"We seldom get into trouble when we speak softly. It is only when we raise our voices that the sparks fly and tiny molehills become great mountains of contention."
There
are days when I sit in my office at work and listen to the wonderful
music of “Les Miserables.” Listening to the music or
watching the movie (I have never read the book) can be a moving
experience. I watch the revolutionaries and feel for their plight.
In
France and most European countries during the 19th
Century, riches were endowed on the few. The aristocracy controlled
the land and wealth of the country. People inherited their wealth
from their families. It was almost impossible for people to rise up
the economic ladder and improve their lives.
When
people do not see hope, then the possibility of radical revolutionary
change grows.
A
common thread running through many of the articles I have written has
been to consistently mention the millions of people that still do not
have a job since the 2008 recession or only have a part-time job, or
have given up looking for a job. Many of us live and work in places
that do not require us to see the effects of bad economic policy on
the unemployed.
When
we cannot see the true economic impact of unemployment, we do not
realize that many of the economic policy changes that are proposed by
politicians are only cosmetic or actually reduce the chance of these
unemployed people from finding a job.
It
is good to remember what the study of economics is all about. A
town, city, province, state, or country produces a finite amount of
goods to be consumed by the people. There is always a system that
determines how those goods will be allocated. The analysis of how
those goods are allocated is what we call economics.
For
centuries, kings or governments had no idea, or really bad ideas,
about how to make an economy grow. To them the size of the pie was
static and the only thing left to decide was how it was going to be
divided among the citizens. And the king or government did decide
how much you were going eat, what would be your lodgings, and other
details of the citizens’ very existence.
Then
in the 18th Century there was a new idea. People would be
free to determine their own fate. In France, where all the property
continued to be controlled by a few, this meant the lower class was
free to be worked to death and die young.
In
the United States, however, it meant owning your own land that you
could farm. You could start your own business and make money. In
America, for one of the few times in history, there was going to be a
middle class.
I
am not talking about the very wealthy. There is always that 1-3% of
the population that has fabulous wealth. But the masses could work,
make enough money to feed a family and provide comfortable living
conditions for their families. And anyone who really wanted to could
join that group.
(I
am obviously glossing over the slavery issue and the horrendous
bigotry that kept African-Americans poor. But in today’s U.S.,
that last statement about everyone being able to join the
middle-class is true.)
Economics
matter because it dictates how people in a country are going to live.
Not the top 3%, but all of the rest of us.
Bad
economic policies at the end of the 1920s in the United States moved
that great middle class towards communism. Roosevelt’s
economic policies may have had a questionable positive impact on the
economy, but his demonstrating that he actually cared about the
unemployed stemmed the tide of communism and saved capitalism in the
United States.
Where
are we now in America?
The
negative impact of the last recession has never been overcome. The
ability to move up the economic ladder is much harder now than it has
been for decades. Imagine you are someone that grows up poor; you
sacrifice and work hard at school and somehow manage to graduate from
college.
In
the U.S. economy of today, there may or may not be a job for you when
you graduate and you may end up going back to the place you started
your journey. If this happens enough, the message gets out that
there is no way for people to improve their life.
If
the economic pie to be divided is really going to stay the same size,
then the only way for someone to get more is to take it from someone
else. Socialism starts to look attractive. It is not by accident
that this election cycle has an admitted socialist contending for
president and there are people that love him.
It
is time for both sides of the political spectrum to put away their
childish behavior and for once do something for the American
experiment of freedom and pass legislation that will help the economy
really grow. If the economy does not improve there are some harsh
economic realities, like an increase in socialist policies and
entitlement programs that will completely collapse the economy.
There
is not another country — or all of them together — that
can bail out the U.S. economy if the U.S. becomes another Greece. We
are that big.
Economics
matter. When people become desperate for hope, then radical measures
are willingly accepted. Are we going to leave our posterity the
opportunities that we had, or are we going to leave them a less-free
country where the government dictates everything they do…and
think?
Adam Smith is obviously not the actual name of the author of this column. The real author has
worked for two Fortune 500 companies, one privately held company, and a public accounting
firm. His undergraduate degree was in accounting, and he earned an MBA for his graduate
degree. He also has completed coursework for a PhD. in finance. He continues to be employed
by one of the Fortune 500 companies.
The author grew up in the Washington D.C. area but also lived for several years in Arizona. He
currently resides with his family on the East Coast.
The author has held various callings in The Church of Jesus Christ of Latter-day Saints.