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After Their Boom, It’s Our Recession —
Heads They Win,
Tails We Lose

UE Research Director

If you haven’t been hibernating this winter, you know that the economy’s stopped booming. Even if you’re skeptical about any impending recession (lots of economists still think that scenario is too gloomy), many indicators are unmistakably pointing to a real economic slowdown. Dotcom entrepreneurs are on the streets, people are postponing the purchase of cars, and "consumer confidence" has dropped dramatically from the highs of last year. More alarming for us is a steep decline in business investment in new plant and equipment and, alongside that, recent announcements of mass layoffs from the country’s largest manufacturers.

While a slowing economy is likely to alter the problems that we face day to day, it’s worth remembering that the boom was far from perfect. A recent article in the Financial Times puzzled over the phenomenon of laid off workers cheering their pink slips, but anybody who’s faced mandatory overtime for weeks on end can readily sympathize. A few weeks of unemployment will no doubt dampen these workers’ enthusiasm, but the truth is that over the course of the boom, we’ve picked up one month per year of extra hours. Towards the very end of the boom, we began to be paid a bit more for those hours, as real wages started to rebound from their decade’s long descent.


But by far, the largest benefits of brisk economic growth went to the wealthy. We exit the boom with wealth more polarized that it has been since the nineteenth century. And the tight labor markets which cause such concern on Wall Street really did very little to improve our futures. Unemployment declined, to be sure. But by and large we were not able to parlay this temporary advantage into longer-term economic security. Indeed, the boom was accompanied by an unprecedented increase in consumer debt (that in part drove growth) and a plunge in the rate of savings for most Americans. As the economy slows, many people are more susceptible than ever to economic disaster.

If booms aren’t necessarily good, slowdowns aren’t necessarily bad. For instance, if we were able to achieve a goal long advocated by the UE, namely, a full-employment with income maintenance, a slowdown could be a very good thing for our families and communities. We could use our reduced hours to volunteer in our community, to read to our children, or to learn the polka. Alas, it appears likely that the current bust will be managed very much like the previous boom. Whether growing or shrinking, the economy is run to advance the interest of corporations.


We had only just heard "drop in the NASDAQ" and employers got busy protecting corporate profits by reducing inventories and payrolls. Never mind that both of these actions can themselves deepen recessionary tendencies. So the Fed got busy lowering interest rates, hoping to free up cash and prop up the stock market. Elected officials then began to debate the size rather than the sanity of an income tax cut. And just for good measure, bank lobbyists got busy pushing legislation to make it harder for individuals— but not corporations— to get debt relief through bankruptcy. Bosses got busy asking for givebacks of whatever modest gains we made over the past couple of years.

For the past quarter century our choice for some time has been between booming for the boss or busting for the boss. And of the two, booming is better, if only because it improves our chance of employment. No question about it: the coming slowdown spells rough sledding for most working people. But the answer is not another boom like the last one. The answer remains a struggle to make booms and busts alike respond to the priorities of America’s working people.

UE News - 02/01

Home -> UE News -> 2001 Archives -> Article

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