Common Sense 287 – Black&White Questions with Cigarettes
This is my first episode of Common Sense, a politics podcast by Dan Carlin. I enjoyed Dan's Hardcore History podcast and decided to give this one a try after exhausting all of the material in Hardcore History. Like Hardcore History, I am very impressed on the insights of Common Sense and will certainly listen to future episodes. What I liked most about this podcast was how Carlin blends his strength in history to give context on modern day issues.
The message in this episode was not prescriptive, but to make the listener question and think more deeply about income inequality, an issue getting much attention in the media and the 2016 election battlefield.
It's well known that the American middle class is getting squeezed with incomes declining, a trend starting all the way back in 1970. The US after WWII encountered a special, unprecedented economic situation as the world's only major economic power: it's competitors had been decimated by total warfare. In these conditions, the US achieved an economic golden age where its middle class flourished and enjoyed the cornucopia of consumerism. However, a side effect of this was heightened economic expectations of the common American: consumers in the US expected high living standards as the minimal baseline such as a detached house, personal car and annual vacations.
|This chart shows the decline of the middle class since 1970.|
By 1970, as other major economies rebuilt themselves and undeveloped countries began industrializing, the US worker started facing more global competition and thus ending the golden age. Year after year middle class income dropped, but the US middle class found other ways to alleviate this like having both spouses work and taking out debt. We are now back in modern times where American economic exceptionalism has been declining for 30 years and middle class expectations have grown more and more out of reality given their declining income. This economic concern is now fully on the minds of politicians as they ramp up for the 2016 election.
Dan refers to a billionaire's statement in Davos 2015 for the middle class to reduce their expectations but is confounded by the difficulties of doing this. I think time will be the best weapon here: I sense younger generations such as the millennial are responding to this new economic normal resulting in less consumer aspirations and demands than their baby boomer parents. The US is simply in a transition period in expectations resulting in these economic anxieties and debates.
Another major question Carlin wants the listener to think about is the entire western capitalism framework. We take it as a given that our current economic model is the only economic model and rarely think about how it can be different. However, in the past there were competing ideas to our market capitalism such as communism and nazism.
Although Carlin does not have answers, he is worried about the future of work and whether or not our capitalistic framework can adapt to it. With trends such as globalization and automation, the situation for the US middle class seems like they will continue to worsen. The most common answer I read to solve this problem is Basic Income, something I'm not quite convinced about.
I am very interested in this "future of work" topic and wished Carlin delved into more specifics and trends (he did hint this as a topic for future podcasts though, so fingers crossed).