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Class, Not Race
In New Geography, Joel Kotkin proposes a better way to look at what’s happening in America:
Today America’s class structure is increasingly ossified, and this affects not only minorities, who are hit disproportionately, but also many whites, who constitute more than 40 percent of the nation’s poor. Upward mobility has stalled under both Bush and Obama, not only for minorities but for vast swaths of working class and middle class Americans. Increasingly, it’s not the color of one’s skin that determines one’s place in society, but access to education and capital, often the inherited variety.
Worries about upward mobility have been mounting for a generation, and according to Pew, only one-third of Americans currently believe the next generation will do better than them. Indeed, in some surveys pessimism about the next generation stands at an all-time high.
But race is not the main determinant in looking to the future. The greatest dismay, in fact, is felt among working class and middle class whites, who are generally much more pessimistic about the future for themselves than are either African-Americans or Hispanics.
So it’s not race, but class — that word that Americans recoil from, reflexively — that’s behind the current uneasiness, pessimism, and even anger in the American electorate. The idea that the system is stacked against you if you’re not born into the right social class is incredibly powerful: it’s as if all our anxieties about taxes, government spending, crony capitalism, and wealthy, lefty social preferences all converge and ripple out of the same place.
Conservatives don’t like to talk about class:
Republicans, particularly those closest to Wall Street, also seem to have a problem even admitting the existence of the class issue. Conservatives economists repeatedly downplay ever greater insecurity about jobs, the affordability of decent housing and generally lower net worths for all but the highly affluent. Convinced that any discussion about these issues constitutes unseemly “class warfare,” the right’s intellectual leadership seems incapable of addressing these concerns.
But also because the way to really address the inequities in the current system seem to require that conservatives and Republicans be willing to look at things like the tax code, at the way capital gains taxes are calculated and imposed, and maybe at the way the government spends money, which right now seems to favor either gigantic corporations with long arms in DC or insane progressive leftist commies and government employee unions. It’s easy to see why nobody’s itching to do that.
Here’s what worries me: we already know that the American voter is easily persuaded that government spending is an acceptable solution. They proved it twice when they voted for Obama; yes, yes, I know he’s currently unpopular, but anyone who thinks that this means that Big Government spending is on the wane is living in Fantasyland. So if the American voter is still wobbly when it comes to spending, what kind of spending should we be engaging in?
(And I’m going to duck quickly because I know some of my Ricochet friends are about to throw a chair at me… But still: a thought experiment.)
Kotkin goes out on a limb, here, which will probably raise the hackles of solid small-government folk:
Ultimately, the best way to address class concerns, as well as those of minorities, would be to spark strong economic growth, particularly in the energy, manufacturing, and construction sectors, which tend to offer higher wage employment for them. Both Latinos and African-American made their biggest economic strides when the economy was booming under Presidents Reagan and Clinton, both of whom have been criticized for “trickle down” policies.
In the old Democratic Party, from Truman to Clinton, this approach would be an easy sell. A policy that encouraged building new water facilities, expanding domestic energy, manufacturing and construction, particularly single family homes, would have widespread appeal to working and middle class voters. But a growth agenda likely would face much opposition from the president’s green gentry base, who seem perfectly content with an economy that rewards insiders, venture capitalists, and companies that employ few people, largely the best educated and positioned.
I’ll crawl a little bit out on that same limb, along with Kotkin and a few others. If we assume, from a practical standpoint, that the federal government is going to spend money, that the American people who voted for Reagan and Obama still harbor a soft spot for a Big Federal Program, then what?
What would you say about an unapologetic pro-American government, focused on economic growth, middle class income, an end to crony capitalism, border security, a robust military, higher tariffs, and energy independence? It would have been, not too long ago, the Pat Buchanan administration. I’m not saying I agree with it, or would advocate its positions, but — looking at the politics, it makes a certain sense.
Published in General
This is silly. The standard understanding of America as a land of opportunity implies that promise. I’m rather surprised that you won’t accept that commonplace without … a citation … which is simply someone else saying the same thing.
