MIT-economist: US has regressed to developing nation status

[XDurionX]

http://www.independent.co.uk/news/wo...=facebook-post

America is regressing to have the economic and political structure of a developing nation, an MIT economist has warned.

Peter Temin says the world's’ largest economy has roads and bridges that look more like those in Thailand and Venezuela than those in parts of Europe.

In his new book, “The Vanishing Middle Class", reviewed by the Institute for New Economic Thinking, Mr Temin says the fracture of US society is leading the middle class to disappear.

The economist describes a two-track economy with on the one hand 20 per cent of the population that is educated and enjoys good jobs and supportive social networks.

On the other hand, the remaining 80 per cent, he said, are part of the US’ low-wage sector, where the world of possibility has shrunk and people are burdened with debts and anxious about job security.

Mr Temin used a model, which was created by Nobel Prize winner Arthur Lewis and designed to understand developing nations, to describe how far inequalities have progressed in the US.

When applied to the US, Mr Temin said that “the Lewis model actually works”.

He found that much of the low-wage sector had little influence over public policy, the high-income sector was keeping wages down to provide cheap labour, social control was used to prevent subsistence workers from challenging existing policies and social mobility was low.

Mr Temin also claims that this dual-economy has a “racist” undertone.

“The desire to preserve the inferior status of blacks has motivated policies against all members of the low-wage sector.

“We have a structure that predetermines winners and losers. We are not getting the benefits of all the people who could contribute to the growth of the economy, to advances in medicine or science which could improve the quality of life for everyone — including some of the rich people," he writes.

Commenting on Mr Temin’s findings, Lynn Parramore, senior research analyst at the Institute for New Economic Thinking, writes:“Without a robust middle class, America is not only reverting to developing-country status, it is increasingly ripe for serious social turmoil that has not been seen in generations.”

Mr Temin says that education is the solution to offer everyone in society better opportunities and calls for investments in public schools and public universities.

He says: “Knowing how to think, how to get on with people, how to cooperate. All the social skills and social capital … [are] going to be critically important for kids in this environment."

What do you think? How should the US fight growing inequalities to avoid disaster? What are the reasons policies that work so well in other countries like generalized healthcare and free access to education won't gain any traction here?

[Nitros14]

All the education in the world won't help people if the jobs don't exist. There aren't enough high paying technology and corporate jobs for the whole workforce or even a large portion of it.

[Low Hanging Fruit]

As long as Republicans are in control all we will do is dump money into military and wars (less than a 100 days in and we have 50 billion more going to a military that doesn't know how to spend what its got and Syria, Iran, and North Korea getting lined up in the sights). When the Democrats take over all the Republicans will do is block them from doing anything.

[Exeris]

All the education in the world won't help people if the jobs don't exist. There aren't enough high paying technology and corporate jobs for the whole workforce or even a large portion of it.

But how can those jobs even start to exist when you don't have people to fill them?

[LilSaihah]

Mr Temin says that education is the solution to offer everyone in society better opportunities and calls for investments in public schools and public universities.

He says: “Knowing how to think, how to get on with people, how to cooperate. All the social skills and social capital … [are] going to be critically important for kids in this environment."?

I'm inclined to agree with his assessment. The American education system, including common core, seems to be pathetically outdated in the modern era.

[Deleted]

Your politicians are corrupt.

The UK is little better, but at least here we already have universal health care, and it seems hard for corporations to remove it once already established. Of course, if the tories win a majority here, that's likely to change fast.

[Teleros]

we have 50 billion more going to a military that doesn't know how to spend what its got

Lol.

The military-industrial complex, love it or loathe it, always has something to spend a measly $50bn on.

= + =

As for the actual topic... yeah I think he's right. Automation is going to be a yuuuuge challenge for the first world, and the modern practice of outsourcing manufacturing and the like to China et al makes it very hard for those at the bottom to climb up the social ladder. I don't like the implications of that, because I'm generally a fan of free trade rather than protectionist policies, but I'd rather have a robust middle class than pay £50 less for the latest iPhone. After all, if those at the bottom have zero prospects, or believe they have zero prospects, why the heck should they be loyal to the society that's taking such a massive dump on them?

One thing where I disagree however, is his solution. Get the government out of the way, and a lot of these things will sort themselves out, I think. So instead of dumping more tax dollars into public education etc, take the opportunity to burn about 90% of the tax code, halve the numbers of the bit that remains, and slim down government spending to match the new tax revenues (sorry, military-industrial complex). A moratorium on immigration coupled with mass deportations will also be required, because importing huge amounts of cheap labour is obviously nearly as bad, if not as bad, for building up the middle class as sending the jobs to China.

[Deleted]

Mr Temin also claims that this dual-economy has a “racist” undertone.

“The desire to preserve the inferior status of blacks has motivated policies against all members of the low-wage sector.

Playing racist card to get his opinion piece noticed?

Article was reasonable until that part. That part made entire article stink of left bullshit.

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Your politicians are corrupt.

Yep. Lobbying system is legalized corruption. US politicians are similar to third world countries where politicians are bought.

Entire system is broken. That is what happens when there are only 2 parties, pretending to play democracy while working for same corporations and status quo cannot be challenged.

[NED funded]

China entering the WTO was a mistake.

[Super Kami Dende]

It made sense until he started with the "Racist" undertone bullshit.

