The lethal combination of governmental mismanagement and corporate greed has finally resulted in America’s gross domestic product having shrunk by a 1 percent annual rate in the first quarter of this year.
Irony comes in the form of President Barack Obama, in his address at West Point the day before the revelation that the economy is shrinking rather than growing, having spoken of America’s “growing economy” as “a key source of American strength,” and having claimed also that, “our economy remains the most dynamic on Earth.”
The government and some observers are claiming that the pathetic performance in the first quarter of the year was due to cold weather. Those who use the weather excuse predict a “spring back” in the April-June quarter. If they're right, we'll know in early July. If they're wrong, and it's another quarter of contraction, we'll officially have a recession
What this is really about is a result of two phenomena. The first is that in 2009 Mr. Obama inherited an economy already in perilous condition from President George W. Bush’s two unfunded wars, tax cuts for the rich and hollowed-out approach to financial regulation. Mr. Obama’s steps to try to fix the situation then strongly favored bankers and Wall Street, with surprising disregard for the ordinary people who had elected him.
The next party to the current disaster is Congress, which through Republican malice, Democratic sleepiness and the gridlock resulting from the two, has managed to hamstring any effort — think tax reform, gender pay equality, minimum wage increase — which might serve to improve matters for the American middle class.
Finally, America’s oligarchs, the CEOs and board chairmen, have remained heedless to rising popular fury at their continuing successful efforts to benefit themselves at the population’s expense. The median annual compensation of an American corporate CEO has risen to $10 million, 257 times the annual median wage of a worker in the company. The Post-Gazette’s “Fortunate 50” index of May 18 showed the average CEO in this region receiving $5.7 million a year, enough to pay 136 schoolteachers for a year.
The 1 percent shrinkage so far this year could serve as a wake-up call, if anyone is inclined to get angry about such things and take appropriate action.