The Disappearing Middle Class

A sad tale...and yet, we Christians too often remain quiet, or worse, defend the systems that empower this abuse.....

Comments

[Roger D. McKinney]

I hope you have informed your readers that you promote Marxism, as does the Huffington post.

The errors in the linked article are too numerous to respond to all of them. But for the most part, the decline in the middle class is real, but it is due to the inflationary policies of your beloved state. Prices have increased faster than wages since Nixon took the US dollar off the gold standard. That has caused the middle class to become poorer every year. If you really care about the middle class, you will vote to get the state out of the economy and for the Federal Reserve to restore honesty to the US dollar.

[zero]

depressed wages and underemployment with no benefits has nothing to do with the disappearing middle class? how about if we lived in a nation that actually lived what it professed to be....a christian nation? it is bothersome that some automatically think that one's desire to have people actually live the way of christ translates into a political slot that, in turn, is always wrong for these people. there is nothing political about wanting christian principles to actually be practice.

[Roger D. McKinney]

Taking financial advice from a lawyer is like going to a mechanic for dental work. Elizabeth Warren is a professor of law at Harvard, but she clearly doesn’t know anything about economics. She wrote “The agency would have the power to end tricks-and-traps pricing and to start leveling the playing field so that consumers have the tools they need to compare prices and manage their money.”

Prices do not rise in general because businesses play “trick-and-traps pricing.” Economists have know for centuries that price increases happen because those in charge of the money supply, the Feds in the US, increase the supply faster than production increases. The cpi, the measure of price inflation for most people, does not cover assets such as housing, but monetary pumping by the Feds is the primary cause of rising house prices.

Bankers have become increasingly richer because they receive the new money created by the Feds first, before prices rise. They buy assets before others and then become wealthy as those assets increase in price due to the increased supply of money. In addition, the prices of education and health care rise because the government has insured an unlimited demand for a limited supply.

In short, the institution responsible for destroying the middle class is the federal government.

[zero]

i would agree that the federal government (probably government in general) bears some of the responsibility for destroying the middle class. but my agreement is based on alternative reasons.

[Philip Koplin]

Since, according to its believers, the “free market” doesn’t exist in the real world in which we now live, none of the consequences deriving from actions done in its name can be counted against it. Since it is the best of all possible economic systems, any defect that someone thinks he or she is ascribing to it merely proves that the system being described isn’t really a “free market.” Since it relies on the rational, enlightened self-interest of individuals for its action, any fault that one might perceive in it can’t be used to invalidate it because such perceived faults simply mean that the individuals involved were not truly acting out of rational, enlightened self-interest. Some might call this question-begging, circular reasoning, but it does have the virtue of making the argument immune to empirical observation.

On the other hand, it does lead to hypotheses like the following: “In a free market, the competitors of a selfish businessman will drive him out of business. Self-interest will force the selfish businessman to restrain his selfishness.” Never mind how much injustice and damage might be done in the meanwhile (how long will this take? 5, 10, 20 years?). That someone would believe this at all is a triumph of faith over any appreciation of actual real-world behavior.

[Roger D. McKinney]

Philip, you do a masterful job of beating up the straw man of your own creation! Congrats! You da man!

Philip: "Never mind how much injustice and damage might be done in the meanwhile (how long will this take? 5, 10, 20 years?).

Capitalism requires the rule of law. Socialists have always portrayed it as lawless anarchy, but no capitalist in the history of capitalism has ever at any time even suggested that capitalism could do without the rule of law that protects consumers against theft and fraud. Any consumer who suffered damage of any kind from a merchant or manufacturer has full access to the courts and the rule of law built up over centuries. Smith's concept of the self-interest of the businessman dealt with issues such as charging too much for an inferior product, not with fraud and theft. Smith assumed the rule of law.

It wouldn't hurt you guys to read something once in a while besides Marxist blogs.

[Philip Koplin]

It's easier to dismiss someone's arguments as straw men than actually address them.

For your argument to be more than just arrogant rhetorical bluster, you need to have objective, self-consistent criteria (i.e., from within the free market framework) for distinguishing selfishness from self-interest.

It’s absolutely ridiculous to use the argument that because Adam Smith was a moral philosopher, it’s ignorant to equate self-interest with selfishness, as though Smith’s intentions guarantee the correctness of his analysis and ensure its moral value.

What free market criteria do we use to decide whether a given company is being driven by selfishness or self-interest? And
by what inherent free market mechanism would a "selfish" company be driven out of business by its non-selfish competitors? After all, it might be making a hefty profit, and continue doing so for enough years to satisfy the interests of its owners.

