My Disposition Towards Economic Politics :-|
Breaking Bogart (09)
After reading through the articles provided, supplemented with a small amount of additional research, I can confidently identify and categorize the different published "economic" policies. As a note, by categorizing these policies, I will by the nature of the act, be stripping some nuance from the initial discussion. Although I will say that about half of the proposed policies lack much nuance...
Identified/assigned categories of policies as I see them:
Main Categories:
1. Address the symptom
2. Blame a people/group
2. Resolve a root cause of income/wealth inequality
Sub Categories:
a. Partisan political posturing and talk-down.
b. "Magic Solutions" that every official and leader somehow missed/implemented wrong. e.g. "just" do this or that.
c. Make the "bad guys" pay up and set things straight.
d. Increase financial mobility and freedom of the lowest class.
***
I do believe that the approach to reforming the gross income and wealth inequality in America is a complex and interwoven one. I find that this is the case with most any issue worth addressing. I am no economic expert, far from it. With that said, I was moderately annoyed and mildly perturbed by the insistence of most every expert to flaunt their allegiances and make it clear whose "side" they are on prior to contributing to the conversation in any possibly meaningful manner. I got the impression that all of these think tank members and politicians were not proposing solutions to help the poor, but were speaking out to solidify their standing with currently existing and grossly advantaged echo chambers of political babble. While I have a myriad of criticisms to levy at most of the policies in these articles, I will do my best to stay on task and evaluate the ideas and opinions presented in a economically positive way.
With my evaluation henceforth, I will assume that the two discussed policies do truly have the well being of those affected by it in their best interest. Regardless of what the majority of rhetoric may suggest.
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Policy #1: "Idea 9: Rein in Wall Street, crack down on white-collar crime"
I have always had a thorn in my side with the repeated stories of how markets crash and both individuals and those under the cover of companies run away with the cash of others and gamble away the well being of millions. Though I just admitted to a severe case of confirmation bias, it was quite nice to read a well spoken university professor's way of explaining the white collar crime issue.
Statistically, with how much many white collar crime committers hold, prosecuting and reacquiring these funds would be a massive boon for potential wealth redistribution endeavors. There of course will always be the issue of how this is handled but that is not the subject of today's discussion. On top of this, the way in which United States citizens have been conditioned and encouraged to hold what little wealth they gain, is through banks. The article explains better than I can how banks essentially force users to allow them to resell and gamble said money on different kinds of loans that they expect to not be paid back in full. The system is fundamentally flawed. And what is the trade off of this kind of activity? The millions of people whose money were in the banks suffer for it. And once again the wealthy walk virtually free of consequence. At this point, how much more economically positive can you say that what is allowed at the top of USA economics is ever-increasing top 1% gain at the continued cost of the rest of the economy. Rampant greed and gargantuan scale gambling has been the normal way of functioning for quite some time now. My economically positive statement is this: middle and lower class income will continue to not change their economic status as long as the means of production and storage of wealth continue to abuse the power that they wield.
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Policy #2: "1. Raise the minimum wage to $10.10 per hour"
[ https://www.americanprogress.org/article/6-policies-to-combat-inequality/ ]
As Mateer and Coppock's "Principles of Microeconomics" very well lays out, the concept of raising minimum wage is very likely to have negative effects both immediate and long term on the local economy. That is, the change will take great affect when it is set as a binding price floor which must legally be offered in minimum for the services the labor force has to offer.
A couple of notable effects I will bring up to discuss this policy are:
-How an excess of labor will remain on the market for jobs as costs for operation rise. (Resulting in rising unemployment in this case).
-Young/unskilled laborers will see much less job opportunity as skilled/older laborers, who are now incentivized enough, return to the labor force.
Proponents of this policy flatly disagree with the academic perspective that raising minimum wage increases inequality. Ben Olinsky states, "Empirical research shows that raising the minimum wage, far from causing increased unemployment, will actually boost the economy and generate a virtuous cycle of increasing prosperity." (6 policies to combat...) I do believe that this is a slightly inaccurate blanket statement. As in economic terms, a binding price floor will absolutely have an effect on unemployment. I think that the root of the issue has become the perpetuation of such wild profits becoming a regular reality for many mega corporations and oligopolies in the United States. An excess in product quantity, consumption, and desire for profits has resulted in more and more companies turning to computers and "customer service" software. This should be an economically positive statement as most companies are openly declaring their digitization or are observable. So while Mr. Olinsky may have some merit to his statement, a virtuous cycle may not be so easily attained.
I do believe that the research and discussion that Ben Olinsky has begun is very important. I think the key factor to consider in the truths he presents is that the PACE of wealthy people's income growth outstrips the middle and lower class. It has done so for years now and continues to do so. I do believe that raising the minimum wage, not as a binding price floor, is a major part of the solution to both addressing the issue (closing the gap) and assisting those that really do need the income. I believe that raising the minimum wage must be implemented as a form of social and economic reform. However, as I have witnessed, most economists view raising the minimum wage as a sure fire way to increase unemployment. This is an issue as economics is a heavily social science. Yet so often, when convenient, economists prefer to flaunt "logic" and "rational thinking" when every economy begins and is driven by human beings. Economies too, should be for the benefit of all human beings. Despite what disturbingly biased political rousers may say about "groups needing to loose as it is unavoidable." So I say, reform society. Impose reform on the the entire country's minimum wage employers. As profits drop that 1% for every massive corporation, they must choose (in this scenario) to re-evaluate the trade offs of rampant top 1% wealth gain or fall behind as the rest of the nation reforms.
God forbid I ever become a hypocrite in this regard. Imposing "rational" thinking is a tool of oppression.
Eat the rich.
Vaughn Hill.
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