The Washington Outsider

On questioning the need to address economic disparity

12/28/2013

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On Friday, December 27, 2013 the PBS Newshour featured a guest by the name of Scott Winship of the Manhattan Institute who argued there is no consensus of research supporting claims that economic disparity hurts the economy.  He also argued there was no consensus on whether disparity is actually hindering upward mobility, i.e. the ability of individuals to improve their socioeconomic standing.  Although Former Secretary of Labor Robert Reich disputed this expert opinion, economic measures like disparity and upward mobility are not necessarily as solid of measures as people are lead to believe; thereforce, they should be heeded, yet not over focused on.

Popular TV series like CSI may like to use catch phrases like “the evidence never lies,” but that is simply not true.  What evidence is gathered and how that evidence is interpreted determines the outcome of a scientific investigation.  Researchers were wrong about the incredible edible egg, because they did not have all of the facts while they were interpreting their data under a false pretense: all cholesterol is bad.  In the case of economics, researchers must tease data from a variety of sources that are from comprehensive while they make tons of assumptions, which determine the limitations of a given economic model or theory.

For example, most economic theory cannot give adequate predictions past a few years, thus economics is short-sighted by its very nature.  In accordance, economic philosophy takes over once the science of economics is no longer reliable.  Meanwhile, most economic theory tends to focus on the macroscopic economy; henceforth, macroscopic measures like the Gross Domestic Product (GDP), upward mobility, and inflation reveal what is happening across the overall economy.  An increasing or shrinking GDP cannot necessarily reveal the harmful effects of economic disparity nor can it readily reveal the long-term instability caused by economic disparity.  Mr. Winship went so far as to say there are some studies that reveal growing economic disparity could help increase GDP.  Even if valid, our attention should be focused on other factors.

As far as community and personal economic growth are concerned, GDP only tells us that our nation’s economic environment favors growth.  Looking at measures like core inflation, the exclusion of vital and often volatile expenses like energy and food demonstrates the need to over focus on ill-cited economic indicators.  What really matter is how much money is steered toward out communities and local businesses.  If the economy is not doing that, we are experiencing economic disparity that makes it less likely our economic interests will be met.  This means we have no incentive to support policies that simply increase the GDP as our interests are less likely to be met.  

It is also important to remember the advantage of democratic government stems from its ability to hear, balance, and address the interests of all its Peoples.  Unfortunately, our wealthy and working class already feel poor people have little right to complain about public policies when they are ones who have the most pressing interest in forcing government to address their economic interests through improved economic policies.  As economic disparity growth and the purchasing power of consumers decreases, so does their influence.  Henceforth, too much economic disparity will weaken our democratic representation and rights.  Moreover, what really matters for the individual is the state of their own finances, so we should always pursue policies that best serve our direct and broader economic interests.

As commodity, energy, and food price increase along with the price of essential consumer goods and services like automobiles, computers, cell phones, internet access, education, etc., the ability of individuals to support their current lifestyle, growth their incomes to increase their lifestyles, cope with potential economic catastrophes, and save for the future is what really matters.  In accordance, the expenses involved in maintaining a middle class lifestyle are far greater than what they were in the 70’s when American incomes peaked while the cost of a “Middle Class” lifestyle will only increase in the future.  The lesson here is that incomes must grow, versus stagnate or shrink, to simply maintain a certain level of comfort or survivability. 

Furthermore, the idea of survivability is often discussed in terms of social welfare programs like food stamps and Medicaid.  If we wish to understand the true nature of our economic state, these benefits and others cannot be included in any calculation of economic disparity while the debt of government must included as it determines the real economic value of America, which is shrinking.  With significant numbers of Americans unable to support themselves without government assistance, including Social Security, or other forms of debt (credit cards, home refinancing etc.), and two-thirds of the American economy based on consumer spending, a lack of wealth in the hands of the majority of American will eventually spell disaster.  As such, the advent of economic disparity and lack of upward mobility on a massive scale could very well be seen as a sudden catastrophic onset, even if there is no gradual increase in these measures.

Meanwhile, it is important to remember economic disparity creates a great deal of long-term issues.  Technologically, the world is headed into an era of unprecedented advancement where the vast majority of the world will not benefit equally due to personal financial constraints and technical skill.  Economic disparity will determine how unequal the benefits of technology will be in the future.  At a certain point, that technological and technical gap can grow so wide the vast majority of individuals in the world will be denied access to modern lifestyles.  In fact, the standard of living of today may no longer be accessible for most American, because they will not be able to afford it or invest into it.

