Paradox
I am too old to cling to the starry-eyed idealism that once led me to believe we dreamers were going to banish war, poverty and injustice, not to mention national chauvinism, with our commitment to love as the power that overturns all other forces in human history. Perhaps it was the assassination of Martin Luther King, Jr. that finally made it sink in that the brave talk about offering one's body was more than talk.
And now that I am financially dependent on a pension that is invested, I am that capitalist pig I once got my jollies from vilifying.
That is prelude to what I want to say about the connection between unemployment figures, interest rates and justice.
I believe the economists when they say that the Federal Reserve governors are watching the employment (and unemployment) figures even more than energy costs or the rate of growth in the economy. The reason is that if the unemployment figures get too low, that means employers have to pay higher wages to employees. And wages are the single largest factor in driving up inflation, which means that if not enough of the work force is out of work, the Fed will raise interest rates and we investors will see our portfolios shrink.
It seems that the larger the industrial economy and the more robust the rate of growth, the stronger is the leverage of management in negotiating with labor.
So, without being a pollyana, what do you suppose it would take for us to at least begin to wonder how we might seek to balance that equation which has now been in favor of the managers for a generation? While the profits of companies have risen an average of 11% - 20% the past three years, the income of middle and poor Americans has stagnated.
We have all been conditioned to watch the Dow Jones Industrial Average as if it accurately records how we are all doing. But the reality is that it is doing way better than most of us. And until we redraw our picture of how we think things ought to go, it will continue to. Because while there is plenty of support for the economy and its chieftains, there is no one any longer trumping for those in the middle and bottom.
Would a Democrat, or perhaps an independent - it would be a sacrilege for a Republican - dare to mount a platform that says its time to let the well-being of the average American worker be considered at least as important as the numbers that measure the heft of the economy? The past 25 years have proved that a rising tide does not necessarily raise all boats. You watch this week's employment figures and think about the people they are about.
And now that I am financially dependent on a pension that is invested, I am that capitalist pig I once got my jollies from vilifying.
That is prelude to what I want to say about the connection between unemployment figures, interest rates and justice.
I believe the economists when they say that the Federal Reserve governors are watching the employment (and unemployment) figures even more than energy costs or the rate of growth in the economy. The reason is that if the unemployment figures get too low, that means employers have to pay higher wages to employees. And wages are the single largest factor in driving up inflation, which means that if not enough of the work force is out of work, the Fed will raise interest rates and we investors will see our portfolios shrink.
It seems that the larger the industrial economy and the more robust the rate of growth, the stronger is the leverage of management in negotiating with labor.
So, without being a pollyana, what do you suppose it would take for us to at least begin to wonder how we might seek to balance that equation which has now been in favor of the managers for a generation? While the profits of companies have risen an average of 11% - 20% the past three years, the income of middle and poor Americans has stagnated.
We have all been conditioned to watch the Dow Jones Industrial Average as if it accurately records how we are all doing. But the reality is that it is doing way better than most of us. And until we redraw our picture of how we think things ought to go, it will continue to. Because while there is plenty of support for the economy and its chieftains, there is no one any longer trumping for those in the middle and bottom.
Would a Democrat, or perhaps an independent - it would be a sacrilege for a Republican - dare to mount a platform that says its time to let the well-being of the average American worker be considered at least as important as the numbers that measure the heft of the economy? The past 25 years have proved that a rising tide does not necessarily raise all boats. You watch this week's employment figures and think about the people they are about.
posted by Blayney at 2:37 PM
1 Comments:
Blayney,
It seems you and many others, especially liberals, view economic occurance and policy affecting those occurances as a zero sum game. In fact, that could not be a more misleading assumption.
I could go on, but I'll use one old example (which actually occurred because some "bright" Dem senator thought there should be a luxury tax on large boats a few years back. Can you say govt revenue and social engineering at the same time boys and girls?) Well, no sooner had the tax been put in place than the sales of yachts dropped like a rock. The millionnares didn't care - just stopped buying boats. It was the howl of the unions and others employed to build and maintain the yachts who were injured.
My point is the law of unintended consequences ensures that if the wealthy are not doing well, before long, neither will anybody else.
My dad taught me "dogs in the manger" were a bad thing.
Your FA
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