://www.wsj.com/articles/trump-should-give-thanks-not-take-credit-for-economic-growth-1510158089>
).
[image: Common Dreams: Rejecting Trump Spin, 62% of Americans Believe US
Economy Primarily Benefits Rich and Powerful]

*Common Dreams (4/29/19)
<https://www.commondreams.org/news/2019/04/29/rejecting-trump-spin-62-americans-believe-us-economy-primarily-benefits-rich-and>*

*But who determines* whether we live in a “strong economy,” and what
metrics should we use to find out? Despite what media say, most Americans
believe that the economic system is “rigged” to benefit the wealthy elite
at the expense of the working class (*CNN*, 6/28/16
<https://money.cnn.com/2016/06/28/news/economy/americans-believe-economy-is-rigged/>;
Pew Research, 10/4/18
<https://www.pewresearch.org/fact-tank/2018/10/04/partisans-are-divided-over-the-fairness-of-the-u-s-economy-and-why-people-are-rich-or-poor/>
; *Common Dreams*, 4/29/19
<https://www.commondreams.org/news/2019/04/29/rejecting-trump-spin-62-americans-believe-us-economy-primarily-benefits-rich-and>).
Do the standard economic metrics deployed by corporate journalists
accurately capture and explain the feelings and economic situation of most
American workers?

When one also reads the contradictory coverage found in corporate media
regarding the precarious situation facing the American working class, it’s
clear they don’t. Here’s a nonexhaustive catalog of facts that make elite
pundits like the *New York Times*’ David Brooks’ declaration that “We’re
enjoying one of the best economies of our lifetime” appear fatuous and
puncture this myth of a “strong economy.”

Overwhelmingly, many of these reports point to GDP growth (increased annual
spending on total goods and services), a low unemployment rate
<https://www.wsj.com/articles/fueled-by-strong-economy-u-s-labor-force-defies-projected-declines-11553338801>
(currently
at 3.6% <https://www.bls.gov/news.release/pdf/empsit.pdf>) and the number
of jobs added to the US economy as evidence of a “strong economy.”

However, the standard unemployment rate
<https://www.bls.gov/cps/cps_htgm.htm> in the US only includes people with
no job who have been searching for work within the past four weeks; this
leaves out significant portions of the population, like the underemployed
and involuntary part-time workers (those who want full-time work but can’t
find any), and discouraged workers who have given up searching for a job (
*Quartz*, 6/7/18
<https://qz.com/1297561/the-dazzling-us-unemployment-rate-is-blinding-americans-to-a-much-darker-reality/>).
This is why the *New York Times* (10/31/19
<https://www.nytimes.com/2019/10/31/business/economy/long-term-unemployed.html>)
found that there are still millions of people not captured in the official
unemployment rate, and people having trouble finding work in this “strong
economy.” The U-6 unemployment rate
<https://www.investopedia.com/terms/u/u6-rate.asp>, considered to be more
accurate by economists because it includes discouraged workers and
part-time workers seeking full-time employment, is 7%
<https://fred.stlouisfed.org/series/U6RATE>—almost double the U-3
unemployment rate usually cited by corporate media.

Another figure that complicates this picture of a “strong economy” is the labor
force participation rate
<https://www.investopedia.com/terms/p/participationrate.asp> (the sum of
all workers who are employed and actively seeking employment divided by the
total working age population). The current labor force participation rate
is 63.3% <https://fred.stlouisfed.org/series/EMRATIO>, 4 percentage points
lower than the average of 67.3% at the beginning of the 21st century.

Although the number of involuntary part-time workers dropped this year
<https://www.usatoday.com/story/money/2019/04/05/jobs-report-number-part-time-workers-who-want-full-time-has-fallen/3368760002/>,
even people who only work one hour a week would not be considered
unemployed by the Bureau of Labor Statistics. A 2016 study
<https://www.epi.org/press/6-4-million-americans-are-working-involuntarily-part-time-employers-are-shifting-toward-part-time-work-as-a-new-normal/>
by
economist Lonnie Golden found that the number of involuntary part-time
workers increased almost 45% from 2007.