You say that Capitalism assumes that as a matter of fact any rational person would want to have a good reputation in the community, obey the law, care for family and friends, submit to God, repent and obey, and help the poor. First, this is quite a mixed list of requirements that people must meet in order for you to consider them rational. On what free market–based criteria is this list based? Second, why is it rational to base an economic system on this assumption, rather than on an assumption that includes human greed, that is, selfishness, which you acknowledge is also a basic driving factor in human relations?

[chuck]

Ah, yes, we have resorted to the "they are all Marxists if they disagree with me" defense. Surely, this is the last resort of a person who can no longer sustain an argument on anything but rhetorical bluster:) Roger, we love to have you participate, but some arguments would be helpful, or at least, own your presuppositions and accept that a presupposition for you is not a fact for me:) The idea that government intervention is the sole cause of all evil, but that we are supposed to have governments to enforce the rule of law without any serious discussion of what would constitute the rule of law and why is not likely to get many to agree, unless they are ideologues of your stripe antecedently.
In another post, you commented that governments were to enforce "justice" but then went on to deny that these are justice matters (care for the poor) is simply false--charity, without attention to systemic injustice--merely perpetuates the injustice.

[zero]

ah, i'm really enjoying myself. piggies!!!

kate!? where are you????

[Roger D. McKinney]

Philip: "What free market criteria do we use to decide whether a given company is being driven by selfishness or self-interest?"

That's not my business or anyone's business but God's. Only God can know the motives of an individual.

Philip: "And
by what inherent free market mechanism would a "selfish" company be driven out of business by its non-selfish competitors? After all, it might be making a hefty profit, and continue doing so for enough years to satisfy the interests of its owners."

Clearly, you have never read "Wealth of Nations" or you would know that answer. Do you really think Adam Smith intended to promote selfishness? That's quite a slander on the reputation of a godly man. You better have a good reason for doing so.

If a company makes a hefty profit, it will always attract competitors very quickly. That is economics 101.

Philip: "You say that Capitalism assumes that as a matter of fact any rational person would want to have a good reputation in the community, obey the law, care for family and friends, submit to God, repent and obey, and help the poor."

No, I did not write that. I wrote that a person will want those things out of self-interest.

Philip: "Second, why is it rational to base an economic system on this assumption, rather than on an assumption that includes human greed, that is, selfishness, which you acknowledge is also a basic driving factor in human relations?"

If you would ever take the time to read Adam Smith, you would know the answer. Smith did base his system on the knowledge that most men are driven by greed and selfishness. That is the whole point of "Wealth of Nations." Smith's purpose in writing the book was to answer the question, "What about greedy and selfish businessmen?" He rejected state intervention in the economy because he saw greedy businessmen using the state to satisfy their greed.

Chuck: "Ah, yes, we have resorted to the "they are all Marxists if they disagree with me" defense."

You certainly have a problem being honest with the writings of others. I never suggested anything like that. I merely pointed out that you're assumptions and claims come from Marx and have no basis in reality, science, or scripture.

Chuck: "The idea that government intervention is the sole cause of all evil..."

I don't know where you got that. It has nothing to do with anything I have written.

Chuck: "we are supposed to have governments to enforce the rule of law without any serious discussion of what would constitute the rule of law..."

Sorry. I thought it was obvious. The rule of law consists of the state protecting the right to life, liberty and property.

Chuck: "In another post, you commented that governments were to enforce "justice" but then went on to deny that these are justice matters (care for the poor) is simply false--charity, without attention to systemic injustice--merely perpetuates the injustice."

Charity is the opposite of justice. If God gave us all justice, we would spend an eternity in hell. Justice for many poor people would mean letting them starve to death. Charity and love ignore justice and rescue people from their own mistakes. The term "social justice" is a fabrication of atheist socialists, and it is nonsense.

I'm sorry if it offends you to acknowledge that you have swallowed the falsehoods of one of the greatest enemies of Christ to have ever lived. Socialism began with atheists and has always been promoted by atheists. It should not come as a surprise that socialism is founded upon falsehoods and promoted with falsehoods.

If you were more devoted to Christ and less to socialism, you could see the truth.

[Philip Koplin]

I’m assuming from the context of your remarks that the intent of the rule of law is to protect the right to life, liberty, and property by penalizing selfishness and leaving self-interest unimpeded. I’m not asking for a God-like look into people’s hearts, but for the objective, self-consistent criteria for distinguishing selfishness from self-interest so that we can agree on what rules are legitimate.

