The New Frugality: Coming to terms with the Great Recession

According to the latest employment report, over 5.7 million jobs have been lost in the United States since the start of the recession in late 2007. Aside from the brief reprieve of a worldwide flu pandemic promising to put us out of our misery, the barrage of bad economic news and painful stories has been more or less ceaseless, forcing even those who haven’t been directly affected by the downturn to confront their relationship with money and their confidence in the economic machine.

Of course hardship and adversity always befall someone—some family, some group, some community—and in our culture we tend to call that tough luck. But for the first time in several generations, national suffering has been introduced into the public discourse in a very prominent way. It is a zeitgeist that hasn’t been felt foursome time—contraction, thrift, poverty. TIME magazine recently anointed it the era of the “New Frugality.” The New York Times likewise chimed in:” The New Frugality: No Passing Fad.” In America, even the enforced belt-tightening of an economic crisis can’t help but announce itself in the language of a new consumer style. Penny-pinching is suddenly de rigueur as recessionistas shop for discount fashion and Americans embrace the staycation.

Yet what’s more notable is that in a culture usually prone to individualizing economic suffering, the “New Frugality” appears as a collective, national phenomenon. In a rather twisted embrace of equality, all can now commiserate in their shared adversity. From the homeless guy formerly working as a construction worker to the bonus-less guy still working as a six-figure investment banker, everyone feels it together.

Progressives have complained for years that the corporate media systematically avoids coverage of issues like poverty, homelessness, growing social inequality, or anything else that might upend our societal facade and lead one to question the basic decency of the greatest nation on earth. Over the past eight months, however, mainstream news outlets have taken keen; some would say aggressively voyeuristic, interest in documenting the stories of lives wrecked by capitalism’s latest hiccup, tales meant to demonstrate that the feelings of anguish and scarcity are now widespread.

But what is most instructive (and most misleading) about the New Frugality and other recent discussions of the economy is the way it defines newness against the recent past by allusion to the old frugality. From the quotes of economists to the human interest stories to the lifestyle schlock, a defining element of the new frugality are the constant comparisons to and invocations of the Great Depression of the 1930s.

Suddenly, the currency of those who suffered in times past has risen amongst a younger generation whose only real conception of the future held the ever-greater diminution of the iPod. Seemingly every news outlet in the country, from the venerable NPR to the Small Town Times has sought to capture some variant of the touching moment when Ethel explains to young Johnny and Jessica how she managed to have fun as a youngster without any allowance.

No doubt this is driven in large part by the fact that conversations across generations make for a feel-good scene in an otherwise depressing plot, but the fact that the term “since the Great Depression” has appeared in newsprint over 23,000 times since last September also testifies to the symbolically-loaded place the Depression holds in the American imagination. Ever since the greatest generation returned from the battlefields of World War II and etched its experiences into the deepest recesses of Tom Brokaw’s consciousness, schoolchildren have grown up learning that the breadlines and Hoovervilles represented the lowest of the low points in American history, when “regular” hard working Americans had to live in train cars and eat apple cores to survive. It is also one of the most well-documented instances of human suffering in American history, its lived contours documented in a canon of powerful photographs, oral histories, folk songs, literature and public works projects. Even if relatively few people look at this stuff now, the representation of the Depression as unique moment cemented its iconic status as the yardstick of national suffering. Last December, then President-elect Obama made his ceremonial nod to the era on Meet the Press: “I think it’s important for us to remember that, as tough as times are right now, they’re nothing compared to what my grandparents went through, what the Greatest Generation went through.”

Illustration by Carolyn Kelly

The Depression is the default yardstick against which pundits and economists gauge the historic proportions of our current predicament, and it serves as a common reference point for discussions of the current economy, one adopted across the journalistic and political spectrum, from FOX News to the Worker Action postings on the anti-capitalism pages of SF IndyMedia.

The problem with all of this 1930stalk is that in linking the present to the distant past, it implies a sharp discontinuity with the more recent past. Even if the New Frugality is a recent concept, the reality it aims to depict isn’t really so new all. Measured by the precipitous drops in the stock market, both the 1929 and 2008 crashes look like a fall from prosperity, but what’s just as striking is how many people were already on the brink.¹ Even before the recession began in 2007, the number of Americans living in severe poverty—defined as being at or below 50% of the official federal poverty line—had doubled against 1975 levels. That figure would be even higher had the government updated its old poverty calculation formula that fails to account for the rising cost of low-income housing.

Some say that the difference between now and a few years ago is that a major recession confronts “regular” middle-class Americans with the sort of economic insecurity previously confined to a relatively small, marginalized portion of the population. But hidden behind the high growth and low unemployment figures of the past fifteen years were rock bottom real wages, stagnant since the late 1970s, and job growth increasingly skewed toward low-paying service jobs. As a result, poverty and downward mobility have been increasingly common experiences, even during the booming 1990s. Based on pre-recession data from a government-sponsored survey, Washington University demographer Mark Rank calculated that by the age of 65, over half of all Americans will have experienced at least one year of poverty at some point in their lives.2Among African-Americans, that figure rises to a staggering 80 percent. And this was during the era of supposed plenty. Low unemployment figures during the 1990s helped feed a perception of homelessness as confined either to lazy people uninterested in working or isolated, mentally-unstable individuals with few social connections. In fact, the fastest growing segments of the homeless population over the past decade have been families with children and persons with full-time jobs. Each of these groups now make up as large a portion of the overall homeless population as the mentally ill. Again, all of this was happening before the recession. Another not incidental fact is that before the downturn hit, income and earnings inequality in the United States had already reached their highest levels in seventy-eight years, since 1929.

