Watching parts (I have a weak stomach) of the GOP debate on the “economy” I think I finally figured out the problem. I am slow, I admit.
The first question by the Fox Business/ Wall Street Journal panel exposed the issue pretty clearly. Should the minimum wage be raised to $15 an hour? Which is about $31,000 per year according to the panelist.
The answer, across the board, was NO. It would hurt “the economy” to raise the wages of people now making maybe 7 or 10 or 12 bucks an hour. It would devastate the economy to have poor working people making a little more to spend.
Trump, by is own admission a billionaire, sees nothing but ruin if a fast food worker were to get a few more bucks. And Carson agrees. The end of the US “economy” as we know it. Catastrophe.
Another question asked by the panelists was about the great disparity between a CEO average pay and that of one of his workers. It used to be 20 to 1. Now it is 300 to 1. I don’t think any candidate ever actually responded to that one. The non answers were clear. No problem.
So, what seems clear to me now (as I said, I am slow) is that the GOP candidates have a completely distorted world view of what an “economy” is and what an “economy” does. Or is supposed to do.
Simply put, an economy is how goods and services are organized and distributed in a given society. The purpose of an economy should be what? To be organized so all members of a society have a chance to benefit from the wealth of that society. If not, then we must assume the “economy” has, as it’s central purpose, the organization of goods and services to benefit only a portion of the society.
The GOP concept of an “economy” seems to accept the second concept, that the economy should be organized to help only portions of society.. The economy to them seems to mean only one thing. How much profit is generated for the investor class. While they talk about “job creation” they are really talking about cheap labor so that investor profits will be higher. Not job creation so workers can have a decent life. Or participate in the overall economy in the broadest sense.
Now there is nothing wrong with investors making a profit. That is how the capitalist system (flawed though it is) works. Since investors are allowing others to use their money they deserve a reasonable return. But what is not reasonable is defining the “economy” ONLY in terms of investor profits. It skews the argument and is not a realist view of what an economy is all about.
When the GOP candidates say that a higher wage for workers hurts the “economy’, what they mean is a higher wage for workers cuts into investor profits. Which is true. Of course, taken to it’s logical conclusion one could argue that slavery is the best system for the “economy” because it reduces all labor costs for the investor. Hence, a slave economy, by definition, would be the “strongest” economy under the GOP world view. Tried that once, if I recall.
The GOP candidates, with real concern for the plight of poor Americans, pointed out that 1 in 5 kids now live in poverty. But their solution to this is NOT to raise the minimum wage so these children and their parents can escape poverty. Somehow, this system of keeping poor people underpaid is “good” for the economy. And it is, if you define the economy as the GOP does. A system designed to promote investor profits.
For the Democrats the challenge is simple. Help folks understand that the GOP definition of the economy is narrow and incomplete. Not evil. Not anti- poor. Not racist. But simplistic and wrong. An economy is more than profits for investors. It is a system that is supposed to work for ALL members, not just a few.
A productive economy is one that is balanced so that workers who provide the labor to create profits benefit from that labor. And they benefit to such an extent that they can take advantage of the wealth they create. Investors also benefit by making a reasonable rate of return on their investments. A balanced system that recognize both halves of the equation.
Back in the days when the CEOs made only 20 times as much as the average worker the economy was better than it is today. Investors made good profits and paid their fair share of taxes. Guess what? The economy worked for most people. Yes, some were poor. But the investor class did ok. Not a single member needed food stamps.