A Tralfamadorian view of the U.S. economy from James C. Scott

 I have been reading James C. Scott's Seeing Like a State, which argues repeatedly that centrally planned communities and economies cannot subsist without the unsanctioned return of small-scale, below-the-radar activity of people forced to circumvent the master plan.

The quick-fire examples below, offered in a final-chapter overview, brought me up short. The workarounds prompted by a "formal command economy" have been elaborated in depth and reiterated throughout the book. What got my attention is the throwaway final sentence, asserting something that has been not elaborated at all in preceding chapters:

Many modern cities, and not just those in the Third World, function and survive by virtue of slums and squatter settlements whose residents provide essential services. A formal command economy, as we have seen, is contingent on petty trade, bartering, and deals that are typically illegal. A formal economy of pension systems, social security, and medical benefits is underwritten by a mobile, floating population with few of these protections (p. 352, Kindle edition).

Green shoots in stasis

Our back yard has a dead zone, a corner that gets too much water and too little light.*  Early this spring, it became clear that two plants back there, a skip laurel and a holly (I think blue princess but I forget...) -- each of which had thriving twins not far away -- were at death's door, the holly two thirds brown, the laurel spotted and nearly bare. Below, the two sick plants, followed by the healthy holly twin (with healthy laurel in background).

We consulted with a neighbor of gardening genius.  He had us move each of the ailing plants 2-3 feet to improve their access to light, build up the soil (earlier, he'd steered us toward putting in a drainage channel and the thriving uphill holly to soak up some of the excess water), and fertilize. We also treated the laurel with an anti-fungal spray.

Both plants stabilized.  Healthy growth stopped turning brown or spotted. Each put out a few green shoots.

Stephen J. Rose's Rebound foresees America Unbound

Stephen J. Rose, a think-tank economist who worked in the Clinton administration, has drawn ire on the left because he challenges key articles of economic faith: that the American middle class has remained static for three decades; that Americans are "drowning in debt"; that they shoulder far more risk than they did a generation ago.  His new book, Rebound: Why America Will Emerge Stronger from the Financial Crisis, consolidates and develops these theses, which boil down to John McCain's  ill-timed campaign mantra: the fundamentals of our economy our strong.

In Rose's view, financial industry recklessness threw sand in the gears (his cliche) of a rip-roaring economic machine. His prognosis for the U.S. economy in the wake of the financial crisis was well summed-up by a David Brooks column largely based on his findings (with which I picked a rather notorious bone): Relax, We'll be Fine. (That is, if we enact effective financial reform, as Rose simply assumes we will.)

Rose is in his element in the book's middle chapters, in which he parses Census, Current Population Survey and other data on Americans' incomes and wealth to debunk what he defines as five myths: that all income gains in the last thirty years have gone to the rich; that the middle class is declining; that good jobs have been disappearing; that international trade is to blame; and that employee benefits are disappearing.

Some of these myths he dispatches more thoroughly than others; his argument with liberal economists such as Jacob Hacker and Elizabeth Warren is often aptly characterized as a glass half empty/half full dispute because at times he emphasizes different aspects of a data set that is not in dispute.  This is almost literally true when Rose points out that "54 percent of households had no credit card debt after paying their monthly bill; this means that the median credit card debt of Americans is zero" (212). Okay -- it also means that almost half of Americans are paying double-digit interest rates on a credit card balance every month. More on this later.

To get a purchase on Rose's attack on the notion that the American middle class is shrinking, it's useful to work one's way backwards through his central claims. The vast majority of American retirees are satisfied with their retirement.  There is every reason to believe that Americans approaching retirement age are equally well positioned -- though Rose does acknowledge that the major decline in wealth caused by the financial crisis seriously dents this relative prosperity, knocking asset levels back to about 2004.  Those subject to the most income volatility -- prime age adults -- also have much higher incomes than oft-cited median income figures for all Americans would indicate.  While growing income inequality is a real problem (indeed, Rose takes credit for bringing it to national attention in 1983), its worst effects are concentrated among the least well educated; the majority of Americans who have at least "some college" have benefited substantially from the strong growth in GDP over the past four decades.

Among the facts Rose cites that run counter to the 'disappearing middle class' thesis: