“Too Much Capital In Too Few Hands”: Populist Backlash Will Keep Increasing As Inequality Continues To Rise
Listen to a typical center-left Democrat, and you’ll hear rosy things about the economy. GDP growth is solid, unemployment is low, and even wages are starting to rise. The Clinton campaign and the Democratic Party generally will be touting these achievements even as they focus on issues of structural racism and sexism while offering government support in areas like childcare.
But there’s a big problem: overall, inequality is still rising at an astonishing rate to unprecedented levels:
Financial inequality became even wider in the United States last year, with average income for the top 1% of households surging 7.7% to $1.36 million.
Income for the richest sliver rose twice as fast as it did for the remaining 99% of households, according to an updated analysis of tax data by Emmanuel Saez, an economics professor at the University of California, Berkeley.
It’s true that the 99% is doing better than it has since the 1990s, but the gains are relatively modest. Furthermore, basic cost of living has gone way up, particularly in the areas of tuition and housing. Housing in particular is a major problem driven by inequality itself: with accumulation of capital comes the need for places to store it, and real estate is a popular piggybank for wealthy investors. This in turn drives up the cost of housing, making it more difficult to afford housing in the urban areas where most jobs are located.
The bigger problem is that America already tried the 1990s approach to prosperity, assuming that rising inequality isn’t a problem as long as everyone is doing OK. What does it matter if the rich are getting much much richer, if the fortunes of the poor and the middle class are also improving even if at a slower rate?
The answer is that it’s unsustainable in both the short and long term. Over the long term high rates of inequality shrink the middle class and increase political instability. In the short term, too much capital in too few hands leads to speculative bubbles, that in turn lead to big recessions. Recessions tend to wipe out the wealth of the middle class in a much more devastating way than that of the wealthy who have more ways to protect their money. More importantly, the wealthy recover their position much more quickly as asset values balloon back, but the jobs that sustain the middle class and the poor return more slowly–often at permanently lower wage levels when adjusted for inflation.
Automation and globalization are likely to inexorably drive the trend toward rampant inequality, exacerbated by tax policy designed to protect the wealthy and overgrown financial sector. Merely tackling structural racist and sexist inequalities will do good in their own ways for women and minorities, but they will do little to address the overall problem. Targeted government programs to help citizens with childcare and other needs will help somewhat but won’t do much to fix what’s fundamentally wrong.
Only much more aggressive policies that give workers a greater say in how companies are run to “pre-distribute” wealth, as well as much more progressive graduated tax policies that distribute uneven gains more equitably, will ultimately tilt the balance back toward the middle class where it belongs. Until then, expect to see increasingly virulent strains of populist backlash from both the right and the left until something changes. Incrementalism may be all that is possible politically, but it’s not an answer for the problems that beset us and give rise to anxious backlash. As long as inequality rises, Donald Trump, Brexit and ISIS will be just the beginning of the world’s back-to-basics nativist woes.
People don’t just want the 99% to do better. As the 1% continues to outpace everyone else, a great many people in America and the world actively want the 1% to do worse. And it’s hard to blame them for that sentiment.
By: David Atkins, Political Animal Blog, The Washington Monthly, July 4, 2016
“Consolidating The Same Old GOP Vote”: Is Trump Leading An Intra-Party Coup Rather Than A Political Realignment?
If you want to make a case that Donald Trump can win the presidency in November without huge “black swan” events like another 9/11 or Great Recession, and you don’t buy dumb polls suggesting Trump’s actually very popular among Latinos, then you are driven to one of two intersecting theories. The first is the famous “missing white voters” hypothesis, which suggests that Mitt Romney left millions of votes on the table in 2012, and Trump’s just the guy to bring these voters to the polls. And the second is the theory beloved of some Democratic lefties that as a “populist” Trump’s going to win former Democratic, white, working-class voters alienated by Hillary Clinton’s Wall Street ties.
Politico has, however, done some number-crunching from the GOP primaries and concluded (tentatively, at least) that Trump’s base of support backs neither of the theories of an expanding GOP:
While Trump’s insurgent candidacy has spurred record-setting Republican primary turnout in state after state, the early statistics show that the vast majority of those voters aren’t actually new to voting or to the Republican Party, but rather they are reliable past voters in general elections. They are only casting ballots in a Republican primary for the first time.
If that’s true, then what the Trump candidacy represents is not some realigning event that could change our understanding of the general-election landscape, but simply an intra-party coup that overthrew the dominance of the business-as-usual and conservative-movement Establishments without necessarily adding to the total number of people prepared to vote Republican in November.
Now even if you don’t believe Trump is God’s gift to Democratic GOTV efforts, it’s pretty safe to say he places a cap on the GOP share of minority voters. So at best the general-election polls showing a tightening Trump-Clinton race may be about as good as it gets for the mogul, showing that he’s consolidating the same old GOP vote without materially adding to it.
On the other hand, the Politico analysis could be wrong. But it helps expose the tenuous reasoning behind Trump-can-win scenarios that rely on hoary ideas about hidden majorities and transpartisan “populist” winds that blow up the existing party coalitions. If the typical Trump supporter is someone who has voted for GOP presidential candidates monotonously since the Reagan Administration without necessarily buying into the party’s economic orthodoxy, then that should be terrifying to the U.S. Chamber of Commerce, but not so much to Democrats.