While there has been pushback
<https://jacobinmag.com/2019/03/precarity-temp-work-workplace-protections-contractors>
against
a widely cited 2016 study
<https://dataspace.princeton.edu/jspui/bitstream/88435/dsp01zs25xb933/3/603.pdf>
from
economists Lawrence Katz and the late Alan Krueger, which found that 94% of
job growth from 2005 to 2015 has been in precarious “alternative work
arrangements” in the “gig economy,” there’s no shortage of studies and
projections showing that freelancing, independent contracting and temp work
for corporations like Uber are playing a larger role in the US economy,
without much of the job security and benefits found in more traditional
jobs (*NBC*, 8/31/17
<https://www.nbcnews.com/business/economy/temp-work-now-permanent-fixture-creating-problems-invisible-workforce-n793466>
; *Forbes*, 2/15/19
<https://www.forbes.com/sites/johnfrazer1/2019/02/15/how-the-gig-economy-is-reshaping-careers-for-the-next-generation/#64851f7b49ad>
; *New York Times*, 8/22/19
<https://www.nytimes.com/2018/08/22/books/review-temp-louis-hyman.html>).

Critically, throughout several years of reports on this “strong economy,”
there have also been numerous reports on the persistent problem of low and
stagnant wages. Although there are reports indicating that workers are
finally seeing slightly better
<https://www.nytimes.com/2019/04/24/upshot/why-america-may-already-have-its-highest-minimum-wage.html>
wage
growth after decades of stagnant wages, it’s still only a fraction of
record corporate profits (*Washington Post*, 11/2/18
<https://www.washingtonpost.com/business/2018/11/02/workers-are-finally-seeing-higher-wages-its-fraction-record-corporate-profits/>
).

The long-term trend of wages not keeping up with the prices of essentials
<https://www.theatlantic.com/business/archive/2014/05/its-expensive-to-be-poor/361533/>
hasn’t
improved much, as it’s been reported that minimum-wage workers can’t afford
a two-bedroom apartment
<https://www.citylab.com/equity/2019/06/affordable-housing-minimum-wage-rent-apartment-house-rental/592024/>
anywhere
in the US. (The Economic Policy Institute—7/19/18
<https://www.epi.org/blog/why-is-real-wage-growth-anemic-its-not-because-of-a-skills-shortage/>
, 2/5/19
<https://www.epi.org/publication/why-america-needs-a-15-minimum-wage/>—found
that if the minimum wage tracked productivity growth
<https://www.epi.org/productivity-pay-gap/> since the 1960s, it would now
be over $20 an hour.)

Almost half of US families are unable to afford the basics like rent and
food
<https://money.cnn.com/2018/05/17/news/economy/us-middle-class-basics-study/index.html>,
and 40% can’t afford an unexpected $400 expense
<https://www.cnbc.com/2019/07/20/heres-why-so-many-americans-cant-handle-a-400-unexpected-expense.html>,
with almost 80% of US workers living paycheck to paycheck
<https://www.cnbc.com/2019/01/09/shutdown-highlights-that-4-in-5-us-workers-live-paycheck-to-paycheck.html>.
Perhaps this is why increasing numbers of people are living in poverty, in
cars and on the streets, *despite* having jobs (*CBS*, 7/31/18
<https://www.cbsnews.com/news/more-americans-are-living-in-their-vehicles-amid-high-housing-prices/>
; *New York Times*, 9/11/18
<https://www.nytimes.com/2018/09/11/magazine/americans-jobs-poverty-homeless.html>
; *Washington Post*, 3/22/19
<https://www.washingtonpost.com/news/local/wp/2019/03/22/feature/homeless-living-in-a-tent-blocks-from-the-u-s-capitol-and-working-full-time/?fbclid=IwAR16Ukr6agj097Vw7FfTYPnltvHPgUF7DIrC6e1cFYzhOmCkjigC0uuQbe8&wpisrc=nl_rainbow&wpmm=1>).
These low and stagnant wages may also be why Americans are increasingly
buried in debt, as student loan debt reached $1.5 trillion last year,
exceeding all other forms of consumer debt except mortgages, and auto debt
is up nearly 40% from the last decade, reaching $1.3 trillion (*Wall Street
Journal*, 8/1/19
<https://www.wsj.com/articles/families-go-deep-in-debt-to-stay-in-the-middle-class-11564673734>
).