If a company is making a big profit and attracts competitors, how does that guarantee that the profitable, selfish company will perish and the non-selfish ones will prosper? After all, being selfish might turn out to be a clear competitive advantage. To repeat: By what inherent free market mechanism would a "selfish" company be driven out of business by its non-selfish competitors? After all, it might be making a hefty profit, and continue doing so for enough years to satisfy the interests of its owners--and if it does satisfy the interests of its owners, it's served it selfish purpose.

Here’s what you wrote: “It’s in my self-interest to have a good reputation in the community, to obey the law, to care for my family and friends. And it’s in my self-interest to submit to God, repent and obey, which means helping the poor.” I take this as at least a partial list of the things that come under your understanding of “self-interest.” So when you go on to say that “Capitalism does not elevate self-interest; it merely assumes it as a matter of fact for any rational person,” it seems reasonable to believe that when you use the word “self-interest” in referring to what Capitalism assumes, it has the same meaning as in the first part of your statement.

Your adoration for Adam Smith is touching, but it's also as irrelevant as your wonderful capacity to use “Marxist” and “socialist” in as many inappropriate contexts as possible.

[zero]

oh man. have i ever missed this. sooooo good to be reading such discussions again. now, people. do not disappear. and others, return. kate? are you lurking?

[Roger McKinney]

Philip: "I’m assuming from the context of your remarks that the intent of the rule of law is to protect the right to life, liberty, and property by penalizing selfishness and leaving self-interest unimpeded."

No, not at all. The rule of law punishes actions, not intentions. And those actions are generally limited to fraud and theft in the economics sphere.

Philip: "If a company is making a big profit and attracts competitors, how does that guarantee that the profitable, selfish company will perish and the non-selfish ones will prosper?"

Let's assume the selfishness doesn't rise to the level of theft or fraud, for in those cases the courts would take over. Then what would constitute a selfish act on the part of a businessman? I honestly can't answer the general question about selfishness. What selfish acts are you referring to? If he sexually harrasses his secretary, no the market won't handle that.

Philip: "Your adoration for Adam Smith is touching, but it's also as irrelevant as your wonderful capacity to use “Marxist” and “socialist” in as many inappropriate contexts as possible."

I'm sorry it offends you and Chuck to point out that most of your premises and arguments come from Marx. I can't help the fact that it is true. Ideas have origins. Before Saint-Simon created stocialism in France in the early 1800's, many of those ideas didn't exist. Marx took Saint-Simon's ideas and refined them. Those are historical facts. I can't change them. That you don't understand where those ideas came from doesn't make it less true. That you don't know that Marx's ideas have been tested and have failed many examinations by Christians and non-Christian economists for 150 years is just sad.

[Philip Koplin]

Your argument rests on distinguishing between selfish actions and self-interested actions, but you continue to avoid offering criteria for how we're supposed to do this, which leaves your argument hollow and meaningless.

You also avoid the question of how a selfish company, simply by attracting competitors, will driven out of business by a non-selfish company, or why a selfish company should be considered a failure even if it's stayed in business long enough to satisfy the selfish interests of its owners.

You also avoid the question I raised about why it's reasonable to assume that any rational person would include under self-interest the things that you list.

No, I'm not offended by your bizarre claim that merely asking you to address the above issues is Marxist.

[Doug]

zero, i'm with you this time. this is pretty fun to read; obviously folks know which "side" I'm on, though. But Philip is asking good questions, even if at the same time showing his ignorance of economics 101.

[Philip Koplin]

You never managed an explanation of how we’re supposed to distinguish between “business” (which is good) and “Big Business” (which is bad), why the profit interest of politicians wouldn’t lead them to be as good at stewardship as businessmen, and how to decide which communally enforced rules to keep business in line are legitimate and which are not. I've already commented on the circular, question-begging nature of your arguments. The quality of your reasoning is further illustrated by your response to my request that you clarify the claim that declaring someone with 51% of the vote the winner of an election is not very ethical and that democracy has failed us miserably: “I never said 51% unethically decides a winner in the election. I said I don't find 51% of the population determining laws or persons who are in authority over the other 49%. Democracy is not inherently better was my point. You claim I provide no evidence that it has failed, yet you've provided no evidence the free market has failed, as you claimed. We're even.” I’m not too upset about getting a failing grade from someone who thinks that this level of incoherence and evasion actually contibutes something of value to a discussion of economics or anything else.

