2012–A Make or Break Year

In general I do not put much emphasis on examining the past in detail. It seems unproductive to me to look back at all that went wrong unless there is some evidence that by doing so, I can improve what is to come or even what might be to come because guessing to work as well unless it involves logic or ethics. I haven’t seen or heard any evidence that logical or ethical politicians exist any longer so why try to apply logic to the results of politics? Thus, by the preceding criteria, it would seem senseless to the point of despair to hope that 2012 will be any better than 2011. But what the hell…everybody else does it, so I suppose I will too.

By any measure that I can conjure, 2011 was a year to forget for the American middle class. Unfortunately, most of us cannot. Who is to blame depends on your political view. Certainly every year has its share of missed opportunities, but for the so-called middle-class in America 2011 might be best to forget. I could be a cock-eyed optimist and still feel uneasy going into 2012…given the following list of problem areas it’s only through advances in modern pharmacology that I’m not downright suicidal.

  • Jobs:  Economists generally agree that the single most effective way to revive the American middle class is to create more high-paying, stable private sector jobs. The unexpected emergence of 140,000 new private sector jobs in November helped drop the unemployment rate to a two-and-a-half-year low 8.6 percent, but the  figure got a huge assist by 315,000 people who simply gave up on looking for work last month. Governments, meanwhile, slashed 20,000 public sector jobs across the country and deadlock in Washington blocked both Obama’s $447 billion jobs plans. Honestly, in a capitalistic society the only real impetus for jobs is demand; not tax cuts, not politics, and certainly not politicians running around calling people that have money “job-creators”.
  • Fiscal order: Economists also generally agree that a bipartisan plan to seriously address the $1.7 trillion federal deficit could increase business and consumer confidence, strengthen the economy and potentially create jobs. Absent the bipartisan Simpson-Bowles plan, the only reasonable, expedient plan I’ve seen is the one frequently referenced on this web site. It’s called  the One-Penny Solution. It is fair, it would take minimal mechanics to implement, and it would simplify the entire deficit reduction process so that the whole country / world would once again believe that this is a country that can solve problems rather than create them–which is precisely why politicians in this country will never be able to get behind it. Instead, we’ve suffered through months of disastrous partisanship, from the summer default brinksmanship, to the fall failure of the Congressional super-committee to the prolonged deadlock over how to fund payroll tax cut and unemployment insurance extensions.
  • Higher Education: Technological advances have created a global economy where members of the American middle class must adapt or fall behind. Low-skilled manufacturing jobs have left the United States and will never return. Learning high-end manufacturing skills or getting a practical college degree are all ways Americans can potentially compete in the global economy, but most are woefully unable to afford the time or money to do so. After carrying out impressive K-12 education reforms, the White House outlined some promising reforms to reduce tuition and increase innovation in higher education at a December meeting with college presidents. Yet again, convincing an ideologically divided Congress to act will be difficult, if not impossible.
  • Health care: A September survey found that health insurance companies raised the average annual premiums for family coverage by 9 percent in 2011, the highest increase in nearly a decade. The average annual cost of a family insurance premium was $15,073 in 2011, roughly twice the amount it was in 2001, burdening middle-class earners and the companies that employ them. Democrats blamed insurance companies. Republicans blamed Obamacare. The actual culprit in runaway healthcare costs is the anti-trust exemption that the healthcare insurance industry enjoys. Healthcare costs rise because health insurance companies can simply raise premiums to cover the costs without fear of competition. This is a case of monopoly defined and should be stricken immediately from the law—so naturally it is being ignored by politicians
  • Housing: Home values are at an eight-year low and more than 10 million American families owe more than their homes are worth. The state of the housing market is yet another drag on the middle class. In October, The White House announced a change in executive branch rules designed to help families refinance at historically low interest rates, but the effort is too small to have a serious impact. Like so many other issues, legislation that might have achieved results is frozen in a deadlocked Congress.
  • Europe: Like it or not, the American middle class now lives in an interconnected world economy. A Euro Zone debt crisis could have a devastating impact on a fragile U.S. recovery. After a confoundedly slow initial response, European leaders showed some semblance of leadership as 2011 waned. I fervently hope that the plans will continue in 2012.
  • Occupy Wall Street: The movement that emerged this fall placed rising income inequality at the center of American debate. It seemed to me, an admitted outside observer, that the disparate group seemed to lose focus and experienced a drop in public opinion polls. December efforts to seize foreclosed homes show signs of promise, but the Occupy movement will need to unite with labor unions and bring some type of focus to its message to be understood by the American public and become a serious political force.
  • The Tea Party: In its second full year of existence, the movement also views itself as a defender of the middle class. Calls for serious deficit reduction and a change in the way government operates are legitimate. But Republican presidential candidates’ absurdly simplistic pandering to the group in 2011 has been counter-productive. The middle class deserves a serious debate about how to reinvent our economy, government and education system. Not false claims that government — and government alone — is responsible for every evil in America. 

2012 and the elections that will transpire are of unfathomable importance to most Americans who have been slow to delve into fact-based, intelligent discourse over who best represents what might very well turn out to be a defining moment in America’s continued viability on the world stage—much less its perceived dominance. 

Vote with pragmatic and thoughtful conviction instead of the “Friday-night-football mentality” is my advice to anyone who might stumble across this post. It could easily be the most important election in a generation.



  1 comment for “2012–A Make or Break Year

  1. jackarm
    December 28, 2011 at 2:32 pm

    This summary of 2011 is spot on. No doubt 2012 will be an important year. The upcoming election will give us a signal as to which way the country wants to go. However, this could be upset by outside influences like Middle East war, further downgrades of US dollar, etc.

    The Chinese say “may you live in interesting times”. Well, I think we will. (this is not a statement of well wishing)

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