One of the grimmest signs that the economy is not working for many is that
US life expectancy continues to drop
<https://www.cdc.gov/nchs/data/hus/2018/004.pdf>, from a peak of 78.9 in
2014 to 78.6 in 2017. The drop is led by rising deaths from suicide, drug
overdose and alcohol-related disease—known as “diseases of despair”—among
men, particularly those without college degrees (Brookings Institution,
11/7/19
<https://www.brookings.edu/blog/up-front/2019/11/07/american-optimism-longevity-and-the-role-of-lost-hope-in-deaths-of-despair/>
).
[image: Atlantic: Government Debt Isn't the Problem—Private Debt Is]

*Atlantic (9/9/14
<https://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865/>)*

*Richard Wolff* has been one of the few economists who have argued that the
media’s false “recovery hype” is a “weapon of mass distraction
<https://www.theguardian.com/commentisfree/2013/sep/27/recovery-hype-capitalism-weapon>”
(*Extra!*, 12/14 <https://fair.org/extra/there-really-is-no-recovery/>) and
observed (in *Capitalism’s Crisis Deepens*
<https://www.google.com/books/edition/Capitalism_s_Crisis_Deepens/pc-pDAAAQBAJ?hl=en&gbpv=1&bsq=credit%20cards>)
that the finance industry’s decades-long wave of spectacular growth has
coincided with stagnating wages beginning in the 1970s, as more and more
Americans have to rely on debt to maintain their lifestyle and keep up with
the soaring costs of essentials like housing
<https://www.citylab.com/perspective/2018/11/housing-cant-both-be-a-good-investment-and-be-affordable/574813/?utm_campaign=the-atlantic&utm_content=edit-promo&utm_medium=social&utm_source=facebook&utm_term=2018-11-19T20%3A01%3A12&fbclid=IwAR19qt8ZyN6NcPYJQ-oP2Rto28D_8LosyIVj317_0MOz-9WF5WzpC9rvdE4>
, healthcare
<https://www.cnbc.com/2019/02/11/this-is-the-real-reason-most-americans-file-for-bankruptcy.html>
 and higher education
<https://www.latimes.com/business/la-fi-student-loan-debt-20181018-story.html>.
Historically, private debt—not public debt—is the harbinger of economic
disaster, contrary to the obsessive focus of media austerity hawks (
*Atlantic*, 9/9/14
<https://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865/>
; *Guardian*, 11/4/13
<https://www.theguardian.com/commentisfree/2013/nov/04/great-austerity-shell-game>
; *FAIR.org*, 2/22/19
<https://fair.org/home/new-york-times-provides-cover-for-austerity-cranks/>
).

Despite corporate media’s ludicrous “factchecks”
<https://www.thenation.com/article/bernie-sanders-bad-fact-checking/> on
presidential candidate Bernie Sanders’ (correct) claim that “three people
in this country own more wealth than the bottom half of America” (the
*Washington
Post* argued
<https://www.washingtonpost.com/politics/2019/live-updates/general-election/fact-checking-the-first-democratic-debate/sanders-on-concentration-of-wealth/?arc404=true>
that
the comparison is “not especially meaningful,” because “people in the
bottom half have essentially no wealth, as debts cancel out whatever assets
they might have”), journalists have consistently reported on the reality of
rising prosperity of the wealthy, record stock markets
<https://www.cnbc.com/2019/11/01/the-dow-could-soon-join-other-benchmarks-at-a-record-as-strong-november-seasonality-kicks-in.html>
and
soaring corporate profits
<https://www.cnbc.com/2018/03/28/corporate-profits-highest-in-seven-years-but-that-may-not-help-stocks.html>.
(Of course, such stories are often presented as good news, as if higher
stock prices benefited anyone other than people who own stock—*Extra!*,
7–8/02 <https://fair.org/extra/celebrating-as-the-rich-get-richer/>.)

