SOCIAL DISTANCING: THE WAY WE ARE AND WILL BE FOR AWHILE

Millions of Americans find themselves under some kind of social distancing order. Many

cities and counties, and some states, have imposed shelter-in-place requirements as a way of fighting the coronavirus. Some political leaders and media pundits have cast the need for social

distancing in patriotic terms, invoking John F. Kennedy’s “…ask what you can do for your country” language as a way of inspiring compliance with social distancing orders or requests.

                  

                                                         JFK delivering inaugural speech, 1963

There is a lot going on in the world now and a lot we could talk about. Today, we explore social distancing and its current and future influence on life in America. How are people coping? What does this practice mean for the nation going forward?

We’re All Day-to-Day

Sports teams describe players with injuries that leave the player’s status uncertain as “day-to-day.” It means the player might or might not make the next practice or game. Whether he or she participates depends on

healing, rehab, pain toleration, the player's mental attitude, etc. Given the uncertainty brought on by the coronavirus pandemic, many people are feeling day-to-day about life.

Much uncertainty exists about what contracting the disease means. A minor

irritation akin to the common cold? Severe illness and hospitalization resembling pneumonia? A death sentence? The answers depend on age, overall health, availability of medical care, and some unknowns. There’s a lot we don’t know about this disease, as the absence of a vaccine demonstrates.

               

That brings us to another problem. The United States lacks sufficient medical resources for fighting a massive outbreak in

which huge numbers of people require hospitalization. Health officials cry out for ventilators for patients and for masks and other protective gear for medical workers. Many people justifiably fear contaminated medical providers and equipment. 

          

                                          Ventilator & Protective Gear needed for Covid-19 care

Another thing creating uncertainty lies in the fact no one knows when this situation will improve. Projections of the duration run weeks, to months, to a year and a half, the earliest we’ve heard we might expect a vaccine.  In the meantime, we suffer loss of human contact, sports, and other things that make us whole. Neither men nor women live by adequately stocked grocery stores alone.

How long must we stay home, avoid friends and neighbors, forsake bars, restaurants, and other gathering places?  How long before we can give a friend or business colleague a firm handshake or big hug expressing our joy

at greeting them? How long before we see live sports played on television again? All three of us sorely miss March madness. Henry and Rob lament the absence of the Masters Golf Tournament this spring. Woodson faces withdrawal symptoms with no NBA playoffs in reasonable sight. 

              

The New Normal

After the September 11 attacks people asked when we’d get back to normal. The truth is

that it didn’t take long, but it never happened. Yes, by October we returned to work, flew again on airplanes, and shopped in stores, things people questioned if we’d do anytime soon after those bleak days in September 2001. Life got going again, but with big differences.

We put up with things – intrusive airport security, metal detectors, and bag searches

at sporting events, massive camera surveillance on public streets – we never thought we’d stand for. We accepted, in the form of the Patriot Act, censorship and other limits on civil liberties many of us abhor. We haven’t felt much of that law’s sting lately because we haven’t had another attack approaching the magnitude of September 11. Those provisions remain in place, however, and the government will trot them out in the event of another calamity. America usually lives with a “New Normal” after tragedies and the coronavirus will probably produce its own. Like what?  Start with economic dislocation.

Even if this ends before summer, the The United States will face significant economic problems going forward. Despite the stimulus package, some small businesses –and many

jobs – will disappear. Unemployment may remain high for months. Even industries getting federal help could have a rough time recovering.  Sooner or later, we must pay for the stimulus

funding. If we don’t, we’ll have limited growth for a long time or face significant inflation or both.

What about replenishing and restocking the

medical supplies being used up in this pandemic? Is this a warning about our health care system in general? We won’t debate Medicare-for-All v. some other approach here. But, doesn’t this crisis make clear we must tackle the entire health care issue with the objective of getting every American insured?

At a social level, how soon will Americans

feel comfortable attending sporting events, patronizing theaters, eating at restaurants, and showing up at other places where large crowds gather? Since many houses of worship coped with the virus crisis by putting services online, could that become the new way we do church in America? Could corporate worship services become obsolete and won’t this new approach affect church

giving? How about shopping? Will more and more of it happen online? Will brick and mortar stores become a thing of the past? What’s

the long-term impact on voting? Did the pandemic make a definitive case for voting by mail?  Will personalized political gatherings go extinct, since campaigning for office likely will change?

