Is the key to Donald Trump’s success just old-fashioned racism? He surely stokes race hatred among his followers and even more-or-less openly panders to anti-Semitism. Yet he also seems to feed on economic desperation. He has won running against trade, his support tracks inversely with educational attainment, and he’s posted his biggest margins in some of the most desperate counties in America; surely economic anxiety has something to do with his rise.
This has led to various attempts to untangle race from economic factors in predicting Trump’s support. An effort from The Washington Post found some of both, with racial resentment something like twice as important in predicting Trump support. Yet one should not end the analysis there: Trump also represents bitter hatred of the political system, driven by the shredding of the American social contract over the last 40 years.
The thing about Trump is that not only is he the most openly bigoted presidential candidate since 1968 (or perhaps even 1948), he’s also utterly uncouth and unqualified. Unlike William F. Buckley, his racism is not genteel or hidden behind polite words, and unlike George Wallace or Strom Thurmond, he has precisely zero political experience. Even against his Republican primary opponents, he was a boorish jerk, insulting their wives and boasting about the size of his penis.
In other words, Trump doesn’t just express bigoted views, he also has utter contempt for the traditional norms of political decorum, and in previous times would have been considered a completely laughable choice for president. But his followers revel in it.
The rise of Trump is worth examining in the context of this brilliant article by Matthew Stoller, detailing the change in the American social contract from the postwar generation to today. In brief, for 30 years after World War II, there was a strong political-economic consensus around a high rate of unionization, shared productivity growth, strict financial regulation, and low unemployment — all centered around homeownership as the bedrock of middle-class status and wealth.
Starting in the mid-’70s, this social contract was slowly ripped apart. First unions were deliberately crushed in the Volcker recession, and low unemployment was gradually discarded as a political goal. This severed the link between productivity growth and wage growth. Meanwhile, Wall Street was slowly unchained, resulting in repeated financial bubbles, each one larger than the last (and each with concomitant sprees of fraud).
Yet growing consumer spending was still needed for economic growth. Thus American women went to work, and American families levered up. They took out credit cards, and drew down their savings. “Finally, they liquidated their financial assets, including their home equity,” Stoller writes. A new, much less egalitarian social contract emerged, where wages were replaced with credit.
But this contained the seeds of its own destruction. Eventually Americans had reached the absolute limit of how much debt they could take on, while simultaneously Wall Street blew up the biggest bubble yet, and this time around the key asset for ordinary families. When home prices collapsed, middle-class America got it right on the chin, and tens of millions were ruined outright.
As David Dayen’s new book details, the Obama administration rescued Wall Street from its self-induced problems but basically ignored foreclosures, figuring that eventually the system would unclog and normal operation of the mortgage and homebuilding sectors would return. They didn’t, because the administration fundamentally misunderstood what was happening. Home equity collapsed for years, and while it has since recovered to some extent, drastically fewer are represented: The homeownership rate has steadily fallen to levels not seen since the mid-’60s.
The Reagan-era social contract has collapsed, and nothing is on the horizon to replace it — indeed, it’s hard to imagine a “social contract” whereby a largely parasitic financial and executive class makes off with virtually all income gains, a rapidly vanishing middle class is increasingly locked out of wealth creation, and the political class is all but owned outright by Wall Street. Such a society would be more about coercing consent from the restless masses through surveillance, mass incarceration, and highly militarized police than it would be about obtaining it by social spending and quality services.
A white backlash to the first black president is a very important part of Trump’s rise. But the fact that he represents a raised middle finger to the entire American political system is, I submit, about equal in importance.
Now, it’s worth noting that the old postwar days were by no means perfect. Homeownership is a highly problematic bedrock for middle-class wealth, particularly in the dispersed, suburban style typical of America. Worse, a great many demographics were left out of the good times — minorities and women especially.
Yet it is unquestionably true that those days had much more enthusiastic buy-in from the broad mass of the population than today. Trust in the federal government has fallen from 77 percent in 1964 to about 20 percent today. The approval ratings of the Supreme Court and especially Congress have also plummeted.
Back in the ’50s and ’60s, minority activism to get a piece of what the white middle and working class had was a sensible goal. Now it seems inadequate, as more and more white folks are careening down to meet their black brethren at the bottom of the social ladder.
