Our Factory of Need

The beliefs we most need to question are generally the ones we don’t notice, because they are so embedded in the drone of daily life. Wars and disasters tend to have unforeseen consequences for this very reason. They disrupt the drone, and so prompt questions that wouldn’t arise otherwise.

No beliefs are more entrenched in the United States than those regarding the economy. A couple of weeks ago I saw a banner headline in the local paper. “San Francisco Retailers’ Plea: Shop ‘Til You Drop,” it said. “Economy needs holiday spending.”


A Misguided Quest for ‘Productivity’

A nation measures what it values, and the way it measures goes far to determine where it goes. We need to pause often, therefore, and consider the litany of economic statistics the government and media parade before our eyes. These just might hold hidden agendas and paths that, if articulated, we might choose to avoid.

An example came a month or so ago with the release of the latest “productivity” statistics from Washington. It seems the nation’s productivity fell by a whole tenth of a percent (although it was revised later). The news prompted hand-wringing and dark prognostication over impending economic decline. “Productivity drop alarms analysts,” the headline in my local paper declared.


The Growth Consensus Unravels

Economics has been called the dismal science, but beneath its gray exterior is a system of belief worthy of Pollyanna.

Yes, economists manage to see a dark cloud in every silver lining. Downturn follows uptick, and inflation rears its ugly head. But there’s a story within that story—a gauzy romance, a lyric ode to Stuff. It’s built into the language. A thing produced is called a “good,” for example, no questions asked. The word is more than just a term of art. It suggests the automatic benediction which economics bestows upon commodities of any kind.


Down Among the Economists

Of the organized belief systems in America today, economics is surely among the strangest – and economists themselves are even stranger. How such agile and ambitious minds could drift so far out of touch with daily reality, is a question which merits the attentions of our most astute psychologists. The profession is like a cult of the highly IQd, and I’ve always wondered about the strange rites and rituals that could enable their beliefs to persist.

So last winter, when I heard that the American Economic Association was holding its annual meeting around the corner from my office, I felt a little like an anthropologist who finds an encampment of aborigines in his back yard. Would anyone raise questions about basic premises, as opposed to the arcane mathematics of hypothetical markets and pecuniary gain? Would they talk about the actual experience of ordinary Americans, or only abstractions like “productivity” and “growth?” I never imagined they’d be talking about me. Several months before, the Atlantic Monthly had published an article by myself and two colleagues, Cliff Cobb and Ted Halstead, called “If the economy is up, why is America down?” The article explored the paradox that had befuddled the nation’s policy establishment during the 1992 Congressional campaigns. The economy was doing well, by the conventional reckonings – the GDP was up: people were supposed to be happy and fulfilled.


The Worst Tax

Few subjects inspire more tub-thumping in Congress than the virtues of honest toil. We must eliminate welfare because people must work. We can’t curb our gluttonous use of energy because — they say — it would jeopardize jobs and work. NAFTA and GATT and even capital gains tax breaks aren’t boons for the very rich; no, their main purpose is to help people who work.

Yet when it comes to taxes, what’s the thing Congress singles out to tax the most? That’s right — work. Today work bears over 75 percent of the federal tax load; and the worst part of the work-tax system is the payroll tax, which is deducted from a worker’s paycheck to provide the funds for Social Security. Unlike the income tax, which applies to all income, the payroll tax falls primarily on the wages and salaries of the working and middle class. It takes a big slice off the top of the entry-level paycheck, with no exemptions or deductions. Earnings above $65,000 a year are exempt, as is income from the stock market, real estate speculation, antiques — everything that isn’t work.