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Economics For Dummies

I received a B in Economics 101 in college.  I never took another economics class.  I took calculus in high school and have never done anything above algebra since then.  My brain over the last several years has basically been conditioned to say funny things or things I think are funny.  So I never expected to be able to synthesize the big economic events that have taken place in the United States over the last few years.  Except for the fact that I have done some reading and have looked at the obvious.  So why is everything so hard for people to see and who is to blame for the predicament?  Well there are only three possible reasons: people don’t read, people are liars or people don’t care.

I make no claims on knowing economics. But I can read and put obvious information together. My conclusion: The American Dream is dead, but America has not woken up yet.

I was never much of a conspiracy theorist, but I do believe in my lifetime, without major significant changes to our economic and political systems, the United States will fall and fall hard in world standing (except in our own collective consciousness).  I fall short of saying there will be a revolution, but something close will occur.

What is happening across the Middle East right now, in my estimation from what I have read and seen is not so much about some anti-religious fervor or some clamoring for USA-style democracy, but more about people not being able to share in some form of economic prosperity.  Now if the Middle East is rising up having never experienced American level prosperity (but able to learn and see it through the Internet), what will happen in this country when people wake up one day and realize that they cannot get what they once believed was a right, or at least a viable opportunity?  Better to have loved and lost than never loved at all, but NOT better to have once been prosperous and realize you aren’t anymore.  The American Dream is moving towards becoming the American Lottery Ticket – it can happen, but it is no longer the odds-on-favorite for a have-not who works hard.  If you are born poor, odds are you will die poor, regardless of how hard you work.  But more than that, this is the generation that is going to be dumber and poorer than its parents’ generation.

In this country we have video games, flat screen televisions, reality television, iPods and a million other gadgets that, despite their considerable cost, have become must-haves from the rich to the barely scraping by.  And even newsworthy issues that seem so divisive, like gay rights, abortion, even war all are mere distractions compared to the economic disparity that is occurring in our country.  I know as a heterosexual man who has never served in the military it may seem wrong to be so dismissive of these issues, but look at any country that has had major uprisings – economics is always what spurs it.  Lack of personal resources.  It just happens that in this country we have all the distractions that come with wealth so there is no massive movement to make issue.  Add up all the people in this country that are gay, having an abortion or in the military and it will still be a smaller number that the people who will be adversely affected by the inequality bomb that will go off without change.  I just always hate how some liberals give a pass to someone who says, “Well sure, I am fiscally conservative, but I am pro choice and pro gay marriage.”  Well all I hear is, “I am OK with corporate America and political whores fu*king over women and gays, whether they have kids and are married or not.”  But here are all the pieces to this puzzle from what I have seen and read:

Companies in the United States used to make things.  They used to have a relationship with workers.  Now the only thing American companies are beholden to are stock prices.  Everything is secondary to stock prices.  Because if a company is successful and productive they can only make stock holders comfortable and CEOS rich, which is not good enough.  But if all else is sacrificed to stock price then that upper crust can become REALLY rich.  How else can one explain how corporate profits hit record highs in 2010, but unemployment did not budge?  But one party will have you believe that more tax cuts and deregulation are needed to improve employment.  So if record profits are not enough to spur employment, the question is how much profit is needed before a company is safe enough to share?

This explosion helped make banking a lot more lucrative than it should be (in addition to an incredible amount of greedy and corrupt individuals).  So you had intelligent people flocking to finance, but not all motivated by a love of numbers, but a love of money.  So when you become an industry attracting disproportionately greedy people, nothing can go wrong, right?  There is a reason everyone is familiar with the stereotype that spawned my comedy bit  “Todd the hedge fund douchebag.”

Meanwhile, since the 198os, big business has been on a two pronged attack to de-unionize workers and curry political favor by investing of money into lobbying efforts (I finally learned this year that the US Chamber of Commerce was not an official body of the government, but an incredibly pro-business lobbying think tank hell hole).  Whether you agree with unions or not (we can all agree that some pensions and benefit plans are too generous and not tenable in this economy), they have always represented a powerful bulwark against corporate overreaching.  Many important worker protections have been brought about because of unions.  And has corporate America (I know that the particular issue in Wisconsin is about government worker unions, but still the GOP has been dedicated to eradicating unions for 30 years) ever shown to act in the benefit of the worker or public in general without prodding or regulation?  Oh, so maybe if we get rid of taxes and unions, maybe THEN corporate America will let us into their party.  I worked at the Bronx DA’s office for 3 1/2 years and anyone who believes this is like a battered spouse who believes this will be the time their husband stops hitting them.  They don’t stop – it only gets worse.

Throw in last year’s Supreme Court Decision in the Citizens United case, which allowed for the flooding of last year’s elections with millions upon millions of anonymous donations from corporations and you have a perfect storm for fu*king over the average American.