By: Ed Kilgore, Daily Intelligencer, New York Magazine, May 17, 2016
“The Irony Of Celebrity Populism”: The Demolition Of The Line Between Celebrity And Political Achievement
“When you become famous,” the famous political consultant James Carville once said, “being famous becomes your profession.”
It’s a sign of the stunning success of Donald Trump’s crossover act that we no longer even think about this campaign’s most revolutionary effect on our politics: the demolition of the line between celebrity and political achievement.
Of course, success in politics can itself breed celebrity. Carville earned his by combining his eccentric sense of humor with actual skill in helping Bill Clinton become president in 1992. The weird interaction between glitz and government reflected at the White House Correspondents’ Dinner suggests how much the borderland between the two has shrunk.
But celebrity has never before been a sufficient qualification for the nation’s highest office. Consider John McCain’s signature attack on Barack Obama in 2008 in a commercial that began with the words: “He’s the biggest celebrity in the world.” The ad’s next line captured the old war hero’s disdain for his opponent and his fame: “But is he ready to lead?”
In light of this year’s campaign, there is something touching about McCain’s protest. He reasoned that sober voters would reject the idea of electing someone merely because of his celebrity.
If the ad misunderstood the sources of Obama’s political strength, it did speak to a nation that still respected experience in government. Trump has now far surpassed Obama in converting fame directly into electoral currency, moving from celebrity to front-runner status without going through the messy, time-consuming work of being a state legislator and U.S. senator. Ronald Reagan, given his Hollywood standing, may be the closest historical analogue to Trump. But Trump did not spend eight years as governor of a large state. There is a perverse purity to Trump’s great leap.
Trump also uses celebrity allies he accumulated in the course of his career as a fame-monger to validate his quest. Facing a decisive challenge in Tuesday’s Indiana primary, Trump hauled out an endorsement from Bobby Knight, a state icon from his successful if controversial run as Indiana University’s basketball coach. Trump may dominate CNN, MSNBC and Fox News, but Knight has ESPN, generally a much bigger draw — except, of course, when Trump has been on a debate stage.
Trump represents the triumph in politics of what the scholars of postmodernism call “transgressive” art, which violates boundaries, including moral strictures, and commands attention through its shock value. Trump is now the transgressor in chief.
We need to think hard about the multiple weaknesses Trump is exposing in our politics. How has he been able to convert fame and outrage into votes without even a moment of apprenticeship in public service?
One reason is the anger in a large segment of the Republican Party that has been stoked by its leaders. You might say they have now lost control of the beast they were feeding. There is also the utter contempt toward government that their ideology encouraged. Trump has played on the fragility of our media system, which, in its search for ratings, can’t get enough of him, and on a pervasive pain among the many who have been cast aside by our economy. They had been ignored by elites of all kinds.
Trump is what passes for “populism” now, but celebrity populism is a strange creature. Consider the case of Tom Brady, the masterly quarterback of my beloved New England Patriots and another sports celebrity who has spoken kindly of Trump.
In a court ruling against him in the “Deflategate” case, Brady learned that neither wealth nor celebrity nor talent protects him in a National Football League system that, in the view of two of three Court of Appeals judges, confers almost unlimited power to management over labor.
Yes, at that moment, Brady learned he was labor. “Welcome to the working class, Tom,” wrote Boston Herald sports columnist Ron Borges.
I don’t know if this controversy will alter Brady’s politics. But it was a reminder of how structural realities that rarely get much television time — collective bargaining agreements, judicial decisions, ownership rights and the raw distribution of power — will not be swept away simply because a man who has mastered old and new media alike has succeeded so brilliantly in casting himself as the avenger for the dispossessed.
Still, a phony celebrity populism plays well on television at a time when politics and governing are regularly trashed by those who claim both as their calling. Politicians who don’t want to play their assigned roles make it easy for a role-player to look like the real thing and for a billionaire who flies around on his own plane to look like a populist.
By: E. J. Dionne, Jr., Opinion Writer, The Washington Post, May 1, 2016
Former New Hampshire governor John Sununu is fond of saying “Iowa picks corn and New Hampshire picks presidents.” Let’s hope that he’s wrong this time, or America is headed for an apocalyptic “choice, not an echo” election.
Celebrity demagogue Donald Trump and Democratic Socialist Bernie Sanders won massive victories on Tuesday, sweeping virtually every voter group in the Granite State. It was a night for pitchfork populism, with the politics of cultural and economic resentment hitting overdrive.
What’s truly troubling is that New Hampshire traditionally serves as a speed-bump in the crowded primary calendar, calming hyper-partisan passions and pandering. Unlike the low-turnout Iowa Caucuses and play-to-the-base South Carolina, the “Live Free or Die” state offers an electorate that reflects the independent centrist sensibility of the American general electorate.
