We sometimes get so caught up in day-to-day political battles that we lose sight of larger realities that will ultimately determine America’s future.
One inescapable reality we must, and will, face is that our economy was for several decades artificially and unsustainably kept growing by a financial services industry whose numbers hit a solid wall of reality during the 2008 recession, and which will likely not ever again play such a role in our economy.
Another inescapable reality is that globalization has shrunk our manufacturing sector, and the manufacturing jobs we lost will not be coming back any time soon, if ever.
The overriding reality is that our American economy has shrunk substantially and will not be able to during this next decade provide the degree of material abundance it did before the 2008 recession.
So, what will be the outcome? Well, it’s much easier to deprive a People of material abundance than to take it from them once they have already had a taste of it. Eventually, the American People will fully understand what it means that the top one percent of Americans own more wealth than the bottom ninety percent combined. Americans will also understand that the top tax rate today is about 35 percent, when it stood at 91 percent in 1959 under President Eisenhower.
It doesn’t take a genius or Nobel laureate in economics to predict our future over these next several years. Unemployed Americans will join forces with those who have lost their homes and life savings against those Americans who have, over the last several decades, grown much, much richer.
The battle will, of course, play out politically. A quick review of what happened between 1932 when FDR was elected and 1937 will give us a relatively clear understanding of what awaits us in 2010 and beyond. The Republican Party, then as now, sided with business and against the People. The People revolted at the ballot box, and by 1937 the Republican Party lost 40 Senate seats, and were down to just 16 Senators. Republicans also lost a comparable number of House seats during those five years.
During the next few years, expect taxes on the rich and corporations to climb much higher than anyone would have previously expected. Why? Well those Americans whose accustomed lifestyle was sacrificed to provide the massive increase in wealth of the top Americans have no other choice but to vote for such tax increases on the richest.
Who else is there to pay for the jobs creation, health care, and other necessities we will experience? We cannot, and will not, saddle our children and grandchildren with an already absurd amount of debt. The middle class and poor don’t have the money. Only the rich can pay for these things.
And so they will. We will probably not restore to many Americans the standard of living they once enjoyed. Nor will their children enjoy an equal or higher standard of living. And along with that will come anger at the rich for being so greedy and so selfish for so long. So, the rich will also lose out. They will ultimately lose their second homes, their third and fourth cars, their discretionary vacation allowances, their huge savings accounts, and many other things they really don’t need.
Over the next decade or two there will be a huge transfer of wealth from the super-rich and rich to everyone else. And that will be alright for all concerned. We will, in fact, all make it out of all of this alright. We need more jobs, and we’ll create more jobs. Yes, the rich will pay whatever it takes for us to create them. The only other option is for them to pay workers not to work, as in unemployment insurance. No one, not even the workers themselves, want that.
The silver lining? After WWII, Americans were about 2 ½ times less rich than we were in 2006, but we were no less happy back then. So, we will all become much less materialistic, and we will all learn from a growing body of happiness research how to be as happy as we want to be with what we have, or don’t have.
Yes, the poor in America will be provided for. Yes, the middle class will be provided for. The rich and super-rich will not survive as classes, but unnecessary wealth is just that; unnecessary. And we will rediscover the happiness that our parents and grandparents knew while growing up in far more difficult times than the future holds in store for us.
God bless America.