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Friday, August 08, 2014

The cost of doing business: maintaining a middle class

Billionaires in this country have noticed a problem. Money is relative. They're beginning to notice that they can no longer suck money out of the economy to float their egos. While it is true that banks can create credit on demand through computer programming, they do so at the risk of running up inflation. Even if your firm can sit at the trough to get at all that new wealth first, inflation can still be a problem. This creates real, tangible limits on the money supply, because you know, we wouldn't want inflation eating our savings.

What to do, what to do? Why, let's concentrate our resources on limiting the ability of other people to make money. First, we'll cut education funding. Why? It's easy to find people who want to send their kids to religious private schools and also object to paying property taxes that support public schools. By reducing funding for education, we make education far more expensive and that reduces the number of kids going to college. Bingo! We lower our labor costs because fewer kids entering the workforce will have the kind of credentials that demand higher wages!

Oh, but it gets better. I want my kids to have a better education than other kids. I kill two birds with one stone when I cut funding for education. Not only do I relieve myself of the burden of educating the middle class, I get to ensure my kids have exclusive access to the best education money can buy. I feel much better now.

Wait. I'm not done yet. I need to ensure that when my kids enter the professional class, that they won't have to deal with pesky international competition. If my kid becomes a doctor, what good is that if they have to compete with doctors from India? Thailand? Vietnam? God, no. We can't have that!

So for the last 30 years, I've been working on "free trade" agreements that put the manufacturing classes out to compete with the world. Why yes, my workforce isn't efficient enough, so I need to give them some encouragement by making it easy for me to buy what they make in developing countries. That way I can energize my workforce and lower my costs at the same time. I want them to know that their job is next if they don't hop to.

Now I've got the middle class exactly where I want them. Too busy and too poor to get the education they need to advance, too scared to be in the streets protesting my austerity measures intended to "build character". This is way cool. I can just see the look on their faces now when they see that I've removed all their options. Now I can buy the laws I want to ensure a safe retirement for myself and a cushy life for my family with little or no opposition.

Hmm. I think I better get some patents and copyrights and make those laws stronger just to make sure there isn't enough in the public domain for the middle class to work with, you know, to create stuff they might sell. Yeah, that would cap it off nicely.

Unfortunately, that mindset creates policies that are unsustainable. Even Goldman Sachs is starting to notice that inequality is hurting their bottom line. "What is this? I have to maintain a middle class, too?" Yes, if you want to live. Or you can face the pitchforks for all your rent-seeking.

Get along with the middle class or stay in your gated community. It's your choice.

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