Whether in the 1920s or the1990s, Dow Jones boom times preceding major recessions have produced ample suffering of their own. Many Americans were spending beyond their means during the past decade; many more had seen their means decimated by an economic system that promoted the outsourcing of jobs, reduced the purchasing power of the minimum wage positions that replaced them, limited the availability of affordable housing, shifted the tax burden onto the working class – in a nutshell, made the celebrated trappings of a middleclass existence increasingly untenable for many Americans. Far from representing a reversal of fortunes, the scarcity and economic insecurity so many Americans are currently experiencing might be better thought of as the deepening—and the revealing—of endemic problems we were already facing.

What’s fundamentally new about the “New Frugality” is that the downturn has finally prodded a complacent news media into acknowledging the rampant economic insecurity faced by citizens of the wealthiest country on earth. If you believe that awareness catalyzes change, then this development may seem like the political upshot to an otherwise unfortunate situation. The trouble, however, is that now that the media is finally paying attention tithe problem, its causes are muddled by a discussion that treats it as a once-in-a-lifetime anomaly brought about by spillover from the mortgage derivative meltdown rather than a systematic outgrowth of the policies we’ve pursued for the past thirty years. In other words, our focus on the otherwise unparalleled similarities between now and 1932 obscures the much closer connection between the news camera-warmed neo-Hoovervilles beneath the interstate today and those same—albeit somewhat smaller—homeless encampments that were willfully ignored so long as the S&P index rose.

We do not mean to suggest there is anything conspiratorial about this obfuscation. For the most part it is driven by nothing more sinister than journalists’ attraction to clichés, their urge to somehow convey the depth of the economic pain Americans are feeling may be (mostly) genuine. But in marking off the present as a singular event, we reinforce widespread misapprehension that economic insecurity is new. As the Nobel economist Robert Solow wisely counseled,” We should avoid the suggestion that something qualitative happened at the end of 2007 or sometime in 2008.”

While Solow may have his own academic reasons for seeking to counter such embellishment of the present, we believe the most important one is that such ideas prevent us from digesting the most useful lessons from the 1930s.3 Contrary to what you may have just heard on the evening news, those lessons aren’t how to darn one’s own socks, plant a potato garden in the backyard. or bow in awe at the unsurpassed dignity of the Greatest Generation. The 1930sshould be an example for bold action toward alleviating suffering, an occasion to fix the systemic ills recently made visible rather than a ceremonial benchmark against which to gauge our own.

Mass suffering during the 30s was met not only by public recognition, but also by a political reckoning: a reckoning by the elites who conceived and pushed the New Deal legislation and a reckoning among workers and farmers who refused to accept a raw deal and struck en masse for a better one. The result was a set of transformative policies that addressed many of the long-standing problems the Depression had made politically tractable, from destitution of the elderly (Social Security), to poor working conditions and poverty wages (enforcement of minimum wage and the 40 hour workweek). To quote Rahm Emmanuel (while not necessarily to endorse his agenda), “You never want a serious crisis to go to waste.” The long-range impact is immeasurable: elderly Americans continue to rely on social security to stay afloat and the passage of 1930slabor legislation set the stage for four decades of a more egalitarian form of American capitalism. Of course critics both left and right like to snipe at the many flaws in some New Deal programs, and conservatives ceaselessly point out that they were less effective than World War II in renewing GDP growth and boosting private sector employment. Much of that is true, but what the New Deal did was marshal the political opportunities brought about by the crisis in order to bring the United States into the 20th century as a nation-state committed (at least in principle) to the social reproduction of its citizens. Unfortunately, so far as yet the dominant reaction to this recession – both by political leaders and the media – has been to reach forth cultural yardstick rather than the cudgel of political reckoning. President Obama has made some promising if vague statements about using the present moment as an opportunity to build new foundations (now New Foundation), but this has to mean more than just new bridges, highways, and train tracks. Embracing policies that do more than merely reestablish the status quo ante requires coming to terms with the fact that many of the socio-economic problems attracting so much attention today have actually been simmering for decades. Otherwise, we’re afraid that when the Dow rises again there will still be many thousands of Americans living in tents and under bridges, only now without any news cameras to keep them company.

Adam Goldstein and Katie Sabo live in Oakland, California.

¹While the media has tended to cast blame for the housing meltdown on profligate consumer spending, it should be noted that often it was the other way around: a lack of affordable housing in over-heated markets like California forced many people to rack up large credit card debt as the income of a typical service sector job simply was not enough to cover the basic costs of living.