August 29th, 2011 // 2:00 pm @ Oliver DeMille
This article in The Atlantic by Don Peck is a must-read for those who are interested in the future of American freedom and prosperity. Highlights from the article include:
- The United States is “now composed of two distinct groups: the rich and the rest. And for the purposes of investment decisions, the second group” doesn’t matter.
- The new name for this state of society, coined by three analysts at Citigroup, is “plutonomy.”
- “A 2010 Pew study showed that the typical middle-class family had lost 23 percent of its wealth since the recession began, versus just 12 percent in the upper class.”
- The lifestyles of non-professional college graduates now more closely resemble those of high-school dropouts than of the professional class.
- The meritocracy is increasingly only a meritocracy of the upper classes.
- “Among the more pernicious aspects of the meritocracy is the equation of merit with test-taking success.”
- “For the most part, these same forces have been a boon, so far, to Americans who have a good education and exceptional creative talents or analytic skills.”
- Most Americans don’t want the middle class to disappear or continue to shrink, and such a development would certainly bring a drastic change to the people-based freedom that has characterized the historical successes of the United States.
- These trends, and the growing divide between the rich and the rest, are increasing the longer the economy remains sluggish.
Peck gives a number of suggestions for improving this situation, including:
- Increasing the funding for effective job training and education.
- “Removing bureaucratic obstacles to innovation is as important as pushing more public funds toward it.”
- Changing our public policy to accelerate innovation.
- Significantly improving our schools.
- Creating clear paths of training and skilled work for those who don’t go to college.
- Altering current immigration policy to allow more “creative, highly skilled immigrants” to come to the U.S. more easily.
Whether or not you agree with Peck’s recommendations, one reality is clear: The success of these things ultimately depends on incentivizing entrepreneurship, innovation, creativity and economic growth.
By spurring significant economic growth, we will directly and indirectly address most of our national economic problems.
On the other hand, if government policies continue to thwart major innovation and growth, little can be done.
Peck makes a case for higher taxes, but hardly mentions that Washington has a serious spending problem.
Democrats typically argue for tax hikes, while Republicans now mostly champion spending cuts.
Most Independents, in contrast, would likely support both—as long as the tax hikes on the professional class were used not to increase or maintain federal spending but rather to directly help put America’s financial house back in order.
Whatever your view on this debate, it is a discussion desperately needed right now.
Too much of the rhetoric on this topic is just that—two sides deeply entrenched and firmly committed to one view only.
We need fresh ideas and inspiring leadership to move beyond this gridlock.
With all this said, Peck’s article is mandatory reading. Every American should think about its main points.
Most will find things to disagree with, perhaps, but the dialogue is needed.
If the middle class is to survive and thrive, it must increase its role of deeply considering, thinking about and making its views felt on important economic and other national issues.
Freedom only works when involved citizens of all socio-economic levels actively participate in such important national discussions.
He is the co-author of New York Times, Wall Street Journal and USA Today bestseller LeaderShift, and author of A Thomas Jefferson Education: Teaching a Generation of Leaders for the 21st Century, and The Coming Aristocracy: Education & the Future of Freedom.
Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.