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Works and Days

Thoughts on a Surreal Depression

May 7th, 2011 - 9:59 am

And yet all I heard were stories of happiness, hard work, and collective sacrifice. Relatives would say that the “’30s” were the worst and best years of their lives, as they related sagas of real genius involving fruit canning and curing, ad hoc repairs to equipment, and cobbled together furniture and clothing —all without spending any money. I just looked in my grandfather’s diary; he has a happy entry in 1958 about raisin prices over $200 a ton — quite in contrast to $40 a ton he received in 1936. (A ton of raisins would fill two of those huge watermelon bins you see in the supermarket.)

In contrast, in the present depression, the out of work and poor are as numerous, but both unhappier and yet far better off than prior generations. This is not the rant of some right-wing laudator temporis acti, or the death throes of an aging old white guy, but rather empirically based and shared by most of my friends in the ascendant Mexican-American middle and upper-middle classes, many of whom are becoming quite conservative.

The cars of our poorer brethren in our major discount stores are late model and often expensive. People get into them with full carts of food and clothing. Housing here is cheap and good. How to square this circle between official poverty and misery and the veneer of a well-off general public?

I’ve been discussing these disconnects with farmers, a professor or two from CSU Fresno, and local business people. All come to the same conclusions. There is a vast and completely unreported cash economy in Central California. Tile-setters, carpenters, landscapers, tree-cutters, general handymen, cooks, housekeepers, and personal attendants are all both finding work and being paid in cash. Peddlers (no income or sales taxes) are on nearly every major rural intersection. You can buy everything from a new pressure washer to tropical fruit drinks. For this essay, I stopped at one last week and surveyed their roto-tillers, lawn mowers, and chain saws, new and good brands.

New “restaurants” are sprouting all over the highways — mobile stainless-steel encased canteens with awnings and chairs set up along the road. And yet for all the cash economy, it seems almost everyone in the food stores and doctors’ offices are on food stamps, Medi-Cal, and rent subsidies. A carload of people drove in last week, inquiring about a house nearby; the occupants assured me that they had county housing vouchers.

A third ingredient is easy credit, whether for credit cards or late model cars. The result is statistically we are impoverished with near 20% unemployment; but in reality something stranger and weirder is transpiring. Prosperity and well-being are mostly assessed in relative not absolute terms. There is little appreciation of the wonders of the iPhone, whose computerized, and GPS-driven gadgetry would have been confined to millionaires ten years ago; there is frequent lamentation that the iPhone in question is not the latest model as others enjoy. A Camry is not worshipped as a wondrous machine that can get one 200 miles in 3 hours, in air-conditioned and musical luxury, only that one has a 4, not a 6 cylinder model, without leather seats and 6-disc CD.

The combination of 2 billion Indians and Chinese in the world marketplace, exporting cheap goods, has meant fewer jobs for Americans and far more material playthings now accessible to every stratum of society. Again, easy credit, combined with little shame or penalty in defaulting on what one owes, has allowed a superficial parity with the upper-middle class. Massive government transfers and relaxed eligibility have ensured households thousands of dollars in entitlements and subsidies. We have printed $5 trillion since 2009, and borrowed $1.6 trillion just this year. And the huge influx of easy government cash shows here.

Cash wages have meant augmented entitlement money and are competitive with those who are formally employed and who pay 30% of their money in payroll, health care, and federal, state, and local income tax deductions. The result is an odd sort of poverty, in which superficially the unemployed and poor to the naked eyed are almost identical to the upper middle classes.

Indeed what distinguishes the latter — the ability to pay a child’s tuition at college, frequent travel, higher end clothes and cars, a pool, or boat — seems rather superfluous. Need-based student loans and grants are now ubiquitous, one can learn more about Florence on a cable TV in-depth tour than going there, and a Lexus or Mercedes is not much different in reliability and comfort from a Honda or Nissan. I did an experiment the other day. I priced “wicker” furniture at Kmart and Wal-Mart and then drove up to an upscale North Fresno design outdoor living boutique. In short, the local version from China was about $300 for an ensemble, the high-end version was priced at $1700. To the naked eye, they were again almost identical and explain what I mean by the “veneer” of affluence. Ditto everything from jogging clothes to watches, and one can be outfitted in Selma for 10% of the cost of the brands of those popular in Palo Alto.

Some final tesserae in this confusing mosaic: The rhetoric of poverty and oppression is far more strident than the Depression-era, spread the wealth, Huey Long sort. The sense of injustice voiced by the SEIU or public employee unions suggests wide scale Dickensian malnutrition, not an epidemic of obesity so amply chronicled by the first lady.

History’s revolutions and upheavals — whether the Nika rioting in Constantinople, the periodic uprising of the turba in Rome, the French upheavals, or the Bolshevik Revolution — are rarely fueled by the starving and despised, but by the subsidized and frustrated, who either see their umbilical cord threatened, or their comfort and subsidies static rather than expansive — or their own condition surpassed by that of an envied kulak class. Perceived relative inequality rather than absolute poverty is the engine of revolution.

These are strange and dangerous times. An insolvent federal government, an exporting China and India, and an almost complete indifference to federal immigration, tax, and regulatory laws have all combined to create a well-entitled but increasingly angry population, one “empowered” and made more, not less, bitter by the last two years of governance in Washington.

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