People versus the economy

A new AP story is out about the growing gap between the rich and the poor in the US.  It’s exciting news.  Economists are finally recognizing that the extreme — and widening — inequality is bad:

The growing gap between the richest Americans and everyone else isn’t bad just for individuals.

It’s hurting the U.S. economy.

So says a majority of more than three dozen economists surveyed last week by The Associated Press.  Read more…

United for a Fair Economy has taken this story and run with it.  Big News:

On Tuesday, the Associated Press released a survey of top economists that reaches a conclusion that won’t be shocking to you and me:
The growing gap between the richest Americans and everyone else isn’t bad just for individuals, it’s hurting the U.S. economy.
You see, there’s a growing consensus—among economists, politicians, a lot of us—that extreme inequality is holding all of us back.
Why is this big news all of the sudden?  Let’s read on (quotes from original AP story)…
A key source of the economists’ concern: Higher pay and outsize stock market gains are flowing mainly to affluent Americans.
Interesting…go on…
Yet these households spend less of their money than do low- and middle-income consumers who make up most of the population but whose pay is barely rising.
Oh, we’re not talking about human welfare…we’re talking about economic spending.  It’s not hurting people, it’s hurting spending.  Why is this a concern?  Let’s find out:
Spending by wealthier Americans, given the weight of their dollars, does help drive the economy. But analysts say the economy would be better able to sustain its growth if the riches were more evenly dispersed.
Oh, ok.  So inequality is only bad when it hurts economic growth.  If the economy is growing and inequality is still stark, we are supposed to give a rat’s ass to how it hurts people.  Because the economy is (growing) just fine.
 
Now hold on a sec, economists aren’t just interested in growth for growth’s sake, are they (because that would be, you know…cancerous…)?  Why are they interested in economic growth so much, now?
A wide gap in pay limits the ability of poorer and middle-income Americans to improve their living standards, the economists say.
Oh, how nice.  They say they have the best interests of “poorer and middle-income Americans” at heart.  Don’t they?
 
Bullshit.  The only reason growth does anything to improve anyone’s living standards is because we live in a society that is already rife with economic inequality.  Simply put, we don’t take care of one-another very well.  That isn’t to say that we aren’t trying —  it’s just a “divide and conquer” strategy.  We’re not supposed to be working a job unless it increases our spending, which is supposed to help us all out, at some point, right?
 
Well, if we were a more equal society to begin with, we wouldn’t need any economic growth in the first place, because the “have nots” would still be above the poverty threshold and able to live with an extremely high quality of life.  Income only increases quality of life past a certain point.  After that, material wealth is just superfluous.  Like any nutrient, too much of it is toxic.
 
Why, psychologically speaking, would wealthy Americans hold onto wealth far beyond what they need to maximize their quality of life?   It’s a cultural thing:  we’re conditioned by this society to feel insecure with what we have, regardless of how much we have.  So many people are afraid — and wealthy people are included.  So they hold onto wealth even though it is toxic to them, and will continue to do so until we change the social norms around wealth.  Until we raise people’s self-esteem and address the underlying currents of fear that drive insecurity (advertising, insecurity, corporate profits, anyone??) in this toxic system.
 
Economics are supposed to be the study of “society’s household.”  Can you imagine if the parents of a single household allowed a food distribution among its children similar to how wealth is distributed amongst the US population?  It would be a disaster — one kid would have way more food than he knows what to do with, and everyone else would be starving, while a couple might be just barely getting by.  And then that kid would be receiving messages that he “earned” all that food and needs to keep most of it, even though he might feel a little guilty for doing so, even though it increases his stress and alienates him from the rest of his siblings.  At the same time, the parents keep telling the kids, “life is so much better when you have more.”
 
So there you have the logic of the system:  We need growth because we have inequality because we need growth.  Two sides of the same coin.  Even though a steady-state economy is necessary for human society to be even remotely sustainable, it is impossible unless we address the inequality-growth cycle.
 
And all the economists and politicians care about is growth, pitting the economy against people and the people against the environment.  As long as this discussion remains about economic growth, there will be no resolution for economic and social injustice, and we will continue to destroy the life support systems that we ultimately depend upon.  That our children depend upon.
 
It makes no sense.  It’s crazy.  And it’s normal.  Welcome to civilization!  Time to defect from this insanity, to refuse to play by this insane rules.  And whenever they get in the way of living a sane, healthy life (however you define it), sabotage the source of the threat.
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