Economically speaking: Are you an optimist or a pessimist?

Posted 8/21/12

A majority of Americans appear to be gripped by a sense of economic anxiety. While many indicators show an improved economy (the unemployment rate is down to 5.8% and growth is up by 3%), average …

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Economically speaking: Are you an optimist or a pessimist?

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A majority of Americans appear to be gripped by a sense of economic anxiety. While many indicators show an improved economy (the unemployment rate is down to 5.8% and growth is up by 3%), average Americans feel left behind in the recovery. Exit polls in last week’s election show that 78% of voters are worried about the direction of the economy. Forty-eight percent said the economy was not good, and another 22% said it is poor. With this as the backdrop, Americans turned to the Republican Party last Tuesday in search of a different solution.

Still, a look at current opinion polls indicates that pessimism reigns. In 2006, 40% of American voters predicted that the next generation would be worse off economically, while 30% believed their children would be better off. Last week’s numbers show that the percentage of pessimists has risen to 48%, with optimists weighing in at just 22%.

Failing to keep pace with inflation, income for middle-class Americans has not increased since 1999. Whatever you may think of the Occupy movement, “the famed 1% received 95% of all income gains in the first three years of this recovery. And part of the reason for the decline in the jobless rate is a reduction in the labor force to its smallest size in three decades.” (POLITICO)

Pessimism is also reflected in the 63% of voters who say that the U.S. economic system generally favors the wealthy, as opposed to the 32% who believe it is fair to most Americans. (Compare these to the pre-recession numbers of 2006, when 56% said the system favors the rich vs. 39% who called it fair.)

Just three weeks ago, Janet Yellen, chair of the Federal Reserve, surprised nearly everyone by making a speech about economic inequality in which she spoke of the increasingly unequal distribution of wealth and income (www.federalreserve.gov/newsevents/speech/yellen20141017a.htm). “I think it is appropriate to ask whether this trend is compatible with values rooted in our nation’s history, among them the high value Americans have traditionally placed on equality of opportunity,” she said. Her speech focused on four sources of economic opportunity: having the means to raise children, having access to education, having the ability to own and operate a small business and having the opportunity to leave an inheritance for the next generation to build on.

We like Yellen’s points so much that we offer them as a roadmap for the 114th Congress when it takes its seat in January. We ask the Republican-controlled congress (1) to raise the minimum wage (Note: every single state with a minimum wage hike on the ballot last week approved it—Alaska, Arkansas, Nebraska and South Dakota), (2) to support higher education in ways that help families, especially those with lower incomes and help address the debt burden graduates are saddled with as the cost of college has skyrocketed (the price tag of a college education has risen more than 500% since 1985), (3) to help mitigate obstacles that have been making it harder for entrepreneurs to start and build small businesses, because doing so will help create jobs. (Among middle-class income earners, business start-ups have fallen to a 25-year low, and equity in these businesses has dropped to its lowest level since the mid-1990s), and (4) to address the issue of declining equality of opportunity, a progressive and meaningful estate tax is needed.

And in one final footnote to last week’s election, voters in municipalities in Massachusetts, Ohio, Illinois, Wisconsin, and Florida, voted overwhelmingly for their legislators to pass a constitutional amendment to overturn the U.S. Supreme Court’s Citizens United v. Federal Election Commission ruling and declare that only human beings—not corporations—are entitled to constitutional rights and that money is not speech and campaign spending can be regulated. To date, 16 state legislatures across the country have voted for an amendment, as well as almost 600 towns, villages, cities and numerous organizations.

And so, we call on congress to again look at House Joint Resolution 29 introduced February 14, 2013. It reads:

Section 1: Declares that (1) The rights protected by the Constitution are the rights of natural persons only; (2) artificial entities (such as corporations, limited liability companies, and other entities established by the laws of any state, the United States, or any foreign state) shall have no rights under the Constitution and are subject to regulation by the people, through federal, state, or local law; and (3) the privileges of such artificial entities shall not be construed to be inherent or inalienable.

Section 2: Directs federal, state and local government to: (1) regulate, limit, or prohibit contributions and expenditures, including a candidate’s own contributions and expenditures, for the purpose of influencing the election of any candidate for public office or any ballot measure; and (2) require that any permissible contributions and expenditures be publicly disclosed. Prohibits the judiciary from construing the spending of money to influence elections to be speech under the First Amendment.

Section 3: Prohibits this amendment from being construed to abridge the freedom of the press.

Finally, it is a sad commentary that only 36% of eligible voters in the U.S. voted last week. Too many citizens think their votes do not matter, perhaps the ultimate expression of pessimism.

Today, if you count yourself among the pessimists, consider how you can become an optimist, by catching the excitement of working to regain the power that democracy put in the hands of the people.

You have a vote; exercise it. You have the right of free speech and a voice; use it.

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