We are in uncharted territory. Americans are resilient, as demonstrated in past calamities. Everything in our history says we’ll bounce back. It will, however, take some time and some things may forever look different. 

               

                         

INCOME INEQUALITY: SOME BASICS

We recently began discussing income inequality in America. We focused our first post on poverty

and who bears the most significant responsibility for attacking the problem of people in our society who don’t have enough for a respectable existence free of want. More recently, we identified and fleshed out barriers to freedom from poverty and income inequality. 

We look now at some of the policy reasons for the divide between those at the top and the rest of the population. A real gap exists between the wealthiest Americans and even the middle class, a circumstance producing anxiety and political instability that feeds our destructive partisan divide. In time, we’ll consider solutions and evaluate proposals offered by the 2020 presidential candidates and others. We think it important we help voters separate real, viable solutions from noise and platitudes.

The Depth of the Problem

We hear much about the “one percent” and how they’ve done better than everyone else.  The numbers tell a disturbing

story of a growing wealth gap in the United States. According to a report by scholars associated with the Roosevelt Institute, since 1980, the share of national income earned by the top 1% doubled, to 20% in 2014, up from 10%. That hasn’t happened in all western democracies. In Denmark, for example, the 1%’s share went up only from 5% to 6%. 

Governmental policies and actions affecting both the top and bottom parts of the economy contribute. At the top, reductions in tax rates gave the wealthy a windfall.  At the bottom, policies negatively affecting wages and job growth suppressed lower income individuals.

Most “tax reform” has benefited upper income tax payers, including the 2017 tax bill the Trump administration touts as its major achievemet. In the

1980s, the top marginal tax rate dropped from 70% to 28% and has remained below 40% since. Capital gains tax changes also heavily favored the wealthy, with 65% of the benefits going to the top 20% of tax payers. More than lower tax rates help the wealthy. Half of tax expenditures – deductions for 401K retirement accounts, mortgages, and the like – go for things from which only the top 20% of tax payers benefit.

Meantime, 80% of job growth has come in low wage service and retail jobs. Worker power through collective bargaining decreased as union membership declined. In 1960, 30% of U.S. workers participated in unions. That dropped to 20% in 1984 and to just over 11 % in 2014. Wages and other compensation stagnated with this development, rising only 19 % between 1973 and 2013, despite a 161% increase in worker productivity. 

 

Government Complicity

Politicians of all ideological stripes like saying government shouldn’t “pick winners and losers” in the economy. Fair enough as a theory, but the idea does not comport with reality or history. In addition to tax policy, government has long been in the business of picking economic winners and losers. Start, for example, with the racially discriminatory housing policies so devastatingly described by Richard Rothstein in his path breaking book The Color of Law: A Forgotten History of How Our Government Segregated America. We exhaustively detailed Professor Rothstein’s findings in a series of posts in 2018 and need not repeat them here in making the point that many governmental agencies frequently pick economic winners and losers. 

The Federal Reserve’s hyper focus on fighting inflation has had the same kind of effect. By tightening the money supply through higher interest rates at the first sign of upward price pressure, the Fed has stopped or reduced the job creating opportunities of large and small businesses and stymied start-up activity by making credit less available. Most progressive economists agree this made returning to full employment slower and more difficult, particularly impacting lower wage earners who have more difficulty insulating themselves from the whims of the business cycle. 

Then there’s the matter of the federal minimum wage. It stands now at $7.25 per hour and hasn’t gone up since July 2009. Opponents of a

higher federal minimum wage, mostly  Republicans, argue raising it kills jobs, despite evidence to the contrary developed by economists like Columbia’s Joseph Stiglitz, a leading income inequality scholar. Whatever the reality on that issue, keeping the minimum wage low disadvantages a large segment of the American economy, giving employers a victory and wage earners a loss. No basis exists for arguing the government hasn’t had a major role in creating our current measure of income inequality.  

Why?

Income inequality exists for many reasons. Some are purely political, like the election of Ronald Reagan and implementation of his tax cuts in the 1980s. Some emanated from fears based on historical events. The inflation of the 1970s, partly sparked by upheavals in international energy markets, helped start the Federal Reserve on its anti-inflation crusade. Some have roots in personal greed, “rent seeking” as economists call the efforts of manipulative players in the economy who extract financial advantage through exploitation.

The reasons for income inequality bring into play a variety of individual and societal factors. The good news is that more people, including some running for president, now think we should do something about the problem. We see paying attention to them in the coming months as a good idea.