First some startling facts about life in America at the end of 2012:
1. Only 55.3 percent of all Americans between the ages of 16 and 29 had jobs.
2. There were 240 million working age people. Only about 140 million of them were working.
3. According to CareerBuilder, only 23 percent of American companies planned to hire more employees in 2012.
4. Since the year 2000, the United States has lost 10% of its middle class jobs. In the year 2000 there were about 72 million middle class jobs in the United States but today there are only about 65 million middle class jobs.
5. According to the New York Times, approximately 100 million Americans were either living in poverty or in “the fretful zone just above it.”
6. According to that same article in the New York Times, 34 percent of all elderly Americans were living in poverty or “near poverty,” and 39 percent of all children in America are living in poverty or “near poverty.”
7. In 1984, the median net worth of households led by someone 65 or older was 10 times larger than the median net worth of households led by someone 35 or younger. Today, the median net worth of households led by someone 65 or older is 47 times larger than the median net worth of households led by someone 35 or younger.
8. Since the year 2000, incomes for U.S. households led by someone between the ages of 25 and 34 have fallen by about 12 percent after you adjust for inflation.
9. The total value of household real estate in the U.S. had declined from $22.7 trillion in 2006 to $16.2 trillion by the end of 2012. Most of that wealth has been lost by the middle class.
10. Many formerly great manufacturing cities are turning into ghost towns. Since 1950, the population of Pittsburgh, Pennsylvania has declined by more than 50 percent. In Dayton, Ohio 18.9 percent of all houses now stand empty.
The most significant take away from the above dolorous statistics and the most predictive of the future of American society is the sudden and calamitous reversal of traditional American expectations that each generation is destined to enjoy greater economic and material success than the prior generation.
To step away from examining the political and economic causes of that reversal, hopefully without ignoring or diminishing them, it may be worthwhile speculating on whether or not there are other contributing or exacerbating causes.
One possible and I guess one can call a positive influence on this seeming slide is the emergence in our economy and society of the pervasive and ubiquitous impact of mobile communication and social networking. To look at it in one way, those most proficient in using the devices, have the potential to provide for pennies almost all ones needs except food and shelter. If that is even remotely so, what remains of the incentive to work hard and achieve material success, if such success is directed in part to acquiring those things necessary to travel to and impress others or to entertain oneself? Does Veblen's analysis of a society driven by "conspicuous consumption" even apply any more.
And, in terms of personal satisfaction, proficiency in manipulating the device may be adequate for many and if truth be known more personally rewarding than what was available for most people only a generation ago.
So, if I am right that access to basic food, basic shelter and inexpensive mobile communication devices and applications may satisfy an increasing number of the emerging generation, who grows the food, who delivers it, who builds the shelters and the devices? Robots? Perhaps that is why Amazon purchased Kiva Robots. What happens to the economy if a sizable portion of the population chooses to travel less, buy less clothing or cosmetics and the like?
And what sort of world is being created? Do those without food and shelter take it by force from those who have, like they did thousands of years ago? Who fights to preserve this rudimentary lifestyle? Does the industrial economy continue to contract and along with it the metaphors for work – credit and money, find less and less upon which to, well, work so that gambling appears as valid a use for it as any? And what is the purpose of education? Are these new people, lazy parasites for opting out as they may do? If so, what do you make them do instead, work on the farms?
"Even without being able to gauge the actual political power of wealthy citizens, we can confidently reject the view that extensive political power by the wealthy would be of little practical importance anyway because their pol- icy preferences are much the same as everyone else’s. On many important issues the preferences of the wealthy appear to differ markedly from those of the general public. Thus, if policy makers do weigh citizens’ policy preferences differentially based on their income or wealth, the result will not only significantly violate democratic ideals of political equality, but will also affect the substantive contours of American public policy."
Democracy and the Policy Preferences of Wealthy Americans, by Benjamin I. Page, Larry M. Bartels, and Jason Seawright
"Empirical research suggests that parents’ economic resources affect their children’s future earnings abilities. Optimal tax policy therefore treats future ability distributions as endogenous to current taxes. We model this endogeneity, calibrate the model to match estimates of the intergenerational transmission of earnings ability in the United States, and use the model to simulate such an optimal policy numerically. The optimal policy in this context is more redistributive toward low-income parents than existing U.S. tax policy. It also increases the probability that low-income children move up the economic ladder, generating a present-value welfare gain of more than two and one half percent of consumption in our baseline case."
Alex Gelber and Matthew Weinzierl: Equalizing Outcomes and Equalizing Opportunities: Optimal Taxation when Children’s Abilities Depend on Parents’ Resources:
(I don't really understand what they are saying here, but I agree with their conclusion that sending poor kids to good schools is, on balance, a good thing)