Few Shakespearean lines are so often taken out of context and misconstrued as is the first line of Richard the Third, “Now is the winter of our discontent.” Fed Up: An Insider’s Take on the Willful Ignorance and Elitism At the Federal Reserve
England’s future King Richard is not lamenting what’s to come but rather embracing the season just over time’s horizon, “Made glorious summer by this son of York.” His brother Edward IV, who has just wrested the crown from Henry VI, ended his family’s long winter of oppression.
Under similar circumstances, England’s Margaret Thatcher rose to power ending central London’s own Winter of Discontent. In Thatcher’s case, Labour Prime Minister James Callaghan’s loss of confidence vote represented the opportunity to defeat what she called the “enemy within” the U.K. The irony is the garbage collectors’ strike, which had left the streets filled with refuse and the electorate infuriated, occurred under Callaghan, a leader who relied on union support.
There can be no doubt that the electorate here in our country was equally compelled to end its own Winter. It came down to the known devil we knew vs. the devil about whom we knew far too much or precious little, if policy was to be the sole sway factor.
For all the sighs of relief that Election Day has blessedly come and gone, and with it hopefully a healing peace, Winter remains upon Us with a huge portion of the population restless at best, scarred at worst.
Pick your poisonous poll, or better yet, average them all together. No matter how you slice it, 60 percent of Americans couldn’t stand either candidate in this year’s presidential race to the bottom rung of hell. We can only hope that the most discontented portion of that 60 percent doesn’t make up the one in six Americans who’ve found this election season the perfect time to purchase that gun they’ve had their eye on. In the hitting close to home category, one in four Gneration X-ers, to which your truly belongs, are among those with plans to start packing iron. For what exact fate are we preparing, or better said, prepping?
It comes down to where we once were as a nation and where we are once again. As was the case in the 1930s, the top one percent controls 45 percent of the wealth and 22 percent of its income. If you want to foment division, burn the rungs of the economic ladder to freedom and see how those who’ve been told the fairy tale of the American Dream react (spoiler: by buying guns). It can’t help that many of the have nots are segueing from just getting by to struggling under the weight of budgetary distress.
In the event you harbor doubts, look no further than the recent Financial Times headline, “Repo Men See Dark Side of Car Sales Boom.” The best that can be said is that repossessions are shy of their 2008 and 2009 record levels. In all, net losses in the subprime auto space are at 9.3 percent, up 23 percent from last year. As for what’s to come, “It’s a big problem, I’m worried.” Those words from a repo man who only agreed to speak behind the veil of anonymity.
And yet, we’re told to praise the recent surge in consumer credit growth as evidence of robust economic growth to come against a backdrop of the weakest doggedly drawn-out postwar recovery in recorded history. First, the numbers, which are terribly lagged. September was punk in one and only one sense – it wasn’t as on fire as August. At $19.3 billion, consumer credit outstanding rose to a record $3.7 trillion. That compares to $2.6 trillion in June 2009 as we technically emerged from recession. As has been the case for years, auto loans and student debt led the charge, but credit cards have continued to bring up the rear; total outstanding is within $20 billion of the $1 trillion mark.
Could it be that the good news about tapping into those credit lines has gone bad, turned rancid as the screws have turned on working middle class families across this fine land? Buy or rent – they’re both unattainable for far too many gainfully employed, despite mortgage lending standards easing for 10 consecutive quarters. Healthcare? More and more out of reach with every passing month. Thank you, Obamacare. Sending your kids to college without incurring debt? Good luck with that.
If you detect a trend, you’re right – the household budget line items listed above are what we call non-discretionary and non-negotiable. At least, that’s the case if you want your kids to grow up in a public school district that renders its stewards literate, healthy and ready to aspire to the American Dream.
Is it any wonder weekly retail sales growth has been running south of one percent for the past six months? And what of a survey reported by CNBC the day before the election? According to consumer consultancy Technomics, 17 percent of households planned to cut back on their discretionary spending at eateries regardless of who emerged victorious. CEOs from McDonald’s Steve Easterbrook to Starbuck’s Howard Schultz to YUM Brands’ Greg Creed echoed the data.
These anecdotal yarns were validated in the most recent decline in consumption’s contribution to economic growth. But by the same token, they contrast with the aforementioned surge in consumer credit. Unless, that is, households are running up their credit card balances to finance nondiscretionary spending. Who, after all, needs credit to get by, has money to spare on life’s little luxuries, when the cost to cover those nagging necessities is quickly escaping the reach of those stuck in the middle?
The media loudly lament the unfounded and unjustifiable anger of the ignorant masses who simply don’t recognize the bevy of opportunities staring them in the face. But has anyone stopped to ask the supposed Fourth Estate’s cocksure cohort how it feels to run in place at full speed and get nowhere?
The answer to that question is actually yes. Bill Clinton posed that very query in an Ohio speech this past November. After asking himself rhetorically why the death rate among white, working-class Americans has been on the rise, he answered, “Why? Because they don’t have anything to look forward to when they get up in the morning. Because their lives are sort of stuck in neutral.”
As is the case with the former president, whose posh future existence promises a permanent vista from which to continue studying those left behind from a safe distance, many among the liberal elite will continue to pour their energies into relieving the suffering of the less fortunate among us.
A word of caution: This approach enflames their anger, rather than suffusing it.
But why bother looking within and asking why condescension incenses those you perceive to be beneath you? The view from your perfect perch is too pristine to bother with such trivialities.
Consider the recent slew of encouraging consumer sentiment data. Expectations for income gains, job creation and favorable news have all turned up of late. Funny thing, this optimism is in sync with income growth among the top 20 percent of earners, even as that of the bottom 80 percent continues its descent. (In the event you’re keeping macroeconomic score, that 20 percent spends enough to carry our economy, for a while at least.)
As for the rest, maybe those fast food CEOs are on to something after all given that the bottom 80 percent consumes 60 percent of food away from home. (Why settle for a McAnything if you can indulge on whatever your heart delights en masse?)
The latest data suggest there could be shorter lines yet at the end of the yellow brick drive through. Job openings and hiring for construction, manufacturing, wholesale and retail trade all failed to make new highs in September, the latest month for which we have data. Is the current cycle peaking and rolling over as these economically sensitive sectors suggest?
And if that’s the case, should we have expected the unrequited electorate to simply go quietly into the night? Or have we just witnessed the break point for those who no longer cotton to taxation without representation? The fact is, as a nation, we are past our due date for a radical remake of our political infrastructure.
Of all the historic insights that shed light on what could come to pass in the aftermath of this historic election, it was a tweet that reminded us all that we are a standout nation due to our conspicuous dearth of political parties. Great Britain has 13 parties represented in its equivalent of our House of Representatives, Japan has ten and Italy nine. What say us? How could we know without a microphone to call our own?
For any who question what’s at stake, appreciate that the very soul of our country has been laid bare. You can choose to reflect back on Shakespearean times or relate to a modern day equivalent.
Though the writers of Game of Thrones will never be in the same literary sphere as The Bard himself, their scripted world of late has nevertheless been prescient, at least in the political arena. To wit, their “Winter is Coming,” delivers a warning to all of those who’ve long stopped worrying about the metaphorical winter to come. Denying our collective vulnerability risks a downfall surpassing that of Lucifer himself. To our just fate we have just marched. May summer now shine down upon us.
Article by Danielle DiMartino Booth, Author of Fed Up: An Insider’s Take on the Willful Ignorance and Elitism At the Federal Reserve