Dr. Julianne Malveaux: S&P Downgrade is Beginning of the End

9 Aug

 

by Dr. Julianne Malveaux

When S&P downgraded the US bond rating from AAA to AA+, they formalized the financial buzz of months, if not years. The US is going to hell in a hand basket, replicating the denouement of England in the mid-twentieth century. Our tax structure, which rewards the rich and punishes the middle class, looks like something from a developing country, and our economic distribution is going to look like that soon, as well. While many are disappointed and outraged that the flawed S&P felt they could involve themselves in the internal meat grinder of US politics by demanding a certain level of spending cuts, the bottom line is that our politicians were willing to take us to the brink on the debt ceiling, and this brinkmanship does not bode well for fiscal stability.

 

There are a number of other trends that are troubling. The US Department of Agriculture reported that 45.8 million Americans received food stamps in May, a 12 percent increase from a year ago. This represents a record – the highest number of people receiving food stamps since the program started. Understand that there are many who qualify for food stamps but don’t receive them – they are too proud to participate in a program that many consider a welfare program. Thus, the report that 45.8 million receive food stamps understates the magnitude of food insecurity in our nation.

 

Nationally, home ownership fell to 66 percent, the lowest level in at least two decades. The level of homeownership has long been seen as an index of long-term family financial stability. In these fascinatingly oscillating economic times, is it any wonder that these rates have continued to drop, and that there is a concomitant economic reverberation from this decline?

 

Of course, the unemployment rate is of extreme concern. It dropped just a tick from June to July, from 9.2 to 9.1 percent. It is still so high and so ingrained that a third of those officially without work haven’t worked for a full year. The average unemployed person has been out of work for 40 weeks. The official unemployment rate for African Americans, at 15.9 percent, has also fallen.   However, the real unemployment rate for African Americans approaches 30 percent.

 

Last week, president Obama urged the private sector to hire more veterans. I applaud his effort to find jobs for those who have serviced our nation. Yet, finding jobs will take more than exhortation, and veterans aren’t the only ones who need jobs. As I listened to our president rattle off the statistics about veteran unemployment, I was reminded that there are other groups that experience higher unemployment than the reported rate. Imagine the impact if President Obama rolled out a program to target those African Americans who experience unemployment. Or, because it is clear that in these racially charged times, he can’t use the word “black” without attracting the ire of the Limbaughs of the world, what if there were also tax credits available for those who hired inner city workers, for those who have been unemployed for more than a year?

 

In tying President Obama’s hands, the Congress signaled that economic revitalization would have to happen without government stimulation. That may be one of the reasons S&P decided to downgrade the value of US bonds. We are in a position that can, at best, be described as embarrassing, when challenged China demands an accounting from us on the world stage. To be sure, China has a point. They are a creditor, we are a debtor. They have a right, now, to wonder if their investment in the United States has been a good one.

 

Is this the beginning of the end of US hegemony? Can we compete with other countries without the edge that once came from being perceived as the biggest and the baddest, the world leader, the trendsetter? Now, in some eyes, we are just another struggling country, hampered by debt that is poorly secured, bereft of solutions because of partisan bickering.

 

Other struggling countries agree that investment in education is a long=term strategy. They agree to provide support for budding entrepreneurs. We haven’t even gotten there yet. Yes, thank you Congress for keeping the Pell grant at its current level. Still, there have been short sighted us in the educational arena that are troubling, including the cut in the summer Pell.

 

Negative statistics need not be the beginning of our end. We can turn it around, if we make clear choices. Is there a collective will to invest in our young people, to provide jobs for our unemployed, to salvage the middle class? Can we get on the same page? The S&P downgrade makes it clear that political brinkmanship weakens our nation financially. Our fiscal failure, if uncorrected, represents the beginning of our nation’s end.

 

 

 

Julianne Malveaux is President of Bennett College for Women in Greensboro, North Carolina.

 

 

 

 

 

Last Word Productions, Inc. is a multimedia production company that serves as a vehicle for the work and products of Dr. Julianne Malveaux. For the last 15 years the company has centered its efforts on Dr. Malveaux’s public speaking appearances, her work as a broadcast and print journalist, and also as an author. Currently, Julianne Malveaux is President of Bennett College For Women in Greensboro, North Carolina and author of Surviving and Thriving: 365 Facts in Black Economic History.

 

 


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8 Responses to “Dr. Julianne Malveaux: S&P Downgrade is Beginning of the End”

  1. Shereen R Hart August 9, 2011 at 1:57 am #

    We don’t go down to hell in a handbasket with Wall Street billionaires. They created those bills and took the jobs out of the country and created a polluted environment for private capital gain, they sink alone. S&P is not America’s problem. It belongs to the big bankers who signed off on that bad debt with money America never had in the first place. They and the insurance companies, like S&P, Moody’s, and AIG who backed it; and they alone need to take the fall for it.

