Monthly Archives: April 2014

America’s Middle Class Falling Behind

Like an exhausted sprint specialist vainly trying to finish strong in a 1500 meter race, the United States is getting lapped by opponents previously thought to be second rate. A recent New York Times study details the falling fortunes of America’s middle class, no longer the wealthiest middle class in the world. Nineteenth-century America gave improved definition to the term middle class, originally used in England during the 1850s. Historian Charles Morris says that in America – unlike aristocratic and socially stratified Europe – the term worker was a job description rather than a marker of class status.* For a long time, American social or economic mobility (work hard and move up) was also the envy of the world. That’s no longer the case; like the sprinter who can’t finish a distance race with any strength, America no longer leads its competition in social mobility.

Let’s keep it real: there are two important considerations as this conversation continues. Firstly, let’s not feel sorry for the American middle class. To live in middle class America is to experience – within historical and current contexts – great blessings of material consequence. Middle class Americans have wide access to goods and opportunities; yesterday’s luxuries have become today’s necessities, and there are also plenty of new gadgets. Compared to other developed nations, the American middle class yet grades out far above average in most economic categories. The other important consideration, however, is that the share of wealth and income held by the very richest in America has increased, in the last thirty-five years, to historically dangerous levels. One only needs to look to the Gilded Age and the roaring ’20s (which helped create the Great Depression) to discover that an economic system top-heavy in rewards is not only unsustainable in the long run, but it exacerbates social inequalities.

Here’s a crucial overlooked reality: Income differences within a society matter more than income differences between countries. Does a middle class kid have it better in the United States than in China? By material measures: yes. But income inequalities have a tendency to increase status competition within a society, often times to the detriment of that society’s common good. Ever seen “poor” kids in the United States, whose parents might need food assistance to feed their families, wearing expensive sneakers? Status competition within a society influences a poor kid and his family to make a decision economically ill-advised but socially needful.

A question: Do you want to live in a society where the very richest continue to get far richer and social inequalities increase as a result? It hasn’t been like this for most of our history, but the United States in this current day is one of the most economically unequal countries on the face of the earth . . . that’s not a good race in which to be a front-runner.

 

 

 

 

 

Charles Morris, The Tycoons: How Andrew Carnegie, John D. Rockefeller, Jay Gould, and J. P. Morgan Invented the American Supereconomy, Holt (2006), 13-16.

Advertisements

2 Comments

Filed under Commentary

The Prize and The Quest

One of my best reads ever: Daniel Yergin’s The Prize: The Epic Quest for Oil, Money, and Power. I read it in 1993, two years after it was published. I happened to be in San Antonio for a two-week conference (Stephen Ministry training) – two weeks! – which left ambitious bibliophiles like me plenty of time to venture into unassigned reading. Having recently moved to Texas, I figured I needed to do some reading up on the oil and gas industry. The Prize covered it all: gasoline as a throwaway product in the days of kerosene; Rockefeller and Standard Oil; Ibn Saud and the rise of Saudi Arabia; Splindletop, Texas and wildcatting for oil; characters like Calouste Gulbenkian, the Armenian “Mr. Five Percent”; the Nobel brothers; and much, much more. At close to 800 pages and more than 400,000 words, The Prize is generally accepted as the oil and gas history bible. It was awarded the 1992 Pulitzer Prize in General Nonfiction.

Twenty years after having written The Prize, Yergin continues the saga with The Quest: Energy, Security, and the Remaking of the Modern World (Penguin, 2011). Ambitious in its own right at more than 300,000 words, The Quest promises to be a vital read. I’m starting to plow through it now. (A welcome change from the last six months strictly reading books and blogs on the art of publishing your own book!) I’ll keep you updated on the read; I expect a few good blog posts to result from the read as it relates to the topics of egalitarianism, economic democracy, and common good.

