You wanna talk about the protests going on in America right now? Well, there’s a certain historical aspect that I don’t feel qualified to talk about. I suggest you listen to the hundreds of very eloquent African-Americans out there speaking out on this issue.
From my perspective, and I grew up a member of the lower middle class in the American South living right next to and going to schools that were 50% African-American, racism is woven into the very fabric of America. It is institutionalized in our Constitution. My Southern family and friends may like to contend with this assertion, but the further I get away from the South, the more I realize that racism was the primary cause for the Civil War, America's most destructive war. This may surprise some of you, for I've only come to find out after traveling and living around the US and abroad extensively, but that is not what we were taught in public school. In the South, we still have it drilled into our head that the Civil War was about "state's rights" and nothing else.
But the older I get and the further I get from my birthplace, the more I realize that racism is a cancer which has plagued the American body politic, lo, these past 244 years. Though it sometimes goes into remission for years or even decades, it is always there, ready to rise up whenever the country experiences weakness. The coronavirus is definitely a weakness that has ripped the US apart. At one point, I've heard that more than half of black Americans became unemployed thanks to the virus. So it’s no surprise that at this point, the cancer came roaring back.
From an economics perspective, I’ve brought this up before, and very recently in my post "DeFi is The Way to Prevent Gini 1.0". The US “Gini coefficient,” that which measures the depth of a country’s rich-poor gap is way out of whack. And it’s been getting increasingly skewed since the Fed’s QE shenanigans began back in 2008.
No chart can make this claim clearer than this one.
China, which is by no means a Gini paragon, has been pulling hundreds of millions of people into the middle class this century, while the United States has been aggressively kicking them out. The results are in the chart below.
Mind you this is not an income chart. It’s a wealth chart. And nothing amplifies wealth like low interest rates, which have been a fixture of US policy for 12 years and look like they will continue for quite some time.
Combine that with a razor-thin social safety net and a consumer culture that eschews saving, and you have a recipe for economic ruin for the bottom 2/3 of the American socioeconomic ladder.
No wonder people are lootin’ mad.
So what do we do now? I'd say the best thing to do is just listen patiently to our best cancer doctors (that would be the peaceful non-violent African and African-American activists that have been so eloquent about their response to this crisis), and we’ll be better off for it in the long run. We'll never be able to truly feel their pain, but we can do our best to understand it better.
We can also try to create better economic policies that don't create such stark divisions between the haves and have-nots.
Whatever it is we're doing now is no good for the majority of people in America.
The riots are in no small part about that systemic wealth inequality.