The Economist: Looking to 2014
It’s that time of year, when we clean out the old to make way for the new. As I go through my ColoradoBiz files, I find things I never got around to and supplemental reflections on subjects I’ve already covered.
First, the endless complaints that the rich get richer and the rest of us suffer. I ran across the fact that it takes the average American household about 25 years to earn a million dollars. That’s hardly poverty-level income. I got no response to my column that advised if we surveyed the richest 1 percent in the world, it would include most Americans. Since I tend to hear from half a dozen or more of you per issue, I’m not sure what spurred that silence.
It’s true that inequality of income and wealth has widened in most of the Western world for the past 30 or so years, and that now it’s happening in emerging markets such as China, Russia, India and Mexico. Apparently we just got around to noticing it. A new book by Chrystia Freeland, Plutocrats: The Rise of the New Global Super Rich, points out that most of these people didn’t inherit their wealth, they earned it. Many were entrepreneurs (isn’t that the hot new buzz word to get Colorado and the rest of the U.S. back on a rapid growth path?) Of course, entrepreneurship that ends with a monopoly is a bad thing. But, it is new businesses (note: not small businesses, although new businesses are, by definition, small) that create most new jobs.
Second, there’s the unshakable immigration issue: Despite the advisory wisdom I’ve imparted on this topic, we seem no closer to a solution.
Most countries define citizenship by ancestry. The U.S., along with Great Britain, is unusual with its civic, rather than ethnic, definition. Anyone can become a citizen by simply agreeing to abide by the values outlined in our Constitution; unless, of course, you happen to have arrived here illegally. No matter that you were 3 months old and are now college-educated. Or that you came because you were desperate for a job to support your family and willing to work for wages and under conditions that most of us ardently refuse. I bet many of these “illegals” would happily work at Walmart or McDonald’s under the existing pay scale.
The one bright spot on the horizon is that both political parties are desperate for the Latino vote. I am optimistic that they will finally agree on a path to citizenship for those already here, preserving the values that make this country the greatest in the world. Would we really rather emulate France?
Finally, there’s the cost of the 16-day federal government shutdown. Did it really cost the economy $24 billion or was that money simply spent elsewhere? Perhaps the money lost at shuttered national parks was redirected to movie theaters and restaurants?
When I think about an issue like that, I like to take money out of the equation and mull over the impact on a barter economy. When a section of a barter economy closes up shop, there are goods and services that aren’t produced and hence cannot be swapped for other goods and services. When people go back to work, it’s tough to see how that lost production can be recovered. Of course, you might argue that government doesn’t produce anything useful, so nothing was lost, and most of the wages were eventually paid. Maybe. I hope Congress doesn’t try another experiment early in 2014.