Pinched

Don Peck “Pinched: How The Great Recession Has Narrowed Our Futures & What We Can Do About It”  Crown Pub, 2011, 188 pp.

This current recession beginning in 2008 has been assigned its’ unique identifier “Great Recession” placing it in the ranks of two other cultural changing recessions (1930s Depression and 1890s) each lasting a decade or more.  The author maintains that recessions as severe as this current one will profoundly alter the character of our society.  Every class and generation will be affected.  The middle class is shrinking faster, wealth is becoming more concentrated, and twenty-year-olds are sinking.  He goes on to point out that we have endured such periods before and have emerged all the stronger from them. 

My Notes:

Pg. 17: At the start of 2011 nearly one in four houses was underwater; nearly one in seven mortgages were in arrears or foreclosure (double the rate before the recession). Three out of four pink slips have been given to men rather than women, this is typical as cyclical industries such as construction are dominated by men.

Pg. 28:  Society’s professional class are physically separating themselves from the rest of the country.  A “mass relocation of highly skilled, highly educated, and highly paid Americans to a small number of metropolitan regions” is underway.  Geographic sorting of people by economic potential on this scale is unprecedented.  In 1970, college graduates were dispersed relatively evenly throughout the United States.  Eleven percent of the national population over the age of twenty-five held a bachelor’s degree.  Now vastly more hold a degree but a relatively small number of places have captured a disproportionate amount of the growth. (In DC half of all residents have at least a bachelor’s degree).  In less privileged parts of the country, a predominately male underclass is forming, and that, in turn, is changing marriage, family, and community life.

Pg. 46:  Reconstruction had ended in 1879, but it wasn’t until the 1890s that most southern states began to enact the Jim Crow laws that would segregate society for generations, supported by a Supreme Court that had grown steadily less forceful in its support for equal rights.

Pg. 73:  Young adults with college and graduate degrees are doing much better than those without; for 2010 as a whole, the unemployment rate among sixteen to twenty-four-year-olds was 9.4 percent for four-year college graduates, 22.5 percent for those with only a high-school diploma, and 31.5 percent for high-school dropouts. 

Pg. 85:  From 1890 through 2004, U.S. house real prices rose just 0.4 percent per year on average, with inflation and home improvements taken in to account. 

Pg. 90:  A 2010 Brookings Institution study found that in a historic reversal, more poor people have recently come to reside in America’s suburbs than in its cities.  And the number is climbing rapidly; over the past decade, the suburban population living below the poverty line grew by 25 percent. 

Pg. 182:  The panic of 1893, the crash of 1929, and the meltdown of 2008 all share a common antecedent: inequality, in the run-up to each of those disasters, was exceedingly high.  Recent research has shown that this is a common pattern; highly unequal societies seem more vulnerable to financial crisis.

Pg. 183:  Some of the policies that have most benefited the rich have little to do with greater competition or economic efficiency. Fortunes on Wall Street have grown so large in part because of implicit government protection against catastrophic losses, combined with the steady elimination of government measures to limit excessive risk taking, from the 1980s right on through the crash of 2008.  Over time, the United States has expected less and less of its elite, even as society has oriented itself in a way that is most likely to maximize their income.  The top income-tax rate was 91 percent in 1960, 70 percent in 1980, 50 percent in 1986, 39.6 percent in 2000, and is now 35 percent.  Income from investments is taxed at a rate as low as 15 percent.  The mortgage-interest tax deduction is most generous to the affluent, and while it’s small potatoes to anyone who makes a good income, so, too, is the savings incentive provided by 401(k) plans.  The estate tax, meanwhile, has been gutted.

Pg. 187:  We will likely remember the Great Recession not only as a time when women first became a majority of the workforce, but also more broadly as a transition from a male-centered economy to one built more around women. The end of the housing-construction boom—and the financial sector’s preoccupation with housing—will surely clear the way for growth in other industries, and for the rise of new ones.