Friday, January 25, 2013

Weak Stance on Purchasing Power

Who was surprised this past Monday when President Obama laid out a liberally progressive agenda for his next term?

And who was surprised to read in Wednesday's Wall Street Journal that America's stagnant middle class is a "myth?"

While a Democratic president portrays our country's middle class as being under attack by conservative business values, a financial newspaper owned by a staunchly conservative One Percenter begs to differ.

Well, duh.

And while plenty of us have read the opinion piece by economics professors Donald Boudreaux and Mark Perry with hopes of salving our concerns regarding middle-income America's buying power, how many of us have been disappointed to discover that these esteemed conservative scholars are merely playing the same smoke-and-mirrors ploy that's the stock-in-trade of political partisans on both sides of the aisle?

Boudreaux and Perry presume to challenge the notion that our country's legendary middle class is losing ground when it comes to paying for our enviable lifestyle.  Liberals like to say that the upper and lower classes are increasing in size, while the economic backbone of America, our middle class, is shrinking.  Conservatives have lately been trying to re-frame the scenario as, yes, the lower class increasing due to government handouts, and perhaps, the upper class experiencing an increase in its wealth, if not its actual membership.  Republicans have resorted to the specter of a shrinking middle class only in its political warfare during last year's election season.

Except now that Mitt Romney lost the election, Boudreaux and Perry figure it's OK to slap some spurious data on the argument and challenge Democrats on the whole middle-class-in-crisis thing.  And they've done just that, irresponsibly contriving an argument disproving Democrats using real data, but data with anecdotal, insufficient relevance as proof of their claim.

First, Boudreaux and Perry claim that longer life expectancy helps show that the middle class isn't stagnating.  Second, they point out that while we're living longer, we're also spending less on life's basic necessities.  In 1970, 40% of our disposable income went to pay for things like groceries, cars, and utilities, while today, we pay 32%.  Third, they say that middle class Americans can pretty much enjoy the same things that used to be available only to the rich; for example, it takes the same length of time for an American to fly across the globe whether they're a billionaire or an office clerk.

All of what the professors say is generally true, if you ignore the fact that life expectancy can have a devastating effect on one's life savings:  how many Americans end up destitute when they die?  Then there's what we're spending on basic necessities, since most of what we buy today is made in Asia for a fraction of what it cost Americans to make it a generation ago, which is another economic conundrum entirely:  is what we're saving buying all this foreign-made stuff greater than our lost manufacturing wages?

And frankly, it's hard to see what difference it makes if both Bill Gates and I can fly to Moscow in the same amount of time if he's still able to fly on his schedule in his corporate jet, and I have to work my flight around an airline's timetable.  Ends hardly ever justify the means, and that's true for morality as well as economics.

But even more than these discrepancies in the glowing tableaux Boudreaux and Perry paint for the middle class, what about the things they're not talking about?  What about the high amount of unsecured debt Americans are carrying?  What about the fact that middle class purchasing power used to be based on one income per family, while now, it takes two incomes to make ends meet?  What about the fact that many Americans don't have enough savings to see them through retirement because they're living paycheck-to-paycheck during their working years?  What about the fact that we're more educated than ever before, but wages have remained stagnant - as the professors readily admit - for decades?  If we're more educated, shouldn't we be worth more to employers, and shouldn't that translate into higher wages?

Boudreaux and Perry argue that middle-class Americans should stop whining, and that our politicians should stop catering to our fears.  We should be content with having more buying power than ever before, living longer lives, and enjoying unprecedented access to the same goods and services billionaires do.  If we'd stop worrying about our shrinking paychecks, our world would look a lot rosier.

Funny how it all sounds like what some liberals have been saying all along, isn't it?  About how the One Percenters throw the middle class bones from their tables with leftover fat on them to try and pacify us.  About how One Percenters have contempt for the middle class and our inability - disinterest, even - in amassing large sums of money.  About how middle class workers don't have the right to be disgruntled at their purchasing power vis-a-vis our One Percenters.

"Enjoy your longer lives, your ability to fly coach around the globe, and your leased BMWs, and quit harassing us about your stagnant wages," Boudreaux and Perry appear to be saying for their elite benefactors at the heavily biased Mercatus Center and American Enterprise Institute, both of which receive significant funding from the right-wing Koch brothers, David and Charles.

If enough conservative, middle-class voters buy this schtick, maybe capitalism and free markets will survive another term of Barak Obama.

Hey - it's one thing to not to like what the President had to say about his plans for the next four years, but if conservatives hope to mount some opposition and advocate for more common-sense economics, does it really help to have people like Boudreaux and Perry running interference with platitudes about longer life and consumeristic gimmicks?

We all know that if you ask ten economists to tell you what 2 + 2 equals, you'll probably get ten different answers.  So it's not like many people are going to take seriously what these two professors have written.  It doesn't take a lot of work to see through the gaping holes in their propaganda.  But neither does it set a very good tone for the next four years if this kind of stuff is what the Journal thinks represents a logical rebuff to the President's grand plans.

If right-wingers have about as much faith in integrity as left-wingers, it might not be much longer before we're through arguing over whether our middle class is stagnating.

We'll know for a fact we're sinking.  And our loss of credibility will be one of the reasons.

No comments:

Post a Comment

Thank you for your feedback!