Of course this might not be possible without a sizable amount of the population being stupid or apathetic.  So it is not corporate America full on raping the average American in all cases.  It is somewhat consensual.

For example, the Tea Party was brought into life, in part, because of anger against the bank bailouts.  Of course these are the same people that are protesting public sector unions, despite, as one Tea Party protester said when quoted by the New York Times, “I am not sure about all the issues here.”  They are not for the banks, nor are they for union workers.  In other words, they are for whoever the well funded corporate ads tell them to be for, even if they are not sure why.  And to be sure, the Muslim President is on the side of the unions, right?

Or articles I read late last year about Detroit car sales improving.  Great news, right?  Except that, with the exception of the Volt, many of the cars that saw big increases were SUVs.  In America, it seems, everything has become YouTube – our attention span and memory last 5 to 10 minutes at best.  We were going to become leaders in new types of cars, not reliant on oil, but do you think Detroit will really have the foresight for that, if they can jack up stock prices in the short term?  Just today, there were big articles on the price of oil rising because of the unrest in the Middle East.  So now will begin the cry for getting of Middle East oil and Thomas Friedman suggesting gas taxes (a great idea, but one that would probably get President Obama assassinated).  In this country people think with their wallet and fight for their wallet and that is the only way to communicate with people.  If gas were $9 a gallon the people would demand new forms of power for cars.  At $4 a gallon they bitch.  At $2.50 a gallon they shut the fu*k up and drive.  But a gas tax would mean government regulation – boo hoo.  So instead we will wait until the benevolent oil and car companies listen to the market (that they saturate with ads assuring us of their commitment to science and new clean technology to pacify us into silence) to ask for new cars.   We are more likely to run out of oil before that plan would work.

And I have been able to work and go to school and even date people of economic means and one thing I have learned is that many of the people of means in this country do not realize that they are of means.  For example I dated a woman whose family lived in a multi-million dollar home in an affluent neighborhood, owned the property the land was on and lost a ton of money on WorldCom stock.  She insisted that they were upper-middle class, even though by definition, if you are rich enough to have lost a ton of money in the stock market and still own a multi-million dollar home you are not middle anything.  Another time someone mocked a blog of mine encouraging the Obama tax increase for people making $250,000 or more by saying “Oh those people making $250,000 are really making a killing!”  Well, YES!!!!  In the world and in this country, just because you live in an affluent neighborhood or work with even richer people does not mean that making $250,000 as an individual makes you less rich.

Over the last year I have read Winner-Takes-All Politics, The Big Short, the New York Times (particularly columnists Paul Krugman and Bob Herbet- two of the few men I am aware of who seem to have the appropriate level of rage on this topic) regularly and seen the movies Inside Job and Capitalism: A Love Story.  Now some may see this list (which I recommend to everyone reading this) that there is some liberal bias.  But what have I said that is false?  There are basic facts that have happened in this country – CEOS make much more relative to their workforce than they ever had and the top 1% of the country owns a larger portion of the economy than ever before.  And at this time of peak economic inequality in America, corporations have had their handcuffs taken off instead of putting them on – less regulation over the past 30 years, calls for even LESS regulation and lower taxes NOW, Supreme Court decisions allowing a free flow of anonymous, corporate advertising for political candidates and brazen attempts to crush unions for good.  How is this not obvious to everyone?

The problem is that too many people still believe in the American Dream.  It is now more an article of religious faith than reasonable expectation based on fact.  Without that faith all this would be awfully disturbing.  But the Revolution (which will also be pacified by Twitter and Facebook – why do anything when you can just complain?) will have to wait until people can no longer afford their distractions.  And when more people see Inside Job than saw the Justin Bieber movie.

So to answer my question of who it is in this country should be blamed?  All of the above – the stupid people who act and vote against their own interests, the people in political and economic power who lie to us and ourselves for doing and saying nothing while it continues to happen.

2 Responses to Economics For Dummies

  • Hey J-L,

    Great blog! Man, I think exactly the same way on these issues (btw, I think you meant “inequality” in the bottom of the third-to-last paragraph). I especially like your comment on your dating experience with the “upper-middle class” girl because I had the same experience recently, only with a “middle-class” girl. It is amazing that many Americans don’t realize what they DO have. More amazing is that, generally speaking, these same Americans DON’T understand what they DON’T have – e.g,, universal health care, well-being for other Americans, etc.
    They would have us believe that they understand what’s going on but, as you pointed out, many betray themselves the minute they open their mouths to convince us to believe in their point-of-view – e.g., Sarah Palin, Rick Santelli, etc.

    Cheers,

    D

  • Great stuff, Mr. Cauvin. Thanks for depressing me!

    And, thanks for using your head, learning the facts, and speaking out. You inspire me, sir. Be well.

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