In business circles they know that what gets measured gets done. It’s the numbers that accountants provide and managers use to set company policies that determine what these policies are, what gets priorities, what doesn’t.
The same is true, of course, when it comes to setting government economic policies and priorities. If the numbers used to shape this policy — the policy-generating metrics — are geared a certain way, the policies ultimately produced are skewed that way.
Today, in Washington and state capitals around the country, the metrics that largely determine economic policies are not metrics that promote the interests of the American middle class. In consequence, not only is the size of this all-important demographic shrinking, but those still clinging to its benefits and perks are having a tougher and tougher time doing so.
Looking at three basic metrics used to set government policies tell this story clearly.
JOBS: In April the government reported that 165,000 new jobs were created. Not a great number, true, but one that policy-makers in Washington were happy to claim continued to show improvement in the job market.
Except they didn’t. Not from a middle class perspective.
Dig into this jobs report and you’ll see what it really shows is a continued shrinking of middle class living standards. Many of the new jobs created in April were part-time or less than 35 hours-per-week. New full-time jobs were mostly in low wage, little or no benefits sectors like retail. Higher paying jobs in government and construction shrank that month. The average wage of workers actually fell. Not a pretty middle class picture.
GROWTH: Economic growth is the present questing beast of both Democrats and Republicans, as well as most economists. The economic growth numbers that policy makers use have shown improvement in recent decades. Not for the middle class, however.
Since the late 1970s, more than 36 percent of all income growth has gone to the top .01 percent of Americans, and more than 55 percent to just the top 1 percent. National economic growth since 2011 has boosted the top 1 percent by another 11 percent, while there’s been a small decline for most other Americans — especially middle class Americans.
There’s no trickle down here. For the middle class, the economic growth metrics used by government planners is a poke in the eye.
INFLATION: Taking official government numbers on inflation at face value (a stretch, but we’ll overlook that here), there’s hardly been any in the last few years, in spite of the Fed’s quantitative easing (i.e. money printing) that pours $85 billion into the economy each month. This much ballyhooed fact has been labeled a great triumph by government economic planners, an economic stimulus that hasn’t concurrently caused inflation.
In fact, it’s only really been a boon for the very rich. For the middle class, especially older middle class Americans who generally opt for safety in their investments, this Fed approach to stimulus and inflation control has been a source of great pain.
For safety-oriented savers (the traditional source of investment capital for worthwhile projects), getting a half-percent return on government bonds when official inflation is running three rimes faster means automatic losses and decreasing spending power. And while 47 percent of American families have shares in a stock market endlessly pumped up by the Fed, only 10 percent have more than $5,000 in this market — and most of this is in pension funds that can’t be tapped without a large tax penalty, while Wall Street bank traders who almost never lose in today’s stock market (three of the six largest Wall Street banks didn’t lose money a single trading day last quarter) garner their profits immediately.
CONCLUSION
What gets counted gets done, in both business and government policy making. What’s getting counted by government policy makers today, to an extraordinary extent, helps the very richest in our society — and most dramatically the investing and lending richest — rather than the middle class.
There’s other ways to figure government policy-making numbers. There’s other metrics that can be used to make policy. People in Washington should be encouraged to adopt these middle class-friendly alternative metrics. Failing to do so, they should be shoveled out of office as soon as possible, and sent off to receive the sinecures they’ve earned servicing their Wall Street masters.
(Michael Silverstein’s newest novel, Murder At Bernstein’s, is the tale of a financial news billionaire who wants to be elected Mayor Of Philadelphia.)