BRYCE ON THE ECONOMY
– And how energy independence can alleviate the problem.
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I recently read a couple of articles regarding the shrinking American middle class. It seems the rich get richer and the poor are doing much better thanks to escalated welfare spending, but the middle class is struggling.
The middle class is an important part of our country both economically and politically. They represent the engine which fuels the economy. They purchase the consumer products, the homes, food, automobiles, and pay the lion’s share of the taxes. The upper class also pays taxes, but not to the degree of the middle class. The poor, of course, contribute nothing.
According to “Forbes,” 60% of middle class American households have experienced a decrease in income. As the Middle Class diminishes, the poor will inevitably feel the squeeze. Politically, it is not the rich or the poor who run the country, it is the Middle Class. The rich are active politically, but it is the Middle Class, representing the land owners and consumers who ultimately dictate the course of the country politically. The poor doesn’t really figure in the formula as they are the most apathetic of voters.
As Aristotle noted centuries ago, “The most perfect political community must be amongst those who are in the middle rank, and those states are best instituted wherein these are a larger and more respectable part, if possible, than both the other; or, if that cannot be, at least than either of them separate.”
As the upper and lower classes expand beyond the size of the middle, anarchy will likely ensue. This has been demonstrated in numerous countries around the world. It also means the Middle Class must be allowed to flourish. To do so, we need an increase in full-time jobs, not part-time. Currently, the Obama administration is pushing for an increase in the minimum wage. Can we not achieve the same goal by lowering costs as opposed to raising the minimum wage? According to the government, inflation is at a paltry 2%. Hardly worth worrying about, right? Interestingly, the price of gasoline is not included in their equation. This is strange as delivery costs affect everything. In reality, we have a much higher inflation rate than the government is willing to admit. I would therefore argue:
DON’T RAISE THE MINIMUM WAGE, LOWER THE PRICE OF OIL!
Our priorities are wrong, instead of raising capital, let’s cut spending instead. Unfortunately, this is not a popular concept with the current administration. However, if we dedicated ourselves to energy independence, we would lower the cost of living, thereby putting more money in everyone’s pocket. In addition, we wouldn’t threaten the closure of businesses, but encourage expansion, and lastly, we would be creating legitimate full-time jobs, not just flipping burgers.
Let’s not kid ourselves, spiraling inflation is the real culprit here, based on the rising cost of energy. It’s the ugly little secret the government doesn’t want you to know. However, if we pronounced a national objective of energy independence, we would be stoking the engine of the middle class, not to mention freeing ourselves from entanglements in the Middle East. We obviously have ample resources and technology to achieve the goal, but we seem to lack the will to do so, e.g., the Keystone XL pipeline, the New England pipeline, and the massive gas field in Pennsylvania.
This is all very real and all very plausible, but we either lack the vision to tackle this goal or there is a premeditated attempt to dismantel the country. Let’s be clear about one thing, if the middle class continues to decline, it puts us on a clear path to destruction. Don’t let anybody tell you otherwise.
Keep the Faith!
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Tim Bryce is a writer and the Managing Director of M&JB Investment Company (M&JB) of Palm Harbor, Florida and has over 30 years of experience in the management consulting field. He can be reached at [email protected]
For Tim’s columns, see:
timbryce.com
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Copyright © 2014 by Tim Bryce. All rights reserved.
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