The desperation economy

The sharing economy is more of a desperation economy, argues New York magazine.

Someone was ranting to me about this last month, blaming the president. The problem is, this problem’s roots have existed since the 1970s, if not the 1960s, which means nobody’s solved it. Two presidents from two different political parties applied quick fixes that worked for a while–I’m thinking of Reagan and Clinton–but nobody has ever successfully addressed the root cause of the income gap. While top earners–the 90th percentile and higher–generally do better year over year, as you move lower on the earnings scale, you see people doing well to hold steady. At the bottom of the scale, you see people earning less and less year over year.

I think the problem is with society. And one thing I learned almost minoring in history in college–I was one class short of a minor–is that when society looks to a leader to solve problems a leader can’t solve, history suggests you run a great danger of it leading to dictatorship.

I think the underlying and overlying problem is materialism–we want too much and aren’t willing to wait long enough to be able to afford it. We’ve spent my lifetime figuring out how to make things cheaper, but then society just tells us we need more things. When I was growing up in the 1980s, two televisions in a home was fairly normal, and one of them was probably a 13-inch model. A 13-inch TV cost $200, so three TVs was extravagance. When I was growing up, I lived across the street from a millionaire who had three TVs. He owned half the town, and literally owned the whole side of the street he lived on, and at one point he had four cars, but he had three TVs.

We figured out how to make TVs a lot cheaper, so now some middle-class people have them in every room. Elvis had a room with eight TVs in it for watching football, and somehow we’ve gotten it in our heads that someone who makes $40,000 a year needs a room with eight TVs too.

In the process of fixing up an old house, I found some old light switches with the price tags still on them: $2.19. Today light switches cost 70 cents. The old switches were made close to here. Now they’re made overseas. The people who used to make things like light switches compete for a smaller number of jobs of that type. There aren’t a lot of those, so some of those people get by doing whatever they can. It helps overseas economies get on their feet and that will be great in the long term, but what do we do about the short term here?

Probably we’ll do what we always do–we’ll put the other political party in power and tell them to solve it. They’ll try a quick fix. As long as the quick fix shows improvement in some part of the economy, they’ll keep getting another four years. If it doesn’t, the other party will get four years. Some of us will climb the ladder enough that it’s no longer a problem for us. I’m not sure what we’ll do about those who don’t.

And as long as everyone has food and entertainment, everything will be just fine for those at the top, and close enough to OK for all but the very worst off that I don’t expect we as a society will address the issue voluntarily.

One thought on “The desperation economy

  • May 7, 2014 at 3:48 pm
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    Dave.
    Coming Apart: The State of White America, 1960-2010 by Charles Murray is an excellent book that tackles the problems of poverty and the decline of the United States. Murray’s book, The Bell Curve, ventures into the politically incorrect area of itelligence and its effect on success in a highly technogical world.
    The answer to poverty is to raise the intelligence level.

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