Blackburn: Evaporating money, middle class

WEST PALM BEACH, Fla. — It is tempting to join in making fun of the predictable rhetoric of the unnecessary political conventions. But real Americans who don't have adoring claques are hurting.

Nonpartisan, non-theatrical data on how they are hurting were contained in the Census Bureau reports released Aug. 26. These are the same reports in which the bureau found that all of the small gain in the number of Americans with health insurance was accounted for by Medicaid. When the reports came out, Bush administration spokespeople were uncharacteristically quiet, and the usual gasbags were taking sides for and against the adoring claques. So the Census Bureau's facts passed almost without comment.

The take-home sound bite on poverty was that it was "statistically unchanged" in 2007. Actually, the number of Americans in poverty grew by 816,000 to 37.3 million, or 12.5 percent. Population growth and rounding of numbers made them disappear into "unchanged." The first thing to note is that these are last year's numbers. By all accounts, things are worse now because unemployment is back to its early post-recession level of 6.1 percent.

The second thing is that last year should have been better; a recovery had been running for six years. In terms of income, employment and poverty, most Americans were doing worse after six years than before the last recession. It always had been one step backward and two steps forward. This time, it was one step back and march in place.

For example: In 2000, when President Bush was elected, 11.3 percent of Americans lived in poverty. The next year, that was up to 11.7 percent. Bush pointed to the recession. He said that his tax cuts would bring the economy back. By the usual measure — growth in production — the economy came roaring back. But the poverty rate kept climbing, hitting 12.7 percent in 2005 and remaining above the year 2000 level by 1.2 percent after six years of roaring.

So the new economy did nothing for the poor, and less for the working middle class. As the liberal Center on Budget and Policy Priorities teased out the figures — a conservative think tank would get the same figures, since they come from the Census Bureau — the median-income family made $1,100 less, in constant dollars, in 2007 than in the recession year of 2001.

The take-home sound bite was that household incomes rose. They did when you include us geezers who get Social Security. Take us away, look at families headed by someone under 65, and the median income fell from $58,721 in 2000, the year when recession was still coming, to $56,545 when Mr. Bush's economic plan had taken hold.

If trickle-down or rising-tide economic theories can't explain those numbers, the problem lies in the theories. What theorists seem to overlook is that it is not 1980 anymore. If the business of America is, as Calvin Coolidge said, business, it's difficult to identify our stock in trade anymore. Since manufacturing was moved abroad over the past 30 years, we get by with a little help from our friends — foreign governments willing to finance wars of choice and to bail out banks. For enterprise, we have relied on a succession of gimmicks: the junk-bond silliness, the savings and loan scandal, the dot.com bubble and the housing boom. Many folks did well in them, but they did well with evaporating money.

As Washington prays for the next big thing, anyone in Detroit or Cleveland can tell you that there is "no foundation all the way down the line," in the words from "The Time of Your Life." Playwright William Saroyan presciently, in 1939, named the character who spoke the line Arab.

Four-dollar gas is not God's way of telling us to drill more holes in the Earth. It's a message from Arab. We can get over the 1980s way of thinking or anticipate more gimmicks and more busts that leave most of us farther behind.

Tom Blackburn is a former member of