    • Bill delaney August 9, 2011 at 11:38 pm #

      The root of the problem is still a citizenry that make decisions based on urban legend, religious dogma, and ethnic phobia. In history wealthy citizens like the Carnegies, and the Rockefellers loaned money to our government because they understood the Monroe Doctrine. In 1970 Dr. Arthur Allen Fletcher said by 2000 the nation’s security would be impacted by our inability to utilize talents of qualified minorities. In the 1980s Morris Berman in his text: “Dark Ages America” saw what I and most of my educated black republican associates saw but the Tea Party, and current black republicans don’t. Ronald Reagan, whom white republicans say they understood recognized his mistakes as did black republicans, when we developed the New Coalition for Economic and Social Change and challenged his Mexican American Appointee ‘Cardenas’ who he tried to destroy 8a set asides that were developed under Richard Nixon. I have to leave the country to hear what is going on in my country, a tactic I learned while in the military, and law enforcement. Until we learn our history, and how to become more analytical, and less egotitstic we all pose a problem to what could have been the greatest country of all time. As I read what whites say Europe stands above all the rest, but analysis shows it was Qmt, and the developers and unifyers were from the south near the Great Lakes and Nile. The groups that destroyed our past did not learn and are now destroying the U.S.

  2. Vera Richardson August 9, 2011 at 3:33 am #

    Speaker Boehner and the Republicans gambled by creating the debt ceiling crisis by refusing to pass a clean bill and they lost. That is the message that the Democrats should be shouting everything they have an opportunity to address the Dow Jones losses and our credit downgrade.

    Standard and Poor’s told us why they downgraded the US credit rating: because of its view “of the difficulties of bridging the gulf between the political parties” over a credible deficit reduction plan. S&P said it was now “pessimistic about the capacity of Congress and the administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government’s debt dynamics anytime soon.”

    Hopefully Speaker Boehner and Senator McConnell and company will realize that they the 1 trillion dollars lost on stocks was a high price to pay to please the Tea Party. We are one nation and we will all suffer if we have another recession and God forbid a depression.

    • Anonymous August 9, 2011 at 12:53 pm #

      49% of the people in America pay no taxes and 45 million on Food Stamps. The Democrats have destroyed America. Wake up and stop blaming people who are only parly to blame. Where is your Wrath for Harry Reid and Nancy Pelosi and their 8 years + leadership of this nation. They controlled boh Houses until January. Wake up and see Reality, stop being loyal to the Democrats and think for yourself.

  3. crispusokereke@aol.com August 9, 2011 at 11:47 am #

    Standard & Poor’s should be one of the many voices that has the right to rant and rave about a nation’s fiscal uprightness, or lackthererof, and should not be the SOLE voice in making such determinations, let alone having the pluck or effrontery to downgrade America’s credit rating from AAA to AA+, and in the process, triggering a meltdown in Wall Street. I thought that credit – rating agencies, especially for matters such as this, are supposed to be apolitical. I get the feeling that this is part of a grand design geared on making sure that President Obama does not see a second term. It’s is no surprise that Tea Party adherents were the first to laud S& P’s audaciouness in down grading America’s credit worthiness. I will also hope that these political extremists would see the unpatrioticness strewn in the rubble which S& P created in Wall street and have the moxie to repremand S& P’s for it’s woefully needless meddlesomeness.
    There is a saying that political upheavels happen in August. Could there possibly be a link between Tea Party’s jubiliation at what S&P’s did to the sudden and mind buggling shooting down of thirty, or so Navy Seals in Afghanistan? That needs to be thioroughly investigated, especially for this twin events to occur simultaneously. Recall here that the killing of Osama Bin Ladin – a feat which Obama masterfully ochestrated in tandem with the US Navy Seals – was a news item welcomed and embraced by many, but grudginly recieved by Teapartiiers. The Tea Party, in essence, did not want such political trophy to be ascribed, or given to Obama. Could there possibly be a link between the eerie news of the Navy Seals’ deaths, so that when it comes to politcal arguments or tinkering, Tea Party adherents would dimiss Obama’s feat as just a zero sum gig?
    If President Obama does not see a second term (I dobut it), I would rather the reason be because of African American gross disappointment with their economic situation – unemployment that loomingly hovers above 16% – and making them not to vote in waves and droves as they did in 2008, than simply due to S& P’s down grade of America’s credit.

    • Vera Richardson August 9, 2011 at 4:18 pm #

      Even more sinister that your position is my belief that President Obama is being setup for the Republican Party to steal the election in 2012. Many of the swing states have Republicans governors and/or attorney generals. The current voting machines can be easily tampered with and voting result changed. The Republican Party will declare that they won because of the poor economy, Blacks stayed home, the tea party, or a combination of false explanations. President Obama’ supporters efforts to have a fair and orderly elections should include urgently calling for the repair of electoral machinery.
      http://www.buzzflash.com/contributors/06/06/con06219.html

  4. kt August 9, 2011 at 4:34 pm #

    s&p didnt they approve the sub prime loans, now they want to downgrade us. we are the most corrupt country, we outsourced so much that now we are a service industry, we cant even make a TV or DVD player so eventually our technology will be used against us

  5. Donald F Guest August 10, 2011 at 4:43 am #

    Dr. Malveaux has brought fiscal soundness to Bennett College at a time of great financial adversity. Last summer I visited my son, daughter-in-law and grandchildren who live in Greensboro and saw firsthand the wonderful work she is doing in maintaining and enhancing Bennett as a first-rate school in the Southeast and in the United Methodist Church. Pay attention to one of the brightest minds of our time.

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