My colleague Damon Linker recently wrote a piece entitled “How economic thinking is ruining America,” arguing that political considerations such as community, loyalty, citizenship, and the common good have been “sacrificed on the altar of economic profit-seeking.”
As an economic thinker myself, I was bound to find some disagreement with Linker’s view. But there is also a fair amount of common ground. As Linker argues, the years since the 2008 recession have been rough: “Inequality is up, while growth, job creation, and middle class wages are running far below historic norms. That’s enough to drive even the cheeriest American to despair.”
One economic measure, of course, that is not down is corporate profits, which are at all-time highs relative to the size of the economy. The same thing is true for the incomes of the top 1 percent. So Linker is absolutely correct to argue that corporate profit-seeking has been allowed to override political and cultural loyalties and restraints. The middle class has been trampled into the dirt.
But is that really a product of economic thinking? Or is it a product of a broken political system that funnels insider access, tax cuts, and bailouts to the well-connected, while largely ignoring the concerns of the middle class?