Population size is hardly the only thing that matters, though. Geographical dispersion also matters. When crops are failing in Saskatchewan but the fishing’s still good in the Maritimes, a Canadian bank with branches in both places can cover the Saskatchewan losses with Maritime assets and get through the crop-failure crisis when a purely Saskatchewan-based bank would fail.
One of the first insurance schemes ever used, I believe, was the geographic separation of assets used by shipping agencies transporting precious cargo. If the agencies put all the precious cargo in one ship and it sunk, they were sunk. If they split the cargo across several ships sailing at different times (so the ships would then also be spread out in space and subject to different weather conditions), then even if a ship sunk, they could still expect most of their cargo to make it.
The problem with that is all it would do is encourage universities to raise tuition and fees by $20,000/year. Give them $100K at 18, and let them do anything they want with it. (Allowing them options other than college means colleges have to be cost-competitive.) Right now that will pay for 4 years of college, but it is also seed money enough for a small business.
Even if they spend it foolishly, there is a second net three years down the road. After blowing the first one they are less likely to blow the second one, especially if they had to suffer a few really, really lean years first. As the saying goes, people get good judgment through experience. People get experience through bad judgement. Gotta have the opportunity for both.
Seawriter
In banking as in anything else, there are diseconomies of scale as well as economies of scale. While there are good reasons for certain people to prefer purely local banks, there are also good reasons to not prohibit branch banking.
Nobody knows the “right size” for all banks. Not the government, not the bankers (though they might think they know – big enough to take over the world, bwahaha!), not even the customers themselves (who only make an educated guess about the right size of their particular bank by choosing one).
We can predict, though, that bailouts will tend to go to the larger, more prestigious banks, as they’re more in the public eye and their failure threatens to cause more voters and campaign donors to suffer. Therefore, we’d expect the bailout regime to artificially prop up bigger banks and cause there to be more of them than there’d be otherwise.
You want to “break up big banks” in a way that makes economic sense? Stop propping them up. The government’s impulse to prop them up and bust them up at the same time makes sense for the government (more control), but not for anyone else.
The well-known term “the American Dream” appears to date from 1931.
So “always” means since when? Columbus? Plymouth Rock? The Declaration of Independence?
And how far upward? Every man a Vanderbilt? Or is reaching above subsistence enough? Is security in life, liberty and the occupation of virtue enough upwards? Or does everyone need some sort of assurance that the sky is the limit, and that failure to take off is a problem for the government?
(My favourite law review citation was for some non-point like “society changes things”: the footnote read something like “See generally, Marx, Karl Collected Works …”)
Agree. I think it is as much a matter of culture as class. A little little low-brow culture can be a fun thing – but there was a time when most people wanted to improve their culture. We now celebrate the lowest of the low-brow as a sign of being cool.
Yes, yes! So many of us cranky middle-class conservatives talk as if the regulatory apparatus only clobbers us and not the poor. But the truth is it clobbers the poor, too, and with their lesser financial, family, and educational resources, they’re even less well-equipped to deal with the clobbering than we are.
Think of how much we suffer with the paperwork, the licensing fees, the inspections, the threat of multiplying fines for not being in compliance. Now imagine trying to face those hurdles with miniscule capital and only a crappy public school education. Could you do it?
The massive barriers to employment poor people face (which includes employers’ barriers to hiring poor people) only serve to make going on the dole that much more of an attractive option. Just calling the poor lazy isn’t really fair when you take these obstacles into account.
For those convinced that free international trade is the American way of life and is what has built this country please note:
Tariff, infrastructure projects, and a conservative centralized banking backbone used to be called– internationally– The American System.
One of the things I like about the Institute for Justice is that they do frankly style themselves as advocates for poor and minorities because they advocate for economic freedom.
Poor people and brown people have been told so often that economic freedom is for rich, white guys that it isn’t surprising when they ask themselves, “So who’s looking out for my economic interests?” The Institute for Justice can honestly answer, “We are,” while inevitably advocating for everyone’s freedom in the process. I think it’s a good model.
