Politics & Public Policy – The Social Critic

Five years ago if someone had described an ongoing effort to unseat a sitting president — complete with salacious allegations about collusion with hostile foreign nationals — would any of us have believed it?

Five years ago if someone had described a leading political candidate under active FBI investigation — with the director of the FBI issuing an unprecedented public comment in the lead-up to the election — would any of us have believed it?

Five years ago if someone had said that a grassroots campaign with a passionate following involving a long-term U.S. senator would be undermined by no less than the Democratic National Committee — would any of us have believed it?

Five years ago if someone had said that a foreign power would stage demonstrations on American streets for and against our presidential candidates — while unleashing bots, hackers and fake news on social media — would any of us have believed it?

With each scandal-of-the-day rocketing out of newsrooms at breakneck speed, it is difficult to step back and appreciate how downright bizarre the past four years in American political history have been. Taking the long view while in the midst of the fray isn’t easy — but it’s a necessary step if we want to learn anything constructive from one of the most contentious periods in modern American history.

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If poor people knew how rich rich people are, there would be riots in the streets.
— Chris Rock

The wealthiest 20 individuals in the United States — a group small enough to fly together on a Gulfstream jet — have as much wealth as the 152 million people who comprise the bottom half of the U.S. population, The Institute for Policy Studies reports in “Billionaire Bonanza: The Forbes 400 and the Rest of Us“.

But what’s really driving the widening gulf between the haves and the have nots in America?

Among the more widely appreciated reasons for declining economic growth is the advance of automation. But other factors have begun to collide with technology to launch what may be a Perfect Storm: reshaping the economy to a “new normal” marked by economic uncertainty.

Another culprit is the rise of lopsided trade deals in the 1980s and ’90s, which have provided greater incentive to offshore jobs. The late billionaire and financier Sir James Goldsmith in his book “The Trap” predicted that poorly crafted free trade deals would produce a “net job loss”. In the early 1990s, Goldsmith testified before Congress advising against entry into another globalization deal known as GATT. Goldsmith also called out the Clinton administration on the Charlie Rose show in opposition to NAFTA, again predicting an outflow of jobs and capital.

If the wage stagnation of the late 1970s had not persisted to the present — some four decades! — the average American would earn $92,000 per year, reports Forbes in “Average America vs the One Percent“. In today’s dollars, those who identify as middle class are less secure than families that relied upon on a single breadwinner in the 1960s and earlier. We have gone from a society that can pay its bills and raise a family on a single income — and often a blue-collar income at that — to one in which the norm is for two able-bodied adults to work full time to support a family. (And because this is the new normal, illness and divorce are now the leading causes of child poverty and personal bankruptcy, according to the book “The Two-Income Trap“.) During this same period household debts have grown and savings diminished.

While cynics use these economic indicators to berate Americans — promoting the simplistic conclusion that Americans are eager to live beyond their means — reality is far more nuanced. In recent years recessions have gone deeper, last longer and recoveries are that much weaker. In part this is because our economy is nearly 70 percent dependent upon consumer spending for its health. Economic growth has instead remained tenuous in ways that economists typically ascribe to “lack of consumer confidence”. Behind the euphemism lies the unsettling reality that fewer Americans have the discretionary income necessary to stimulate the economy. More than 2/3 of Americans struggle to come up with $400 in an emergency.

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