Daniel Yergin is widely recognized as a definitive voice on the economy, security, and politics of energy. Without question, he is an apologist for the oil and gas industry – that is not necessarily an indictment. As Yergin details, the oil and gas industry has decisively made the modern world as it is. The dilemma that confronts all those employed by the industry and all of us moderns dependent upon it: Is uninhibited economic growth – always dependent upon relatively cheap energy – only and ever the definitive way forward? The current boom of natural gas from the drilling of shale formations in the US (optimistically forecasted to last some twenty-five years) does create jobs and fuel economic growth. But unlike eras of previous booms, we now must soberly consider fossil fuel pollution and climate change, especially with the increasing demand for energy from India and China. Can we go forward as we’ve done before, or is it time for a shift in understanding, practice, and outlook? The oil and gas industry, of course, is mostly resistant to such a shift.

Yergin, bullish on the future of oil and gas (and renewable sources), is in an interesting spot. His words, recorded for future generations in his bestsellers, will be re-examined in twenty-five years and fifty years and beyond . . . How will the future look back on the conceptions, formulations, and actions of our generation? If the pursuit of uninhibited economic growth continues to be first and foremost, our legacy and its potential for good is wasted – like the gasoline carelessly tossed into rivers during the days of kerosene.

 

Leave a comment

Filed under Commentary

“Let’s All Make Lots of $$$”

The following is an excerpt from the book Just a Little Bit More: The Culture of Excess and the Fate of the Common Good, to be published May 1, 2014. This excerpt comes from chapter 6 – “Excess.”

The plane neared its destination; we looked out the window with excitement. Halfway expecting to see tumbleweeds and brown stretches of barren land, we saw green terrain and trees—lots of trees. My wife and I, both from the Land of Lincoln, were flying to Houston for my first interview at a church; it was 1990 and neither of us had been to Texas before. We were pleasantly surprised by what we saw out the plane window. The particular Texas stereotype that we brought with us, constructed of sagebrush and desert, was crushed by reality. Houston was lush and—as we would find out later—got its fair share of rain. Over the plane’s intercom, the friendly Continental Airlines flight attendant, complete with Texas twang, informed us of the local time and temperature. What we heard next, however, from our hospitable hostess shockingly showed us that not all our Texas stereotypes would be poleaxed: “Y’all have fun in Houston and hope y’all make lots of money!” My wife and I looked at each other with mouths agape, our faces betraying abject disbelief over what we had just heard. Did she really just say that? Our Upper-Midwest sensibilities took a direct hit; we wondered, what awaited us in this land of big profits and tall talk?

Truth be told, that jarring introduction to Texas more than twenty years ago didn’t scare us away. We love it in Texas—and for many reasons: the people, the mix of cultures and traditions, the food, the opportunities. Texas is unique historically; a big part of that history is commercial boldness. When we came to Houston in the early 1990s, low crude oil prices had made parts of the city go bust. Earlier, when the rest of the country suffered economically because of the Middle East oil embargo, Houston boomed. High oil prices were and are good for Houston; the romance of the energy business is reflected in its sprawling urban geography and lack of zoning laws. Houston, in the words of Enron chroniclers Bethany McLean and Peter Elkind, was “wide open to opportunity and worshipful of money.”* Houston hasn’t changed. In 2011 Forbes named Houston the fastest growing millionaire city in America. The reason? It’s still oil and gas.

*Bethany McLean and Peter Elkind, The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron, Penguin (2003), 1.

Just a Little Bit More: The Culture of Excess and the Fate of the Common Good, Blue Ocotillo Publishing (2014), 132. All rights reserved. Paperback edition available at http://www.blueocotillo.com.

Leave a comment

Filed under Excerpts

“Un poquito más”

Hace cien años atrás, cuando John Rockefeller era considerado la persona más rica en la historia del mundo, le preguntaron qué pensaba acerca de la acumulación del dinero. La pregunta fue muy simple “¿Cuánto es suficiente?” y él solo respondió “Un poquito más.” Recordar esto es muy importante, porque nos sirve para describir una tendencia muy arraigada en los Estados Unidos desde el tiempo de Rockefeller: la búsqueda sin restricciones del dinero no es solamente deseada, sino también glorificada.

97h/02/huch/4978/21

Rockefeller 1915

El libro Just a Little Bit More: The Culture of Excess and the Fate of the Common Good (Un Poquito Más: La Cultura del Exceso y el Destino del Bien Común) será publicado en Mayo del 2014. El tema principal del libro trata uno de los grandes dilemas de los Estados Unidos: la desigualdad social. Aquí nos encontramos con dos interrogantes: ¿Es la desigualdad social el precio que se paga por la búsqueda sin restricciones del dinero? ¿La desigualdad destruye los principios democráticos?

