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OP-ED | Provide Access to Economic Change

by Brian O'Shaughnessy | Jun 6, 2014 10:30am
(3) Comments | Commenting has expired
Posted to: Economics, Opinion, State Budget, Taxes, Transparency

Change is really hard.

Neither political party will embrace change. It makes sense. There is more money in protecting power. This is an unfortunate fact of life: state, local and federal government spending represents $7 trillion dollars. That is something you protect.

Instinctively, we know change is important. Our sitting President leveraged the word — perhaps more than the concept — and won his first election. He may have won the second election because we are afraid of change.

Folks that study economic policy acknowledge we need big change to reverse trends that undermine the strength of our economy. As an observation, most folks would agree. The means to this end, however, is a political landmine.

Adjusting funding levels for exisitng programs does not constitute change. That would imply we have prioritized the distribution of our limited public funds correctly. The nature of our spending problem is centered on how we invest, not how much.

We need to invest in different stuff, but thinking different is really hard. It is hard to change. When you propose change to a system, the system pushes back. I have learned that the language we use is central to creating consensus.

One example should help prove my point.

Nationally, our economy is constricting for many. Our national median income is down. In Connecticut, the dynamic is more pronounced. We actually lost private sector jobs for the 20 years of national prosperity before the recession. In Connecticut, the money from Wall Street enabled us to divert our attention. OK, now need is expanding and the engine to address that need is sputtering and failing. Bad news. We should change.

Whoa. Hold on. One tribe talks about “income inequality” and the other cries “socialism” and we are off to the races. The hyper partisan among us scream and policy suffers. Both red and blue are convinced the status quo is unacceptable, but their intransigence ensures nothing will change. There is plenty of “quasi data” to go around: look at the stock market, unemployment is down, we have a surplus but — on the other hand — poverty is increasing, our unemployment data excludes the designated “non-people” and we have the highest per capita debt in the nation. Your head starts to hurt.

This is not your parents’ economy. Recent job gains have been concentrated in lower-wage occupations such as retail sales, food preparation, manual labor, home health care, and customer service. They have not come close to compensating for the loss of jobs in moderate income professions such as manufacturing and skilled construction. Additionally, part time work is increasingly the norm and our long-term unemployed — who are human beings with families — should be counted. So should folks in prison.

“Income inequality” is a core economic issue that has been politicized, similar to climate change. The issue is not only relevant to “liberals.” Many business leaders are beginning to care deeply. Why? A vibrant consumer market makes us a stronger nation. It means Medicaid expense will decrease and your next flat screen TV will be cheaper. A win-win.

The conversation about income inequality is not a personal assault. It does not diminish the glory of your success, whether you trekked 20 miles in the snow to go to school in the morning, or if you went to college at night while holding down 4 jobs. Less people with access to the economic means to be self-sufficient means our economy will begin to shut down. Even the wealthiest people can only buy so many pairs of jeans and happy meals. Retailers for the low- to moderate-income market are beginning to experience pain.

Meaningful structural change is required. Yes, we have a spending problem. However, the problem is not in the amount of spending, but in the nature of our investments. Proposing that we simply “spend less” implies that the investments are appropriate in nature, but wrong in the amount. No. We need to change.

So what do we do? That is really hard to figure out. But if we don’t provide access to change through a more honest and less partisan dialogue, we are all protecting the status quo.

Brian O’Shaughnessy of New Haven is a principal in the firm Community Impact Strategies Ltd.  The mission of CIS is to facilitate the investment of public and private capital for the purpose of creating measureable improvements in human productivity and living conditions.

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(3) Comments

posted by: GuilfordResident | June 6, 2014  3:38pm

It’s not that hard. The government taxes and squanders legitimately earned income and capital gains. If you want to get ahead, figure out a way to get a marketable education or skill (while you’re at it, do the same for your kids). And while you’re at that, figure out legitimate ways to keep more of your tax dollars to your self. Then do what you have to do to find a job and earn a living. I was a wayward, welfare-bred kid. I enlisted in the Navy to get out of CT (and I thank God it was during peacetime), realized CT was bad but there are a lot worse places to be ... I needed to shape up and go to college when I got out. I delivered pizzas, washed windows, and drank beer to get through college. Now, I have a pretty good gig. Work smart and hard. Or, sit around and play Call of Duty and write articles complaining that your ills are someone else’s fault. You decide.

posted by: shinningstars122 | June 8, 2014  8:21am

shinningstars122

I agree with you that we are at a critical point in our country’s history.

The control of wealth by fewer and fewer in our country has swelled since the Great Recession. When the top 7% of earners saw their income rise 27% from 200-9-2011 and the other 93% see theirs drop by 4% that is the problem right there.

http://www.pewsocialtrends.org/2013/04/23/a-rise-in-wealth-for-the-wealthydeclines-for-the-lower-93/

This is simply not sustainable.

We need to revisit tax policy sooner rather than later.

Also prices have gone up on all things and most especially on college education, which no longer guarantees a trip to the middle class.

With fewer and fewer grants and lower interest loan rates college students graduate with an average of $26,000. One in ten students will have college $40,000 in debt.

http://www.forbes.com/sites/specialfeatures/2013/08/07/how-the-college-debt-is-crippling-students-parents-and-the-economy/


I wonder if @GuilfordResident had that noose around his neck when he graduated?

The other major point you missed is the illustration of how much middle and working class incomes are flat, and have been flat for decades.

http://www.nytimes.com/2014/04/23/upshot/the-american-middle-class-is-no-longer-the-worlds-richest.html?_r=0


Trickle down economics is something you see in a museum these days.

The irony is that you think progressives and conservatives would rally together around these critical social and economic issues this but as @Guildfordresident painfully made clear we are not in this fight together.

posted by: GuilfordResident | June 10, 2014  3:00pm

shiningstars. when did a college education ever guarantee a trip to the middle class? you can’t expect to ever pay the bills graduating as an art history major or similar major w/ low-marketability. you can ease your tax burden by starting a legit schedule c business. sell something, anything legit. expense what you can to adjust your gross income down. once you minimize the tax burden, you’ll it be easier to accumulate wealth. i graduated w/ $15-$20K in student load debt. i worked miserable summer jobs and scrounged other work as i could ... not necessarily W2 work .. in college to pay living expenses. i partied and had fun too, slacked occasionally but worked a lot also. i have college friends who’ve worked much harder than i and are doing awesome. i’m not a 1%-er but i like where i am. prices will continue to rise. funny. i heard an npr interview where the interviewer said something along the lines, “.. if you take out price increases in food, energy, and housing, you don’t see much inflation at all.” i was dumbfounded.