Wednesday, October 28, 2015
The Legacy of Rewarding the “Job Creators”
As so many conservative legislators, state and federal, have clung to the mantra that trickle-down economics floats all boats. This supply-side economic theory didn’t work when it was proposed during the Reagan era, and it doesn’t work today. We’ve watched as post-recession billionaires increased their incomes and share of our nation’s wealth, as the middle class has contracted and those at the bottom rungs are slammed to the ground.
Aside from token gestures (like phasing in a fifty-cents an hour increase over three years) to raise the minimum wage, and some sleight of hand to change the nature of the tax code in a manner that still favors those at the top of the food chain well over those modest or low earners, little has been suggested from the conservative side to make the world a better place for average workers, and nothing much for those who still cannot figure out how to climb back into the earnings stream. Lots of distractions from this huge income inequality issue: immigration reform, religious rights to oppose gay marriage, etc., etc., but putting more money into the average pocket… nothing meaningfully measurable at all.
Insisting that financial and environmental regulations cost jobs – rather than focusing on the jobs environmental controls would create and the billions if not trillions of dollars financial controls might actually save – those supported by big business seem to choose to ignore the real cost of not reining in climate change damage. At the second GOP debate, sitting in a state with a horrific job-killing drought as land/home destroying fires raged to their immediate north, the uniform response was that there is little that we can do to fix the climate-change problem that matters, so we should basically ignore it. How many trillions of dollars of hard costs, lives impaired and shortened, have to occur before they react? It may be too late, but we can make things worse… much worse.
Remove the Affordable Care Act – not fix its obvious defects – remains high on the list of GOP targets. Nothing proposed to replace it; just kill it and go back to the bigger mess that preceded it. Take the almost nine million folks benefitting from the program and shove them back into the world of no coverage and even higher medical costs. Make life more difficult, particularly in the new “gig” economy where fringe benefits just don’t exist, for the average workers.
Lots of opinions. Now for the hard numbers that support how hard life is for Americans in the middle and below. Oh, from Census statistics from the Department of Labor if you’re worried about my bias. “The typical American family income was $53,657 in 2014, barely changed from $54,462 a year earlier, the U.S. Census Bureau reported [September 16th]… What's worse it's far below the peak set in 1999. That's a major reason why so many Americans are still gloomy about the economy six years into the recovery.
“This was the third year in a row that median household incomes stagnated, following two years of declines. Whites saw their incomes decline 1.7%, while blacks, Hispanics and Asians saw no significant difference…
“Median income remains lower than it was in 2007, Census said… The holding pattern in wages comes despite the fact that millions more Americans are working. Some 1.2 million more men and 1.6 million more women are working full-time, year-round, respectively… The earnings of women who work full time were essentially the same as they were in 2007, while men's earnings were 2.2% lower.
“Wage stagnation is a central focus of the 2016 presidential election. The Democratic candidates want to raise the minimum wage and widen the safety net, while Republicans want to spur job creation by lowering taxes and shedding regulations… Meanwhile, the nation's poverty rate also held steady at 14.8% last year. Some 46.7 million Americans were in poverty, compared to 46.3 million in 2013.” CNN.com, September 16th. In fact, in terms of discretionary income, given the rising costs of food and housing, Americans have experienced an unending contraction since 2002.
Strangely, the only really bright spot was in healthcare: “The Census Bureau also reported that the uninsured rate fell to 10.4% in 2014, the first year people could sign up for coverage on the Obamacare exchange or through Medicaid expansion in many states. That's down from 13.3% the year before. Nearly 9 million more people had health coverage in 2014 than a year earlier… But more recent government data found that the uninsured rate fell to 9.2% in the first quarter of this year, which marks the first time in decades the uninsured rate has dropped below 10%. Some 29 million people lacked coverage, down 7 million from a year earlier, the report found.” CNN.com.
Why do we even use the word “recovery” in our description of our post-recession economy? Because too many of the economic measurements – from stock prices and real estate values to income averages that include the massive pay increases of those at the top – simply are focused on numbers that do not accurately reflect those in the middle and lower economic brackets. Most of us are still very, very uneasy about the economy.
We just do not believe numbers that suggest the worst is over and we are now living in growing times of prosperity. And the reason we don’t believe those optimistic projections is anchored in the personal earnings numbers set forth above. For most of us, there has been no recovery and without some major changes to redistribute income, things are going to continue in the wrong direction. So you can vote along socially conservative lines, but if you are not at the top of the food chain, you simply are going to have to get used to a continuous and unceasing fall in the quality of your life, with even worse consequences for the next generation. It seems that those at the top of the earnings curve have figured out that too many Americans will vote to reduce their true income (and bolster the money paid to the top) if social conservatism rules otherwise.
I’m Peter Dekom, and rich folks – who can themselves side-step the constraints imposed by social conservatism by flying somewhere where those rules don’t apply – do not hesitate to agree to such policies as long as they can make more money.