Our “Horse & Carriage” Economy

Ted Folkert

June 21, 2014

Please sing along: “Love and marriage, love and marriage, go together like a horse and carriage, this I tell you brother, you can’t have one without the other.”

You remember that song that Sinatra and many others sang to us all those years. Maybe we can get David Basse to sing it for us.

Well, I am not one to lecture on the subject of “love and marriage”, but I always think about the “horse and carriage” as I incessantly read articles and hear commentary about income and wealth inequality. Love and marriage and horse and carriage seem to apply here too. The facts are what they are. If too much of the income is being captured by too few and too much of the wealth is owned by too few, the economy doesn’t work very well. It doesn’t produce enough jobs and doesn’t provide enough spending to create and maintain needed jobs. “You can’t have one without the other.”

If everyone has a job that pays enough to meet the family needs of food, shelter and clothing and then has a little left over for some discretionary spending, then the economy works quite well. If such is not the case, then it doesn’t work very well. History exemplifies this quite clearly, as do our leading economists. (unless you read Ayn Rand or listen to Tex Crude).

Most of the commentary on this subject evolves into finger pointing, name calling and stereotyping, all if which doesn’t help to resolve the problem of income and wealth inequality. Those on the right side of political idealism tend to call those who are reliant on assistance, such as unemployment insurance or other safety net programs, lazy and irresponsible, leaches on society, the 48%.

Those who are on the left side of political idealism tend to call the rich and powerful the rich and powerful, self-indulgent, self-serving, blood suckers and other disrespectful names, such as the Kook Brothers. Well, anyone who tries to approach the subject of the working class with an open mind knows that none of these stereotypes truly define those on that side of the spectrum. I have employed many people over the last 40 some years, most on the lower end of the wage scale, some somewhat better off. I can’t remember anyone who I employed, worked with, interviewed or interacted with socially who didn’t want to work, earn their way, enough to take good care of their family.

I can’t remember anyone who simply wanted to depend upon social programs for their survival. Where is the dignity in such an existence? Of course, there are those who experienced so much rejection that they gave up and succumbed to a welfare existence, but I doubt if it was ever their first choice. And that would probably be our fault, not theirs.

And anyone who tries to approach the subject of the rich and powerful with an open mind knows that these stereotypes are not true in most cases. Those who worked hard or had good luck, those who were in the right place at the right time, who took advantage of the system, shouldn’t be labeled either. They too are misunderstood. I have had the pleasure of knowing many of them and have represented them in business dealings and managed their assets. They are not villainous, they wanted to grow and prosper and many of them did. They deserve to enjoy the fruits of their labor and to pass on some wealth to their loved ones.

Some of the wealthy choose to pass on some of their wealth to make life better for those who haven’t been so fortunate, particularly some of those who have attained massive wealth, such as Bill and Melinda Gates, Warren Buffett, George Soros and many others. The problem is that they are not creating enough jobs to keep the economy growing. Perhaps growing the economy is no longer capable of improving the condition of the working class. As the economy grows now the increases in income and wealth seem to all rise to the top. This isn’t just because the rich and powerful are greedy, it has many reasons – automation, the global labor pool, global competition in technology, manufacturing, pricing. Some of the problem can be attributed to the rentier class and the investment funds who are taking a big bite out of that society since the vast home foreclosure debacle became a great investment opportunity for investors with unlimited funds available. Many families cannot afford or qualify for home buying and must rent. The rentiers increase the rent enormously all over the country. The renters have less money for discretionary spending, so few jobs are created and new jobs create low wages because most jobs created are low-skill jobs.

None of the economists or politicians seem to have a viable solution to the jobs and livable income problem without income and wealth distribution. Those with the power to legislate choose austerity over rebuilding our crumbling infrastructure, which would create good paying jobs that cannot be outsourced abroad. They choose austerity over unemployment benefits, education, job training and other working class benefits that would grow the economy.

We have choices. We can leave our negligent leaders in office or we can elect new ones. We can leave the taxation system of regression as it is or we can elect leaders who will correct it. Whatever we choose, things will not likely get much better and they will likely get worse unless we redistribute some of the massive wealth accumulated by the few and increase the taxation on income.

Then we can pay for the infrastructure rebuilding and education enhancements that are mandatory in improving the opportunities for the young.

Otherwise we will not have good jobs and we will not have a sustainable economy. It’s like love and marriage, they go together like a horse and carriage, you can’t have one without the other.

Think about it!

Convince someone today to help us elect better leaders, please!