Wednesday, September 28, 2011

societal hot-spots

When a person wants to gauge the overall strength of a society, there are certain things to look at that will indicate whether a nation is doing well. One is the strength and size of the middle class. Another is the disparity between rich and poor. A third is to look at the trends in the markets. These three indicators, among many, offer a pretty good idea of how a country is doing. Based on these three indicators, our country is in trouble.

First off, our middle class is shrinking and seeing its influence diminish. One of the reasons for this is that their jobs are the first to be cut in order to save costs for business. Second, they were hit hardest by the housing collapse. And, now their unions are being upended. A recent study showed that union membership and strength actually helps the middle class. With unions being systematically destroyed nation wide, it's no wonder that the middle class is being whittled away as well.

Second, the disparity between the wealthy and the poor is greater than it's ever been, spurred on by high unemployment and business making record profts simultaneously. As the rich get richer and the poor get poorer, our economy flounders. The poor can't afford to buy things, and the wealthy tend to hoard the vast majority of their wealth instead of spending to fill in that gap. Again, a vibrant middle class would help here, but that is disappearing. The difference between the privileged and the under-privileged is starting to become a permanent state, with recent laws being passed or considered that help to keep this disparity going. Things such as the Citizen's United ruling, the laws limiting voter access, and the redistricting efforts being made by conservative lawmakers nationwide are building permanent barriers between the rich and poor that will soon be very difficult, if impossible, to dismantle. Combine this with a conservative group of politicians that refuse to force millionaires to pay a little extra so the poor won't starve, and it appears as though their plan is to create a permanent under-class of secondary citizens.

Finally, the volatility of the markets reflect the volatility of our society. Again, this helps the wealthy because they can capitalize on shaky investments, and demand money from the government, while the poor are left behind. In crazy markets that fluctuate rapidly, long-term investments make no sense. Long-term investments are what most of the lower to middle class citizens do to secure money for retirement. Instead, short-term investment becomes very profitable and helps the wealthy to get more and more money out of the markets. The poor can't compete at the same level, and the volatile markets means prices for goods and services goes up, reinvestment is down, which means no one is growing or passing on savings of any kind. This turns into higher costs of living for everyone, and the poor are the least able to handle that.

The solution to all of this is simple in theory, even if it is difficult in our current political and social climate. First, we need to balance the wealth in the country by taking more from the rich and giving some back to the poor so that they can survive and maybe even start buying things again. Second, we need to encourage businesses to expand, not by giving away cash, but by creating demand. We need to provide incentives for people to buy, which will in turn lead to increased demand. Increased demand means companies need to increase supply. If they need to increase supply, they will hire. Finally, once people start getting jobs, they will purchase more, leading to more demand, more jobs, more purchasing, more demand, more jobs, etc. When this happens, our middle class will effectively be re-established, and we can start getting laws passed that protect the middle class rather than demonize and diminish it.

It's a long, hard, contentious plan, but it's one of the only ways to go through this in a way that restores our American values, makes us stronger than before, and helps everybody benefit. Focusing on the hot-spots in our society will end up getting us into an upward spiral instead of a downward one.

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