Matt: I think what we're seeing with this "death of the middle class" is more of an evening out of the global marketplace. As globalization continues its inevitable march forward countries all around the world are better able to compete with the U.S. by offering cheaper labor to companies etc... American workers are simply too expensive for most companies to hire.
Me: I agree that globalization is inevitable, I agree that subsequently we’re seeing an “evening out” as well. However, the last forty years has been full of profound financial deregulation. Take for example, the repeal on the prohibition on commercial banks from participating in the investment banking business, the Glass-Steagall Act. A piece of legislation with the intent to prevent another market crash of 1929 or a subsequent “Great Depression”.
Not only can America not rely on the marketplace to fix this problem, it was newly “free market" that caused it. After 1929, it was the job of government to remedy this crisis. A government led by a socialist, populist, progressive President elected to four terms, with the highest approval rating in history. He and his administration established the notion of “Big Government” as we know it, having tightened the reigns of the market and leading us to victory in World War II.
Sadly, the public confidence in our government isn’t anything close to those times. Congress with an approval rating often close to 10%. For good reason as well. Government does need to get more involved, except… the one we’re working with is defunct.
Matt: America can't solely rely on the marketplace to fix this problem of a shrinking middle class. The government needs to get involved to a much greater extent when it comes to saving the American economy. Investing in Green Technology would help this country on numerous levels (jobs, national security... ie. not having to rely on the Saudis for oil, etc).
Me: You’re not wrong about Green Technology. It’s a great example of a contribution to a healthier economy. However, our current legislators and administrators are profoundly ineffective and overspend in the most unfathomable ways. They simply can’t be trusted to perform basic governance.
Matt: But, investing in new industries is hindered by the fact that there is now this idea among many in D.C. that any Government regulation or participation in the marketplace is a bad idea.
Me: This is a very true statement, especially on the right. It brings up some questions, who are these people in D.C. that hold his persecutive? Why might it appeal to a constituent? What are the ways it effects a constituent? Who makes up the constituents? Who makes up the government?
Matt: (Government regulation is meant to encourage and compliment capitalism by insuring that a truly free and fair marketplace exists. An example of how regulation/government has insured a free and fair marketplace is when the U.S. government filed a lawsuit against Microsoft in 2000 claiming the Microsoft was becoming a monopoly and was violating anti-trust laws. By doing this, the government was insuring that competition would be able to develop and compete against Microsoft. The government was actually protecting capitalism by trying to insure a free and fair marketplace.)
A strong economy is one where innovation and development are encouraged not only by consumers but by the government as well. This kind of economy no longer exists in America imo.
Me: Microsoft is a great example, so is the anti-trust suite against AT&T in the 1980’s. Government protecting consumers, protecting capitalism. The markets need a referee to prevent corruption and monopoly. However, since 1970, the combination of supply-side “trickle-down” economics, deregulation and globalization has resulted in unprecedented wealth going to .01% of the most powerful individuals on the planet. Who are in large part, American.
Concentration of power, further enabled by loosening campaign finance regulations. The mechanism of wheel greasing. With the Citizens United v. FEC and McCutcheon v. FEC, the supreme court has given free reign to the influence of money in politics. SuperPACs funded by the massively wealthy .01% have blatantly taken control of our elections.
No one currently or eventually elected in government will be effective unless we take the money out of politics.
This may come to a constitutional amendment. Lawerence Lessig, the director of the center of Ethics at Harvard university also has an interesting approach in creating a crowd-sourced SuperPac with the sole intention of dismantling SuperPACs. https://mayone.us
If these efforts fail, we may only be left with civil protest as a option. Which, historically, results in tragic violence.