What is needed is a new social contract that restores some fairness and decency to American society. Without it, the politics of rage and contempt will only grow.
By: Ryan Cooper, The Week, May 24, 2016
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May 26, 2016
Posted by raemd95 |
Donald Trump, Middle Class, Racism | Anti-Semitism, Bigotry, Economy, Financial Crisis, Trump Supporters, Unions, Wage Stagnation, Wall Street, William F. Buckley |
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Talk about a political tin ear! Wednesday, House Republican Leader Paul Ryan and Senate Leader Mitch McConnell threatened to take away middle class overtime pay.
Speaking as a Progressive Democrat my response is simple: go ahead — make our day. Talk about bad politics.
Here is the backstory. On Wednesday, the administration announced its final rule revising the threshold used to define who is automatically required to be paid time and a half for overtime when they work more than 40 hours per week.
The Wage and Hour Act that was passed in 1938 requires overtime be paid to almost all hourly workers. But there are exceptions for professional, managerial and executive personnel.
To prevent employers from declaring that people who do ordinary jobs are professional, managerial or executive personnel, the law required the Labor Department to set a pay threshold. If a worker makes less than that threshold, he or she cannot be categorized as a professional, manager or executive, no matter what his or her “duties.”
Three decades ago, when the wage threshold was set, 62 percent of all workers made less than that threshold and qualified for automatic overtime, no matter their job classification.
But the threshold has not been materially increased for 30 years. As a result, only 8 percent of all employees now qualify for automatic overtime. And, not surprisingly, many companies have driven a Mack truck right through the “professional, executive and managerial” loophole. As a result many employees, like some who spend most of their days making sandwiches at Subway, are classified as “managers” and required to work 50- or 60-hour weeks with no overtime pay. In fact, they are often put on fixed — if tiny — “salaries” so they get no pay for overtime at all.
The disappearance of overtime protections is precisely one of the rules of the economic game that has been rigged by the CEO class to assure that virtually all of the new income growth in America has gone to the top one percent.
So Wednesday, Labor Secretary Tom Perez, Vice President Joe Biden and Senator Sherrod Brown went to Columbus, Ohio to announce that the threshold would be raised from $23,000 — where it has been stuck for years — to $47,500.
This is a huge victory for the middle class and all ordinary workers, and it is likely to benefit more than 12 million American families. It will once again make certain that workers are actually paid for their overtime.
But to hear the Republicans, this was a gigantic Obama overreach that will stifle job growth and hurt small businesses. This is the same thing they say whenever we increase the minimum wage or take other steps to make certain that ordinary people get to keep a bigger share of economic growth that they themselves create. But Republican predictions of doom never turn out to be true.
Of course the reason it never turns out to be true is that economic growth — and with it, job growth — is actually fueled by putting more money into consumer pockets rather than in the offshore accounts of corporate CEOs.
But putting the economics of the case aside — for the GOP this is really dumb politics. It doesn’t take a rocket scientist or political guru to tell you that trying to take away the overtime pay of ordinary voters will not make them happy — no matter how happy it makes the GOP’s corporate givers.
If there is one thing that this election season has made crystal clear: ordinary voters are plenty unhappy about the fact that their incomes have flatlined at the same time CEO salaries and bonuses have soared. It makes no sense to them that per capita Gross Domestic Product has shot up 48 percent over the last 30 years and yet their incomes have stagnated. And they are figuring out who is to blame — the .01 percent that rigged the rules of the economic game so they could keep virtually all of that gain for themselves.
But Paul Ryan and Mitch McConnell have convinced their rank and file that they are better off being dragged around by their noses by corporate bigwigs who give them money than they are by paying attention to the needs of ordinary voters.
Newsflash: want to know why the GOP rank and file has turned on the GOP elite? It’s because they have time and time again failed to deliver for the white working class men who they have used as cannon fodder in their quest to give more tax breaks for the rich.
So now this brilliant GOP leadership has threatened to use the Congressional Review Act (CRA) to pass resolutions overturning the new overtime rule — and in effect take away people’s overtime pay. But when they do, President Obama will veto their resolution, and there is no way Democrats will give the GOP the votes to override his veto of this very popular new regulation.
