"Prosperity"

I got into a political/economic debate this past week on the Current Events forum on Hanson's official website... an incredibly odd place for such a discussion, I know.

Explaining my objection to the simplistic approach the folks in DC are taking to economic 'stimulus', I wrote a post ending with this-

"I loathe the idea that the strength of our economy is now based on consumer spending, rather than on job growth and general prosperity."

The first response I got was the following-

"HAHAHA! I don't mean to be unkind, but you might as well say, 'I loathe the idea our diet is based on bread, rather than on flour and baking powder.'

General Prosperity? Job growth? Without consuming and spending there would be no jobs, all jobs find their use in meeting consumers needs and desires. And general prosperity? What is general prosperity other than the ability to spend and consume?

Someone needs to take Economics 101."

This was followed by another user who agreed, adding-

"I'm guessing he thinks the government should just give everyone jobs.

It is a chain reaction. The more money being spent allows for more jobs, epescially in the retail/sales, and service sectors. If people aren't going on vacations, buying TVs or cars, then those sectors are hurt and jobs are lost."

My first thought was that both of these people must be young (not that I'm exactly old myself, but I'm at least aware of history prior to 1990). My second thought was how well years of conservative talking points had become conventional wisdom to so many. I responded-

"I'm not saying the government should give people jobs... I love how for conservatives, if someone opposes these current policies, they must be advocating socialism or something similar.

The fact is that our economy did not used to be so entirely consumer spending-based. We used to manufacture goods, but now we mostly import them from the countries where those jobs were outsourced to. During the New Deal era, the government also made keeping up (and improving and expanding) our nation's infrastructure a priority (not just physical infrastructure, but programs like education which are the backbone of our society) which created countless jobs for many Americans who then reached the middle class for the first time. Something we might consider again, as we've seen so many stories in recent years about the crumbling and ancient infrastructure we have now. Stuff like that. These changes away from this approach didn't happen randomly; they happened because of bad policy.

I want a leader who's not happy with merely fixing the status quo, but realizes that our country needs serious changes. And if it requires some small bit of sacrifice, well then John Edwards is right... it's time people were patriotic about something other than war.

As for general prosperity... again, I will say it's disturbing to me that our idea of 'prosperity' now = how much consumer crap we have. That is not an indicator of prosperity. For instance, I could be poor as dirt, but get a high-limit credit card and buy countless luxury items (TVs, vacations, etc), but that is misleading and does not indicate my prosperity. It's all illusionary.

Prosperity to me means that someone has a good job, one that pays well and in which they are not in danger of being outsourced or downsized. It means they can afford a nice place to live, without needing one of those subprime scams that the unregulated market made possible. It means having health-care coverage they can count on (ie. not having to worry about going broke just because you might get really sick someday). It means a generally good quality of life. Etc.

And that used to be the definition that this country had too. But around 25-30 years ago, that started changing, and that is what I object to."

I post all this rambling because I wanted to clarify how I judge economic strength.

I believe that we have defined down the idea of economic strength so far that the only one we display it now is by creating bubbles-- the dotcom one in the late '90s, the housing one in this decade, etc-- rather than doing the hard work of enacting policies and programs to foster long-term sustainability. And we have so many ways to fake prosperity now-- credit cards, cheaper consumer goods-- that we neither notice nor care. And until we undertake the hard, unpleasant task of addressing those problems, we will keep just getting by as a nation until the bill(s) finally come due.