A Gen Z Guide to American Political Economy

As mentioned in the last post, economics is surprisingly malleable and spontaneous. However, during gilded ages economics tends to get stuck. Since our current political economic system is based upon inequality, the rich having massive amounts of political influence and the environment upon which we all depend being sucked dry, change has to come. Interestingly, economics had not developed a model for a sustainable economy until now. Kate Raworth, a Cambridge educated economist, came up with a marvelous framework called Doughnut Economics. The main idea is that humanity should not deplete resources faster than the earth can regenerate them. Society should exist in the doughnut, where humanity has what it needs to thrive, not in the doughnut hole, which signifies us not having enough of what we need. We should also not go past the doughnut’s outer edge, which stands for humankind taking more than it needs. This fits within the positive understanding of capitalism that Adam Smith concept...

Economics is more malleable and spontaneous than Americans realize. Students are taught that the Great Depression was caused by the stock market crash. That’s oversimplified and incorrect. Ben Bernanke won the Nobel Prize in Economics in 2022 for pinpointing that it was in rural America where things started to unravel. When President Hoover signed the Smoot-Hawley tariff bill against the advice of many economists, it decreased the amount of crops farmers could sell globally. Needing cash to pay their bills, so many farmers went to their banks to take out their money that rural banks were forced to close. Coupled with the rural bank closures, the economy had been strained since WWI. Average people used credit to buy new products like cars and radios, but they ended up not having enough money to fully pay. There was no real middle class, so the economy wasn’t anchored by a large population of people with stable incomes. There were no controls on the stock market, no Securities and Exchan...

As mentioned in my first blog post, we are in the 2nd Gilded Age. For the 99% of us, it’s a scary time. We’ve been here before. Unfortunately, the U.S. goes through cycles of crisis and recovery and then promptly forgets that history. Lasting economic change requires a full accounting of what happened. It all started in the 1950s. During World War II, people around the world saw the horrors of racism, racial hierarchies and inequality. In the U.S., racial hierarchies remained ingrained after the Civil War thanks to Jim and Juan Crow laws. An increasing backlash to the oppression of minorities and women and lack of opportunity spurred the creation of the Civil Rights movement and pushed the Supreme Court under the Warren and Burger Courts to expand rights under the scope of the 14th Amendment. President Lyndon Johnson worked with Civil Rights leaders to pass the Civil Rights Act of 1964. Following these advances came the inevitable backlash. The segregationist Southern Democrats switche...

My age places me in the first couple years of Generation Z. Many of the people I know who are also in my generation are either in despair about the state of the world or are very angry and resentful. That leads them to take positions that are extreme in ideology and substance. While their anger and despair is understandable, it prevents them from grasping the history or context, so they can’t formulate a complete and logical plan of action. The context, according to most political economists, is that we are in the 2nd American Gilded Age, which began in 1980. Patterns in our Gilded Age mirror the first that started after the Civil War and ended around 1901. Then and now, there is tremendous inequality, poverty, political corruption, environmental degradation, political polarization, gridlock, and narrow elections, over-the-top materialism, systemic financial risk and robber barons with large amounts of political control (Elon Musk, Jeff Bezos, Bill Gates, Mark Zuckerberg, etc). As Mark...