Where Will Recovery Come From?

Let our journalists help you make sense of the noise: Subscribe to the Mother Jones Daily newsletter and get a recap of news that matters.

The LA Times does a good job framing yesterday’s economic news:

Retail sales unexpectedly tumbled in May in the biggest drop in eight months, raising a vexing question for the nation’s still-shaky economy: If consumers are not going to lead the way back to prosperity and additional stimulus spending by the government isn’t likely, what’s going to keep the recovery alive?

Last month, Americans slashed spending on everything from cars to clothing to building materials, the Commerce Department reported Friday. Auto sales fell almost 2%, a major drop for a single month.

I’m probably oversimplifying, but whenever I see news like this I keep thinking the same thing: the rich can only do so much. Recovery has to be built primarily on the backs of middle class consumer spending, and the only way for that to rise steadily is for (a) employment to go up, (b) wages to go up, (c) borrowing to go up, or (d) savings to go down. But employment is forecast to remain sluggish, wages are pretty flat and likely to remain so (thanks to high unemployment), consumers are still deleveraging, and although savings rates have recovered, they need to recover more to get back anywhere near historical levels. Add to that the likelihood that housing prices are going to drop some more now that the new home buyer’s tax credit has expired, and there’s really nothing left to drive long-term economic expansion. The millionaire class may be recovering nicely, but they just don’t spend enough to do the job on their own.

THE TRUTH IS...

what drives Mother Jones' team of 50-plus journalists. The truth is powerful, as evidenced by how hard those with something to hide, or profit to gain, seek to discredit it. The truth, stated boldly and reported meticulously, is what draws so many readers to Mother Jones.

And the truth is, going into the final 4 days of the year we still needed to raise $TK to hit our $350,000 goal and start 2021 on track. It's nerve-wracking, wondering if the big spike we normally see at the end of December is going to be another thing that doesn't go as planned in 2020, or worse, if, now that Donald Trump is set to leave the White House (for longer than a taxpayer-funded golf trip to a property he owns), folks might be pulling back from fighting for the truth and a democracy and think the hard work is done.

It's not, and if you can right now, please consider a year-end donation to support our team's fearless nonprofit journalism so we can close that big fundraising gap and finish the year strong, ready for all that's ahead in 2021. Whether you can give $5 or $500, it all matters in keeping us charging hard, and we'd be grateful.

payment methods

THE TRUTH IS...

what drives Mother Jones' team of 50-plus journalists. The truth is powerful, as evidenced by how hard those with something to hide, or profit to gain, seek to discredit it. The truth, stated boldly and reported meticulously, is what draws so many readers to Mother Jones.

And the truth is, going into the final 4 days of the year we still needed to raise $TK to hit our $350,000 goal and start 2021 on track. It's nerve-wracking, wondering if the big spike we normally see at the end of December is going to be another thing that doesn't go as planned in 2020, or worse, if, now that Donald Trump is set to leave the White House (for longer than a taxpayer-funded golf trip to a property he owns), folks might be pulling back from fighting for the truth and a democracy and think the hard work is done.

It's not, and if you can right now, please consider a year-end donation to support our team's fearless nonprofit journalism so we can close that big fundraising gap and finish the year strong, ready for all that's ahead in 2021. Whether you can give $5 or $500, it all matters in keeping us charging hard, and we'd be grateful.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate