State of National Economy

It is hard not to be attracted to positions you endorse. It is natural. We like to receive confirmation that we are not too far from reality.

Over the last several decades, one aspect of economics that seemed clear to me that it is not good to have a great disparity in the distribution of wealth. Originally, my focus was focused on the discrepancy between the Developed Nations and the Third World. Unless the disparity was bridged, violence would be the ultimate price paid. How could you not empathize with those who saw the signs of wealth elsewhere while you were trying to survive, literally.

More recently, the concern has been the economic discrepancy in our nation. Harold Myerson is only the latest of a series of critics of the gross discrepancy between the rich and others. He (and I) grew up with the positive results of a Middle Class that was sharing the growing wealth of the nation. While racial problems, along with poverty, existed, these problems were seen as problems that would be addressed by weight of the growth of our economy. Justice and fairness were words that meant something. They worked to a great extent, albeit not perfectly.

Myerson, Krugman, et al. are now focusing on the phenomenon of the Middle Class losing its capacity to contribute to further growth. In fact, the Middle Class is eroding.

As in the case of the disparity between the wealth of the Developed Nations and the poverty of the Third World, so now we are faced with the prospect of further erosion of our common good, our common security, and our common ground for hope if we cannot recognize the need to ensure that we have a vibrant Middle Class.

In the midst of all this, we have a national economic problem. We have a horrendous national debt, there is an enormous debt being crunched out by credit borrowers, and now we have the problems with liquidity, resulting from the sub-prime fiasco. David Ignatius shares his fears, fears that seem real to me. The problems associated with the packaging and repackaging of mortgage loans into various forms of security may have been "inventive", but the reduction of risks that were cited as the rationale for such derivatives seems now an example of how smart people can act periously.