President Obama and other political leaders have decided to take on economic disparity, so there will be those who push back while what policies are pursued should be questioned.  Certainly, no one should suppress evidence that undermines popular perceptions.  That evidence is actually valuable as it give us insights into what policies will be most effective, but such evidence read improperly will derail efforts to solve problems.  The GDP, economic disparity, and upward mobility of today are not necessarily the issue; it is the trends that reveal our future economic state that matter.  In their book “Why We Want You to Be Rich,” Donald Trump and Robert Kiyosaki, who wrote the quintessential “Rich Dad, Poor Bad,” make the case for increasing and broadening one’s sources of incomes and financial assets.  A failure to address economic disparity makes it that much more difficult for the American to follow the advice of these two financial experts, so the American People always need to be followed on how to decrease economic disparity, increase upward mobility, and decrease poverty.

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      • Should One's Faith Influence a Citizen's Vote?
      • Should the U.S. Government Help Fund Election Campaigns?
      • On Defunding Political Science Research
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      • Justice for All: The Case for Legal, Social, Economic, and Personal Justice
      • Why Hardliner Thinking in the NSA and CIA is Doing Damage
      • On the Baby Boomer’s Self-Centeredness
      • The Case for Personal Responsibility
      • What Modern Day Revolutionaries Need to Learn from Leader's like Mandela
      • Rising Western Acceptance of LGBT Primes Culture Clash
      • The Need for Wisdom Beyond the Numbers
      • Perceptions of the United States
      • How Honesty Relates to the Great Recession
      • Why the Middle Class and Rich Need to Support Their Long-term Interests
      • The Aristocratic Republic of the United States of America
      • Discussing the Need for Community Support
      • Why New Forms of Capitalism and Socialism Will Compliment Each Other
      • The Reason We Need to Understand What it is to Be Poor in America
      • Why the World Needs to Reinvest in America
      • Why Are We Against Terrorism?
      • Why Does Terrorism Exist?
      • US Influence: The Value of American Citizenship Around the World
      • Responding to "the Soldier as Sacrficial Victim"
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      • How comfort defines us as people >
        • Is Suicide a Cowardly Way Out?
      • Defense Against the Dark Arts of Manipulators
      • Defining Abuse >
        • On the Willing Victim of Abuse
        • How to Understand Abuse Victims
        • Recognizing Abuse
      • The Role of Substitution in Decision Making
      • Trying to Understand PTSD and Other Trauma-induced Mental Health Issues
      • Exploring Human Emotion >
        • Mental Illness is Not the Cause of Anger and Violence >
          • Trying to Understand the Boston Marathon Bombing and Other Violent Crimes
          • Getting into the Twisted Mind of the Tucson Murder
      • Describing the Mind as Modes of Thought >
        • It’s Just Sex?
      • Relationships, or Arrangement
      • Understanding the Effects of Groupthink in the Workplace
      • Relating Circular, Inductive, and Deductive Reasoning to the Scientific Method and Religion
      • What is a Redneck? Understanding Different Cultures and Thinking
    • Economics >
      • The Need for Greater Economic Leverage >
        • Evaluating NAFTA and TPP
        • Undercutting Logistics with the Underpaid Independent Contractor
        • Unions: Hindrance or Essential to Free Markets
        • Eminent Domain Used Against Banks
        • Haitians Sue the UN for Failure to Help With Cholera
        • Looking at How Corn-based Ethanol and Other Alternative Energy Subsidies Stack Up
      • Empowering the Sovereign Nation-State by Rethinking Trade Policy >
        • Irish Sovereignty Lost Before Bailout
        • Why Sudan's Greatest Long-Term Hurdle is Our Lowest-bidder Economy
        • Reduce US Imports by Buying American Made Products
      • Ending the need for government support and tackling poverty
      • Income inequality: understanding the limitations and psychology of disadvantage
      • Looking at the Future of American Jobs >
        • On Questioning the Need to Address Economic Disparity
        • Minimum Wage is Not the Problem
        • Responding to the "Blip"
        • Why Education Is Not The Civil Rights Issue Of The Twenty-First Century
      • Considering the Impact of the Capital Gains Tax Deduction
      • Embracing a Capitalist Mindset >
        • Capitalism Versus Socialism
        • The Negatives of Socialism