"The desire to preserve the inferior status of blacks", the only people preserving their Ghetto lifestyles are themselves. Plenty of Smart and motivated Black people pull themselves out of lower class living, just as all people do

This Article is nothing more than a "HURR MUH RACISMS" bullshit. I would expect better from someone from MIT. Though I have little faith in University Professors anymore.

[XDurionX]

It made sense until he started with the "Racist" undertone bullshit.

"The desire to preserve the inferior status of blacks", the only people preserving their Ghetto lifestyles are themselves. Plenty of Smart and motivated Black people pull themselves out of lower class living, just as all people do

This Article is nothing more than a "HURR MUH RACISMS" bullshit. I would expect better from someone from MIT. Though I have little faith in University Professors anymore.

"Plenty" is not an accurate metric by any means. In that socioeconomic environment it is considered MUCH harder for a black to achieve the same an average white person can achieve. That is no opinion.

"There are wealthy blacks so there can't be structural racism" is not an argument. That is not an US-specific problem, though. Many societies are struggling with this. If not for moral reasons, there are enough economic reasons to fight this, because it prohibits a full potential to unfold.

[Macaquerie]

It made sense until he started with the "Racist" undertone bullshit.

"The desire to preserve the inferior status of blacks", the only people preserving their Ghetto lifestyles are themselves. Plenty of Smart and motivated Black people pull themselves out of lower class living, just as all people do

This Article is nothing more than a "HURR MUH RACISMS" bullshit. I would expect better from someone from MIT. Though I have little faith in University Professors anymore.

So as long as the article was implying that people like you were getting screwed over by the system, you were totally on board with it, but the minute it suggested that the system might actually be rigged against someone else, that's when you tuned it out?

[NED funded]

The high-income sector will keep wages down in the other sector to provide cheap labor for its businesses.

Free trade & Immigration

Social control is used to keep the low-wage sector from challenging the policies favored by the high-income sector. Mass incarceration

I mean really? I don't see this.

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So as long as the article was implying that people like you were getting screwed over by the system, you were totally on board with it, but the minute it suggested that the system might actually be rigged against someone else, that's when you tuned it out?

America’s underlying racism has a continuing distorting impact. A majority of the low-wage sector is white, with blacks and Latinos making up the other part, but politicians learned to talk as if the low-wage sector is mostly black because it allowed them to appeal to racial prejudice, which is useful in maintaining support for the structure of the dual economy — and hurting everyone in the low-wage sector. Temin notes that “the desire to preserve the inferior status of blacks has motivated policies against all members of the low-wage sector.

”
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[Ghostpanther]

As long as Republicans are in control all we will do is dump money into military and wars (less than a 100 days in and we have 50 billion more going to a military that doesn't know how to spend what its got and Syria, Iran, and North Korea getting lined up in the sights). When the Democrats take over all the Republicans will do is block them from doing anything.

But the democrats had some years they had the Presidency and control of Congress. What happened?

[Belize]

But the democrats had some years they had the Presidency and control of Congress. What happened?

Got the ACA passed, amongst other things, and gov. was not being threatened with a shutdown like the past few years.

GOP has both Congress and the WH. What are ya'll doing, hm?

[Super Kami Dende]

So as long as the article was implying that people like you were getting screwed over by the system, you were totally on board with it, but the minute it suggested that the system might actually be rigged against someone else, that's when you tuned it out?

I'm viewing it as an outside observer to the system. I'm also sick of the utter need for people to always do the "WAAHHH WAHHH BLACK PEOPL HAVE IT SO HARD WAHHH" shit every single day.

Literally nothing stops people from succeeding except themselves.

[dabanks07]

As long as Republicans are in control all we will do is dump money into military and wars (less than a 100 days in and we have 50 billion more going to a military that doesn't know how to spend what its got and Syria, Iran, and North Korea getting lined up in the sights). When the Democrats take over all the Republicans will do is block them from doing anything.

The Democrats had a president in office and still added almost $8 trillion to an $11 trillion debt. Even without full control the entire presidency you'd think they'd at least not double the debt totals. These parties don't care about anyone but themselves in the here and now. Everyone talks big and says they are going to work for the people but it's just a farce.

[Deamon002]

So as long as the article was implying that people like you were getting screwed over by the system, you were totally on board with it, but the minute it suggested that the system might actually be rigged against someone else, that's when you tuned it out?

Against someone else, for no other reason than their skin color. That's where I filed this guy under race-baiting bullshit artist.

Just because a larger percentage of blacks are poor than whites (although smaller in absolute numbers) doesn't mean that policies that disadvantage the poor are actually put in place to keep the black man down. Those policies are explained perfectly well by the desire of the rich to maintain their positions at the top of society, the same way it has been in societies throughout history.

[Deleted]

I'm inclined to agree with his assessment. The American education system, including common core, seems to be pathetically outdated in the modern era.

USA produces more relevant (not peace or literature) Noble Prize winners than the rest of the world combined. At least one part of the education system is working extremely well.

The solution to tax the 'one percent' higher and invest that money in public infrastructure is probably accepted by 80 or 90% of experts. Still in the two major parties, such positions are represented by fringe candidates at best - people like Sanders who completely fail in other fields of politics.

The “The desire to preserve the inferior status of blacks..." bullshit obviously devalues his whole argument like several people already mentioned. Seems americans can't have any public discussions anymore without mentioning race.

[Belize]

Literally nothing stops people from succeeding except themselves.

Tell that to the "oh so poor rustbelt worker" then. Maybe they just need to stop being lazy instead of blaming their problems on Mexicans, or China or LIBRULZ.