The Audacity of Hope and Slow-Growth Economies

No amount of reasoning can dissuade the intransigence with which the public clings to its anti-hero.

This guest article was written by William Laraque who is the Managing Director of US-International Trade Services

“There is no Democratic or Republican Way to pick up the trash.” ~ Fiorello La Guardia

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These simple and clear words describe the role of politicians in changing the trajectory of the US economy today. Politicians, politics and ideology are largely irrelevant to the achievement of economic change and their intervention can best be described as ‘helicopter economics’.

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The frustration and dashed hopes of the US public with politicians is noticeable to such an extent that no amount of reasoning can dissuade the intransigence with which this public clings to its anti-hero.

Making the Case

Helicoptering into the carefully selected theaters of the absurd, politicians drop into the economically ravaged Midwest, the coalfields of Appalachia, into the formerly muscular steel towns of America, to declare the bringing back of jobs and industries which are no more.

The acolytes prostrate themselves at the altar of demagoguery and sing hymns of hatred and spew the bile of bigotry, racism and xenophobia while buying what is populist and compelling though completely devoid of any common sense.

It is Not About Politicians

COLORADO SPRINGS—Billionaire industrialist Charles Koch opened a gathering of about 400 conservative donors involved in his sprawling network by calling for a reduced focus on politics.

Speaking at the luxurious Broadmoor resort, the billionaire voiced concern about “an increasingly stagnant two-tiered society, with the rich and politically connected doing well, and most everybody else stuck down below.” But those seeking to overhaul institutions, such as the education system, err in “looking to politicians,” he said.

“I recognize reluctantly that politics needs to be a piece of this strategy,” Mr. Koch said. “But we’ve got to keep in mind … that if we just focus on politics, we’re going to continue to lose. We’re going to continue to deteriorate.”

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The Young, the Old and Wealth

New research shows rapid retirements deprive companies of critical knowledge, undermining productivity across the economy, Greg Ip writes. Demographics may thus be a critical factor in why the current economic expansion is the weakest on record.

From the Washington Post:

“In the last 25 years, the odds that an old person is a millionaire have improved slightly. But for young people, they have gotten much worse.”

These figures come from a new paper by economists at the St. Louis Fed’s Center for Household Financial Stability, which shows evidence of a growing wealth gap that few people are talking about — the gap between the young and the old.

The paper, by William Emmons, Bryan Noeth and Ray Boshara, draws on surveys of 40,000 families that the Fed carried out between 1989 and 2013 to examine the all-important role that your age plays in how much income you make and how much wealth you accumulate. It offers a few clues as to how young people can game the system and end up like their wealthy older counterparts, as well as a lot of evidence to show that things are just different for young people today.

The Counterattack

Amazon, Walmart, Alibaba, and Uber, each in its own way, represent a counterattack of sorts to the dismal economic picture of the US painted by the Republican Party at its convention. Trade and globalization are too easily upheld as the scapegoats for the US economic malaise. E-commerce and the internet offer hope for economic liberation, social mobility; hope for the realization of opportunity and the accumulation of wealth by everyman.

An Economic Role for the Old 

There is now considerable evidence that the startups of today are catalyzing a new economic dynamism. The studies of Linda Rottenberg of Wharton and David Brierly of Bain Capital demonstrate conclusively that the nurturing provided to the young entrepreneur is what sustains the startup and the young entrepreneur…everywhere!

Constant mergers and acquisitions result in endless streams of national monopolies, a constant démarche of global oligopolies, resulting in layoffs, redundancies and the concentration of wealth. Would it not be more purposeful to instead create collaborative enterprises in which the wisdom and experience of the old is wed to the dynamism, technological innovation and élan of the youthful?

E-commerce entrepreneurs, not politicians have shown the way.

 

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