Our Vanishing Middle Class Part 1

” The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than it is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves quite exempt from any intellectual influences, are usually slaves of some defunct economist.” – John Maynard Keynes

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I read a while ago that, according to the comptroller general of the U. S. Government Accountability Office, 2004 ranks first as the most fiscally reckless year in U. S. history, perhaps only to be topped by 2005. Now that’s before Hurricane Katrina so we are talking about a war that the administration doesn’t want to budget for and tax cuts for the wealthy that slow the recovery and add to the debt. To say nothing of expensive prescription drug programs that funnel money to pharmaceutical companies. A fact made more frightening by the knowledge that folks like the taxpayer’s league want to bring this fiscal irresponsibility to Minnesota, a state that, prior to our current governor, seemed to know how to make government work. Minnesota used to have a more progressive tax system that asked those who could pay more to contribute.

My friend Jonathan Larson is often reminding me that economic theories, whether we understand them or not, go along way in shaping the world we live in. Industrialization brought us many things: improved standard of living, many conveniences, life saving innovations, and, combined with New Deal political economics and climbing wages, distributed prosperity to many more citizens.

But it also brought us one huge problem. Industrialization, if we can’t change it, will destroy the earth we live on. Free market economics of the Reagan era did not alter this: it has made things worse by not only undermining manufacturing but also through deregulation encouraged more environmental destruction. On top of that it reversed the idea of income equality and encouraged a wholesale rip off of workers across the globe, destroying industry and manufacturing jobs in any country it touches.

Free market advocates argue that an ‘invisible hand’ can create the world we need when in fact all it seems capable of is transferring more wealth to the wealthy. Free market monetarists who manage money in the stock market can do little more than run industry into the ground by moving jobs overseas, and lowering wages. This is progress? But they have sold us on it hook line and sinker. They seem content to let us drown ourselves in the deep at the same time telling us the world is flat, when it is anything but an even playing field.

What we need again, reminds Jonathan, is planning. The ability to look at the world we want to live in and plan to make it through careful and ‘elegant’ design. Jonathan has written a book about it, Elegant Technology that outlines what we need to do to create the industries that will make the processes of industry more compatible with the processes of the biosphere.

Jonathan also has produced a couple of short films explaining some the basics of his thinking. Both of them have been featured among the short films on The Huffington post. The first “Creating Prosperity” explains how the economic thinking is taking us in the wrong direction. The second “Understanding Class” helps us understand what makes talk about class so important but complicated. You can watch the videos by clicking on the titles.

It doesn’t take much searching to discover that there is much that needs to be done. Little in current political thinking seems to grasp that we could encourage industry, not business, to design systems that create jobs and are more compatible with the world we might want to live in.

Instead we encourage business leaders to design systems that make them richer paying the rest of us as little as we will work for and claiming we are the better for it because the goods we buy are cheaper.

Meanwhile the Bush administration spends us in to the biggest debt in our history. What does this have to do with Minnesota Government you might ask, well I hope to explain that in the next few days as I explore some of our economic conundrums and try to talk about what has been a 150 year debate about what kind of tax system we should have and who should pay for what government does. In Minnesota, recently one side has been winning that debate but the tide is beginning to turn.

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