Whose Economy Are We Talking About? The Gremlins in the Grammar

Mrs. “Grinchwelder,” The Comma Queen of distant memory who could reduce a student essay into ego-destroying pulp with repeated strokes of her mortiferous red pencil, was right: Modifiers Matter.  Consider the use of “the” and “our” as they apply to the American economy.  Here are two examples of why modifiers matter:

From the Romney Campaign:  “The economy is a great riptide that is taking Obama out to sea. And they’re going around pouring sand all over the beach, but they’re not teaching him how to swim,” said the Romney aide, spoke about the campaign’s strategic thinking on the condition of anonymity.”  [HuffPo]

From the Obama Campaign: “President Obama knows we still have more work to do. That’s why, in his State of the Union address, the President laid out a blueprint for an economy that’s built to last—an economy built on American manufacturing, American energy, skills for American workers, and a renewal of American values.”  [Obama]

The Mrs. “Grinchwelders” of the world would be pleased to know that most of us recall the difference between a definite article (the) and an indefinite article (a/an).  Definite articles refer to a particular item; indefinite articles refer to non-specific thing.   When we use “our” as the modifier this implies ownership, the possessive case explained so tediously in  Warriner’s English Grammar and Composition.

Both the President and his challenger have applied definite articles, indefinite articles, and possessive pronouns to the word “economy” in various speeches, but for the moment let’s put the grammar aside and look at the gremlins.  Whose economy are they talking about?

In our first example, Governor Romney refers to something specific — the economy — in a very generalized way.  However, the President may be more accurate in his use of the indefinite article because The economy is composed of various and sundry segments which infer that it is a far more indefinite antecedent.

The Economy of the Top 0.1%

… Is doing very nicely, thank  you very much.  They already had a head start in the race, which can be graphed using data from Jobs and Income Growth of Top Earners and the Causes of Changing Income Inequality: Evidence from U.S. Tax Return Data  Bakija, Cole, and Heim April 2012.  (pdf)

The top 1% has also benefited from tax policy which favors their interests. The report concluded:

“Our findings suggest that the incomes of executives, managers, supervisors, and financial professionals can account for 60 percent of the increase in the share of national income going to the top percentile of the income distribution between 1979 and 2005.”

Therefore, no one should be surprised that there is increasing income inequality in the United States, or that the middle class is experiencing a very different economy than the top 1%, and especially the top 0.1%

Those who are doing well are (1) high income and (2) predominantly white.  This leaves the remaining 99% comprised of both white and non-white middle to lower income earners struggling to deleverage from household debt while their homes, previously the source of most of their net worth, dropped in value in the wake of the Housing Bubble disaster.

The Other Economy

One of the primary reasons for avoiding generalized discussions of “the” economy is the lack of consistency in several measurements.   For example, it’s easy to remark that unemployment levels are too high.  However,  the next question should be: Compared to what?  If we compare job creation from prior to the enactment of the ARRA (Stimulus) to April 2012 the picture looks like this:

Drilling down a bit further, it’s been noted time and again that unemployment levels are generally lower for those with higher levels of education:

Assuming that 4% is an acceptable level of unemployment,  those holding bachelor’s degrees or higher are in reasonably good shape.  Are those in the middle range, defined as between 9.4% and 6.8%, experiencing a different economy than those who have advanced degrees, or from those who have less than a high school diploma?

There are regional differences as well.  The unemployment rate for Wyoming is currently reported at 5.4%, Vermont at 4.7%, Utah at 6.0%, Virginia at 5.7%.  South Dakota unemployment is reported at 4.3%  Nebraska’s 3.*% is a far cry from Nevada’s 11.6%. [BLS]  Even within a state the unemployment rates vary:

No one should argue that because some states are doing better than others, or like Elko County some regional economies are in better shape, we are out of the economic woods.  However, overarching generalizations about “the” economy aren’t applicable to every situation.

We Need To Ask Better Questions

Listening to stump speeches isn’t likely to produce much information of great utility in the formation of economic policy, but it should inform the audience of the economic philosophy underpinning the presentation.

#1.  Are the economic policies under discussion those which will do the greatest good for the greatest number?  Will they help increase demand for goods and services in local economies? Will those local economies be the ones in the most need as evidenced by their unemployment rates?

#2. Are the policies being debated those which will primarily benefit those who produce goods and services?  Are the policies of primary benefit for those who manufacture, transport, and sell goods? Or, provide business and technical services to local economies?  Are we rewarding production or the manipulation of financial sector paper, which may or may not be of local benefit?

#3. Are the policies directed toward the distribution of more means into the hands of middle class consumers, or are the policies drafted with the interests of the top 1% of the top 1% in mind?

Thus far the election campaign of 2012 is offering us some fairly clear choices.   We may need to modify our thinking, decide if ours is a “definite or indefinite economy,” and evaluate in what ways  the economy is ours,  in order to make a good selection.

See: “Jobs and Income Growth of Top Earners and the Causes of Changing Income Inequality: Evidence from U.S. Tax Return Data,”
Bakija, Cole, and Heim April 2012.

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