Matt Bruenig at the People’s Policy Institute found that the top 1
percent’s net worth has increased by $21 trillion
<https://www.peoplespolicyproject.org/2019/06/14/top-1-up-21-trillion-bottom-50-down-900-billion/>,
while the bottom 50% of the population saw theirs decrease by $900 billion,
from 1989 to 2018. Perhaps this is due to massive
<https://www.reuters.com/article/us-usa-tax-offshore/big-u-s-firms-hold-2-1-trillion-overseas-to-avoid-taxes-study-idUSKCN0S008U20151006>
 criminal tax evasion/avoidance
<https://www.currentaffairs.org/2019/10/how-the-rich-get-away-with-it> by
the wealthy
<https://www.nytimes.com/2017/11/07/world/offshore-tax-havens.html> and
corporations
<https://fortune.com/2019/04/11/amazon-starbucks-corporate-tax-avoidance/> in
overseas tax havens (euphemistically labeled “loopholes”), coupled
with unprecedented
tax cuts
<https://www.washingtonpost.com/business/2019/10/08/first-time-history-us-billionaires-paid-lower-tax-rate-than-working-class-last-year/>
for
the rich, alongside relentless
<https://thinkprogress.org/irs-private-debt-collectors-47da9d18ab06/amp/?__twitter_impression=true>
 selective enforcement
<https://www.propublica.org/article/irs-sorry-but-its-just-easier-and-cheaper-to-audit-the-poor>
 and *increased* taxes on the working class
<https://www.washingtonpost.com/business/economy/irs-outsources-debt-collection-to-private-firms-and-the-poor-feel-the-sting-watchdog-charges/2018/07/23/30edb5da-89ce-11e8-a345-a1bf7847b375_story.html>
 (*FAIR.org*, 12/6/17
<https://fair.org/home/media-gop-tax-bill-class-warfare-rich/>, 1/17/18
<https://fair.org/home/tax-bill-that-steals-from-poor-to-give-to-rich-mislabeled-as-cut/>
).

Given all this, GDP growth tells us little
<https://www.theguardian.com/business/2018/dec/03/gdp-wellbeing-health-education-environment-joseph-stiglitz>
about
how wealth and income are distributed amongst the US population. It’s
*theoretically* possible for GDP growth to be entirely accounted for by
things like increased military spending
<https://www.cnbc.com/2019/03/12/the-pentagon-is-asking-for-a-colossal-718-billion-for-its-2020-defense-budget.html>
for
a US-driven arms race
<https://fair.org/home/hypersonic-missiles-arent-starting-an-arms-race-washington-is/>
, corporations buying back stocks
<https://www.theatlantic.com/ideas/archive/2018/07/are-stock-buybacks-starving-the-economy/566387/>
and
paying out dividends to further inflate their stock prices—instead of
giving raises to employees or hiring more of them—and the wealthy’s
environmentally
destructive
<https://jacobinmag.com/2019/07/environment-rich-people-tesla-powerwall-super-yacht-private-jet>
conspicuous
consumption of things like private jets
<https://www.bloomberg.com/news/articles/2019-02-27/money-managers-get-break-for-plane-purchases-in-trump-tax-law>
 and superyachts
<https://www.nytimes.com/2019/10/08/style/superyachts-billionaires.html>,
since all of them count towards GDP. Journalists shouldn’t use GDP as an
indicator of economic health without further context, because growing GDP
alongside skyrocketing income and wealth inequality is not evidence of a
“strong” economy, but of a *parasitic* economy
<https://www.theguardian.com/commentisfree/2017/mar/30/wealth-banks-google-facebook-society-economy-parasites>
.

What explains corporate media’s credulous reliance on uninformative
economic measures
<https://www.jacobinmag.com/2017/08/stock-market-boom-wages-inequality>,
and contradictory references to a “strong economy,” alongside reports on a
struggling working class? It makes little sense if one assumes corporate
journalists are primarily concerned with informing the public. It makes a
great deal of sense when one realizes that corporate news outlets have an
inherent interest in cloaking class warfare by equating a “strong economy”
with the prosperity of the investor class, even if it comes at the expense
of everyone else (*FAIR.org*, 10/16/19
<https://fair.org/home/wsj-nyt-celebrate-shale-revolution-for-investor-class-despite-its-leading-to-our-doom/>
).

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