Part I of “Socioeconomics Reforms” Series
Some economists think the current economy is divided into two states. They call it the “K-shaped economy”. This wordsmith argues that many experts in economics are not necessarily right. Why? Because all of them should be talking about socioeconomics and not only “pure economics”, based on the bottom lines of profit-and-loss business statements.
Some learned and even Nobel-Prize-winning economists think it is now a “K-shaped economy,” a divided twin-state economy in which some groups, particularly wealthy consumers, prosper. In contrast, others, especially low- and middle-income individuals, struggle. This results in unequal recovery, with the “top” of the K representing the wealthy whose assets appreciate, and spending remains strong. And the “bottom” refers to those who face financial hardship due to inflation, high interest rates, and a weak job market. (In other words, it is status-quo economics that this writer dubs as “crony capitalism”.)
The field of “Socioeconomics Studies” is defined as the interplay between social and economic factors. It examines how factors such as income, education, and occupation influence individual and group behavior. And conversely, how social structures and behaviors impact economic outcomes. This interdisciplinary field is used to understand issues like inequality, health disparities, and consumer behavior. This columnist opines that students, especially in college, must be taught not only economics as a subject but also social engineering.
It is advanced that socioeconomic state is composed of three groups: the Filthy Rich Cronies, the Working Middle Class, and the Poorest-of-the-Poor. For want of a better term, this writer calls it the “Kangkong Socioeconomics”. Like the “kangkong” (or water spinach), people are divided into three parts, just like the plant: Arrow-shaped leaves at the top (the Filthy-Rich Cronies or FRC), the tender but hollow stems (the Working Middle Class or WMC), and underwater roots (the Poorest-of-the-poor Consumers or PPC).
Thus, the kangkong truly represents the letter “K” with three strokes of the pen: the upright long stroke represents the FRC; the upper slanted short stroke is for the WMC, which supports the leaves; and the bottom slanted short stroke is the PPC, the roots of the water plant. Thus, this question: Have we seen a kangkong or any plant or tree without roots?
Filthy-rich Cronies (FRC)
Those with high incomes and huge assets benefited from a booming stock and commodity market, especially as stock manipulators allegedly grew richer through insider tips from their cronies in government. Thus, they turned real estate markets bigger, more expensive, and beyond the reach of working people.
They continue to spend freely, driving growth in certain sectors where they choose to invest or monopolize. They also bankroll their crony politicians to maintain control of their city, county, district, or state. They use billions of greenbacks to donate openly and legally (in accordance with current federal election regulations) to political action committees (PACs) and to the two largest political parties. They do not even hide their political donations; they gloat about them. They are not ashamed to flaunt their wealth and links to cronies in government. There are billionaires — like the Buffetts, the Bloombergs, Gateses, et al., of course– who are honest-to-goodness philanthropists as exceptions.
“ … [D]ue to the absence of term limits in the U.S. Congress and in most state legislatures, and the need for campaign funding, almost all leaders of the biggest parties pander more to FRC supporters and monopolies like the oil industry, and seldom to lowly voters, especially minorities.”
Working Middle Class
Those with high incomes. This group is composed of the working middle class — white- or blue-collar — that contributes the majority of income tax revenues. Those who have steady, or even part-time, jobs are members of this class. But its members struggle with rising costs due to inflation and higher interest rates. They may cut back on spending, shift to cheaper or alternative products, and find it challenging to get ahead. They now struggle with debts — like student loans (and those of their children in college), housing amortization or sky-high rentals, and credit-card bills for medical co-pays, etc.
Poorest-of-the-poor Consumers (PPC)
These are the retired workers who live primarily on Social Security pensions (SSP), with their spouse receiving their spousal benefit and Medicare. Added to these are those who did not qualify for SSP and Medicare. A growing number of homeless people who live on the concrete or asphalt jungles of cities or parking lots (in old cars or used RVs) often receive SSI (supplementary income) or unemployment benefits. Plus food-stamp benefits, which usually depend on the whim and caprice of federal and state leaders.
This writer has reported that while the PPCs have the least income, they are allegedly the biggest buyers of lottery tickets, and the homeless are major consumers of cheap liquor, beer, tobacco, and recreational but often illegal drugs. They also lack healthcare coverage. Unwittingly, political leaders often refuse to find bipartisan ways to do a real, doable, and affordable universal healthcare for the lowly, especially from the ranks of minorities. Why? Because cartel-like industries and insurance firms have some of the best lobbying efforts and biggest campaign dole-outs.
Causes and Concerns
Academicians and social engineers say that many factors cause economic divides. Yes, situations including, but not limited to, uneven access to economic opportunities, pains associated with inflation and poverty, and differences in wealth accumulation (where a large portion of financial assets is held by the wealthy, who control corporate equity and dividends). Public-policy responses such as interest-rate hikes, benefit suspensions, and planning are other factors. But they are the least of their concerns. And poor family relations or lack of kinship are also the tempests of modern times. Making it worse is public officials’ indifference, which further swells the ranks of those who, to paraphrase William Shakespeare, “Misery acquaints a man (or humanity) with strange bedfellows”.
Implications
This trifurcation of a “Kangkong” socioeconomics can raise concerns about growing wealth inequality and pose challenges for businesses, the banking world, and policy and decision-makers in addressing the needs of different groups. But due to the absence of term limits in the U.S. Congress and in most state legislatures, and the need for campaign funding, almost all leaders of the biggest parties pander more to FRC supporters and monopolies like the oil industry, and seldom to lowly voters, especially minorities. They use one-liners as platform slogans, “Like free bus rides”, without explaining how to fund it and making sure that it does not add to the perennial problem of deficit spending in governance.
