A toxic combination of government mismanagement and corporate greed resulted in the shrinkage of America’s gross domestic product by a 1 percent annual rate in the first three months of this year.
In his address at West Point last week, a day before the GDP figures were announced, President Obama spoke of America’s “growing economy” as “a key source of American strength.” He claimed that “our economy remains the most dynamic on Earth.”
The government and some observers say the brutal winter caused the pathetic first-quarter performance. They predict a spring-back in the quarter that ends this month. 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.
Two phenomena are at work. In 2009, Mr. Obama inherited an economy in perilous condition because of President George W. Bush’s two unfunded wars, tax cuts for the wealthiest Americans, and hollowed-out approach to financial regulation. Mr. Obama’s steps to try to fix the situation strongly favored bankers and Wall Street, with less regard for the people who elected him.
Today, Congress — through Republican malice, Democratic torpor, and the gridlock from combining the two — has resisted efforts to improve the condition of the American middle class. Such measures include tax reform, gender pay equality, a minimum-wage increase, and a restoration of extended unemployment benefits.
The nation’s oligarchs — corporate chief executive officers and board chairmen — remain heedless to rising popular fury at their continuing efforts to benefit themselves at other Americans’ expense. The median annual compensation of an American corporate chief executive officer is $10 million — 257 times the annual median wage of a worker in such executives’ companies.
The shrinkage this year in the economy could be a wake-up call — if anyone is inclined to get angry and take action.