In recent years, as the global economic geography began to tear up the fabric of the fabled middle-class life in America, I started yelling again my frustrations with the political system that was seemingly uninterested in rewriting the social contract. Of course, nobody listens to me.
The frustrations got worse when the political faces for the rewriting came in the form of Bernie Sanders and the fascist! Major Buzzkill got promoted to General Malaise ;)
The next best thing then is to wallow in excellent company. Like with Laura Tyson and Anu Madgavkar.
The consequences of such failures are far-reaching. Stagnating or falling real incomes do not just act as a brake on consumption demand and GDP growth; they also fuel social and political discontent, as citizens lose confidence in existing economic structures.
Yep. And, unlike me, those two are awesomely qualified people to say that.
MGI surveys in France, the United Kingdom, and the US have found that people whose incomes are not growing, and who do not anticipate an improvement, tend to view trade and immigration much more negatively than those who are experiencing or foresee gains. The Brexit vote in the UK and bipartisan opposition to trade agreements in the US are clear signs of this.
In case you are wondering about MGI: It ain't any socialist think-tank! McKinsey Global Institute is as pro-capitalist as it can get, as I am sure this guy would attest to.
Another expert--this time a male, for a change--who is a columnist at another pro-capitalist publication, The Economist, also states the same ideas, using different words:
I think we are headed for a really important era in economic history. The Industrial Revolution is a pretty good guide of what that will look like. There will have to be a societal negotiation for how to share the gains from growth. That process will be long and drawn out. It will involve intense ideological conflict, and history suggests that a lot will go wrong.A lot will go wrong? Looks like I have company in the buzzkill department ;)
Bernie Sanders and Donald Trump are two sides of the beginning of this social evolution. Bernie is pushing along the direction of, "let’s distribute more." Trump is pushing along a related direction which is, "let’s exclude others who are not like us."I tell ya, misery loves (excellent) company!
So, what kind of challenging political/ideological issues can we expect in the near future?
What comes next would be higher wage subsidies and in-kind benefits, like tuition-free college or subsidized health care. But it’s coming, and the debate will be: If we’re going to pay people to do work that isn’t necessary, who do we let into the system? Who is allowed to benefit?If only we the people could talk about all these as responsible adults. Oh well, democracy ain't perfect!