It’s the Economy, Stupid

It’s the Economy, Stupid

There is much discussion in the air about how to keep the economy strong. This is always a big topic at any time, but I think it is fair to say that it is almost the only issue that really affects everyone. Issues like abortion may be an example of a non-economic issue (though I bet someone could draw a loose connection), but whether we are talking about infrastructure, immigration, defense or climate, literally EVERYTHING is really about its economic impact. At its core, it may not seem that an issue like voter suppression or gerrymandering is economic, but that is simply not the case. It is becoming increasingly evident that the rest of the world is watching intently as we in this country flail about over the issues that can only be defined as fundamental to our democracy. Democracy is to economics as health is to happiness. An old Chinese proverb suggests that health is the 1 before all the 0’s. For the life of me, I cannot find references for that proverb, but I know it exists because it seems so sensible to me. Well, this causes me to say that a functioning democracy is the critical basis for all economic value. Without it, it doesn’t matter how many zeroes you have, they add up to nothing without the 1 precedent of a strong democracy.

If there is anything we learned and repeatedly reaffirmed in the 20th Century, it is that long term prosperity is best achieved under a democratic system. For some reason, people seem quick to forget that. Actually, it is less than that they forget it, most would admit the correctness of the perception, and more that they are prone to ignoring the cause and effect of the things that undermine democracy. It is anathema to democracy to think that you believe in democracy if you secretly want to see fewer people who think differently than you to be enabled to vote. A democracy requires an idealistic view towards equality and inclusiveness. It is fine to define citizenship such that only true members of a society, of an economy, can have a say in its policies and governance. But if we allow and encourage people to be a part of our society and economy, then it is simply wrong to keep them in a class of people that cannot participate in the democratic process. Many businesses and businesspeople these days are in desperate need of more inexpensive (or at least lower cost) labor and we all understand that the biggest pool of that sort comes from the immigrant population. It is the bottom rung on the economic ladder to be sure, but it is a rung and as such, those people deserve to be considered part of our civil society. There can be no second class citizenship in a democracy. There can be people who are still in the process of earning their citizenship, but that path must be clear and fair and recognize that participation in the economy earns the respect of membership in the society.

It is quite shocking these days to think about all the ways that supposed “economic conservatives” are poking themselves in the economic eye in order to regain control of the government at all costs. Do they not understand, now especially in the wake of the COVID Pandemic, the importance of willing immigrant labor? Do they not see that defying attempts to eliminate the national debt ceiling is a preposterously stupid way to play politics and that international perception of that is to wonder whether the United States deserves the continued role as a reserve currency and a zero-risk repository for investment? Do they not get it that giving the working population the ability to stay healthy and able to work by virtue of having decent child care access is in the best interests of a growing economy? Do they not see the connection between affordable education and the ability to field a knowledgeable and capable working population? As an economist by training and a long-time banker and financial professional by occupation, I am astounded by the economic idiocy of current Republicans who are doing everything they can to undermine democracy in the name of…..what, democracy?

I grant you that having grown up globally with six years in Latin America, three years in Italy and two years in Canada, as well as a great deal of international travel for business and leisure all during my adult life, and as a result, I am more globally oriented than most Americans. But it is impossible for me to imagine that anyone with any common sense and any ability to analyze the past two hundred years of economic history would deny that an America with strong global economic outreach is a stronger economy. Nationalism and isolationist thinking is a doomed strategy. Hitler found that out as he desperately tried to annex production in adjacent states to substitute what he could not access on the global playing field due to his perception as a misanthropic autocrat. The short-sightedness of teeing up China as the enemy of America that somehow owes us reparations for unleashing the COVID plague on us (as suggested by Marco Rubio as an obvious tactical maneuver to appeal to the small-mindedness of the Trump voters) is not only ridiculous but economically dangerous. It ignores the importance of the Chinese market as both a cost and talent-effective production source and a growing marketplace to American business. Do Republicans not realize that to be nationalistic in a globally interconnected world that we have enabled through our technological leadership and innovation is to bite off our nose to spite our face?

I am inclined to imagine a world that Republican ideals these days seem to suggest. It is a world where only the white and the wealthy get a say in policy and that those policies are oriented towards a self-serving societal fabric that increasingly excludes people of color and immigrants. If it were possible for people to vote with their feet, they would be creating the newest “Old Country” that all of our forebears eventually saw fit to leave for an ideal that used to be the shining light of American democracy. That “Old Country” eventually shrinks and shrivels into dysfunctionality and becomes irrelevant in the geopolitical landscape. It would truly be the end of the American experiment. But such tends to be the ongoing cycle of the world. If Republicans have their way, there will be some new shining light out there that draws thinking people who are willing to risk their livelihoods to create a solid structural form of government that endorses life, liberty and the pursuit of happiness. I, for one, hope that Americans can galvanize to see the value of not abandoning this role as the beacon of freedom and democracy, but if that cannot be, then I trust my descendants will find their way to that new place that does espouse those ideals. If the king dies, then long live the king.