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Lifting All Boats Requires Cutting Loose Anchors of Racism, Sexism…

The Federal Reserve Bank of Minnesota posts an article worth reading that contends that President John F. Kennedy’s 1963 line about a rising tide lifting all boats isn’t borne out by recent economic history. In recent decades, our economy has cranked out more stuff and more money, but that wealth has trickled up to float more yachts than life rafts:

Traditional theories of economic growth sidestepped questions of inclusion. Robert Solow, who served on Kennedy’s Council of Economic Advisers from 1961 to 1962, won a Nobel Prize for his theory of growth. In it, the factors that make a country’s GDP grow make each of its identical workers better off by the same amount. All the boats are the same and sit on an even tide by assumption.

…Economists typically define inclusion by the income distribution. In 2019, Solow himself argued that income inequality in the United States is “a topic you can’t ignore,” adding: “One of the ways in which the society has changed is, as everyone now knows, [we have] vastly more inequality than we used to have.” Indeed, since 1999, the annual income of a household at the 10th percentile has been stuck at $16,000, while the income of a household at the 90th percentile grew by 20 percent, from $165,000 to $201,000. Even among households whose incomes grew, the amount of that growth varies widely. “Inclusive growth means taking some of the real productivity growth that we’re experiencing and ensuring that it doesn’t all just trickle upward,” Autor said. Over the past 20 years, though, median household income grew by only half as much as the income of households in the 90th percentile [Andrew Goodman-Bacon, “The Myth of the Rising Tide,” Federal Reserve Bank of Minnesota, 2021.04.14].

Raising our GDP numbers doesn’t enrich those at the bottom of the economic scale, the folks who need a list the most, as much as it lifts the folks already at the top. Helping people at the bottom may depend more on cutting the chains of exclusion and inequality that anchor them to the bottom:

Economists have made progress on another argument for inclusive growth: Inclusion will actually create more growth. A concern among some who embrace the “rising tides” metaphor has been that trying to foster inclusion by redistributing resources, for example, will hamper economic growth by reducing incentives to strive for high incomes. “Income inequality,” wrote the late Harvard economist Martin Feldstein, “is not a problem in need of remedy.”

But better economic theory and statistical evidence clarify how exclusion and inequality act as a drag on the economy. To contribute to their fullest, people have to be able to invest in their own productivity. But “because the U.S. is so unequal at so many levels,” Autor said, “a lot of our citizenry is being under-invested in in terms of skills, in terms of health, in terms of safety. Not only is that morally unjust, it is also a wasted opportunity.”

Exclusion and inequality also mean that talented people can’t pursue their ideas, make discoveries, and expand knowledge. In Solow’s classic growth model, for example, the key determinant of prosperity is technology. “If it’s all about technological change,” Logan asks, “then why do we as a society not make investments that would lead to developing the intellectual and innovative capacity of the entire population?” Indeed, research by Michigan State University economist Lisa Cook shows that lynching led to fewer patents by Black inventors. When we do better on inclusion, we all do better economically [Goodman-Bacon, 2021.04.14].

When we pour resources into “economic development” in general, the economy continues to respond to and reinforce the market forces already in play, including the forces of racism, sexism, and other discrimination that marginalize lots of willing workers and innovators and their families. When we as a community turn our collective governing energies toward reducing discrimination and opening doors for marginalized groups, we create more opportunities for more people to unleash their creativity, increase their productivity and their earning and spending power, and participate fully in the economy.

Promoting economic growth doesn’t reliably lead to inclusion and equality. Promoting inclusion and equality more reliably leads to more inventors, more workers, more shoppers, and more economic growth.


  1. mike from iowa 2021-04-18 08:27

    My heart tells me it will be less onerous nd much less odiferous to simply dredge the swamp and incinerate the sludge in fossil fuels to give the swampies their desired send-off….burn in HELL!

