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Economic Idiocy 101

In yesterday’s Press there was a feature story entitled “Treading Water: Will middle class wages ever catch up to inflation?”  Well if we follow the advice of the four college professors they asked, we will no longer be treading water, we’ll be sinking like a stone.

I wrote a short rebuttal to it, but I fear it’s not short enough to satisfy their editors.  (They expect me to counter two full pages of BS in a 250 word letter.)

Anyway here it is.  We’ll see how much of it is left when or if they ever publish it.

The economic policy prescriptions offered by college professors to save the middle class in the feature “Treading Water” on October 3, served to reinforce my great hesitation to send my teen-aged daughters to college.  If I do, I will have to spend many hours around the dinner table un-educating them.

The Rowan U. professor thinks the answer is for every young person to have a college degree.  Apparently this individual never heard of supply and demand.  When only 10% of job applicants had a college degree, those applicants could demand a premium.  If every applicant has one, the degree doesn’t mean anything anymore.  It becomes the equivalent what of a high school degree was in the past.  This is why so many grads are working in jobs they didn’t need a degree for, or jobs that in the past didn’t require a degree.  All that has been accomplished by following this professor’s solution is to bid up the price middle class young people have to pay to get a degree, and make the degrees worthless once they have them.  (Of course this solution is quite beneficial to college professors, into whose paychecks much of our education aid flows.)

The Monmouth U. economics professor also thinks the solution lies in more education aid, but would add a higher minimum wage and various government programs with cute acronyms, including some aimed at preschoolers.  Does this professor think the middle class has time to wait twenty five years so these toddlers can then save us?

The two Rutgers economics professors think it’s a very complex problem caused by globalization, technology and competition.  I can’t understand how economics professors can say technology is making us poorer.  Technology makes us more productive and if we are more productive we can demand higher pay. 

None of these writers seem to understand that productivity is the key.  If we want things, we have to produce them. 

The middle class isn’t dying of natural causes.  It is being undermined by government policies.  We must reverse those policies that are making all of us poorer.  We must be allowed to be productive again.  We must unwind much of the taxes, regulations and legal liabilities that harm our productivity and make American workers too expensive to hire.  

  Just as importantly, we must stop the money printing that is essentially an ongoing pay cut as it reduces the purchasing power of the dollars we are paid in.  And interest rates must be market-driven so investment capital flows into long-term productive enterprises that benefit everybody and not into speculative bubbles that benefit only the 1%.

 Big, intrusive government is directly at odds with high productivity.  We can’t have both.  The only way our middle class can return to the high levels of productivity it once enjoyed is for America to revert back to….dare I say it?….free market capitalism. 

 I don’t expect that to suggested by any college professors anytime soon.


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