My son-in-law is a marine biologist. He hopes to travel next year to study what may be the only unfished coral reef in the world. It is in a small group of islands in the Pacific. To get there he would travel to Fiji, and then go five hours more. The reef is unaffected by human contact except for a community of about 30 native islanders on one island.
According to my son-in-law, the reef is stunningly alive and healthy. He also says it has the highest concentration of sharks anywhere on the planet.
I asked him what contributes to the fecundity of the reef. It is the amazingly abundant lower life, he said — plankton and the other small creatures fuel the energy and abundance that create optimum conditions for all of the larger forms to have a luxuriant supply of food moving up the food chain. There is plenty for all, bubbling up from the generative powers of the lowest forms.
It seems to me that nature (and God) offers some wisdom that might also apply to our economic system. I believe that economic activity generates from the bottom better than it trickles down from the top.
Former John McCain advisor Mark Zandi, Chief Economist of Moody’s Analytics, recently estimated that every dollar of Unemployment Benefits paid to out-of-work Americans generates about $1.60 in new economic activity in the first year. Only an increase in food stamp benefits, which Zandi estimates generates roughly $1.70 of GDP for each dollar of cost, has greater bang for the buck.
That makes sense. When an unemployed family gets a check, it gets spent immediately and locally, generating a “trickle-up” quick-dollar-turnover that stimulates economic growth. Yet Congress is threatening to let unemployment insurance expire on Dec. 1 for an estimated two million out-of-work people in an economy that is not producing jobs. That seems not only immoral but also economically foolish to me.
Part of our economic stuckness right now is that the wealthy aren’t spending their money. Banks have lots of money to loan, but there isn’t enough economic activity to prompt borrowers to invest in new projects. Many corporations are reporting high cash reserves, but they aren’t expanding because there is no demand. People aren’t buying. When dollars don’t turn over, the business cycle stagnates.
And when the wealthy do decide to invest, how much will go to foreign companies? How much of corporations’ cash reserves will be spent outsourcing jobs and manufacturing overseas, increasing American unemployment?
Maybe much of the economic stagnation we’re experiencing now is related to the transfer of wealth into the hands of fewer and fewer people over the past thirty years. Since 1976, 58 percent of all income gains have accrued to the top one percent of US households. In 1974, 9 percent of the nation’s income was earned by the wealthiest 1 percent. By 2007 they earned 23.5 percent. Yet, some are also proposing to extend Bush-era tax cuts for families earning a quarter of a million dollars, adding $700 billion to our deficit over ten years (maybe a trillion if you adjust for interest).
According to David Cay Johnston of tax.com, over the last thirty years, the average income of the bottom 90 percent of Americans has grown only $303 in constant dollars.
In our Northwest Arkansas Congressional District our poverty rate recently went from 20.1 percent to 25.2 percent in just one year (2008 to 2009). We now have more kids in poverty than any congressional district in Arkansas; we also have the highest proportion of uninsured children. Poverty is not just for the Delta anymore. It is a glaring local problem.
The prophet Amos saw a similar economy in the 8th century BCE. He condemned those who lived in luxury but were not “grieved over the ruin of Joseph.”
We’ve had thirty years of “trickle-down” economic policies that have benefited the wealthy, left the middle class strained and increased poverty rates.
Let’s try it like nature and scripture teaches us and invest in the lower levels of the economic food chain. If it works like it does in the reefs, the sharks will thrive along with the plankton.
LOWELL GRISHAM IS AN
EPISCOPAL PRIEST WHO LIVES IN
FAYETTEVILLE