Murray — who I revere, by the way — describes the collapse of the white underclass, but he doesn’t really say how or why it happened. Maybe because that’s hard to do, or impossible to know. But middle class wages have been essentially stagnant since the mid 1970’s — household income has risen because most families now are two-earner units, not by choice but by necessity.
So, yes, families have a lot to do with mobility. But something else is going on in the American working and middle class, and some politician is going to start addressing it head on. My guess is it’ll be a far-left socialist kind of leader with populist themes — because if you simply remove progressive urban elite lefty nonsense from a political platform (open borders, gay marriage, bilingual education, soft on crime, etc. etc.) and concentrate on a populist, traditionally left-wing working class agenda — high tariff industrial policies, soak the rich taxation, large government infrastructure spending, immigration limitations, Main Street vs. Wall Street banking and financial regulation — what you have, it seems to me, is a pretty winning agenda.
I may not like it — though big parts of it seem attractive to me — but I have a hard time seeing it lose.
Put it this way: if the Democrats can rid themselves of their elite liberal nonsense, they’ll own most of that agenda. If the Republicans can stop reflexively supporting and subsidizing big business, they can too.
If neither of them does, why shouldn’t some enterprising populist “third way” candidate emerge? Politics abhors a vacuum.
We still build things – all the things, in fact – with American manufacturing representing the Tenth Largest world economy if taken by itself.
The myth of the decline of American manufacturing has mostly to do with the loss of low-skilled, assembly-line type work which is better done by robots. If one looks at the productivity of American labor, it has gone nowhere but up since time immemorial.
Do you also want to smash the machines so there will be more jobs for people pulling plows?
This is without question true. Hamilton called for a national industrial policy — mostly because during the Revolutionary War we didn’t have the manufacturing capacity (almost) to arm ourselves.
What’s odd, to me, is that there’s really no one in Washington — not the doomsaying environmentalists, not the free-market Republicans, not even the big union Democrats — who seems to be unabashedly representing “America.” Weird. It’s the first time in history I can think of where that’s true. Here’s what it seems like to me: Democrats represent welfare-state minorities and illegal immigrants. Republicans represent money center banks, the military, and large businesses.
The message from the Republicans to the American worker is: we are going to sell your job overseas, and that’s that.
The message from the Democrats to the American worker is: we are going to sell your job overseas, but we’re going to put you on welfare.
Not terribly uplifting.
Seems like an opportunity.
Canada also didn’t have a central bank.
I agree. Santorum seemed to be honing these themes — but the problem with him, I think, is that he conflates all of these populist themes with a fairly rigid (to me, anyway) religious view of the world. It’s akin to the Democrats, who keep tacking on their weirdo lefty elite attitudes onto basically old-timey liberal politics. The two are yoked together, but the politician who unyokes them will appeal — I think — to young people, working class people of many races, middle class whites, and working women. That’s a winning coalition.
That raises an interesting question: How do those who favor “breaking up the big banks” feel about having a central bank?
Do they still want one? If so, why, when they think banks that are “too big” should be broken up?
So? It has nothing to do with what is the “American way of life,” it has to do with the correct answer. Whatever America did in the past, and managed success despite, says noting about the right way to do things, which is to follow economics.
Jindal. Clinton.
Watch.
True, but American politics abhors 3rd parties even more and that’s why there will be no successful “third way” candidate. Have you noticed the “anti-competitive” regulations that the 2-wing National Statist Party enforces on ballot access?
That Santorum got as far as he did shows how successful this message can be. For a candidate who had so many strikes against him- he was underfunded, he lost his last election by a wide margin, his inability to shake the image of a scolding, dogmatic Catholic, and IMO his lack of discipline as a candidate- Santorum went very far into the primary.
True. But everything’s impossible until someone does it.
Good point.
The Republican Party was the last successful 3rd party to become a successful majority party. It took three Presidential elections: 1856, where it ran as an alternative to the Whigs, 1860, where it won the Presidency in a four-party race (taking a majority of the electoral votes), and 1864 where it ran head-to-head with the Democrats.
