Capitalism Is NOT The Problem…

I’m going to put on my fiscal conservative hat here and try to convince you that class-war is a losing proposition. That in my mind means Bernie Sanders has it fundamentally wrong. That is what this post is all about.

Capitalism is doing what it is supposed to do. It’s about paying for productivity; the more productive the more pay. Yeah, bargaining power would probably help in who gets the profits but without profits no one benefits. But let’s face it those with the most desirable skill get the best wages.

It is a known fact that between 1989 and 2017 productivity in the high skill industries rose about 34% and wages rose by 26% Engineers in Silicon Valley, management jobs in Chicago are doing well it this economy. Amazon has 30,000 open positions in the U.S. but they require certain skills that have been unmet. Plainly speaking the middle class, that is with marketable skills, are doing quite well in today’s economy.

Finally, getting to Bernie Sanders. His class war story is just not a long-term way to anything successful. As David Brooks said in an oped article recently, the core problem is not of capitalists exploiting their workers, it’s really the rise of productivity inequality. It about those who don’t have the skills to remain in the middle class.

This century will see and explosive growth in technologies. If you don’t have the skills to compete in this new arena you won’t get your share of the productivity accomplished by it. If I ignore Bernie’s class war scenario, he does get it right in other areas including extending free education beyond the high school area. Another area is with healthcare for all. The goal is absolutely right. No one should die from a preventable or curable condition.

Some say that if Sanders wins the nomination that it is political suicide for the Democratic Party. I don’t really see it that way. Everything Bernie is espousing takes money and that comes solely from the legislative branch. Bernie’s goal are certainly commendable and noble but they will take time.

One thing Bernie and Elizabeth also have wrong is sticking it to the most successful capitalist enterprises. Given that I am wearing my fiscal conservative hat for this post I don’t think the solution to our problems is to punish those who do an extraordinary job. I am a loyal Amazon customer. I think they are the new paradigm in what a consumer products retailer should look like.

The real solution is not to punish success but to boost and expand productivity to more for everyone. To do that we need to provide free or low cost educational opportunities for those currently stuck in low paying jobs. But perhaps the biggest challenge in this area is to convince everyone that a high school diploma is just the starting point for preparing for joining the 21st century workforce.

Leaving it to the fundamental capitalists to fix things is by no means the answer. Even though I am wearing my fiscal conservative hat I know that unregulated capitalism a demon not a savior. It spurs greed and that is very contrary to what is needed. Yes, we should celebrate the most successful capitalist but simultaneously making sure they don’t use lobbyist to lock in their advantage.

5 comments

  1. We have a real opportunity to have a national conversation about where we are going. I think we are ready for the swing back- and both sides of the elite are scared. This time people are ready for real health care reform (universal care). Climate change and an educated working class are key to the move. Notice we are going back to abortion????Really? Downballot?These are great scare tactics.
    If the Democrats go with the safe choice of a “questionable soundness of mind”, we will end up with who we have. Have the conversation. I think it is time, once again, to shock the elite. The President cannot change us to be socialist—but he can move us in a better direction. I am sad to see Elizabeth go, but it is time to MOVE!
    And yes, no matter what hat people have placed on me in the past, I am actually an independent and have voted that way for 40 years.

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    • Thanks for the thoughts Jane. We are pretty much in the same boat. Right now I think that Biden is the safe vote. I’m just afraid that Sanders turns off too many moderates that might stay home if he is the candidate.

      First and foremost is to get that despicable person out of the Oval Office. After that is done then by all means let’s do a serious battle for healthcare and education.

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  2. I am fiscally conservative. I never want to see a tax cut without an equal amount of real time spending cuts to offset the cost. No ludicrous accounting about how the tax cut will pay for itself, that never happens. We should have seen significant tax increases to pay for both wars in the middle east. The tax increases would have slowed the economy. Too bad. You pay for what you spend.
    Amazon and Walmart have created lower prices and improved convenience for consumers. They have also destroyed many small businesses and significantly increased offshoring. Basically they have consolidated profits into fewer hands. If Americans are OK with that then fine. If they want to bust up these monopolies I am willing to look at that. Yes your prices might go up if we bust up these giants, but it would increase opportunities for many more.
    I have been glad to see professional jobs offshored. Programmer jobs to India, semiconductor manufacturing to China etc etc. When it was just the jobs making washing machines that left none cared. Now everyone gets to share. This is globalization. The American consumer will always go for lower prices. I have not seen any clamor to bring these jobs back if it will increase prices.
    You can get all the skills upgrades you want. When the service you provide can be transferred to a lower cost country you will lose. Good luck keeping up with the transfer because it is getting faster and faster. One could always do something in healthcare, but some of that is going oversees also. Since we currently pay twice what anyone else does for healthcare how long will it be before we attack those profit centers. Not long.
    Our current corporate compensation and tax system encourages decisions that benefit fewer people while sending jobs to the lowest cost providers in the world. It has less and less to do with improving American’s lives.
    Americans need to understand what is going on and make a decision on which direction we want to go. Unfortunately this country has always displayed a strong attitude of every man for himself. Good luck with that when other countries are laser focused on coordinating all of their resources against us.
    The next twenty or thirty years will be very interesting. I cannot tell how it will end up.

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    • Thanks for the thoughts Fred. Off shoring jobs will be going down in this decade. Now that automation is finally reaching a tipping point even low wages won’t be able to keep up with the 24/7 robot doing the same thing. When that happens there will be more jobs in maintaining those automated factories but that will require skills that those who have lost jobs don’t yet have.

      One of the problems with our warped view of the middle class is that 90% of us think we are in it when by its definition no more than 50% are really included. Then there are the 10% at the top and 40% at the bottom. That will likely change but it will never go back to the untrained being middle class.

      You seem more pessimistic than I do. Maybe it is because I see the possibilities and you primarily see the problems. As I say in the post the secret is to make education a lifelong thing and free to those who have the desire and fortitude to get it.

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      • You are probably correct RJ, that I am more pessimistic. I will try to layout a few reasons why in as few words as possible.
        I think probably 30% of the population will never be able to take advantage of that improved education for higher tech jobs. They are simply not capable for any number of reasons. That is the role manufacturing used to fill. Jobs to pay your bills and keep you out of trouble.
        Health care costs are going to gut this country. Giving baby boomers a few more months of life at unlimited cost is plumb crazy. We have no plan for this no solution in the works.
        It is considered unpatriotic to not support limitless spending on the military. It is actually more patriotic to realize our limitations and understand increased military spending makes us less secure not more. The two greatest defenders of our freedoms are the Atlantic and Pacific oceans.
        We are past the point of no return on the national debt. There is no way we can ever repay any portion of it without draconian action. This item will limit any progress on every other problem we face. The most likely solution is massive inflation. That will relatively reduce the debt. Retirees will feel it the most. Our cost of living increase on SS will not even come close to the rate of inflation. Most pensions do not have inflation riders. Savings will be significantly reduced in value.
        I would love to be wrong on every count. I see no reason to believe I will be when I see zero plans zero action. I can’t wish away problems of this magnitude.
        Sorry to deviate so far from your original topic.

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