Introduction: Recession, Recovery, Resilience
In September 2008, the U.S. economy was brought to the brink of collapse by the greed and recklessness of some of the largest firms on Wall Street. A deflated housing bubble exposed the astonishing risks these firms had taken, enabled by government policies and policymakers that encouraged any and all forms of financial innovation, without regard for the possible consequences to U.S. or global financial systems.
A catastrophic meltdown of the economy was averted by the extraordinary intervention of the federal government in the nation’s financial markets, taking measures that would have seemed unthinkable in the heyday of the bubble years. But a government response was not enough to prevent an economy already in recession from spiraling further downward.
The crisis of 2008 led to comparisons with the financial crash on Wall Street that precipitated the Great Depression of the 1930s. Excessive risk taking was responsible for wrecking the economy then as well. But while there are similarities, there are also some clear differences, including the wider dimensions of what some have called our Great Recession.
Chapter 1: Work in a Sustainable Economy
It is possible to battle climate change and create jobs at the same time. It is even possible to confront a daunting environmental challenge like climate change and recast it as an economic opportunity to build a more inclusive and sustainable future for everyone.
One strategy is to scale up investments in clean-energy technologies like wind and solar power, creating millions of new manufacturing and construction jobs. Another is to improve the energy efficiency of existing homes and buildings, an effort that could, if done on a wide enough scale, also provide jobs for millions of people in the construction trades.
Climate change is one factor among many that are forcing the United States to come to grips with its unsustainable agricultural system. Changes to U.S. agricultural policy that distribute supports to farmers more equitably could have multiple benefits: making farming a viable occupation for more people, boosting rural economic development, improving the environment, and increasing the amount of healthy foods people eat.
Chapter 2: Pulling Inequalities Up By the Roots
The latest data on income inequality in the United States indicates that the gap between the rich and everyone else is greater than at any time since 1928. While all inequalities raise questions in an egalitarian-minded society like ours, it’s not immediately self-evident why income inequality is a problem. The reality is, income inequality is a very big problem for anyone concerned about reducing poverty and giving children born and raised in poverty a real chance of prospering later in life.
By the time children start kindergarten, socioeconomic inequalities are already driving outcomes in life. Inequalities begin as early as the womb. A mother’s battle with hunger while pregnant has consequences for the baby, who faces higher risks of low birth weight and infant mortality. Children who grow up knowing hunger are more likely than their well-nourished peers to suffer chronic health problems, exhibit antisocial behaviors, do poorly in school, drop out of school, have difficulty finding and keeping a job as adults, become entangled in the criminal justice system, and depend on government assistance programs.
Society’s indifference to child hunger conveys how little it cares about its own future in a way nothing else can. Apart from the enormous loss to individuals, society also pays for child hunger. Child poverty, the primary cause of child hunger, is estmated to cost society $500 billion each year.
Chapter 3: Remaking Marginalized Communities into Gateways of Opportunity
In times of hardship, people turn to their neighbors for help. It’s the very essence of community. In healthy communities, networks of friends, family, and neighbors are assets that individuals can lean on for advice when times get tough or for help in finding jobs and advancing their careers. But networks don’t function this way in communities where unemployment is the rule and most people are struggling.
The disadvantages of living in a poor community pile up in configurations that analysts with little experience in such places have a hard time seeing and understanding. Policy solutions frequently miss the mark because they aren’t designed to deal with problems that affect a community as a whole. For example, when policymakers look for ways to reduce poverty, it’s easy to see only problems within the household. Not enough food in the home? Enroll the family in nutrition programs. Jobs don’t pay enough? Apply for the Earned Income Tax Credit (EITC). Too poor to afford health insurance? Get on Medicaid or the State Children’s Health Insurance Program (SCHIP).
But none of these solutions gets to the heart of the daily barriers that confront families in high-poverty communities. A poorly educated child is rarely an isolated case; groups of poorly educated children attend underperforming schools in neighborhoods with a host of other problems. In Detroit, for example, three-fourths of all children drop out of high school. Detroit’s problems are legion. Joblessness, crime, substance abuse, broken families, substandard housing, food insecurity, and poor health: these are all common in high-poverty communities.
Chapter 4: A Global Agenda for a Just and Sustainable Recovery
Only 1 percent of households in rural Ethiopia have access to electricity. Rema, a village 150 miles north of the capital city of Addis Ababa, is an exception: every household—that’s more than 5,500 residents—has electricity. The Solar Energy Foundation, with support from other donors, has installed solar panels on more than 2,000 rooftops.
The project started in 2006 with a $2.7 million grant from the Good Energies Foundation. Rema was selected on the basis of its ability to demonstrate the potential of solar power to transform its community of poor families. Since the solar panels were installed, children have been able to do their homework by lamplight and it is possible to store medicines that require refrigeration. A solar-technician training program has been established, and it is able to operate in the evenings thanks to the solar energy generated during the day.
“Normally, an NGO [nongovernmental organization] installs a diesel generator, while the people are responsible for finding fuel,” said Harald Schutzeichel, director and CEO of the Solar Energy Foundation. “However, the villagers of Rema said they didn’t want a technology they can’t pay for, especially since diesel is becoming more and more expensive.”
