I both agree and disagree with some of the points of this
article, but having just finished it I would like to make the point that “the
masses” or those who are ignorant will often turn to “magic” as the cause of
their problems. This is because they lack the basic understanding of the system
and therefor try to ration out, often in error, what is happening.
Sigh.
As all good economics students know an increase in technology
results in an shift in Supply. New technology lowers production costs and
supply increases-shifts to the right and up. In this regard to the middle class
vanishing, I will again reference, the milk delivery man, the come to your home
TV repair man, technology evolved to the point where these positions were no
longer demanded in society. Quantity Demand decreases, as a result price (wages)
drop, and presto no more middle class.
The problem with this theory is that it is only looking at a
fraction of the problem, yes we have identified one variable, but we do not yet
know how important it is in effecting the rest of the system. The article also
mentioned trade policies, but did not touch on what was to be done with them. Though
I suspect that more tariffs will be put in place to “secure American Jobs” (a
great example of masses “magic” fix)
Lastly, the real culprit (or is it) Policy. American’s in general
live quite “high off the hog”, I can not help but wonder how much of the “lagging”
behind those who have made it is a simple choice between consumption now and
consumption later. I would throw out the theory that those who have chosen
satisfy their demands now rather than invest in capital for the future compose
a majority of these people.
The solution is not to take a dollar out of the rich man’s
pocket and give it to the poor man, this does not result in economic growth,
but a redistribution of the pie, nothing is gained. Rather the “middle, and
lower” class should be making the effort to make new pie, and therefore increasing
the pie overall. Motivation is something a great deal of Americans lack, and I make
the Disney comparison to Donald Duck, a lazy laid back no work down on his luck
character, vs. his uncle, Uncle Scrooge who started as a nobody Scottish popper
and through hard work and intelligence, luck, and a great deal of persistence
becomes the richest duck in the world. These are the traits that most American’s
lack, there are success storys out there, and almost all of them have the
common note of perseverance and motivation.
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