Forty-four percent of New Hampshire voters are registered independents, essentially mirroring national self-identification numbers. It’s an open primary, increasing competition and voter participation. And it’s a swing state, one of only seven that is considered up for grabs in a presidential election.
For Republicans, New Hampshire is a rare state where the party is evenly divided between conservatives and moderates. Libertarians have a strong presence and perhaps not coincidentally it’s the least religious state in the nation. Social conservative litmus tests have limited appeal here. For example, New Hampshire became the first state to legalize marriage equality via the legislature in 2009. While the state isn’t exactly a bastion of racial diversity, New Hampshire has ideological diversity and a proud live-and-let live culture. In the last two presidential primary cycles New Hampshire backed John McCain and Mitt Romney after the Iowa caucuses elevated Mike Huckabee and Rick Santorum. Earlier in the cycle, it seemed like one of the strong center-right governors—Chris Christie, John Kasich, or Jeb Bush—would be primed to repeat the pattern.
So much for that streak. The record will now show that Donald Trump romped to victory in 2016 with a nativist campaign. He updated the conservative populism of Pat Buchanan, the right-wing pundit who narrowly won the state in 1996 with an anti-immigrant, anti-trade, and anti-establishment agenda. Trump’s proudly anti-PC appeals defined deviancy down in this campaign, delighting in the attention that outrageously ugly “us against them” rhetoric can bring. His Teflon comes from being a reality TV star with a reputation for ruthless business success. Fame and fury more than compensate for a lack of conservative philosophy to those folks who just want an anti-Obama in the White House. Trump’s victory cut across all age, income, and ideological groups, according to CNN’s exit polls—though the more educated and wealthy a voter is the less likely they are to buy his B.S.
The prospect of a billionaire populist should be enough to make your head explode. But for the earnest liberal activists who clustered around Bernie Sanders’s insurgent campaign, the idea must be particularly insulting.
After all, the energy behind Bernie’s campaign comes from righteous anger at income inequality that has only deepened in the wake of the great recession, making millennials more receptive to a democratic socialist agenda than at any time since post-war Progressive Party members insisted that “Uncle Joe” Stalin was simply misunderstood.
Sanders’s campaign has so far succeeded in making “moderate” a dirty word in the Democratic primary—a mirror image of what the dynamic Republicans have been wrestling with for decades. Whatever the ultimate impact, we are witnessing the birth of a left-wing Tea Party that may divide the Democratic Party—with predictable results—for decades to come.
No doubt Bernie’s big win was boosted by his status as a Senator from Vermont. New Hampshire traditionally rewards neighboring state elected officials from Paul Tsongas to John Kerry. But his campaign also became a crusade against the governing establishment represented by Hillary Clinton. In the psychology of support, it is cool to like Bernie now. And according to CNN’s exit polls, he won almost every voter cohort—including, somewhat surreally, moderate voters. Only non-white voters, senior citizens, and those who made over $200k supported Clinton in New Hampshire.
It’s worth noting that these two opposite-in-everything men share two broad policy positions: a distrust of free trade deals and a belief that big money super PACs are trying to buy elections.
But while Bernie also rode a wave of populism to his victory, buoyed by his unscripted authenticity—any parallels to Trump stop there. While The Donald glories in incivility, Bernie refuses to go negative during the campaign. While Trump’s policies are all bumper-sticker bluster, Bernie glories in a five-year plan with detailed bullet points.
Perhaps the most relevant difference is that Trump has positive primary calendar ahead of him—he leads the polls in the upcoming conservative states throughout the South. Bernie has a much tougher road ahead in states that are both more conservative and more diverse. Democratic socialists from Vermont via Brooklyn don’t expect a friendly reception in the South.
Adrenalin is surging for Trump and Sanders supporters after their lopsided wins in a centrist state. But there is something nihilistic behind the anti-establishment anger that drove them to the polls. Because polarization doesn’t solve problems—it compounds them.
The authoritarian-tinged appeal of a strong-man or the promise of ideological purity makes true-believers feel invincible until they collide with reality in a constitutional democracy. Victory in presidential elections requires reaching out beyond the base and winning over the reasonable edge of the opposition. Effective presidential leadership requires working with congress in a spirit of principled compromise, defining common ground and achieving common goals.
The frustration that many folks feel with Washington stems from its current division and dysfunction, the sense that special interests are ignoring the national interest. They’re right. But the populist protest candidacies of Trump and Sanders will only deepen Washington’s division and dysfunction because they don’t offer any practical bipartisan solutions as a matter of pride. Banning Muslim immigration or single-payer healthcare may have their constituencies but they aren’t going to pass congress. Insults and ideological purity are only a recipe for further polarization, creating a feedback loop of frustration and alienation. Their prescriptions double-down on the disease.
Some hardcore partisan supporters no doubt love the idea of a Trump-Sanders general election, effectively forcing America to choose between two extreme visions. But despite their current popularity with the partisan base, neither man represents the vast majority of Americans. And here’s a proof-point to keep the moderate majority from fearing the future: Less than 0.3 percent of Americans have voted so far in the 2016 primaries. We’ve still got some time for sanity to catch up with all the crazy talk.
By: John Avlon, The Daily Beast, February 10, 2016