[Doug]

Philip, last I checked we were discussing those things on a former thread. So if you want to bring up the kitchen sink, go ahead. As for "incoherence and evasion," you have done the same thing with Roger's arguments.

I'll retract my point on "democracy has failed," but it certainly hasn't succeeded YET. I'll retract that on the basis I don't claim Obama has failed, because it's too early to tell.

As for ethics, I stand by my 51/49 comment. If 51% say that the other 49% have to behave/act/live a certain way, that is unethical. I just watched The Boy in the Striped Pyjamas" last night, about Nazi Germany and "worker camps," and the thought occurred to me: free markets don't lead to this. Hitler was elected democratically. Obviously, that doesn't mean democracy has failed, but it is certainly not morally superior to another system, and can yield dangerous results just as much as it can lead to great results. My point was, it has failed to produce the results its proponents believe it will.

So, please explain, how has the free market "failed"?

[Philip Koplin]

I guess one person's kitchen sink is another person's list of issues ignored or answered in a way that leaves them even more muddled.

It's ridiculous to claim that the concept of democracy will be validated or invalidated based on how you in particular judge the success or failure of a given political leader. If, in your view, it’s unethical for the person with the most votes to make governmental decisions that people who voted against him or her will have to follow, what difference to the ethical foundation of the system would it make whether you agree or disagree with the outcome of those decisions?

You tried to clarify your view as follows: "I said I don't find 51% of the population determining laws or persons who are in authority over the other 49%. Democracy is not inherently better was my point." The first sentence fragment makes absolutely no sense. The second is little better and raises the following question: not inherently better than what? What is this system you propose that would allow citizens of what are now democratic nations to negotiate their conflicting interests in a way that would be better based in your ethical principles? If not democracy, what system are we to use to arrive at a legitimate, enforceable, communally agreed-on code of rules?

I haven’t tried to explain how the free market has failed because Chuck has done so with far more patience and charity than I could have mustered (testaments to his status as a Christian and a teacher), and it would be pointless to continue down that road, given, as he noted, the unfalsifiable nature of your faith. Chuck’s remark in that regard echoed my comment to Roger: “Since, according to its believers, the ‘free market’ doesn’t exist in the real world in which we now live, none of the consequences deriving from actions done in its name can be counted against it. Since it is the best of all possible economic systems, any defect that someone thinks he or she is ascribing to it merely proves that the system being described isn’t really a ‘free market.’ Since it relies on the rational, enlightened self-interest of individuals for its action, any fault that one might perceive in it can’t be used to invalidate it because such perceived faults simply mean that the individuals involved were not truly acting out of rational, enlightened self-interest. Some might call this question-begging, circular reasoning, but it does have the virtue of making the argument immune to empirical observation.”

Finally, you initally said that I'm asking Roger good questions, now you say my responses display "incoherence and evasion." I’m sure this makes sense in some region of the universe, but not in the part that I'm used to inhabiting.

[Doug]

Philip, you are a decent thinker, and have found inconsistencies in some of my arguments (I'm sure you think all of them). It's a bit tedious to go back and explore every nuanced conversation. I'm sure we'd be able to do that as time goes on, hence my mentioning the kitchen sink. I'm not trying to be evasive. Maybe I'm just lazy because in my mind the conversation has evolved and moved on to other things.

I also dealt with the falsifiable comment in another comment, but here it is, pasted: "a point about your claim that I am using unfalsifiable arguments. I don't feel as though (at least in my mind) I'm justifying an argument against a free market by claiming, "Well it's not REALLY free, so your critique is invalid." My point is, there are many failures in our society, but because we are largely a capitalist society doesn't mean it was the free market that caused the failure.

Let me explain briefly how I feel when you describe capitalism. I feel as though you're telling me you don't like bunny rabbits because of their reptilian skin surface. Well, it's okay if you don't like reptilian skin, but that doesn't mean you should dislike bunny rabbits. Or, another analogy: many Christians have done atrocious things throughout history. But wouldn't we agree that that wasn't "true" Christianity, but rather a perversion of it? If I've failed to parallel that line of thinking with free markets, I'm sorry. All I meant to say was that we don't have free markets, but that doesn't immunize its critiques."

In sum, I think it is perfectly legitimate to say that free markets can be perverted, and problems can come from it, just as much as it is legitimate to say that governments can be perverted, and that a so-called failure of gov't/legislation could just be the wrong legislation.

[Philip Koplin]

I'll await your response on democracy and ethics before deciding whether I need to make any further comment.