February 23, 2014

Political class seeks to divide

Last week, both Paul Grasso and I lamented that we seem to have reached a standoff in the war on poverty. While President Johnson began the War on Poverty in 1964, it has since become class warfare that has divided our nation ever since.

I often lament that we are insufficiently focused on expanding the economic pie, which benefits us all, and instead focused on dividing the economic pie in favor of whatever group we consider ourselves a member.

This fixed-economic-pie mentality pits one against another, and, in the process, wears on the tie that binds all Americans. While our political struggles may make for good politics, and perhaps strong newspaper sales, it does nothing to improve the economy for our children. And, almost always, young children, and children not yet born, rarely have a voice in the conflict, despite the obvious stake when they pick up the tab for our excesses.

How have we lost our national focus? While leaders contemplate how many angels dance on the head of a pin, our individual efforts lack coordination. There seems to be no national industrial plan, modernization or globalization plan, or even a few notes about how we could better deploy our limited resources.

Perhaps the lack of a plan is simply the political analog to individual choice. Economists argue that if each institution and each citizen simply pursues their own self interest, our collective interests will be optimized. This tenet makes some assumptions — that no entity has undue influence, that the pursuit of my interest doesn’t diminish yours, and that information is transparent and flows freely.

In the real economy, these assumptions fail. The question then becomes how we might guide and prod our economy toward a solution that at least approximates the ideals of empowerment, entrepreneurship and effective government.

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