Just a Little Bit More, comenzando con Rockefeller, sigue la historia de la búsqueda sin limitaciones del dinero en la historia del país y sus efectos dañinos. Hay tres épocas: la edad de oro (1870-1900), los años 20 y finalmente la época corriente que empezó en 1980. Cabe destacar, que en los años 20 se produjo “la gran depresión” y la última época produjo la crisis económica del 2007-08 cuyos efectos aún están presentes.

Como si fueran miembros de una religión, muchos en los Estados Unidos creen que este sistema económico es el único que nos puede rescatar y salvar. Sin embargo hay que destacar que el sistema capitalista ha proveído de alguna forma de los recursos para cubrir las necesidades básicas de comida, ropa y techo.  Pero cuando se inclina la balanza al lado del exceso – se agregan muchas horas de trabajo, la búsqueda sin cesar de cosas materiales, la tentación de identificar el valor personal con el valor monetario que uno tiene – finalmente el bien común se destruye.

 

Ordenar una copia de Just a Little Bit More: The Culture of Excess and the Fate of the Common Good. 

The Spanish version of the Summary Version and Study Guide is now available. ¡Que bueno!

¡El librito de JaLBM – llamado Solo un Poco Más –está disponible en Amazon y el sitio web www.blueocotillo.com!

Anderson-Front Cover

 

 

 

 

 

 

 

 

 

(Carlos Gormaz me ayudó con este artículo – ¡Gracias!)

 

 

Leave a comment

Filed under Commentary

Inexhaustible Unlimitedness

I like listening to guest commentators David Brooks (The New York Times) and E. J. Dionne (The Washington Post) on Friday afternoons during their segment on NPR’s All Things Considered. I am usually in the car – the 5:00pm hour is when they grace the airwaves of Austin’s NPR affiliate, KUT – and if Denise (my betrothed) is in the car with me she knows that the seven minutes of exchange between the “conservative” and the “liberal” commands my attention. You can drive astutely while listening to the radio, but not while playing with your phone – an apt example as to the limitedness of our ability to multi-task.

David and E. J. don’t call each other names – it’s NPR, not Fox News – but they had a spirited discussion on the Supreme Court’s McCutcheon v. Federal Election Commission ruling (April 2, 2014); the five-to-four decision abolishes the biennial limit of $123,200 that individuals can donate to federal candidates and national political party committees. Even though they disagreed on the ruling, both made valid points as to what it will mean for future elections. Brooks: The current situation is not good with “all the underground money, [and] all the candidates deciding that they have to go directly to the special interests to kiss up to them.” The decision points us in the “right direction.” Dionne: “The number of people who hit that limit that you described, all giving to congressional candidates, was 591. So this court has empowered a very tiny number of Americans to exercise even more power than they already have. It’s a terrible decision.”

While both make legitimate claims, Dionne is right (as he also states in the discussion) that the ruling follows in the path of the court’s 2010 decision in Citizens United v. FEC. In today’s America, “free speech” is becoming costlier and costlier. Market values – all things bought and sold – infiltrate an arena (political democracy) that runs the risk of being captive to only the highest bidders.

Both rulings give further assent to the spirit of unlimitedness that has dominated American society since the late 1970s (what I call the short era of excess). The unlimitedness credo was articulated by George Gilder in his 1981 bestseller Wealth and Poverty: “The United States must overcome the materialistic fallacy: the illusion that resources and capital are essentially things, which can run out, rather than products of human will and imagination, which in freedom are inexhaustible.”* Gilder’s sense of stretching the boundaries—for positive gain—is admirable; dreaming, envisioning, and reaching for the stars makes the supposedly impossible attainable. But, not so fast – history is chock full of examples showing that the ignorance or disregard of limitations breeds corruption, social injustice, and economic chaos. Complex derivative securities and credit default swaps helped lead to the economic derailment of 2007-08. Yeeeaaahhh, the formulation and implementation of those financial products was a great and glorious moment for the unlimitedness of human will and imagination.

