"Education and Income Inequality"
"Despite an impressive 5 years of above average economic growth that drove the unemployment rate below 5 percent, a majority of Americans in 2006 reported significant dissatisfaction with the state of the economy.There has been a sense in middle-income America that in recent years prosperity's economic rewards have not been distributed fairly. And indeed though "fairness" is in the eye of the beholder, it is true that income concentration has been rising since 1980. The mood of a significant portion of those answering pollsters' questions is disturbingly sour. The danger is that populist politicians, catering to such a mood, can marshal unexpected majoritys in Congress for shortsighted, counterproductive actions that could turn a state of bad feelings into a truly serious economic crisis."
Chapter twenty one, paragraph one, from 'The Age of Turbulence' by Alan Greenspan.
I am finding this book incredibly difficult read. Mostly because of suggestive phrases like "There has been a sense in middle-income America that in recent years prosperity's economic rewards have not been distributed fairly" have stopped me cold in my reading when on the very next page he describes that he has seen collected data that show how much faster the incomes of those in "supervisory" positions have increased their incomes as opposed to the supervised or "nonsupervisory". What bothers me about the words "sense" and "fairness" is the first suggests they did not know, and the second has come to suggest a childish belief in undeserved rewards. Entitlements if you will. It might be more accurate to write 'middle-income America has seen the growing income disparity with surprising clarity, even though they have never seen the data, and that they are growing unhappy at seeing those on the golf course overpaid and unproductive'. Suggestive phrases such as the one above appear on a vast majority of the 394 pages I have tortured myself with to date and is not what caused me to share this wonderful paragraph with you.
It is the last sentence that moved me to post.
"The danger is that populist politicans, catering to such a mood, can marshal unexpected majorities of Congress for shortsighted, counterproductive actions that could turn a state of bad feelings into a truly serious economic crisis".
Cause and effect. "Shortsighted, counterproductive actions" could cause "a truly serious economic crisis".
I tend to stray away from financial magazines, and investing websites when I read. I visit environmental, leftish, and liberal websites. I visisted them before I understood, but when they warned of lax lending standards and duped home buyers, as libs do not always see the home buying liar who also exists. I visited them when they warned that cheap credit could not last forever and a day of reckoning would come. But they were "America Hating Libs" and marginalized while the party went on. Then I came here, and met Bent and Floridabuilder, and Demondoug who saw some of the same things happening. I met Calculated Risk, Bespoke and Safehaven and Mish and Dwot and other even more bearish bloggers than our own Dwot. All warning of "a truly serious economic crisis" and explaining how it would come to pass. And the only "shortsighted, counterproductive action" they mentioned was Alan Greenspans' own lowering of interest rates. But even more than that they blamed greed as banks and brokers and ratings agencys and real estate agents and appraisers went after every penny possible or looked away when their jobs needed doing. And the most bearish among them have been correct. And ultimately they blamed the Government. The Fed and the SEC for not having had the forsight and ability to reign in the pratices that encouraged sub prime lending, and liar loans, and SIV's and the 'too incredibly inept for me to believe it was a programming error' AAA ratings agencys.
What Alan Greenspan feared did not come to pass. "Shortedsighted, counterproductive actions" did not cause this "truly serious economic crisis". Shortsighted, counterproductive inaction did.
Cause and Effect. But the reverse of Alan Greenspans' imaginations. For now it seems that a "truly serious economic crisis" is causing what Alan Greenspan feared most. The dreaded "Shortsighted, counterproductive actions". Like Ben Bernake panicing and lowering interest rates, a Bear Stearns bail-out, an economic stimulus package to increase our debt and send the last of our dollars to pay for rising oil barrels, A bank bailout as the Federal Government tries to help them get paid for mortgages they should never have written.
What is done is done. The dollar is devalued. Instead of having one dollars lost and only one dollar left to buy a two dollar gallon of milk, I still have my two dollars to buy a five dollar gallon of milk, and some of those "shortsighted counterproductive actions" have caused more US dollars to leave the country. We can survive this though. We can share living spaces as we rent to evicted neighbors. We can have vegetable gardens instead of specimen plantings and sweaters instead of heat. There is enough food and water here.
So what is on the horizon? If, as I said, shortsighted counterproductive inaction caused this "truly serious economic crisis" are there any other shortsighted counterproductive inaction type problems still out there?
Like putting our entire energy portfolio overweight into fossil fuels and not diversifying into renewables? The liberal environmentalists and economists suggested diversifying years ago and that one is starting to seem obvious now. We however have waited for Free Markets to get caught up. This was a Democracy after all and the people were content.
A lack of oversight into housing and banking allowed the financials to get away with what they could at great economic expense.
A lack of oversight at the EPA has allowed incredible amounts of pollution into our air and water. It is amazing we are not getting killed by our medical bills. Fifty one percent of Americans are on at least one prescription drug. One in six children have asthma. Even more are on psychotropic drugs. How are they going to deal with adulthood if they have to be drugged to get through childhood? More kids are winding up in hospitals because they overdosed on their Mothers bathroom cabinet than any two illegal drugs combined.
Career FDA scientists have quit because safety standards have been ignored by FDA heads. Fifty one percent of Americans are on drugs, I wonder how many are on inadequately tested, unneeded or useless or genuinely harmful drugs.
No one regulates what is in your cosmetics and there is bad stuff in them.
I think the real problems are still ahead of us and our financial issues will only restrict our ability to deal wih the real problems.
I admire the ability of the Unregulated Free Market Capitalist Advocate to keep a straight face as he assures me that criminals don't organize and act like they are a business. That a small Government is best and the free market should be allowed the freedom to do what it does best.
Every time I read a post from an Unregulated Free Market Capitalist Advocate I find myself asking... Is he guilty, or just gullible.
I would like to have a strong Democratic Government. Not the puny weakling helpless Government that we have today. I would like a Government that will shut a polluter down and unemploy the workers if neccessary. I would like a Government with the strength to enforce its laws and not give a competitive advantage to the ones who break the law. The unintended consequence of small Government is a Government that cannot enforce its own laws, to the detriment of law abiding businesses and citizens.
Some of you do not like some specific regulations and suddenly bash every regulation instead of just bashing the one you do not like. You are the Government in this country, at least for a little longer.
Many of you whined about the Bear Stearns bailout, but did you call your Congressman? You will get the laws you work for. So too might the criminals. Who is working harder?
Have a nice day.