It should. Economics does. But banking doesn't. Given that, I tend to think this probably isn't as big of a crisis as it's being portrayed.
Indeed, I think it isn't.
Not that it isn't important.
A couple of observations, however, on the observations.
On This Week and Meet The Press, Elizabeth Warren was on, meaning she was doing a full court press over the weekend. Both of her interviews were nearly identical, as both interviewers let her backtrack on a question to give her full, long explanation of the history of this topic.
I have to say, her explanation was good. I don't know if it's correct, but it was good. And that's saying something, as I frankly can't stand Elizabeth Warren.
One thing she continually noted is how we weren't watching these big banks like we were "small local banks". I don't know if that's true either, but she was full of profuse praise for small local banks.
Hey, I'm a distributist and a localist, so I like small banks. Is there an argument here for keeping small local banks local?
Seems like there is, although with a modern economy you're going to need big financial institutions. She wasn't arguing otherwise. It's just an interesting aspect of this.
One member of the banking committee was asked if these banks were "too big to fail" and he flat out said yes, an interesting example of political honesty.
Of note, while the banks are sort of being "bailed out", those who are really emphasizing this right now seem to fail to appreciate that FDIC insurance is being used for this, which suggests that the insured face amount of $250,000 is really way too low. It probably ought to be more like $1,000,000 at this point.
Robert Reich, whose opinions I have a love/hate relationship with, used the opportunity, predictably, to hammer the rich, writing:
A while back I saw somebody commenting to one of Reich's Twitter feeds on this topic, which he's obsessed with, that Reich was rich himself. According to an online source he has a net worth of $4M, which would mean, quite frankly, that in contemporary terms, he really isn't. Shoot, half of that could be his house alone, depending upon where he lives, with the house not really being all that much.
Reich's article is an interesting one and basically amounts to an argument that post Reagan, the economy has been rigged to favor the upper 1%, more or less. That's not how he puts it, of course, but is basically what he believes. He notes that workers incomes haven't really gone up in 40 years.
All that is true, and from a Distributist point of view, is a nifty argument, the problem is however that the percentage of Americans who are "wealthy" has increased remarkably in the past 40 years. Indeed, some demographers worry that the American middle class is disappearing not because the middle class is sinking into poverty, but that the upper middle class is moving into wealth.
In real terms, almost nobody, save for people on the street, something that wasn't tolerated 40 years ago, is poor the way the poor were, say, in the 1960s. Prior to 1950, the middle class was mostly lower middle class and lived on the edge of poverty, That's just not true anymore. And poverty was by and large worse in real terms at that time, than now. It's easy to forget that as we have a 1) Norman Rockwell view of the past and 2) we always think our own times are worse than they really are.
Therefore, the Reich argument, the way it's made, really doesn't hold water.
Which gets us to the fact that the best arguments for addressing the modern economy actually have to do with Social issues, as in Social Justice in the classic Pieper sense, rather than economics.
What people like Reich, or Warren, edge up on is arguing that life was "nicer" when there was a big middle class. That's true. And many things that are unobtainable to even the upper middle class and the lower wealthy class were then, as there were very view super wealthy. But lib economist don't go there as they are, frankly, just a little left of center on the capitalist scale.
Put another way, the difference between liberal economist and conservative economists is very slight. Both main camps are fully vested in capitalism and are, beyond that, invested in the theory that a capitalist economy is its own good, rather than the distributist concept, which is another free market concept, that any economy only serves to serve people.
Hardly anyone is going to argue that in the lib or con economic camps, but it's true. The theory is always that we do this or that for the economy, and then this or that happens to people, rather than considering what do people want, and what kind of economy best serves that.
A really interesting example of this, I'd note, is that really left wing economist essentially join industrialist in concepts that really only serve industry. They seemingly don't know that.
For example, you'll see left wing economists, and politicians with strong interest in economic topics, argue that we need abortion so that women can work, or that we need government funded day care so that women can work.
This is really only liberal in that it takes the liberal view that pregnancy is some sort of freakish medical aberration that needs to be medicated into extermination or, if a person is so unfortunate that a child is born, it needs to be separated from the Dear Worker. Beyond that, it's pure industrialism.
The big achievement of industrialism early on is that it took men off of family farms and family workshops and sent them off all day long to work. In the 20th Century, it started to do the same for women. Abortion and birth control were big industrial successes, as they meant that there was a way to separate women from biology and all those problematic little people. Of course, it turned out that people had children anyhow, so daytime child concentration camps had to come about in order to address that.
This, really interestingly, is one area where the extreme left and industrialist have all come together. Communists, for example, boosted the "let's warehouse all these little problems so that the mothers can toil" approach to things, whereas quite a few modern businesses have put in day cares so that they can take the "time off to raise children: . . no, just bring the little urchins into the business day care".
Here's an area where Reich and company have a real wage point, but not in the manner that they might imagine. Part of the reason that wages have remained low over 40 years is that we've practically doubled the work force in relationship to the population. I.e., if where you had 200 adults and 100 workers 40 years ago, now you have 200 workers. More workers equal less pay.
Now, I'm not saying that women shouldn't work. I'm just saying that in our modern economy, they've been compelled to work. And one way or another, in the modern economy, employers have had to accommodate children in the workplace where they would have resisted even 20 years ago.
A lot of people are refusing to work now, it seems, or so the society wide rumor has it. And that does seem to have some merit.
Chuck Todd, on the Meet the Press, noted a labor shortage in his early part of the show this pasts weekend, attributing that to a "restrictive immigration policy".
Todd is apparently delusional.
The US has the most open immigration policy on the planet. What the country has been working on, not too successfully, is halting illegal immigration. That's what Todd really means. Clamping down on illegal immigration is creating a labor shortage, in Todd's mind.
Illegal immigration actually serves to depress wages for the same reason noted above. Illegal workers in the country means more workers, and that means lower wages. D'uh.
All of which suggests, on this topic, that addressing illegal workers would mean a rise in wages, which we have been seeing. Isn't that what we wanted? Well, it is inflationary, at least temporary, but having suppressed wages for years, some of that's going to occur until it levels out, which it ultimately will.
All of that gets back to this, what do people want out of the economy?
I suspect they want something of their own.