The problem with that happening today is the Democrats are a far-far left party. Their leadership is to the left of their voters, but as long as they deliver the goodies most of their base does not care. (They are basically politically apathetic.) Only the conservatives really care about principles. This causes a dangerous split between the center and the right wings of the party the Democrats exploit. So a Republican-Conservative split (with the Republicans filling the role played by the 1950s-era Democrats, and the Conservatives filling the role of the 19th-Century Republicans ends up yielding Democrat control of the Legislature and Presidency – very bad thing as we saw in 2009-2010.
Seawriter
Well, isn’t that what we Republicans are trying to do? Or if not Republicans than the Tea Party? It might be a Sisyphean task, but it’s our job.
The problem is that this approach — the right one, IMO — involves short-term costs, while its long-term benefits can’t be directly predicted. (We can expect opportunities and the economy to improve, but can’t say specifically where that improvement will come from.) So it’s an electoral loser. Meanwhile, the attractive electoral messages — the ones Rob is looking for — are promises of specific short-term government action. That action has to be in the form of goodies through government programs. It’s an approach that will only exacerbate the problem in the long term.
I would like for a moment to bring up a topic I’m intimately familiar with: rural Poverty.
[On soapbox]
Simply put: the 14% of us Americans who live in small towns, on ranches, or on farms are on the whole not doing that well. In fact, we’re socially disintegrating. Drug abuse and alcoholism are rampant. Most children are raised by a single parent or their grandparents. Young people leave in droves. Finally, at least here in the inter-mountain West, people are increasingly disillusioned: with religion, the government, and everything else. It’s a bad mix… the kind that turn cranky old ranchers in Clark County into folk heroes.
Sure, there are some people who are wealthy (mostly part-time residents from cities), agribusinesses receive government subsidies and tax breaks, and some places have tourism. And those added together create jobs that are sorta-kinda okay seasonally sometimes. But we’re increasingly a broken population (irregardless of race), and no longer the stalwart, self-sufficient frontiersmen of old.
My solution? We don’t actually need more spending. (Or at least not a lot of it.) We need the Greens off of our backs. Badly. Here in the desert West mining jobs pay – and pay well. We need more of them. Family ranching operations can provide an excellent standard of living and some jobs. But the BLM has to stop choking them out of existence. Power plants, factories, and natural gas drilling: we need those. We need them – or most of us are going to have to leave and move into the cities. Where we very much do not wish to go.
[Most rural Americans realize that, to the Green movement, our decline in population is a feature, not a bug. They’ve always wanted us off the land. But entire idea that those of us who actually live in rural America constantly need the “wise supervision” of people who’ve never lived there to prevent us from poisoning Mother Earth is offensive, absurd, and frankly bigoted.]
[Off soapbox]
No, not really.
What does step out of the way of business mean? What would that look like? Is that what a majority wants? If so, then what is the strategy to make it happen? If not, what is the strategy to convince them?
Republicans have lots of jobs to do. Dreaming is not one of those jobs.
Since you bring it up, no. But I do think productivity– which you’ve noted is robust– has delivered an economy where only 20% of the working-age population needs to work to fulfill consumer demand. This is, I suggest, unique.
Will a perpetually growing economy constantly inflate consumer demand, ensuring abundant jobs? The Fed’s been pushing that string most of our lives.
“Following economics” is what Majestk is advocating. That’s gotten us a new Gilded Age, generational middle-class income stagnation and galling underemployment.
The American System worked well when our nation was not the biggest economy in the world and capital did not travel the speed of light. Our eponymous system worked before. Should work again.
Aside: Without those factory and farm jobs what’s the left half of the bell curve supposed to do to make a living? Program computers? Design robots?
Does it?
Can you point me to a short-term proposal for improving middle-class living standards, improving lower-class job prospects, or reducing social dysfunction that doesn’t involve the government giving out goodies?
Aside: Without those factory and farm jobs what’s the left half of the bell curve supposed to do to make a living? Program computers? Design robots?
Thank you. Well put KarlUB – that’s what I was trying to get at. I’m lucky in that I’m a redneck who has enough IT skills to run a business from a remote location. Most people haven’t had my opportunities.