The United States economy is cruising for a bruising. Inflation keeps ticking up thanks to, among other things, rising inflation. The job market is not performing as expected, and unemployment rates are ticking up. Private sector employment shed 22,000 jobs last month, while forecasters thought that private sector employment would increase. The government shutdown will cost jobs, and that man who lives in the House that Enslaved People Built (HEPB) says he will lay off or fire more people each day that the government is shut down. And health care costs are rising, which is one of the reasons Democrats held firm on dealing with health care as a condition to keeping the government open. Bottom line, our economy is precarious.
Implosion may be a strong term. Economic indications suggest we might experience stagflation, which means economic stagnation, combined with inflation. We might experience a mild recession, which means two quarters of negative economic growth. We might experience a deep recession or even a depression.
Even in recession, though, there are winners, people who find opportunity in economic distress and maximize it. During the 2008 recession, I remember meeting some young men in an Atlanta suburb who made thousands by packing and storing the belongings of evicted people. During COVID I met women who started catering businesses after they lost their restaurants. There is opportunity everywhere, though many have neither the resources nor the resilience to take advantage of those opportunities.
Who are some of the winners when the economy implodes? The greatest gainers are those who are cash rich. People or corporations who used advantageous tax policies to stack cash in the past. It’s now cash they can invest in hard times. They can buy up foreclosed homes, distressed businesses, abandoned assets and more. They can even steal assets as those who leave property or resources on the table are not always legally equipped to protect their stuff. While this Congress is not likely to protect these people, especially given the near shuttering of the Consumer Finance Protection Bureau (CFPB) and the current hostility to government regulation.
Black women, backbones of the Black community, are especially hard-hit. The much-reported fact that Black women lost more than 300,000 jobs in the past several months trickles down to students whose tuition may be unpaid, families who spiral down to instability, and communities in crisis.
The economic crisis benefits some people. We must do whatever we can to help those who have been further marginalized, but from a policy perspective, we must also target the winners and demand that they do their part to ameliorate the pains that economic implosion causes.
Dr. Julianne Malveaux is a DC based economist and author. Juliannemalveaux.com