Monday, April 18, 2016

The American Dream is alive and well


Recently, I received an email quoting a Baptist minister that started:

The American dream ended on November 6th, 2012 in Ohio.  The second term of Barack Obama has been the final nail in the coffin for the legacy of the white Christian males, who discovered, explored, pioneered, settled and developed the greatest republic in the history of mankind.

“A coalition of blacks, Latinos, feminists, gays, government workers, union members, environmental extremists, the media, Hollywood, uninformed young people, the "forever needy," the chronically unemployed, illegal aliens and other "fellow travelers” have ended Norman Rockwell's America.”

There are a lot of emotional hooks embedded in this openly racist screed.  However, I am unpersuaded.  Having grown up in the Melting Pot of New York, I don’t think of America as a monolith of white Christian males.  In my view, the American Dream is the product of hard-working immigrants, many of whom are not white, Christian or male.

Moreover, I don’t think the American dream has ended.

I would guess I am swimming against the tide of public opinion.  Rasmussen reports that about 70% of the public thinks we’re on the wrong track. Many are enamored of Donald Trump because he speaks to the trends that disrupted the 20th Century economic model that made them secure.

But, this isn’t the 20th Century and our challenges aren’t the result of a lack of jobs.  They are the result of a lack of skilled applicants.  McKinsey reports that “[i]n advanced economies, demand for high-skill labor is now growing faster than supply, while demand for low-skill labor remains weak.”  They further predict that there will be a global shortage of workers with the skills demanded by the 21st Century economy while the cohort of low-skilled workers will grow by over 90 million, resulting in an oversupply of 11 million such workers. 

If we are to address income inequality – if we want to “make America great again” -- we should start right here. 

Birth rates are declining in the industrialized world just as the Baby Boom generation is retiring in great numbers.  The American Dream is our greatest weapon in the competition for immigrants.  We need more engineers and well educated technical people than our education system can produce in the next decade.

Writing for Quartz.com, Leila Janah asserts that the challenges go to the heart of our education system.  “Community colleges… have a 70% dropout rate nationwide,” she reports.  “And even when people do manage to finish, they emerge with training that doesn’t equip them to succeed in the new economy – skills like marketing one’s talents in an online profile, submitting applications for project-based work, and developing new skills using on-line resources.”

Ms. Janah is associated with Rework America a private initiative whose goal is to harness the energies of “entrepreneurs, educators, technology leaders, CEOs, diplomats, community activists [and] religious leaders”… to “expand opportunities for employment … for all Americans to learn and train for the work of the future.”  Such efforts are more likely to achieve results for workers than any government program. 


To achieve the American Dream, 21st Century workers will need to project themselves into the future rather than pine for the past.  Don't expect government to provide the answer. You must make the right choices.

The Bernie Sanders ad running in NY goes like this:  “if you’re doing everything right and finding it harder and harder to get by, you’re not alone.”

We need to modify that message thusly: if you're doing everything right and finding it harder and harder to get by, you’re not doing everything right.


WHO WILL LEAD?

Monday, April 4, 2016

Time travel and our social welfare


If you could travel through time, would you like to live in the society of 100 years ago?

No?

What if you could be the wealthiest person in the world 100 years ago?  Say John D. Rockefeller or Andrew Carnegie.

I don’t know about you, but my answer would still be NO!

Today, middle class Americans are way better off than the wealthiest a century ago.  A hundred years ago, you couldn’t live in a climate-controlled house, drive a modern car, travel by airplane, watch a flat screen TV or carry a smartphone in your pocket. 

Nor would you have access to quality healthcare.  A hundred years ago, there were no antibiotics, no heart stents, no chemotherapy and no Advil (to say nothing of Xanax, Prozac and Vicodin).

The most commonly used single measure of our national wealth is Gross Domestic Product (GDP).  However, despite the impact on your life of the items listed above, they are not included in GDP. Robert Kennedy asserted that GDP “does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials.  It measures everything, in short, except that which makes life worthwhile…”

We should distinguish between our wealth and our social welfare.  The quality of our lives is certainly affected by our net worth (our wealth).  However, it can be said that the social welfare of our society has a greater effect on our lives than our net worth.  Hence, advances in medicine, transportation, telecommunications and household infrastructure have a greater effect on our well-being. 

And, those advances are the product of the free enterprise system. 
           
Of late, capitalism is under attack. That outcomes are uneven troubles many here in the U.S. and the world over.  People are marching in the streets…  Wall Street’s excesses are scrutinized…  Higher minimum wages are demanded… 

Our anxieties are heightened by a political season in which it is de rigueur to instill fear in the public.  That’s how you get elected. 

But, I am more aligned with the so-called Oracle of Omaha, Warren Buffet. While acknowledging that income inequality is deep-rooted and needs to be addressed, he is eternally optimistic about our economic prospects.  “For 240 years, it’s been a terrible mistake to bet against America, and now is no time to start,” he avers. 

The roots of our income inequality are rooted in globalization and rapid technology change.  Individuals who are well educated and innovative are more likely to earn the rewards of the 21st Century, he tells us.  

Our response to our current challenges should not be to pull up the bridge over the moat – to close our borders and raise tariffs, for example.  Rather, we should focus on providing equal opportunity, improving education (particularly in poor neighborhoods) and strengthening our social safety net.

And, the only economic system that can generate the wealth do so is capitalism.

WHO WILL LEAD?