I have an extremely simple but effective solution to fixing our economic system. Bombard the public with economic data important to the middle class as frequently as we are bombarded with stock market indicators.
The stock market will rebound precisely because of the feedback presented to the public and authorities alike on a continual basis. Those stock market indicators form a homeostatic sensor like the thermostat regulating heat in your house. When the stock market goes down investors, financial institutions and government all react to the situation. Unemployment indicators are not broadcast as frequently, but often enough that they induce targeted reaction as well, and as a consequence unemployment has been cyclical since the seventies.
Not so with many of the economic trends reported on The Middle Class Forum. If some contrivance could be made to report on a weekly basis the proportion of our annual incomes going to housing costs it would not have doubled since the seventies. Since I am not an economist I cannot guess what would have been done to keep this ratio down; as a systems analyst I can only tell you that it surely would have been kept in balance if provided as constant feedback.
Simple, right? Don’t hold your breath for this simple fix to be employed soon. That would take the cooperation of corporate media and politicians. The self-interest of corporate media and corporations would not be served by the same indicators important to the middle class. Corporate media would avoid such a solution even if it occurred to them, while politicians will not step beyond the bounds of what corporate media deems important.
Unfortunately, all the other suggestions I have made the past few days, like maximum compensation ratios, face a similar fate. Even if they could be instituted when the conditions are right the misinformation network will work hard to erode and reverse them over time. We do not fix our economic system without addressing the misinformation network that keeps it out of balance.
A concrete solution would be to put together a panel to determine what indicators are best for the country to view often. This panel should include ample representation from the middle class as well as experts. Having decided on the important indicators, FCC licensing should be contingent on media broadcasting these indicators often. Licensing of the airwaves is supposed to be done precisely in the public interest, we are not requiring the FCC to do anything that they are not mandated to do. Pundits must be invited to explain the mandated indicators at least as often as pundits are invited to explain the stock market.
If we prominently displayed indicators important to the middle class this might lead to one other monumental fix of our economic system – abandoning the business corporation model as we know it. Perhaps some hybrid between the current business corporation and nonprofit corporation would be devised. Perhaps we tinker more with different types of proprietorships and abandon the business corporation model altogether.
At the least economics would not be mired in scholasticism and economic schools like the Austrian and Chicago spouting off entrenched dogma. Rather, economics may join the empirical crowd of disciplines (don’t get me started about the subjective and dogmatic Friedman championing empiricism) and start to catch up after being left behind since the time of the Scientific Revolution. Like real science, the masses instead of just the scholars would be involved in its empirical progress.
Does this provide guidance for who to vote for in the presidential election? Probably not. There are fixes to the political system that are needed before these fixes to the economic system. Still, you might try to detect which candidate seems to be more aware of the misinformation we are laboring under.
Tags: Corporate Media, Free Market Merit, Middle Class Economics, Misinformation, Unbalanced Trends
