Vanna & The Economy

By Ashley Bean Thornton

I squeezed in a little trip to Magnolia, TX, this weekend to see my Mom.  Mom is a die hard “Wheel of Fortune” fan, so naturally talk turned to Pat Sajak’s recently announced retirement and the fate of the show…would Ryan Seacrest be a worthy successor?  Will Vanna stay?   And eventually… I wonder what Pat and Vanna get paid?  Google told us Pat makes $15 million a year in salary, while Vanna makes a “lousy” $3 million.   They also each receive a few more million a year for licensing their likenesses to be used on Wheel of Fortune slot machines.

I dropped this little factoid into the heap of random bits of information about the economy that I have been collecting all my life. Here are a few of the other recently added bits…

• Texas had a budget surplus of $32.7 billion this year.
• About 600,000 people are homeless in our nation today. 25,000 or so in Texas.
• Average range of teacher’s salaries in Texas is between about $46,000 and about $68,000.
• It is not unusual for a USED Hermès “Birkin Bag” to cost $20,000+. (If you, like me, have never heard of a “Birkin Bag” – it’s a leather tote bag.)
• It cost me $2,000+ last week for a plumber to come out and replace a piece of gas pipe that was leaking, repair the dripping toilet that had corroded the gas pipe, and fix it all back so I could flush again.
• I have a friend who has been working at Whataburger for five or six years who gets paid $11.00 an hour. She can’t get a raise because she has a medical condition that prevents her from driving, so she can’t flex her hours to work the higher paid positions.

Some of the math in the information listed above is crazy to me.  We could pay 44 teachers a year for what we are paying Vanna?  I could get my plumbing fixed 10 times for what some people pay for a used leather tote bag?  We could give a million dollars to every homeless person in Texas and still have money left over in the budget surplus?

The economy is weird…

What is “the economy?”

Which begs the question…what is “the economy” and how would I like it to work?

“The Economy” is the way we trade our time, energy, intelligence, creativity and skills for things we need and want like food, housing, clothing, health, and fun.  It doesn’t seem very complicated when it’s just one person trading with another person – I mow your yard, you give me lunch.

In our modern world though, it is almost infinitely complicated.  I can quickly run out of brain space just thinking about the complexity of making one thing – the lawnmower for example. The metal, the paint, the tires, the engineering that goes into making the motor work, the gas — each little piece comes from different people all over the world doing different jobs with different tools and materials.  Each of those tools and materials are made by different people doing different jobs in different countries.  The levels of complexity for making one fairly simple contraption seem to go on forever like one of those mirror rooms that reflects the same image to eternity.

That level of complication, mind boggling as it is, does not even touch on the question of what to do when some material or skill needed to produce the lawnmower becomes scarce.  For example, what if the rubber I use on the tires for my lawnmower is the same rubber used to make tires for cars and there is not enough for both?  How do we decide who gets how much rubber?  What happens if there is only one person who knows how to mow the yard?  How do we get that person to mow our yard and not someone else’s?

And… all that does not even take into consideration human psychology, goofy as it is.  Greed and generosity, jealousy and sympathy, the desire to be unique, the desire to be like “the cool kids…” These contradictions are just the tip of the iceberg.  I’m willing to pay more for this car than that car, because I want others to admire me.  I’m willing to bake a wedding cake for one couple, but not for another because of my religious beliefs.  I was happy with these pants last year, but now I am not happy with them because they have gone “out of style.”  Why do I even want my yard mowed in the first place?  Why not just let the weeds grow?  Why not just cover the whole thing with rocks?

We invented money and prices as a way to live and trade with each other given all this complexity …and then money and prices led to creating even more complexity…

We call it “the market” or “the free market.”  By and large it has been a fantastic invention! It manages all this unimaginable complexity fairly efficiently and painlessly – much, much better than any other system we have developed! (Sorry, central government control!) It encourages innovation and improvement of processes and products. It gives people the freedom to decide what they want to do to make money and how they want to spend their money.  It inspires people to work hard and do productive things in order to buy the things they want.  It works really, really well for a whole lot of us.   I certainly can’t complain.  It has always worked great for me. I have a comfortable life, and with any luck at all, I will be able to skate along on the money I’ve saved and invested till Wilkerson-Hatch-Bailey totes me out.

Could it be better?

Despite all the things I love about the free market economy, though, I don’t think it is a magical machine that will just chug along making everything fair and beautiful forever.

