Rising Tide Lifts All Yachts

Lyndon Johnson was fond of observing: "a rising tide lifts all boats."

This was pretty true for twenty-five years following World War II. From about 1946 to 1971, income for all income groups tracked very closely with the increase in productivity for the US economy as a whole.

Then something happened. As economist Noah Smith put it in his blog about three months ago, "Something BIG Happened."

From that time to the present, productivity has continued to increase at about the same rate, but hourly wages for workers (adjusted for inflation) remains stuck at the 1971 level. Who gets all the profit from increased productivity? Mostly the top 1% of earners.

In other words, the rule now seems to be: "a rising tide lifts all yachts."  

Noah Smith is puzzled. In a blog post last July, he notes that this phenomenon seems not to have been studied. He thinks it should be.

So do I.

Noah has offered some ideas about concurrent events that might be related - for example, the change from fixed to flexible exchange rates in international commerce. Or possibly the oil crisis. But no one seems to know for sure.

Old Times There Are Not Forgotten

I was moved by Kitty Dumas' op-ed in today's New York Times. She brought back memories of an earlier time and of names forgotten.

Kitty Dumas is too young to know the whole story. (I may be as well).

What moved me most was her account of the young white man at Ole Miss expressing gratitude for what Kitty Dumas' generation had done for him. There are some Mississippians who get it. I wish there were more who understood the Civil Rights movement was for them, too.

I'm glad to know that Jim Silver is still remembered at Ole Miss. And his friend William Faulkner. Other Mississippians come to mind who fought the good fight in the 1950's, before there was a Civil Rights movement: Will Campbell, Hodding Carter, P.D. East, Hazel Brannon Smith, and countless ministers of all faiths and colors.

Those stories also need to be told.

A Moral Goal For Economics

"Now at last we are setting ourselves seriously to inquire whether it is
necessary that there should be any so called ‘‘lower classes’’ at all: that is
whether there need be large numbers of people doomed from their birth to
hard work in order to provide for others the requisites of a refined and
cultured life; while they themselves are prevented by their poverty and toil
from having any share or part in that life . . . the answer depends in a great
measure upon facts and inferences, which are within the province of
economics; and this is it which gives to economic studies their chief and their
highest interest."

Alfred Marshall Principals 1890, pp. 3-4


My comment: In this political season, I am appalled at the number of elected or aspiring political figures who seem to believe the object of our economy is the continued and increasing wealth of the wealthy rather than the prosperity of all. This is the overriding moral conflict of our time. Marshall's serious inquiry is not yet completed.

We once had the tools to create general prosperity. We have let them freeze up with rust from disuse and a lack of moral willpower.

This moral failing has been aided and abetted by neo classical economists seduced by the mathematics of the Polish mathematician Walras. Walras' theories fall short in part because pure homo economicus does not exist. Humans by nature are cooperative beings who live in groups and are motivated by what seems fair, rather than what maximizes their own economic gain. That is, normal people are so motivated.

Ideas Of Government

"There are two ideas of government. There are those who believe that if you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below. The Democratic idea has been that if you legislate to make the masses prosperous their prosperity will find its way up and through every class that rests upon it."

William Jennings Bryan, 1896

Seventy Years Ago: Guadalcanal

September 28, 1942. Sixty-two Japanese planes attacked Guadalcanal, U.S. defenders shot down 23 aircraft, losing only one of their own. 

Good for morale. Many struggles ahead, though.

Ed Credle: Patriot And Servant Of The People

Last weekend, Mr. Ed Credle, one of Pamlico County's most good and faithful servants, passed away. The county has lost a wonderful gentleman who served our community well.

Ed did not seek the limelight, he merely sought to serve. Over the years, Mr. Credle served as a town commissioner, but most memorably, he served on the Pamlico County Board of Elections.

I don't have a list of the exact years that Ed served the voters of Pamlico County. His terms were not entirely consecutive, but they add up to about two decades.

He was an inspiration to me and a source of valuable perspective on election matters. He will be sorely missed.

Ed Credle will be laid to rest this coming Saturday at the Missionary Baptist Church in Mesic.

The finest tribute any of our citizens can pay to the memory of Ed Credle is to vote in the 2012 election.

Seventy Years Ago: Brisbane, Australia

The convoy carrying the 27th Air Depot Group docked at Brisbane, Australia September 24, 1942. Brisbane is in Southern Queensland. They established a temporary headquarters west of Ipswich at Amberly airfield.

Destination: Port Moresby, Papua New Guinea. Facilities at the destination: nonexistent. The roughly 900 men of the Group would have to build the facilities themselves. With inadequate tools.

For the next three months, the Air Depot Group unloaded and sorted out their equipment and continued training for their mission. One of the tasks: obtain heavy equipment to use in building their own warehouses, hangars and campsites.

It would be early December before the group arrived at Port Moresby.

Fascism

I had a conversation last evening with a Korean War veteran. The veteran shared a thought from an earlier time: "If Fascism comes here, it will arrive wrapped in the American flag."

A thought worth pondering.

I think it will also wear the armor of hate.

The conversation also calls to mind an earlier comment I posted about democracy.