It’s NOT the economy, stupid, says Alan Blinder, former Federal Reserve second-in-command. Instead, the 500-pound gorilla in the room is less economic and more political; political gridlock, that is.
While forces on the left are not immune, the huge problem lies with congressional Republicans who block almost everything and propose almost nothing. Nope. Negatory. HELL NO! Indeed, in their widespread opposition to Barak Obama, what they are opposing is…well…modernity.
Republican Donald Trump’s mantra “Make America Great Again” captures widespread angst about failed personal opportunities impacting aging white guys who didn’t make it to college. But consumer surveys report something quite different than “white guy” angst. Instead, American households are once again optimistic…as optimistic as a decade ago, prior to the Great Recession.
Almost everything that should be going up, says Blinder, is going up; whereas almost everything that should be coming down, is coming down. Unemployment, inflation and poverty rates are about where they were before the Great Recession; even stagnant real wages are beginning to un-freeze; up over four percent in two years. Surely, much more is needed, but signals of an economic comeback are apparent. Even so, America’s Donald Trump-type culture is tuned out—totally—in this crucial election year.
So, what are the widely felt economic irritants Donald Trump’s acolytes are protesting? Since huge numbers have been pummeled by technology shifts away from conventional industries, amid job shifts overseas…their declining living standards must be arrested, reversed…again moved forward. But that’s not all.
Productivity is key to growth, and growth of standard of living. With these—now flat-lined—especially for Trump’s folks, how can the old adage possibly hold true, that a rising tide will lift all boats? Chances are, it will lift only the very big, very flashy boats…but not much else. Some call the problem inequitable distribution.
Now, serious voices on both sides of the political isle call for a Keynes-Roosevelt-type fiscal stimulus to boost growth—to really get America moving again. Most crucially, it could focus on America’s aging public infrastructure—roads, bridges and the like.
In this podcast series, particularly, we point out fraud-laced hoarding schemes by pseudo-capitalists. These need fixing, immediately, now. Allegedly, their perpetrators often are household names: Wells-Fargo, EpiPen and a host of others. Typically, their strategies may be crafted, then overseen by a phalanx of lawyers, accountants and fast-driving MBA’s in Audi’s, if you’re looking for a visual image. These are the sorts of folks who take the money and run, then plug it safely into cushy nest eggs while they recover from 80-hour work weeks and rediscover their playfulness in places like Monaco, the Swiss Alps, or…well, you get the picture.
You probably have a good idea about the sort of drill involved. Get out of productive investment. Get into finance-heavy schemes. Stick a ton of the proceeds into real estate, gold, art, whatever. Sit on it. You’ll do well. Everyone will do well.
If you believe that last part, chances are you’re somewhere off in la-la land.
Corporate rip-offs need to be scrutinized more rigorously, then prohibited. Productive capital needs to be differentiated—and rewarded. Financial placements, analogous to the plow horse now tethered permanently by the pseudo-capitalist’s door, need to be viewed for what they are: Nonproductive. Taxes need to go up on the holdings of these folks, then used to fund common-good investments for our futures. Bernie Sanders understands that.
First up, the profit lacuna needs to get fixed.
To get there, America sorely needs a consensus vision of the future. It ought to be a vision of the world in which we want our children and our children’s children—and their cohorts—to grow to maturity and beyond. It must be a vision within which things productive—and things that are not—can be sorted out.
To illustrate: Consider a farmer planting and harvesting wheat, an engineer developing new software, or a manufacturer creating environment-conserving processes. Might these be more useful to society, for instance, than some new casino to be operated by Donald Trump?
How can a consensus vision of different activities such as these, possibly be sorted out? Is such a vision—and sorting out—even possible?
Without it, how may contemporary society hope to judge what is productive—like the plow horse in the field—and what is not? How may elected leaders hope to guide us toward refreshed tax and regulatory strategies honoring the spirit of Adam Smith? Honoring humane, ecologically sound visions such as those shared by Pope Francis or the Dalai Lama?
So, here is the rub about where this is leading.
Given that contemporary capitalism now requires a vision and a strategy for implementing it, how can we the people come together to get this done?.
Will there be increasing good will to make this possible? Or, will the common refrain of a misguided congress prevail, instead? You know the drill. Nope. Negatory. HELL NO! Because after all, stupid, the problem is not economics; rather, the problem is politics.
From Boulder, Colorado, this is Jim Sawyer for Capitalism in Crisis.