Economists talk about the economy being a country’s output of goods and services measured by the Gross Domestic Product (GDP). It is much more than some statistic. The economy should enable people to achieve their hopes, expectations, and dreams to support themselves, their families, or start a business. The economy is a financial perspective on behavior patterns where there is a transaction of buying and selling that results in currency exchange. Currency is the measure of the value of the trade.
Hopes, Expectations and Dreams
Our economy is based on the ‘hopes, expectations, and dreams’ of people as measured by transactions like wages received. When viewed from the economic aspirations of a segment of the people, it becomes clear why our society is so polarized politically. The ‘haves’ in the top 1% have control of Congress via campaign contributions and lobbying. Plus, the financial backstop of the Federal Reserve and most agencies of government. The ‘have nots’ in the working class with diminishing economic power are looking to leverage political power to right their economic imbalance.
GOP voters responded in polls that the economy was their number one issue. Seventy million economically focused voters wanted their financial concerns heard. Yet, they indirectly supported a party that used unfounded fraud allegations to undermine the election. False allegations of a fraudulent election attack the heart of our democracy. Not recognizing the fair result of the election undermines the peaceful transition of power in response to the people’s voice.
Income Inequality Highest Since 1929
Today, inequality of income and wealth is at the highest level since 1929. In just the last 40 years, the top 1% experienced a 157% increase in wages than the bottom 90% with only a 22% increase. After inflation adjustments, the bottom 90% wage increases workers lost income.
Sources: Kopczuk, Saez, and Song, Social Security Administration, EPI – 10/18/18
Most of these voters don’t agree with the ‘ends justifies the means’ aspect of policies that undermine democracy. But they will go along if their economic lot in life will get better. These citizens are sending a message of exhaustion and desperation to Congressional representatives and party leaders to listen to them. The level of trust between citizens and Congress is at an all-time low. In 1972, 73% of all adults in a Gallup Poll had trust and confidence in Congress. By 2018 trust had dropped to 42%. Generation after generation frustrated with their declining standard of living will lead them to search for leaders who will listen.
We Need To Wake Up To The Threat To Our Democracy of Inequality
We all need to wake up! And listen to our fellow citizens’ pain, suffering, and concerns that have been left out of the economic mainstream of our society. Our democratic institutions that safeguard our rights, freedoms, and way of life are threatened because of extreme income and wealth inequality. The October 1929 catastrophic stock market crash was followed by the Great Depression, which lasted ten years until WWII. We need the support of our people in institutions like our legislative, executive, and judicial branches, along with a fair and free election to make their voices known. Otherwise, our democracy will wither away into authoritarianism. Plus, our economy is likely to dive into a deep recession, driving people to look for even more prosperity promises while giving up democratic rights, freedoms, and protection.