Because we worship unlimitedness in matters financial and economic, we now somehow think that fewer boundaries in the political realm is the better way forward. Forgive my limited will and imagination, and redundancy: Yeeeaaahhh.

 

* George Gilder, Wealth and Poverty: A New Edition for the 21st Century, Regnery Publishing (2012), p. 315.

4 Comments

Filed under Commentary

Just a Little Bit More book – Foreword

Peter L. Steinke, author of Healthy Congregations: A Systems Approach has written the foreword for Just a Little Bit More: The Culture of Excess and the Fate of the Common Good.

 

Writing on behalf of the common good, the author asks how the American economy can benefit all, not a few. As currently structured, it can’t. T. Carlos Anderson argues for an egalitarian approach to fiscal matters.

Deftly, he sets the historical scene of how the economy took the form of religion. Money is the new god, actually, the old god in new design. For a god is that in which you put your trust. By tracing the development of the economy from the land of opportunity to the summum bonum, the reader gets a perspective as to why we are in the present quagmire.

The new religion comes with priests and bishops known as bankers and investors. The free market evangelists boast of the invisible hand that guides the system. There are even rogue angels like Bernie Madoff and other Ponzi schemers. With money as god, financial worth determines worthiness. Money is no longer “the root of all evil” but the essence of the good life. Excess is the sign of cosmic blessing.

Years ago, psychologist Erich Fromm noted that “greed is a bottomless pit,” an apt image for hell. Greed “exhausts the person in an endless attempt to satisfy need,” but Fromm contends that the need is insatiable, leading to addictive behavior and the selling of one’s soul.

Anderson knows that money talks, but it is a one way conversant. He wants economic democracy to be the new standard to define a system that has lost a sense of proportion.

The reader will benefit immensely in seeing how we have shaped the system we are part of and what can lead to a new way of doing economics that embraces the common good.

 

From the foreword of Just a Little Bit More: The Culture of Excess and the Fate of the Common Good, Blue Ocotillo Publishing (2014). All rights reserved. Paperback edition available May 1 from this website.

1 Comment

Filed under Excerpts

No Foolin’

Thank goodness for Tom Perkins! If you don’t know who he is . . . he’s the American venture capitalist who recently opined (in February) that the wealthy – paying more taxes – should get more votes at election time. It’s all part of his idea to make the country a better place: “You pay a million dollars in taxes, you get a million votes.” Perkins admitted to being purposely outrageous with his remarks at the California Commonwealth Club event . . . Outrageous?! No, au contraire; it’s about time someone doubled-down to stand up for the rich!

Yes, Mr. Perkins doubbledd-down!! In January he compared the current attack upon the wealthiest 1 percent in America to Nazi Germany’s kristallnacht. Racially motivated murder and incarceration, vandalism, arson, and expulsion – with government support and backing . . . these extreme measures suffered by Jews in Germany in 1938 have apparently resurfaced in 21st century America. I haven’t seen any such things (thankfully), but apparently Mr. Perkins has. Guess we need to take him at his word and thank him for sounding the alert! Twice!!

All this at a time when OXFAM reports that the richest 85 people in the world have just as much wealth as the poorest 3.5 billion – half of the world’s population. But don’t go about blaming this arrant and relentless inequality on Mr. Perkins – he’s not part of that exclusive club. He’s merely in the “top 200 richest” club! Now he did have at one time the biggest private yacht in the world, but he chose to sell it after the 2007-08 economic swoon . . . right around the time when this persecution of the rich movement started gathering its plebeian momentum.

But like I said – we can only thank our lucky stars that Tom has chosen this opportune time (while we are here to witness it!) to publically express his opinions about wealth and social inequality. Tom is “self-made” as they say – first in his family to go to college (MIT on a scholarship, no less!) – and that gives him the right to articulate his finely honed views on the world situation that only fifty years of being fabulously (and deservedly so, of course) wealthy can construct. Those of us who don’t have a million bucks (and pay only mere thousands in taxes)  – we oughta just shut up and listen to him. He’s rich and therefore probably a million times smarter and wiser than the rest of us! No foolin’! 

 

April Fools’ Day 2014

 

3 Comments

Filed under Commentary