It’s Morning, Again, In America…Or Is It?

LarryChecco_Photo_Largeby Larry Checco

sTo hear many politicians, pundits and financial analysts tell it, it’s morning again in America.

The stock market is at record highs. Corporations are sitting on trillions of dollars in cash (Apple, alone, has US $178 billion in cash). Employers are adding workers to their payrolls at an average of well over 200,000 jobs a month.

For the period ending December 2014, even workers’ salaries increased by 2.2 percent, according to the U.S. Bureau of Labor Statistics. And inflation remains low.

In short, the catfish are jumping, and the cotton is rising high in the morning sun.

But for millions of working-class American families the damage caused by the Great Recession has been done, and will take decades, if not generations to undo. These folks don’t know from morning in America. They’re still living a nightmare.

Some inconvenient facts

According to the Russell Sage Foundation, the typical American household saw its wealth cut nearly in half as a result of the Great Recession. From 2007 to 2013, median household wealth, adjusted for inflation, decreased 43 percent, from $98,872 to $56,335.

Desperate to stay afloat, countless working-class Americans have gone through, or are still spending down, their life savings, including their retirement funds. Some are just another job loss or major illness away from total financial ruin.

Many boomers approaching retirement age are staying in the workforce longer. When they do retire, many, because of their depleted savings, will be forced to rely on Social Security as their only means of support.

Millennials are finding it hard to find good paying jobs and the unemployment rate for young African-American males remains at nearly 25 percent.

Perhaps the worst tragedy of the Great Recession is that the greatest vehicle for transferring wealth to future generations—namely, the family home—is no longer available to the estimated eight million families who have lost, or may still lose, theirs due to foreclosure, according to Moody’s Analytics’ chief economist, Mark Zandi.

Although foreclosure rates have abated, one out of 10 homeowners — or 5.1 million homes — remain underwater, meaning they are worth less than the mortgages owed on them, down from a high of 12.1 million homes that were underwater as recently as the fourth quarter of 2011, according to MarketWatch.

How did we get here?

Irresponsible lending—and borrowing—as well as trash subprime mortgage products foisted on unsuspecting folks can be blamed for a lot of the wrack and ruin in both the housing industry and the general economy.

Even though some financial analysts are predicting that 2015 will be a good year for U.S. equities—some even rosily predict good news for the next five years—the low- and middle-income families hurt most by the Great Recession will receive the least benefit from a recovering economy.

According to the latest Federal Reserve survey data, the vast majority of Americans—94.5 percent—hold one sort of financial asset or another, from savings and checking accounts to stocks and cash-value life insurance policies.

The sad fact is that America’s richest 10 percent hold nearly 85% of these assets, according to Inequality.org, a project of the Institute for Policy Studies.

So, yes, millions of Americans are back working—but at a fraction of what they were making in the past, and with fewer benefits. Some have even had their pensions reduced.

How long will it take for these folks to return to pre-recession levels of savings and wealth formation? For most, decades, if not longer. Some, perhaps, never.

More importantly, what will it take for us as a nation to ensure this never happens again?

That’s the $16 trillion question — the amount of wealth this last financial debacle cost us.

However, here’s a thought: We might want to start by creating policies that offer more opportunities for all throughout our system—including access to good, affordable education, healthcare, housing and living-wage jobs—more transparency in our markets, more oversight of and accountability from our financial institutions, greater consequences for those who prey on others unethically or illegally…and, oh yeah, tax reform that creates far less trickling up of wealth and far more trickling down.

It would be a start.

Contents © 2015 by Larry Checco

Larry Checco is president of Checco Communications. His latest book is entitled Aha! Moments in Brand Management: Commonsense Insights to a Stronger, Healthier Brand. Checco Communications is a consulting firm that specializes in branding. Larry’s take is different. His message is that good branding is far less about marketing, advertising and public relations and far more about quality leadership and staff, appropriate and ethical behavior, and an organization’s willingness, ability and commitment to live up to the promises, or covenant, its brand represents. His first book, Branding for Success: A Roadmap for Raising the Visibility and Value of Your Nonprofit Organization, has sold thousands of copies worldwide.
larry.checco@verizon.net

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