March 15, 2016


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Global Economics and the American Middle Class

In his book, "The Post-American World," Fareed Zakaria assures his readers that today's problems are not the result of an American decline; rather, he believes that they are the result of the rise of other global economies. In this new world, Zakaria says that he feels certain that the United States won't have the same ability to dictate to dictate politics, economics, or culture that it did in the past. Perhaps his own words define the central thesis best:

"This is not a book about the decline of America, but rather about the rise of everyone else". Fareed Zakaria

Is it the Global Shift or Our Reaction to it Causing Problems for the American Middle Class?

Most of us have been brought up to believe in American exceptionalism. That is, we have been taught that the United States has a unique character because of its emphasis on personal liberty and economic freedom. This isn't a bad thing. We can still remain incredibly proud of our nation's achievements and the example we've set for the world. However, it might be time to change our perspective about just what that term, American exceptionalism, means. The definition doesn't have to include anything about America always having to be in charge or even leading the charge. By attempting to do this, we might lose the very things that have made the United States exceptional.

For example, I think we can all agree that the strong and vocal American middle class has been one defining  and positive feature of American civilization. Yet, as Rob Garver so eloquently and pessimistically put in an article on the Fiscal Times:

"... the 21st century will not be known as the era of the middle class in the U.S."

According to analysis of U.S. Census data from the Pew Research Center, America's middle class is shrinking:

  • The middle class was defined as a household earning between 67 and 200 percent of a state's median income.
  • By that definition, every state suffered a reduction in the middle class between 2000 and 2013.
  • Not only did the middle-class decline, the actual median income declined in most states, which made the problem more acute.
It's Not Too Late to Save the Middle Class

There's little argument about the symptoms. Of course, the debate centers around the solutions. Very conservative voices might say the solution lies in striking back against what they perceive as a decline in the United States by becoming more insulated and at the same time, trying to somehow withdraw our support of the success of other countries. However, some of the loudest voices to proclaim this as a solution have been governors who have watched their own state's middle class shrink the most. This has to make an impartial observer wonder just who they are rooting for.

Zakaria's perspective is actually more optimistic, and his formula for saving the American economy and the middle class is actually a bit more opportunistic. For example, he doesn't think we should fear immigration in this nation of immigrants. In fact, he says that we need this young labor force to help support our growing elderly population in the next few decades. In fact, this more youthful average demographic will actually be a competitive advantage that the United States could have when competing against many European and Asian countries that suffer from the problems of aging populations.

It's also possible that America just needs to focus upon leadership by example and not through power. Yes, electronics are being manufactured overseas, but they're still getting invented in the United States. The country can defend the middle class by focusing on technology by investing more in education, sustainability, and our own infrastructure. It's true that everybody can't become an engineer or scientist, but advancements in technology seem to have proven themselves as the one way that trickle-down economics ever really worked.  If a decision is made to invest less in overseas matters, a wise decision also has to get made about how to use that investment here. Economists and politicians can still argue about the best way to do this; but it's pretty clear that the answer isn't ignoring the rest of the world, building a giant wall, or trying to figure out who to blame.


The-Post-American-World-Fareed-Zakaria - decline of middle class - Rick Perry, and Jeb Bush were mentioned as advocates of insulation.

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