No offense to Vanna, but I’m not sure her contribution to society is worth 40 times as much as the person teaching fourth grade math at the school down the street, or 130 times as much as the person who feeds me my Jalapeño Cheddar Biscuit every day.  I’m not sure a used leather tote bag is worth 10 times more than fixing a gas pipe at my house and making my toilet flush again.

That’s the thing about the “Free Market Machine” (FMM) – it’s good at setting prices, but it can get out of whack when it comes to real worth, or contribution to society.  It is not programmed for “fair” or “beautiful” or “important” or “wise” or “compassionate” – it’s programmed for “how much can I get for that?”  There’s nothing wrong with that, as long as we don’t expect it to do more than it can do, as long as we realize that if we want those other good things we are going to have to keep an eye on the machine and make some adjustments every now and then.

The challenge is that the FMM is so complex that we don’t really know how to tune it up just right.  Sometimes fixing one thing breaks something else.  Sometimes there is such a lag between the fix and the result – good or bad – that we can’t tell what affected what.  Even when we get it running good, it doesn’t stay that way for long.  Some people believe that means we should just leave it alone and not fiddle with it. They worry that trying to fix it or improve it or steer it does more harm than good.

I can certainly see why someone would believe that, but I don’t think that’s the right approach.

When the FMM is out of balance, we need to level it out and redistribute the weight before it shakes itself apart.  Admittedly this is a humbling process.  We don’t really know what we are doing. Our fixes have not always worked like we expected. We have made some painful mistakes for sure, and we are not always super smart about recognizing a bad fix and correcting it.

Overall, though, I think we are farther ahead than if we had always taken a hands off approach. Even though we have been fumbling along, we have made some pretty effective tune ups along the way – child labor laws, weekends, bankruptcy rules, deposit insurance, social security, anti-discrimination legislation, earned income tax credits… you can come up with a pretty long list pretty quickly if you think about it.  The FMM serves us better because of these tweaks and adjustments and occasional re-designs.

Voting

James Carville, Bill Clinton’s “Ragin’ Cajun” political strategist, is famous for emphasizing that when it comes to getting elected “It’s the economy, stupid!”  But what am I trying to vote for in terms of the economy?  What am I listening for from the candidates who hope to get my vote?  I don’t want to stifle the FMM, but I do think we might need some adjustments.  Here are half dozen things I would love to hear our leaders talking about:

1. The balance between the benefits our FMM is providing and damage it is doing to the environment we depend on for our survival is out of whack. I am listening for ideas about how to restore that balance.

2. On one end of the spectrum, we have too many people who are not making ends meet despite being willing to work. On the other end we have people who have piled up so much money that it cannot possibly be making their lives happier or better. It’s just “waste wealth.” I’m listening for ideas about how to recycle some of this “waste wealth” back into the system for the benefit of us all.

3. The FMM doesn’t care how quickly jobs change, or where they are located, or even whether it’s a person doing the work or a machine. But all of these things have real impact on people and communities. I’m listening for ideas about adjustments we can make that will allow us to benefit from the rapid rate of changes and innovations instead of suffering from it.

4. The economy is a worldwide phenomenon. I am listening for ideas about how we can participate productively in the world economy without being either a bully or a schmuck.

5. The FMM does a good job of creating prosperity, and part of what makes the FMM work is that the prosperity is not distributed equally. The rubber band that connects what we have and what we want needs some tension to make the whole system work. On the other hand, if the rubber band stretches so far it breaks, that’s not good either.  I’m listening for ideas about how we can effectively maintain a system of social supports that provide enough security to protect against devastation and despair, and also motivates people to participate productively in the economy if possible.

6. Some people, for whatever reason – age, disability, mental health issues – are not going to be able to participate productively in the economy. I am listening for ideas about how we, as a society, can care for them compassionately.

What I would just as soon NOT hear is a bunch of wailing and griping and finger pointing about how “the other side” is doing it all wrong, and that any suggestion we might need to tweak the FMM is “Marxist!” and that any suggestion that we need to care about what businesspeople think is “corporate tyranny.”

I’ve also run out of patience for arrogant proclamations that “I know exactly what to do.”  I’m listening for a little humility, a little acknowledgement that the FMM is complicated, and we don’t really understand everything about how it works, and we might have to try a few things and make corrections as we go along…and we are already thinking about that and planning for it best we can.

I’m listening for an assessment of what’s going well and how we can build on that.  I’m listening for ideas of what we think we should try to tune up, or redesign, or fix so that the Free Market Machine is working better — for now at least — for more of us.