Romney will be at pains not to "flatten" the middle class

Jamelle Bouie is confident that Romney will respond to Perry's flat tax proposal with one of his own:

Of course, with prominent Republicans pushing for a flat tax, it’s likely that Romney will relent and release his own proposal for instituting a single income tax rate. As The Times writes, “Lately…his tone has been more positive. ‘I love a flat tax,’ he said in August.”

 Jamelle, I'm going to have to bump Romney-readings with you.

On Goldman's summer forecast

How long ago seems a sunny forecast on rising global wealth delivered this summer by Goldman Sachs chief economist Jim O'Neill:

It is also evident that poverty is dropping dramatically around the world. According to our calculations, the number of people living on incomes of less than $1,000 dollars a year ($2.75 a day) has already dropped significantly from about 50 per cent of the world's population in the 1970s to 17 per cent by 2000. According to our numbers, it could be as low as 6 per cent by 2015. On the more familiar World Bank definition of one dollar a day, the same dramatic shift is evident. Probably no more than 5 per cent of the world's population now suffers this indignity. Of course, this is too much, but as long as the forces of globalisation continue we expect it to drop further.

O'Neill also claimed that 70 million people year are joining the "world middle class" and forecast acceleration to 90 million per year by 2030, "even allowing for a global slowdown."

How does the much more severe-looking worldwide recession affect these projections? On the one hand, on the long view, even a prolonged downturn should not compromise the broad upward trend of human wealth spreading planet-wide -- any more than the rise of radical Islam or of petrodollar-fueled autocracies erases the broad movement toward democracy among the world's nation-states.

On the other hand, the last Depression triggered world war. Prolonged stagnation or contraction could swell the ranks of those receptive to radical ideologies, or destabilize China or India, or help turn any number of countries' frustrations toward outward aggression.

Back in 2001, when India and Pakistan last faced off, Thomas Friedman suggested that India had too much of a stake in its emerging economic strength to throw it away on a potentially nuclear conflict. I thought the logic was dicey then - reminiscent of pre-World War I claims that the economies of Europe were so interdependent that the bankers would always put the brakes on major conflict. But to the extent that growth and hope were restraining factors, those restraints may give way as economic woes mount.

Conversely...a pause in breakneck development in emerging markets may also provide an opportunity for more sustainable growth -- particularly with stimulus packages in the U.S. and perhaps elsewhere pointed toward developing alternative energy sources. And if the slowdown proves to be a "correction" in a non-euphemistic sense, it will lead to increased saving in the U.S. and increased consumption in countries that have been developing rapidly. Can we rebalance without cataclysm?

Goldman Sachs bulletin: these are the good old days

Every now and then, the facts get in the way of near-universal pessimism about humanity's prospects for world peace and prosperity. Preoccupied with the admittedly very real specters of nuclear terror and proliferation, global warming, the rising power of police states, etc. etc., we tend not to notice that fewer and fewer people are dying of war, hunger or disease.

In today's Financial Times, courtesy of Goldman Sachs' chief economist Jim O'Neill comes a reminder, in the midst of rich-world economic turmoil (alarmingly surveyed on the same page by Martin Wolf), of the continued rapid spread of middle-class prosperity worldwide - and the continued reduction of poverty. Citing Goldman research, O'Neill writes that 70 million people year are joining the "world middle class"; allowing for a global slowdown, Goldman still forecasts acceleration to 90 million per year by 2030. Even more encouraging:

It is also evident that poverty is dropping dramatically around the world. According to our calculations, the number of people living on incomes of less than $1,000 dollars a year ($2.75 a day) has already dropped significantly from about 50 per cent of the world's population in the 1970s to 17 per cent by 2000. According to our numbers, it could be as low as 6 per cent by 2015. On the more familiar World Bank definition of one dollar a day, the same dramatic shift is evident. Probably no more than 5 per cent of the world's population now suffers this indignity. Of course, this is too much, but as long as the forces of globalisation continue we expect it to drop further.

Now, O'Neill is pushing Goldman research, and Goldman is pushing Bric and other emerging market economies, and these forecasts do raise as many questions as they answer. (For one thing, is 2 billion more people joining the world middle class by 2030 such a wonderful performance? How much will world population rise by then? A quick check on Google turns up forecasts of increases in the 1-2 billion range, e.g. an increase of 1.7 billion forecast by the Free World Academy). But the broad current trend of rapidly rising global wealth and "significantly declining" global inequality seems clear.

I've long felt that in that notwithstanding the horrific setbacks of the twentieth century, Hegelians (and more recently, Fukuyamans, if there's more than one) are essentially right: humanity is trending toward universal liberal democracy, peace, prosperity, and shared scientific enhancement of body, mind and conditions of life. The threats outlined above, or yet-unimagined horrors, could obviously derail this rosy scenario. But belief in human progress is not naive. It's where the evidence points.