Instead, Democrats plan to have a field day reminding voters that their GOP representative voted to take away their overtime pay.
Sometimes, as the famous organizer Saul Alinski once said: you can count on your enemy. This time, the Republican’s blind allegiance to corporate orthodoxy and rightwing ideology will lead them into a bloody political ambush. It couldn’t happen to a more deserving crew.
By: Robert J. Creamer, The Blog, The Huffington Post, May 20, 2016
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May 23, 2016
Posted by raemd95 |
Middle Class, Mitch Mc Connell, Overtime Pay, Paul Ryan | Congressional Review Act, Economic inequality, Minimum Wage, Wage and Hour Act, Wage Stagnation, Wage Thresholds, White Working Class |
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Since the seventh anniversary of the American Recovery and Reinvestment Act – the “stimulus” – was this week, it was a good time to ask, “Who Do You Want In The White House When The Next Recession Comes?”
On Friday, Ed Dolan, writing in Nouriel Roubini’s EconomMonitor, answers: Definitely not Marco Rubio.
Dolan fleshes out the argument that our post made earlier this week about the kind of economic decision-making any rational person would want to have in the White House in the event of an economic downturn. And he concludes that in the case of Rubio (and other Republicans, for Dolan notes Rubio’s views are “widely shared” within the GOP), “the federal government would be legally bound to allow the economy to drift rudderless onto the rocks.”
That’s because Rubio – and for that matter all of the Republican presidential candidates – don’t have a firm grasp of Economics 101.
If you remember your basic college econ course, you’ll know that the first line of defense against a recession is fiscal policy. When the economy goes into a slump, spending rises on unemployment compensation, food stamps, and other benefits. At the same time, tax receipts, which are linked to income, decrease. Because the spending increase plus the tax decrease automatically cushion the slump, economists call them automatic stabilizers.
If you’re a true Keynesian, automatic stabilizers aren’t enough. You add some discretionary fiscal stimulus in the form of road projects and maybe a temporary tax rebate. If the timing is right, that softens the recession even more and speeds the recovery.
But Rubio, as Dolan notes, is a staunch supporter of a balanced budget amendment to the Constitution. (So is Ted Cruz, Jeb Bush, Ben Carson and John Kasich.)
It sounds like a sensible idea, until you think about it. But then, you see that the idea of balancing the federal budget every year is nuts. It would mean that when the economy went into a slump, pulling tax revenues down, Congress would have to enact across the board emergency spending cuts to keep a deficit from emerging. The cuts would quickly hit jobs and household budgets. Consumer spending would fall, firms would cut output to fight ballooning inventories. Without the automatic stabilizers, a mild recession would turn into a tailspin.
But Rubio would not stop there, Dolan goes on to write. Rubio also wants to constrain the ability of the Federal Reserve to stimulate job creation – one half of its dual mandate to keep both unemployment and inflation low.
Here is what [Rubio] said about the Fed in this week’s South Carolina town hall:
That’s not the Fed’s job to stimulate the economy. The Fed is a central bank, it is not some sort of overlord of the economy. They’re not some sort of special Jedi Counsel that can decide the best things for us.
The Fed is a central bank. Their job is provide stable currency and I believe they should operate on a rules based system. They would have a very simple rule that determines when interest rates go up and when interests rates go down.
So just what is this “simple rule” Rubio is talking about? He provides the details elsewhere. His rule would replace the Fed’s dual mandate with a single mandate to prevent inflation. The Fed would be required to raise rates to stop inflation during a boom, but it would be barred from doing anything when unemployment soars during a recession.
That is why it behooves us to ask pointed questions of the presidential candidates about what they would do if the U.S. faced an economic downturn on their watch. Chances are, if they are reading from the same economic playbook that Marco Rubio uses, they would turn the next recession into the next Great Depression.
