George Rebane
Dr Tyler Cowen is professor of monetary theory, financial economics, and welfare economics at George Mason University and Mercatus Center . He joins a growing list of academics and authors (cf Charles Murray’s Coming Apart) who have now concluded that systemic unemployment and permanent class divisions all will become entrenched features of our future. To some of us such a future has been apparent for some years now as reported here.
The thesis of Cowen’s recently published Average is Over is “that America is dividing itself in two. At the top will be 10% to 15% of high achievers, the “Tiger Mother” kids if you like, whose self-motivation and mastery of technology will allow them to roar away into the future. Then there will be everyone else, slouching into an underfunded future of lower economic expectations, shantytowns and an endless diet of beans. I’m not kidding about the beans.” according to reviewer Philip Broughton (here).
Dr Cowen concludes that “we will move from a society based on the pretense that everyone is given an okay standard of living to a society in which people are expected to fend for themselves much more than they do now.” In that future, the top 10% will continue to enjoy what we have come to call the ‘American dream’, the middle will continue to muddle on with stagnant or shrinking wages taking their comfort from “cheap education and cheap fun”. But “the rest (Murray’s bottom 30%) will fall by the wayside, with government less and less able to take care of them.”
President Obama is deftly guiding the nation into default. He will accept no alternative solution other than his diktat that the Republicans fold any remaining negotiating stance to save the nation from fiscal, monetary, and regulatory disaster. Bolstered by Reid and Pelosi, the Dems have repeatedly refused to even consider any counter proposals that deviate from their ‘clean’ demands for continuing our country’s wreckless course.
The strongest evidence of this is the Left’s strong and constant opposition to passing the McClintock-Toomey ‘Full Faith and Credit Act’ that would guarantee that the US would never default on its debt obligation that Obama now threatens the world with multiple times a day. “The McClintock-Toomey bill replicates the guarantees that state constitutions have had for hundreds of years to strengthen investor confidence. It gives the Treasury Secretary discretion to prioritize among other federal obligations until the political deadlock ends, tempers cool and the parties can reach a deal. But it makes his first priority to protect the full faith and credit of the U.S.” While screaming about the dangers of default, the Dems have repeatedly killed this prudent measure, most recently as it was again included in the latest continuing resolution the House sent to the Senate last week. (more here)
‘Obamacare wrecks the work ethic’, so argues Casey Mulligan (here), professor of economics at the University of Chicago. Of the many horrors of this ‘affordable(sic) care act’ as it staggers toward single payer healthcare, possibly its worst consequence is “a reduction in the reward for working”. The secret lies in what it will do to marginal tax rates (figure) – “The health-care law, starting Jan. 1, will begin driving up marginal tax rates—well above 50% for many.” Perhaps more than anything else, this will encourage increased effort and ingenuity expended to switch from being a maker to joining the ever-growing ranks of the takers.
Administrivia – Now TypePad has quit sending comment notification emails to its bloggers (at least this one). This will require more work on my part to keep up with RR’s commenters. A little slack will be appreciated while I am actively seeking to move the blog to WordPress as already suggested by several readers. I have been woefully remiss.
[4oct13 update] Reports are now pouring in of federeal facilities and recreational sites being patrolled by platoons of guards and other public employees to keep people from accessing them. What is insulting to me as a citizen is that these same locations had no such security personnel on duty before the ‘shutdown’. This sleazebag administration sets new records daily in lying and its practice of naked autocracy. I find it hard to identify with people who either don’t care/know about this, or worse, they condone it and see nothing wrong in the practice. (More on Barry Pruett’s Nevada County Introspective.)
Oh yes, and the other lying claptrap coming out of the WH is Obama’s positioning budget and debt limit negotiations as somehow an immoral or underhanded attempt by Republicans to introduce a new dimension into American governance. Nothing, absolutely nothing, could be further from the truth as noted here before. A piece today by Hassett and McCloskey (here) makes clear that “Congresses run by both parties have used the borrowing limit as political leverage with a president.”
[5oct13 update] A liberal commenter here argues persuasively that the reason the Dems don’t accept any of the Repub passed House bills to refund the government is that they contain proposals and actions which the Dems don’t like – well no s&!t Red Ryder! However, the brain blinders are strapped on immediately by these same members of the National Association of Naifs when the Repubs argue similarly about adopting the Dem demands to forward with a “clean CR” for the President’s signature.
Obama’s overture to America, painting the Repubs as immoral (‘terrorists’?) and obtuse since they refuse his offer to negotiate AFTER they give him a clean CR and raise the debt limit, is the epitome of calling his constituents double dummies. This he does that several times a day now; and he’s spot on since the double dummies are not throwing this argument back in his face.
Most of us learned in kindergarten that differences are settled by compromise – each party participates in a ‘give and take’. What the double dummies have forgotten is that if the Repubs give up their opposition to an unconditional continuing resolution and debt limit increase, then they have nothing left to give that Team Obama values when the parties enter subsequent negotiations. It’s like being invited to a gunfight with the proviso that first you leave your six-gun at home. Negotiating such instruments of funding government was written into the very fabric of the Constitution and has been practiced for decades. (There is an excellent and extensive graphic on pA4 of the 5oct13 WSJ
print edition detailing the last 20-year history of debt limit
negotiations and increases showing who dominated Congress and the WH,
and the major points negotiated. Apologies for not being able to find
it online.)
However, given the generations of government educated masses since the Great Society (aka the above cited double dummies), such knowledge in America is as arcane as the contents of the Dead Sea Scrolls. Truth to these people is only that which is recent, repeated, vocal, and preferably on an up volume video. And truths no longer have to be remembered or recalled, since they will be supplied as needed with new ones tomorrow.
(As long argued here, those who know will understand that debt, and more importantly debt service, is the real threat to the country. The rest is a sideshow as Niall Ferguson argues here in the 5oct13 WSJ.)
[6oct13 update] Check out Russ Steele’s new blog Sierra Foothills Commentary. In the latest edition Russ posts and important piece from The Daily Beast titled ‘California’s New Feudalism Benefits a Few at the Expense of the Multitude’ which makes the case that “once famous as a land of opportunity, the Golden State
is now awash in inequality, growing poverty, and downward mobility
that’s practically medieval,” Everyone knows of California’s downfall, it is not limited to the intelligentsia, or to the US, but is common knowledge around the developed world. People ascribe different reasons for our downfall, but the accepted wisdom is that California is in the toilet both economically and socially.
rebanesruminations.com 
Leave a comment