A short discussion on the radio the other day caught my ear. Like so many we have our antennae up looking for signs that the great house of cards that Republicans claim are good economic policies will start coming apart at the seams.
The discussion was concerning what was the cause of the current slowdown in retail activity. While the discussion was focused on the current state of brick-and-mortor retail establishments with former giants such as Kmart and Sears nearing their death knell and others such as JC Penny’s, Macy’s, Abercrombie and Fitch and The Limited closing numbers of stores.
The panel blamed the internet or overbuilding as the cause, but no one even approached the elephant in the room until the last minute or so of the discussion. That elephant is the uncertainty being faced by the vast majority of Americans at this moment.
When Trump and Ryan talk about gutting Obamacare they are threatening not only those who are enrolled in the ACA, but also every household that is covered through private health insurance. As the radical Republicans reshape health care every household in the country will be affected, even Medicare households. People will either lose insurance or the price will rise dramatically and cover much less. Better start saving now.
What is most cynical about this is that the drive for gutting health care for millions is to free that money up to give huge tax cuts to the wealthy.
In the face of such uncertainty, many folks are cutting back on spending. Folks are no longer dreaming of buying that boat or camper. Heck, a new bed may even be out of the question. Just a year ago folks were finally putting dreams back on track after many shaky years following the great Republican Recession of 2008.
Few remember that the nation turned its collective eyes to a skinny black man from Illinois to pull the country and the world from the brink of a possible depression that could have been the worst ever. Few remember that Republicans obstructed programs that would shorten the recession at every turn.
Yet Obama was able to slowly pull the country and the world back from the brink to the point where the economy was at least healthy enough for people to dream again.
However as soon as the new president was installed in Washington and the new legislature was installed in Des Moines these folks went about their work of turning the country’s and the state’s wealth over to the rich, those in the middle class started getting those queasy feelings of uncertainty again:
Will my job still be there?
Will my pay be cut?
Will I lose my savings – for the kids college, for retirement?
Will we lose our health care or will it still cover me if I do get sick?
Will I have to deal with pre-existing conditions again?
Will the cost of college be so expensive that we will have to remortgage the house so the kids can go to college?
Why can’t the damn Republicans just let us have healthcare and be able to get decent wages and send our kids to college?
As Republicans in the Iowa legislature passed bills that took away bargaining rights from a large swath of Iowa workers, cut wages for another large swath, cut workman’s compensation and cut support for education at all levels the uncertainty started rearing its ugly head in many Iowa households.
At the same time, Republicans in Washington moved quickly to take healthcare guarantees away from Americans and return to the bad old days of pre-existing condition clauses. They are also loudly threatening to cut both Social Security and Medicare drastically.
Americans try to plan their lives for tomorrow, next week, next year and five and ten years or more out. In order to make plans they must have some baseline certainties to work from. For decades Social Security and Medicare were baseline certainties, not only for the elderly but also for their families who would otherwise have to support them.
For many decades decent jobs with good pay were certainties, but that has eroded. While productivity and wealth have both dramatically increased, the workers share stagnated. Increases in share of the wealth now goes to the top.
Access to affordable college was once a certainty in America. It still is in most other major economies. Sadly in America the cost of education has skyrocketed while the the aforementioned wages have stagnated making college a huge burden.
Healthcare was slowly coming to be something that Americans could plan on also. With the ascendancy of the Republican Party healthcare is no longer seen a a certainty and the costs will most certainly be less controlled than they are now.
Most recessions and depressions are considered to be caused by a lack of faith in the economy. By undermining the very baseline programs that keep faith in the economy strong, Republicans have gone a long way in undermining the economy. When consumers feel uncertain they cut back on purchases beyond the necessary food, housing and clothing. When consumers cut back on spending, workers lose jobs which in turn prompts a new round of consumer spending cutbacks.
One of the first signs of coming problems is a slowdown in retail sales. Reports for the first quarter reflect a slowdown. Many of the closings mentioned above were due to overbuilding and competition from the cyber stores, but the uncertainty has been a factor since the campaign. The ascension of Republicans has only accelerated the uncertainty. Fearful consumers will hang on to their money rather than spend it.
I hope I am wrong, but as congress once again threatens major cutbacks in the ACA with Social Security and Medicare in its sights, expect consumers to react.