By: Isaiah J. Poole, Editor of OurFuture.org, Campaign For America’s Future, February 19, 2016
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February 22, 2016
Posted by raemd95 |
Balanced Budget Amendment, Economic Policy, GOP Presidential Candidates, Marco Rubio | Automatic Stabilizers, Depression, Economic Recovery, Federal Reserve, Fiscal Discretionary Stimulus, Inflation, Jobs, Recession, Wage Stagnation |
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For a poor woman born in the Roaring Twenties, getting to age 50 was something of an accomplishment. She had to contend with diphtheria and tuberculosis, hookworm and polio, not to mention childbirth, which killed about 800 women for every 100,000 births at the beginning of the decade. Widespread use of penicillin to treat infections was still 20 years away; Medicaid, four decades. If she did make it to 50, on average she would live to be 80 years old. That sounds pretty good, until you consider that the richest women born at the same time lived about four years longer.
Americans have become much healthier since then, generally speaking, thanks to scientific advances, higher living standards, better education, and social programs. Life expectancy hit a record high in 2012. But as with economic prosperity, gains in physical health haven’t been spread equally. Instead, they’ve been increasingly skewed towards the wealthy—and a new analysis from the Brookings Institution indicates gaps in lifespan between the rich and the poor are getting worse, not better.
Using data from the Social Security Administration and other government records, the report compares the lifespan of people born in 1920 and in 1940 who were in either the top or bottom ten percent of wage earners. It turns out that rich men born in 1940 can expect to live 12 years longer than the poorest, compared to a six-year gap between rich and poor men born in 1920. The disparity in life expectancy between women at the top and bottom more than doubled, growing from four to ten years. In fact, women at the bottom saw no increase at all in their life expectancy. The difference continued to grow between rich and poor people born in 1950.
The Brookings analysis “adds to a growing body of evidence that there is a widening gap in health between the haves and have-nots in the country,” said Steven Woolf, director of the Center on Society and Health at Virginia Commonwealth University. It’s been clear for some time that how long Americans live depends on how much money they have, even their zip codes. What the Brookings study adds is evidence of the problem getting steadily worse.
As for how socioeconomic inequalities translate into inequities in life span, “It’s rather mysterious,” said Lisa Berkman, the director of the Center for Population and Development Studies at Harvard University. One answer is that low-income people tend to be sicker in the first place, because the neighborhoods they can afford to live in are more polluted; because they can’t afford to adopt and maintain healthy behaviors; because they can’t afford health insurance premiums, copayments, and prescription drugs.
Woolf accounts much of the disparity in death rates to what he calls “stress-related conditions.” People who aren’t secure economically are likely to experience high levels of stress, which studies have linked to shorter lifespans and a heightened risk of death from strokes, heart attacks, and other illnesses. “We’re seeing a dramatic increase in deaths from opioids, whether we’re talking about prescription painkiller or heroin, but also from suicides, liver disease, and other conditions that I personally feel come from different ways that people are coping, in an unhealthy way, with the stresses that they’re facing in their daily lives,” Woolf said, particularly since the recession. Smoking, the leading cause of preventable death, takes a particularly costly toll on low-income people.
Berkman traces at least some of the stress load on lower-income Americans to changes in the workplace. The 1920s cohort analyzed by the Brookings researchers had their greatest earnings in the 40s and 50s, a time of economic growth and greater equality across the income spectrum. While low-income people born in the 1940s entered a labor market that was less demanding physically, they may also have experienced greater insecurity as wages stagnated, and difficulty balancing work and family life as more women entered the workforce. Unlike many other peer countries with more robust family support, the United States didn’t do much to accommodate the increased challenges facing working parents, Berkman noted. “The second wave of occupational risk are sets of working conditions that are hugely stressful,” she said. “They aren’t so physically stressful, but they’re socially stressful. They’re insecure, they’re inflexible, or they have no ability to balance work and family issues. We need to rethink what occupational health and safety is.”
The point of the Brookings study was to examine how the redistributive impact of Social Security benefits were impacted by lifespan gaps. The report’s authors concluded the disparity
means that high-wage workers will collect pensions for progressively longer periods, even as low-wage workers see little improvement in life expectancy. That gap, when taken together with the rise in average retirement ages since the early 1990s, means the gap between lifetime benefits received by poor and less educated workers and the benefits received by high-income and well educated workers is widening in favor of the higher income workers.
In other words, one of the programs that’s specifically intended to help poor Americans through retirement isn’t really working to their benefit anymore. To Berkman, that suggests the need for reform tailored to different groups—people who’ve worked physically demanding jobs, for instance, need a different sort of retirement security than wealthier people who are in good health able to work longer.
