I have little to say about the GOP/Trump tax bill. I'm not an economist, nor am I a prophet. I have little confidence that the average American will see long term benefits, if any at all. Corporate America doesn't exist in a vacuum, and today the social context emphasis is on hedonism and narcissism. I've long said you can't split people in terms of morality. If you let people insist that what goes on in their bedroom is only about them and what they want, then it won't take long for them to conclude that what goes on in the boardroom is only about them and what they want just the same. Worrying about how things impact others will be as common as thinking how one's personal life impacts others.
Today, wages are stagnant, and that's the mischief behind our economic woes. The fact is, people had much more buying power 50 years ago than today. Stagnant wages means less buying power, and less taxes (blood from turnips and all). I know some will argue it's all the government's fault, what with taxes and regulations. I just can't help but notice that each time an attempt has been made to loosen those same taxes and regulations, there is no real movement from the top to make sure the excess trickles down into the little people's tin cups.
If the bill passes and in a year that changes, then that will be good news for the GOP and Trump. If the bill passes, and suddenly wages begin to go up and more money is in the pocket of the average American, then Democrats had better start shuddering. If, however, we only see Wall Street leap and bound ahead, while wages stay where they are now, which is where they were years ago, while cost of living continues to rise, then those who dread a Democratic majority will be the ones doing the shuddering.
I don't think I can buy your "wages have been stagnant for 50 years" argument. For instance, the percentage of people with roof, plumbing, and furnace problems is lower, and decreasing, because the quality and durability of these items is increasing. Central air conditioning is far more common. A 2009 Chevy Malibu today is almost certainly a better car than a 1966 Chevelle Malibu was in 1970. And the hours a man has to work to buy a decent set of tires, a TV, a window A/C unit, an iron, a toaster, a refrigerator, or a range, has fallen.
ReplyDeleteSome links (granted, all from the same guy, but nobody else is presenting his evidence):
https://youtu.be/INidwrnvcF0
http://cafehayek.com/2006/01/a_1975_sears_ca.html
http://cafehayek.com/2006/01/working_for_sea.html
http://cafehayek.com/2017/01/41985.html
http://www.econlib.org/library/Columns/y2016/Boudreauxprosperitypool.html
But what of the Malibu being a better car if now over 50% of the American population can no longer afford it? As for quality of construction, I wouldn't go there. Houses built a hundred years ago are sitting strong next to houses built 20 years ago that are falling apart. And all of this while the cost of basic former middle class living perks - like college, healthcare and savings - are denied an increasing percentage of the population. Compared to maybe 100 years ago, hours of work have declined, but the hours people are working today, partly because of the number of people who have to add extra jobs to their lives to afford what previous generations could afford with one income, has also increased compared to the last couple generations. No, there is little debate that wages haven't been stagnant. I've heard few argue against it - on either side. Even Trump made that a key part of the problem. And if it remains a problem, then we'll see other parties given the chance to fix it in the upcoming elections. And that doesn't count the fact that people who think they are making a lot today, might actually be making proportionally less than their parents or grandparents, they just don't realize it.
ReplyDeleteWell it's one of those tricky things.
ReplyDeleteFor example: how did you write this? No really, think about it. You used a computer, right? 50 years ago, a computer would cost almost as much as your house and would have less power than modern calculators. And your cell phone? Not even existent yet. So how do purchasing power calculate into buying things that didn't exist 50 years ago?
Not that I'm saying all has been awesome. I'm conservative which means I believe in trade offs. Things have a price, even large benefits will have downsides.
But the other catch is that the period of 50 years ago was a freak occurrence in history. The ENTIRE WORLD had been blown up in a war and the nations that had been untouched were not industrialized. The sole exception was America which means we were the only game in town to buy things from when suddenly everybody needed to be rebuilt. NO possible policy devised by ANYONE will return America to anything like a 50s, 60s, or 70s style economy save bombing literally everybody else that could compete. (And hopefully we all agree that such an idea is beyond the pale.) We need to realize that such economics was once in a dozen generations, and not a standard anybody can realistically reach.
That doesn't mean there aren't some things to be done. A lot of policies should be reexamined. But to blame a lot of current day woes on capitalism is... well it is capitalism's fault because other nations have rebuilt now and need us less that they have learned to stand on their own. Make of that what you will.