Home » Opinion » Book review
Power prevails over the silent poor
By Wan Lixin |
April 3, 2010, Saturday
|
Print Edition
Print Edition
THE United States strikes visitors as a land of affluence.
Their wonder will grow as it is realized that such opulence is particularly enjoyed by people who no longer find it necessary to have their hands soiled by work.
Yes, there is the rhetoric of the plight of the working poor, but the more disturbing fact is probably that the nation in question is neither working nor poor.
The much eulogized global trade is triggering serious dislocations and imbalances across the world, with the US and China particularly affected.
In this game generally known as growth, one country has been turning itself into an enormous factory to finance, perpetuate, and propagate the consumerist lifestyle of another nation.
But as Jared Bernstein observes in his "Crunch: Why Do I Feel So Squeezed? (And Other Unsolved Economic Mysteries)," not all Americans enjoy this famed paradise of consumption.
Bernstein points out that the greatest challenge the US faces today is finding a way to organize the economy so that it achieves the goal of providing the goods and services that people want and need.
The author perceives this goal as noble and political, though a more nuanced discussion can be focused on the difference between the "wants" and "needs."
How many of the goods produced today are wanted or needed?
But this is where the advertisers come in.
The books then explains why millions of hard-working Americans are under financial stress, and why politicians choose to determine economic benefits the way they do.
"Something's wrong, something fundamental. Not Third World-poverty fundamental, not blood in the streets, massive homelessness or Great Depression fundamental. If the problem were that obvious, it would be less of a head scratcher," writes Bernstein.
The situation could be less of a head scratcher if the author was cognizant of a Confucian tenet that some Chinese have abandoned -- that a wise politician should be more concerned with the uneven distribution of wealth than poverty.
The book observes that notwithstanding financial pundits' nonsense about GDP growth, inflation-adjusted income for ordinary American households including two wage-earners has declined in recent years, as house prices, college tuition and medical costs soared.
The real wages of US college graduates increased less than 2 percent between 2000 and 2006. Meanwhile, 1 percent of US households received 22 percent of the nation's total income, the highest since 1929.
Unlike the 1929 crisis, this time the market's attempt at correcting these staggering inequalities has been completely defeated by government bailouts.
It does not take much imagination to see why.
"Those who hold a privileged position in the economic hierarchy -- the CEOs and the holders of large capital assets -- are able to steer the bulk of growth their way," the author observes with much perspicacity.
To see through their tricks it is useful to clarify some concepts that have been taken for granted.
As the author sees, some long-standing economic terms obscure more than they explain.
Take GDP. It ignores the environmental impact of expenditure and includes the value of things that get destroyed.
This is an understatement, for, instead of ignoring the environmental impact, the GDP is about production and consumption, and thus it cannot but show a keen interest in our environment.
The trick to rationalize this reckless squandering of natural resources is to hold up energy-consuming life as progressive, and traditional lifestyles as poor and undesirable.
Clarification of such terms as affluence and poverty can make redundant much of today's seemingly arcane economic debates.
But it is enlightening for the author to point to the simple fact that powerful interests can shape the national debate by eliminating the input from the economically disenfranchised.
The social impacts may be gradual.
"If people feel that the system is rigged against them, they're less invested in that system," the book concludes.
Sadly, the US is not the only country where such analysis applies.
Their wonder will grow as it is realized that such opulence is particularly enjoyed by people who no longer find it necessary to have their hands soiled by work.
Yes, there is the rhetoric of the plight of the working poor, but the more disturbing fact is probably that the nation in question is neither working nor poor.
The much eulogized global trade is triggering serious dislocations and imbalances across the world, with the US and China particularly affected.
In this game generally known as growth, one country has been turning itself into an enormous factory to finance, perpetuate, and propagate the consumerist lifestyle of another nation.
But as Jared Bernstein observes in his "Crunch: Why Do I Feel So Squeezed? (And Other Unsolved Economic Mysteries)," not all Americans enjoy this famed paradise of consumption.
Bernstein points out that the greatest challenge the US faces today is finding a way to organize the economy so that it achieves the goal of providing the goods and services that people want and need.
The author perceives this goal as noble and political, though a more nuanced discussion can be focused on the difference between the "wants" and "needs."
How many of the goods produced today are wanted or needed?
But this is where the advertisers come in.
The books then explains why millions of hard-working Americans are under financial stress, and why politicians choose to determine economic benefits the way they do.
"Something's wrong, something fundamental. Not Third World-poverty fundamental, not blood in the streets, massive homelessness or Great Depression fundamental. If the problem were that obvious, it would be less of a head scratcher," writes Bernstein.
The situation could be less of a head scratcher if the author was cognizant of a Confucian tenet that some Chinese have abandoned -- that a wise politician should be more concerned with the uneven distribution of wealth than poverty.
The book observes that notwithstanding financial pundits' nonsense about GDP growth, inflation-adjusted income for ordinary American households including two wage-earners has declined in recent years, as house prices, college tuition and medical costs soared.
The real wages of US college graduates increased less than 2 percent between 2000 and 2006. Meanwhile, 1 percent of US households received 22 percent of the nation's total income, the highest since 1929.
Unlike the 1929 crisis, this time the market's attempt at correcting these staggering inequalities has been completely defeated by government bailouts.
It does not take much imagination to see why.
"Those who hold a privileged position in the economic hierarchy -- the CEOs and the holders of large capital assets -- are able to steer the bulk of growth their way," the author observes with much perspicacity.
To see through their tricks it is useful to clarify some concepts that have been taken for granted.
As the author sees, some long-standing economic terms obscure more than they explain.
Take GDP. It ignores the environmental impact of expenditure and includes the value of things that get destroyed.
This is an understatement, for, instead of ignoring the environmental impact, the GDP is about production and consumption, and thus it cannot but show a keen interest in our environment.
The trick to rationalize this reckless squandering of natural resources is to hold up energy-consuming life as progressive, and traditional lifestyles as poor and undesirable.
Clarification of such terms as affluence and poverty can make redundant much of today's seemingly arcane economic debates.
But it is enlightening for the author to point to the simple fact that powerful interests can shape the national debate by eliminating the input from the economically disenfranchised.
The social impacts may be gradual.
"If people feel that the system is rigged against them, they're less invested in that system," the book concludes.
Sadly, the US is not the only country where such analysis applies.
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