The first post-election month is spam in the can. Everything is proceeding not normally, but according to predictions. The winners are consolidating their positions and thumping their chests. The losers are doubling down on the same behaviors that made them lose in the first place.
Nobody is really sure what just happened. Here’s one woman’s view:
The US citizenry in many ways has become, over the last 2.5 decades, the lobster in the slowly heating pot. As trade agreements and offshoring and automation have proceeded merrily along to make the rich richer, the poor poorer, and leaving fewer and fewer in between, we’ve paid for the losses from our standard of living, which was and still is so absurdly high that the primary health problems of our poorest citizens continue to be obesity related diseases.
But it’s sinking. Our ability to purchase vehicles is stunted, so increasingly creative leasing arrangements are advanced to keep us in the ride of our choice for lower monthly costs. Ignore the credit bubble it creates. Same for housing, where the same increasingly creative mortgage schemes that caused a bit of an economic event in 2008 remain popular. Ignore the credit bubble they create. We can’t afford four years of college for our kids, so we make a hard push for them to use AP courses and dual credit courses and spend a year or two at community college to soften the blow, after which they rack up generational debt getting a useful degree. Ignore the credit bubble that creates. And at the grocery, we continue to make substitutions to our baskets, opting for increasingly cheaper (and often less healthy) selections of protein while loading up on canned goods and vegetables. Middle-tier retailers like Macy’s suffer while the low end retailers hit new revenue highs.
We don’t think of the above in terms of “we’re losing our standard of living”; we think of it in terms of “just making smart choices”. And they are. However, from an economic standpoint, they all represent losses from a former economic status quo to a new one, one where the average individual is forced to do with less.
The advancing impoverishment of America is not due to either liberalism or conservatism, it should be said; it’s due to corporatism, which when implemented in practice makes the tacit assumption that “what’s good for the corporation is good for the citizen”. While it is true that the objectives of the corporation and that of the citizen are conceptually aligned (both want to make more money), it’s not always true in practice; and the citizens see through this charade. Peggy Noonan today nailed it by writing this:
The past few years it seemed the progressive left and the Democratic Party, confident in what they called the coalition of the ascendant, were looking at the old American working class, especially the white working class, and saying: “Here’s your disability check, now go take your opioids and get lost while we transform our country. By the way, we have friends on Wall Street.”
From the right and Republicans it was: “Take your piece of the dole, we are importing an entire new people from other countries to take your place, could you please sort of pass away? We’re replacing you! Why can’t you get the message? By the way, we have friends on Wall Street.”
Against that backdrop enter populism’s flawed messenger, Donald Trump.
What is known is that one cannot credibly claim to be a great country, or even a successful one, if your population consists of (a) the very rich, (b) a moderately wealthy class who were born sufficiently gifted to obtain STEM degrees, and © a class of marginally employed service sector people requiring public assistance. In that case, you’ve failed to create a functioning economic ecosystem. It’s a bit like an African savannah where the grass has died, causing the large mammals to leave. If there’s nothing for the lions to eat larger than rodents, the future does not bode well for either.
And, importing a few zebras back in for the lions to eat doesn’t solve the problem either. The zebras are quickly eaten, and the problem of the grass is not solved.
The Democrats and the Republicans have killed the grass. In 2016, two candidates, Trump and Sanders, noticed this, and made suggestions as to how to rectify it. Trump won; Sanders was done in by a rather infernal coalition at the DNC and a system of super-delegates that was clearly designed to insure that only the Approved Candidate Need Apply. I wasn’t a Sanders supporter, but if I was, I’d still be angry.
That leaves us with Trump as the only individual who has suggested ways to make the grass grow again. Honest Republicans and Democrats both agree that a lowering of corporate tax rates and a review and dismissal of egregious regulations are good fertilizer. A program of infrastructure investment, long rejected by the GOP because of the prior Administration's constant demands to have “new revenues” (e.g., tax hikes) associated with them, could catalyze the economy, providing enough good paying temporary jobs over the next few years to ease the current pain and ease those recipients into permanent jobs as they are created. Calling China out on fair trade practices also plays into the mix.
I THINK there is enough cooperation in the government now to get to the above. Charles Shumer fortunately has a long standing friendship with Mr. Trump, and agrees in principle with the above measures, with the possible exception of deregulation. Hopefully the Trump Administration stays focused on the economy and doesn’t wander off into social issues neverland. But the larger point is that it very much MUST be successful at this juncture in our history; in the event of failure, even if another populist president could be procured in 2020 (highly unlikely, by the way — — the Empire Will Strike Back), the negative trends in our economic equality ratios might be, I fear, too advanced to reverse.
Let’s all hope for success, and not tie our self up in cynical knots.