The Economy is Still Broken

Bad Policy

Sometimes these days when you hear the news it feels like we the people are playing a macabre game of tennis where it truly matters if the ball goes where our racquets point; where whether the ball is in our court or not could make a huge difference in our everyday lives. Each piece of news seems more hostile and vicious than the one before it and we must get in our best position to try to hit that ball right off the court so that the server does not get a point and then get ready for the next bad policy to get served up.

Throw millions off of health care – slam. Send DACA young folks to countries they do not remember ever having lived in – backhand slam. Keep your eyes on the regulations on capitalism and the cuts in environmental protections that are being served up every day and be ready to call the game when harmful effects begin to crop up in our lives.

The game seems long and exhausting and yet the lobs keep coming and if we don’t return them there will be repercussions (we could lose the game). This is, to me, what the Trump/Republican government feels like so far.

One Conservative Writer

But David Brooks, a Conservative writer of commentary with the New York Times, and a very erudite man, writes indefatigably from a place of optimism and the point of view of a problem solver. He is not on the fringes of the right wing. He is most likely that almost extinct being, a moderate Conservative. He offers solutions from his Conservative soul and they are not mean, although perhaps a touch unrealistic and moralistic. He argues that the roles the church and the family once had in American culture are sadly eroded and that restoring religious participation and family values would set the world right once again. He reads the leading literature by Conservative thinkers (not political thinkers, thinkers about society) and shares what he reads with us.

I often feel that wishing backwards, though, is a waste of good intellect. Nostalgia for institutions that once worked does not mean that they will be revived or that they are the keys to our future. Still, I admire his writing and often read his opinion pieces.

“The Economy isn’t Broken”

However in the NYT on Friday, September 15, 2017 he got a bit too optimistic even for me. This is one time when I think his arguments hold no merit and are simply meant to cheerlead for trickle-down economics. It turns out that a new study shows that the mean income for the middle class has risen to 59K+, after being stalled in the 30K area for many years. He concludes from this that “the economy isn’t broken” (in fact that is the name of his article).

If our economy has ticked up a bit since 2008 it is probably not due to anything the Republicans have done. And Mr. Brooks does give some credit to the Obama administration. But he also uses this as an argument to suggest that income inequality is exaggerated and the economy doesn’t need fixing.

“On both left and right,” he says, “movements have arisen to fix capitalism’s supposed structural flaws, either by radically interfering in the marketplace (Bernie) or by clamping down on global competition (Trump).

But what if there are no structural flaws? What if the market is working more or less as it’s supposed to?”

He gives data for how much family incomes have risen but he says that productivity has not kept pace. He recommends “more dynamic capitalism – more trade, more immigration, more free competition, fewer regulatory burdens, more growth.” I imagine that he means the first four recommendations will produce more growth since more growth is not something you can legislate.

Wealth Inequality in America

But I don’t think the middle class should start celebrating its great good fortune yet. The difference between 86 billion dollars (Bill Gates, #1 on Forbes 2017 list)  and 59K+ is pretty much the same as the inequality between 30K+ and 86 billion dollars. And in fact people on the bottom have not necessarily shared in rising incomes. Also, a point to remember is that Democrats insisted on a rise in the minimum wage and they have been somewhat successful in making this happen, which may be partially responsible for a rise in wages.

On September 11, 2017 a source called dqydj.com published an article with a title that begins “Net Worth in the United States…” and in that article is a table summarizing net worth for varying percentile points. While a source called “don’t quit your day job” may not have quite the cachet you would wish in a source, the table seems to be from a valid source.

 

Clearly vast inequalities still exist between those who have 30 million in disposable wealth and those who do not even have enough to allow them to own any meaningful share of this economy or in fact to live a viable lifestyle from week to week. I certainly would not look to David Brooks (who is not an economist) to show the way to more growth especially economic growth that is shared equally across all classes. Obviously what you can buy with 30 million in net worth gives those at the top an extremely comfortable life with plenty left over to insure financial security in the future. Most of us realize that even a net worth in the 100K+ levels does not absolutely insure long term financial security. And these are net worth figures, not indicative of how much the actual worth would be in some of these categories.

I am certainly not ready to say that we ought to agree to any tax or budget plan that gives more money to those in the top centiles. I am not ready to give up a plan like Obamacare for a plan that relies on block grants to states. Republicans love to argue that the federal government has taken on all kinds of responsibilities (rights) that our forefathers gave to the states. I think that a fundamentalist interpretation of the Constitution is unlikely to work given that population in America has risen from about 350,000 in 1789 to 350,000,000+ in 2017. I do not think that the states can offer equal services to all Americans if they are loaded down with economic responsibilities that are unrealistic. In fact it is entirely possible that we have reached the right time for single payer health care and it will be the only way we will not be fighting these “state’s rights” battles over and over again for many years to come (a terrible waste of precious time).

Another article I saw today was in The Post Standard, Syracuse, NY. It says “Syracuse’s alarming poverty rate keeps rising in 2016:” 13th worst in U.S.” (up from 29th a year ago). I find it difficult to give countenance to two articles in one day that suggest opposite conclusions. On the one hand we have David Brooks saying that the economy is not broken and on the other hand we have my hometown where it is. (Although that could be partially due to a lingering reliance on the “lock them up’ approach to social change in Syracuse.)

The economy of America is not good until it is good for everyone. We are not there yet. We do not owe one cent in tax cuts to anyone at the top of the wealth tables. We have passed more and more money up the chain and none of it makes our personal financial resources grow or allows us to enjoy the financial security enjoyed by those at the top. Those at the top of the economic heap think 59K is generous but, at the same time, they are still stockpiling the majority of the nation’s wealth.

How are you feeling about your financial security? Do you think we should trade in Obamacare for block grants to states?  Do you think we should reform taxes on corporations? Will that bring more job growth or just line the pockets of those who head the corporations? Do you agree that owners and heads of businesses give workers a fair share of the wealth that workers help generate? Should we give tax cuts to those in top income brackets? The way you answer these questions should determine what you have to say to those who represent you in Congress as the 115th Congress lumbers on. This is a view from the cheap seats.

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