  2. Porter Lansing 2021-04-18 12:41

    -After 2042 white people won’t be the majority voting group in USA.
    -The super wealthy emphasize this to the working class, continually.
    -Working whites will endure stagnation of their life situations as long as they’re still above and able to urinate down on minority groups.
    -That low self esteem by white male workers is why they vote against their best interests and allow the wealthy to become the super wealthy.

  3. Mark Anderson 2021-04-18 13:21

    Cory, I really believe most people believe they are getting pissed on from above. Democrats need to point that out continually. The trumpies can’t fool them forever.

  4. o 2021-04-18 15:16

    Mark, I disagree. I really believe that people are deliberately clueless and easily distracted from that fact so obvious. Keep up the barrage of lies countering the reality people live in; ignite a culture war every now and then; the GOP CAN fool them forever.

  5. leslie 2021-04-19 08:02

    Exclusion and Inequality.

    Up early for NASA Mars chopper test flight, surfing, i noticed this story:

    “Come and Get It,” from 1936, directed mostly by Howard Hawks and then, after he was fired, by William Wyler. It’s the story of a Wisconsin logging foreman named Barney (Edward Arnold), who jilts the woman he loves, Lotta (Frances Farmer), in order to marry his boss’s daughter; many years later, having become a paper-mill tycoon, he meets the woman’s daughter (also played by Farmer, and also named Lotta) and falls in love with her. There’s a scene in which Barney, the younger Lotta, and two others travel together by rail, from Wisconsin to Chicago, in a private train car.

    There, a Black porter ushers them in and awaits orders from Barney, who addresses him as “Snowflake” before cheerfully dismissing him. Barney’s casually racist bonhomie may be in keeping with the character and the times (the action is set in 1907); But the film never makes the porter or his perspective a part of the story; he is merely there to get the foursome into their private rail car.

    MY POINT: On 1.06.21, like others, surfing for context as the insurrection was quelled, i saw the 1st “explanation” on a blog to the effect that the rioters were really Antifa.

    Some jerk used this “casually racist bonhomie—Snowflake” answering a commenters question: “Who are these people?” He(?) dismissed the question saying something like: “get a clue Snowflake, does it look like these people are Trump supporters?” (referring to the infamous pic outside Thune’s minority whip office sign where Shaman, Proud Boy window breaker Spazzo, Confederate flag waving dad and his son, a judge’s lost son was carrying a stolen Capitol Police shield, and others, who are are initially confronting a half dozen cops in that statuary lobby at about 2:30pm est, after just wild-goose-chasing decorated military veteran Officer Eugene Goodman up and down stairs near the Senate gallery, if i have my directions right.

  6. leslie 2021-04-19 08:30

    Note Tim Giago’s story below:

    Eight days later an editorial appeared in the Aberdeen Saturday Review written by the editor, L. Frank Baum. He wrote about the massacre that had just occurred at Wounded Knee with this editorial, “Having wronged them before perhaps we should wrong them one more time and wipe these untamed and untamable creatures from the face of the earth.”

    L. Frank Baum … wrote the book, “The Wizard of Oz” 10 years later. And now, this man who called for genocide against a people, is being celebrated in an episode of the acclaimed PBS series “American Masters” that airs Monday night.

    In 2006, Baum’s family issued an apology for his racist writings.

    Great reporting by Tstrian. To his occasional credit, Mike Rounds has called for the many Congressional Medals of Honor issued for the 7th Calvary massacre be justifiably rescinded.

  7. jake 2021-04-20 17:03

    Socialism, ahhh socialism! The SD GOP loves it when Uncle Sam sends ‘liberal’ money to be spent on projects supporting Republican businesses…..

  8. jake 2021-04-20 17:06

    Leslie, if only Rounds would give us anything of merit, it would help. Our three musketeers are about as effective in congress as candy at a parade in the summer.

  9. leslie 2021-04-20 17:21

    Mo, Larry and Curly fo’ sho’

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