- Jay Maharjan

I do not believe in socialism, but I have to admit that the current socialist Independent Senator from Vermont Bernie Sanders’ speech does reflect a fairly accurate state of America. In his passionate speech given on the Senate floor, Senator Sanders presents a case for shrinking middle class in America. He makes his case quite accurately that the top one percent of all income earners in the United States made twenty three and a half percent of all income, i.e. more than the entire bottom fifty percent. This number tripled since the mid seventies. The top one tenth of one percent earned twelve cents of every dollar earned in the United States. Though these are valid and staggering statistics, the senator runs short when it comes to offering any form of sustainable solution.

The real reason behind this shrinkage and the more important issue that Senator Sanders fails to address is that entrepreneurs and small businesses emerging from middle class are facing huge hurdles in terms of not being able to sustain competitiveness. More and more, entrepreneurs and small businesses are folding their businesses and moving downwardly from their middle class status. And, the government must address the situation now.

Mom and Pops must be protected from competition coming from multi-national corporations

The rationale that the likes of Wal-Mart and Starbucks will bring jobs to small towns is not good enough. With types of wages that these corporations pay at the low levels, it simply is not a remedy for killing entrepreneurship in these towns – hurting locals both financially and in spirit. Companies and private platforms like eBay and alibaba.com have done more to foster local entrepreneurship and introduce to International commerce than most of the government programs. In this case, I can not agree fully that trickle-down aspect of job creation is a good thing in these small towns.

SBA is not working

SBA follows principles and lending criteria that traditional banks have been following for ages that lending is good business only when banks loaned money to people who didn’t need money in the first place. Lending based on stellar credit and substantial personal equity is not going to help struggling entrepreneurs and small businesses. The system must focus on awarding loans and investing funds on risky yet disruptive, innovative, sustainable business models.

Manufacturing plants, jobs must return

As Senator Sanders makes a valid point about the way Chinese products flooding the American market, this is not a sustainable manufacturing and import/export model. Everything boils down to incentives for entrepreneurs. New innovative ways need to be explored to manufacture goods locally and to re-focus on quality and creating local jobs. DOI’s latest effort to offer land to eco-entrepreneurs for solar projects is the type of initiative that the government needs to take frequently and it shouldn’t be limited to only emerging industries, but should also focus on reviving industries (like plastics) under distress.

Must sustain and improve on existing knowledge base

Unlike in the last century, incentives are strong for foreign knowledge workers not to leave their countries and immigrate to the United States. Knowledge economy is getting stronger in many parts of the world. This time around, the US must take lead in empowering entrepreneurs to take charge of the new conceptual economy – where knowledge workers will need to transform into savvy creative entrepreneurs and innovators.

Reforming education at the core

Here is my take on reforming education and introducing entrepreneurship in classroom in early age.

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Tags: Conceptual economy, middle class, middle class america, salvaging middle class