Date: 2025-01-15 Page is: DBtxt003.php txt00017290 | |||||||||
The Trump Economy | |||||||||
Burgess COMMENTARY Let's be clear ... the title of this article should not include a reference to Obama. The US economy went to hell at the end of the Bush (43) administration and the Obama administration brought the US and world economy back from the brink. To the extent that there were economic issues in the time of the Obama administration, they were caused by the GOP Senate Majority Leader Mitch McConnell who made fiscal stimulas impossible while Obama was President and has caved completely under the Trump administration. Peter Burgess | |||||||||
THE ROT IN THE OBAMA-TRUMP ECONOMY IS BEGINNING TO STINK
A decade of growth has palliated the sickness at the heart of the American dream. But under the surface, symptoms of economic inequality are getting worse. When the next recession hits, and the blinders come off, elites will have to grapple with a more potent radicalism. A woman walks past a closed store in New York City. BY SPENCER PLATT/GETTY IMAGES. Congratulations, Californians. Your median hourly earnings have gone up by 1% since 1979, according to a new report from the California Budget & Policy Center. It might hurt that wealthy Californians have seen gains that are 40-times higher, but we’ve become accustomed to this sort of disconnect. Stocks rallied yesterday over news of revived trade talks, then slid this morning on weaker-than-expected jobs data. Sixty-nine percent of Americans say the state of their personal finances is the same or better than it was two years ago, and many are optimistic about the economy. And yet, and yet—that number for mid-wage Californians says a lot about where we are in the country as a whole. Many Americans are obsessed with getting rid of Donald Trump, and it’s hard to blame them. But Trump represents forces as well as a person, and we’ll see more figures like him as long as the middle class keeps losing ground. If you’re in the top quintile of earners, life is okay, and if you’re the next quintile down, it’s manageable, but take a place in the next three and life gets very hard very fast. Dive into the numbers on American wealth and you see how bad the past couple of decades have been not for just factory workers but for the middle class as a whole. When the next recession arrives—and arrive it will—we’ll have to grapple, once again, with unbridled capitalism and its consequences. Here’s one striking, if sad, fact. During seven years of Bill Clinton’s presidency, real median household income grew steadily, reaching a peak in 1999. For the next decade and half, however, it fell in every year but four. By 2014, according to Pew, 49% of U.S. aggregate income was going to upper-income households, meaning those earning more than twice the median income, versus 29% in 1970. Another cruel statistic: In real income, working-class white men in 2014 were making less than they were in 1996. During the 2016 presidential campaign, people on the left started to pass around the quote (the origins of which are uncertain) that “when you’re accustomed to privilege, equality feels like oppression.” The implication was that working-class men were sad to be sharing their good fortune. In reality, millions of them were sad to be losing their good jobs and finding themselves in more and more competition for bad jobs. All of the working class, not just the segment that is white and male, has been hurting. Stagnant income feels worse than going nowhere. In practical terms, you’re getting poorer. Crucial goods and services like education and health care have outpaced inflation, and the same is true of housing in prosperous coastal cities. Many consumer goods that didn’t exist in 1970 have also become necessary for middle-class survival. For instance, applying for almost any sort of job, whether as an office assistant or a greeter at Walmart, requires having a device that can connect to the internet. No wonder that financial fear has become the norm. Vox can write about a “labor shortage” and call for more low-skill immigration in “order to fill all the open jobs and keep the economy growing.” But Vox writers have college degrees, and such Americans have an unemployment rate that’s only half that of Americans without them. This speaks to what people take for granted about today’s economy, in which we’re paying only $12 or $13 an hour to the Americans who prepare our food, care for our elderly, or harvest our fruit. As the economist Dean Baker has noted, doctors are protected from labor competition in a way that agricultural workers are not. It’s a sign of who calls the shots that we have an economy in which a doctor can get less expensive fruit instead of an economy in which a fruit picker can get a less expensive doctor. If the story of middle-class income has been grim, the story of middle-class wealth has been downright stunning. New York University economist Edward N. Wolff has offered some numbers that have received too little notice. By 2010, the blow of the Great Recession had been so hard that median wealth, in real terms, had fallen to below what it had been in 1969. By 2016, mean wealth had recovered to pre-recession 2007 levels, but that was because rich Americans had recovered. Median total wealth among Americans in 2016 was still 34% below what it had been in 2007. The average wealth of the poorest 40% of Americans was already low in 1983, at about $7,000 in today’s dollars, but by 2016, with spiraling debt, it had gone thousands below zero, to minus $8,900. Most of us have seen big-ticket statistical shockers about wealth inequality today, so hearing that the net worth of Bill Gates, Warren Buffett, and Jeff Bezos exceeds that of the bottom half of Americans put together has become a refrain of sorts. Also, the rise of hyper-billionaires does not bother everyone in itself, since it can be a sign of overall national vitality, as was the case in the Gilded Age. But we’re far less prepared to accept a broad-based decline of fortunes. Most Americans are poorer than they used to be. To put it gently, this has implications. Radicalism will be a potent strain of our politics for decades to come. If you’re fine with where the ship is going, overall, then the question of whether your captain steers a bit left or right doesn’t feel urgent. If you hate where it’s going, however, and taps of the wheel fail to change it, then you look for someone who promises to cut it hard. Resentment toward an elite expresses itself in populism, the variety of which will be up for grabs. In his book The Populist Explosion, John B. Judis distinguishes between left wing populism and right wing populism, noting that the former pits the lower and the middle against an elite, while the latter pits the middle against an elite that is coddling a third group, such as immigrants. “Left wing populism is dyadic,” he writes. “Right wing populism is triadic.” You could say, therefore, that left wing populism seems kinder. At the same time, it may be a tougher sell. Resentment of the poor isn’t something that politicians create among those in the working class but rather something that grows out of proximity and a sense of unfairness. As University of California law professor Joan C. Williams has pointed out in her book about the white working class, people struggling to make ends meet on a working income can get angry about benefits (such as childcare subsidies) that are denied to them but made available to people in a lower income bracket. Some of the bigotry on display at Trump rallies, which many on the left refuse to see as economic in origin, can be tied to this phenomenon, a belief that those who, in the words of Bill Clinton, “work hard and play by the rules” are the last to get help and those who take advantage of the system (welfare recipients, asylum seekers, etc.) are the first. If there is any cause for hope, it’s that economic problems tend to have economic solutions, unlike problems of identity or faith, which are often all or nothing. Currently, a lot of trends prevent us from making deals on any divisive question. On the left, a lot of populist energy has been lost because of infighting over identity. The same is true on the right, as Trump makes up for his ineffectuality by stoking cultural grievances as much as possible. But Americans are better than their ruling class, an assertion that sounds like reverse snobbery but, with the evidence at hand, is something more like the truth, and our financial divides have left us less miserable than you might think on other measures. A 2019 survey from the right-leaning American Enterprise Institute found that about three quarters of Americans are still happy with life in their communities, which suggests that we have an incentive to make things work and not just break them. With a sunny radical who played to our better angels, perhaps we could escape the jam we’re in. That’s one reason why lesser-known figures like Pete Buttigieg and Andrew Yang have had made waves and why Bernie Sanders remains potent. Until the right person comes along, though, we’ll have to keep ourselves together. 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