      • Stealing Intellectual Property
      • Changing Business Models: From Enduring Entities to Cash Cows
      • Consumer and Investor Evolution in the Great Recession of 2008-09
      • Dealing with the Issues Surrounding the Patenting of Self-replicating Technologies
      • Is Technology Threatening Jobs?
    • Education >
      • The Role of Education in Creating a More Dynamic Workforce
      • Primary Education in America and the Changing Needs of Society
      • The Greatness of the American Education System
      • Ideas for Improving the United States Education System
      • Are Teachers Treated as Professionals?
      • Is Engaging Parents in Their Children's Education a Major Factor in Turning Around Low-performing Schools?
      • Should Grants Be Awarded to School Districts that Try Innovative Methods to Improve Student Achievement?
    • US Constitution >
      • On Reading the US Constitution
      • The Senate should not do more to limit the powers of the Judicial Branch
      • On the DOJ Justifying the “targeted Killings” of US Citizens
      • Corporations Do Not Have the Same Rights as US Citizens >
        • Corporate America Pleads the First
      • Discussing the Constitutionality of Per Capita Taxes
      • Was the California Supreme Court Right in Legalizing Gay Marriage?
      • Should the Bible Continue to Be Used for Swearing-in Ceremonies and in Courtrooms?
      • Should Religious Student Clubs Be Allowed in Public Schools?
      • Should the Government Control Talk Radio to Make it More "balanced"?
      • The Second Amendment: Not Outdated >
        • Are We Losing Our Second Amendment Rights
      • Eminent Domain Used Against Banks
      • Should a Woman Have the Right to Choose Abortion? >
        • Should Fathers Be Able to Opt Out of Parenthood?
      • Should Smoking Be Allowed in Public Places?
      • Is Teen Driving a Right or a Privilege?
      • Should US Companies Be Required to Provide Equal Pay to Women and Men?
      • Is eighteen too young to vote?
      • First Amendment Rights: The Priviledge of The Press
      • Do Mandatory Seat Belt Laws Violate Individual Rights?
      • Should cell phone use be banned while driving?
      • Dealing with the link between video game violence and children's behavior
      • Should police have to submit to routine drug and alcohol testing?
      • Public schools should not impose mandatory drug testing on students
      • Are High Taxes on Cigarettes Proper?
      • Should pharmacists be required to violate their religious beliefs and dispense the "Morning After Pill?"
      • Should school counselors uphold patient privacy or report students who become unstable?
  • For the record
    • Ongoing Issues >
      • Red Dawn in Ukraine: Understanding the Actions of Russia >
        • On Russia’s Coercion of Ukraine
        • The Russian Annexation of Crimea in the Eyes of the World
        • Putin Has Overplayed His Hand With Crimea
        • Ukraine in Terms of Resovereignization
        • Avoiding a Conflict Between America and Russia Over Ukraine
        • What Drives the World’s Interest in Russia’s Actions in Ukraine
      • China’s Aggressive Pursuit of Interests Demands a Global Response
      • Iran Makes a Deal: A Start to a Long-term Diplomatic Effort to Denuclearize Iran >
        • On the Future of a Nuclear Negotiations with Iran
      • America's Sphere of Influence: Retaking South-East Asia >
        • Power in Asia: Looking at the Power Shift in Japan
        • The China Paradox: Why America is Worried About China
      • Assessing US Support of Israel >
        • Tread Softly Israel for a Heavy Step May Be Your Undoing
      • Understanding the Dysfunctional Nature of the US-Pakistani Relationship
      • Recognizing the True Threat Behind the Current Unrest in the Middle East >
        • Reacting to the Escalating Crackdown in Syria
      • Assessing the Threat of North Korea >
        • Answering North Korea's Call for Food Aid: Breaking the Vicious Cycle Forced Upon Us by a Warring Nation
        • Dealing with the Restarting of the Korean War
        • North Korea Attacks South Korea
      • Dealing with the Ill-effects of Climate Change
      • Racial Inequality and Oppression Do Truly Exist in Today's Society
      • Should energy independence be a high priority in the US?
      • An overview of world wide Human Rights violations
      • Nuclear Threat from Pakistan
      • Return of The Cold War?
    • World >
      • Coverage of FIFA World Cup is a Chance to Focus on Poverty >
        • The FIFA World Cup Offers Benefits for More Than Brazilian Soccer Fans
        • FIFA Can Bring Brazilians Together as a Nation
      • Being Prepared for Any Potential Dangers at the FIFA World Cup Games
      • Treading Softly on the Politicizing of the 2014 Sochi Olympics Over Gay Rights
      • Why NATO Operations in Libya Lack a Well-defined Mission
      • China Hijacks the Web
      • Lessons from the Great Japanese Earthquake of 2011
      • A Modernizing Cuba Offers an Opportunity for Capitalists
      • The Seeds of Democracy Take Root in the Middle East
      • The Rebirth of Democracy in Tunisia
      • What May Come from the Hurt Revolution in Libya
      • Responding to the Violence of Qaddafi and Other Besieged Leaders
      • Embracing the Rise of a Democratic Egypt
      • Protests in Afghanistan Turn Deadly for Coalition Forces and UN Personnel
      • Haiti: Another Failing Humanitarian Investment
      • What Karzai Can Learn from Calderon
      • START II: A Necessary, Easy Success that Nearly Failed
      • Why Does the U.S. Government Support Independence for the Breakaway Serb Territory of Kosovo but Oppose Independence for the Breakaway Georgian Territories of Abkhazia and South Ossetia?
      • Iraq's Electric Issues: When Human Wants Trump Economic Sense
      • The International Community Reacts to Wikileaks: We May Be Moving Toward a Third World War in Cyberspace
      • On Climate Gate
      • Assessing Obama's Afghanistan War strategy
      • 2009 Iranian Presidential Election: The Fallout
      • Resolving Sri Lankan Conflict through Free Media
      • What are the Global Consequences of Russia's Invasion of Georgia
      • The War in Iraq: an assessment of President Bush's surge strategy
      • Drug War: Actions of Venezuela, Columbia, Ecuador in terms of Resovereignization
      • Is the Iraq Refugee Crisis America's Responsibility?
      • US support for a united Kosovo, Abkhazia, and South Ossetia: why?
      • Should the US withdraw from Iraq?
      • Setting a Timetable for Troop Withdrawal from Iraq is a Terrible Mistake
      • War on Terrorism is needed
    • Law and Order >
      • Rape in the US Military
      • Ethics of Force-feeding Guantanamo Bay Detainees
      • Reacting to the Aftermath of the Tucson Massacre
    • Economy >
      • Affordability Drives Fear of Obamacare and the Individual Mandate
      • Is the Economy Built for a Job's Recovery?
      • Gutting Healthcare Reform of the Individual Mandate
      • Arizona Budget Cuts Lead to Lethal Healthcare Rationing:
      • Shameful Collection Practices of American Banks
      • The Fed Reveals it Actually Undertook an International Bailout
      • Thoughts on French Budgetary Reforms
      • Seniors Start Businesses
      • The Case for Slimming Down the US Military to Make it Better
      • Looking at the Obama Administration's New Approach to Economic Policy
      • Should the Government Regulate the Credit Card Industry?
      • The Big Three's Big Chance
      • The Unhealthy Tone of the Healthcare Reform Debate
      • Should the federal government offer a bailout for home owners?
      • Environmentalists: Do They Do More Good Than More Harm?
      • Responding to Scott Walker's Contribution to the War on Unions
    • US Government >
      • America Needs to Focus on the Impending Fiscal Crisis
      • Reacting to the Bush Era-tax Cut Extension Deal
      • Quitting the Obama Revolution: The Fickle Nature of American Politics
      • John Boehner's Circus
      • Is the Fed Putting Itself in Jeopardy?
      • Wikileaks Goes After the US State Department
      • Discussing the Political Environment Surrounding the 2011 Budget Debate
      • What the Democrats Can Do to Ensure a GOP Year in 2012
      • What the 2010 Midterm Actually Said
      • Congresswoman Kathy Dahlkemper
      • Democrats Minus Nancy Pelosi Equals Opportunity
      • Terrorists Go Postal: The Terrorism Threat Reexamined
      • Victory in the 2008 Election: Reaction to Barack Obama'a Win >
        • Expectations for Barack Obama
      • President Obama's first one hundred days
      • John McCain's Negative Campaign
      • Reasons People did not Elect John Mccain
      • History judges the George W. Bush Administration
      • Should the next US President focus on domestic issues?
      • President Bush, should he resign or be impeached
      • Should the Ban on Government Sponsored Assassinations be Repealed
    • Off Topic >
      • A Face of America’s Greatest Generation
      • A Story About a Man Who Made the World a Better Place
      • Making the World a Better Place
      • The Bipolar Ethical Nature of Google
      • Learning Computer Plays Jeopardy
      • Verifying Medicine is the Real Thing
      • Taking a Practical Step Forward in Optical Computing Using Slow Light
      • Scientists Take a Closer Look at How Lithium Batteries Work
      • Remarking on the First Blizzard of the 2010-2011 Winter Season
      • Driving in the Snow: Acceleration is the Key
      • How People in Northwest PA Are Coping with the Increasing Cost of Oil
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