“It’s sort of amazing that people haven’t stood up and said, ‘Oh my god, what are we doing?” Berkman said. “What are we doing to not a small part of our country, but the bottom third, maybe even the bottom half?”
By: Zoe Carpenter, The Nation, February 18, 2016
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February 22, 2016
Posted by raemd95 |
Life expectancy, Lifespan Gap, Poor and Low Income, Wealthy | Death Rates, Economic Growth, Occupational Health and Safety, Physical Health, Retirement, Socioeconomic Inequality, Steven Woolf, Wage Stagnation, Women |
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In achieving their improbable surges in presidential polling, Bernie Sanders and Donald Trump have profited from the same wellspring of anxiety, a deep-seated fear about the future that is rising across the land. Their answers to that anxiety are very different — as their followers are very different — but they have both tapped into an undercurrent of unease that affects a broad swath of American voters.
And that unease is well-founded. In mid-September, the U.S. Census Bureau issued its annual report on wages, poverty, and health insurance. Its findings come as no surprise: Though the official unemployment rate is down to its lowest level in seven years, the percentage of people living in poverty — around 14 percent — hasn’t budged in four years.
Equally worrisome is the stagnation in wages, which haven’t risen significantly for more than a decade. “Anyone wondering why people in this country are feeling so ornery need look no further than this report. Wages have been broadly stagnant for a dozen years, and median household income peaked in 1999,” Lawrence Mishel, president of the Economic Policy Institute, a research group, told The Associated Press.
And ornery people are. That’s the only thing that explains Trump, who for weeks has enjoyed the top spot in GOP presidential primary polls. Full of bombast, narcissism, and blame, the real estate titan has pinned Mexican immigrants as the purveyors of all that is destructive to the American way of life. It’s astonishing how much support he’s received for his proposal to deport the estimated 11 million who are here illegally.
There’s no doubt a good portion of racism and xenophobia among the Trump crowd; they are largely voters uncomfortable with the country’s increasing diversity. But they are also anxious about a future in which the American dream is out of reach for their children and grandchildren.
On the other side of the political spectrum, Sanders, Vermont’s self-described socialist in the U.S. Senate, is giving Hillary Clinton a run for her money, attracting large crowds, and leading in New Hampshire, which holds the first presidential primary vote. His answers, at least, are not xenophobic: Among other things, he would increase taxes on the wealthy and end some longstanding trade agreements.
Sanders has long warned about income inequality, which has been growing for decades but was exacerbated by the Great Recession. Suddenly, ordinary workers saw their jobs disappear, their savings evaporate, their homes taken by the bank. Many of them have not recovered the ground they lost, and their traumas have invited fear bordering on panic.
Meanwhile, the rich have only gotten richer. The top 1 percent own 40 percent of the nation’s wealth, and they hold a larger share of income than at any time since the 1920s and the Great Depression.
These trends are evident throughout the industrialized world; they’re not the fault of any single politician or ideological philosophy. According to economists, they’ve grown from a convergence of factors, including the technological revolution and the globalization of labor.
Still, the wealth gap is quite worrisome. It’s a recipe for revolution, the sort of gulf between the haves and have-nots that is characteristic of developing countries, where the ties of the civic and social fabric do not bind. It’s hard to overstate the potential for upheaval in a country such as this, where a diverse population is not held together by a single language or race or religion, but rather by the belief that opportunity is available to all. What happens when a majority of the people no longer believes that?
You’d think, then, that income inequality would dominate the campaign trail. But the subject was hardly mentioned during Wednesday’s marathon GOP presidential primary debate, where such pressing priorities as possible Secret Service code names were discussed.
That’s not good. While it’s hard to see either Trump (his bubble may already be bursting) or Sanders as a presidential nominee, the voters they represent aren’t going away. Neither is their anxiety, which could prove a disruptive force in American political and civic life.
By: Cynthia Tucker Haynes, Pulitzer Prize for Commentary in 2007; The National Memo, September 19, 2015
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September 21, 2015
Posted by raemd95 |
Bernie Sanders, Donald Trump, Economic Inequality | Diversity, GOP Primary Debates, Great Recession, Hillary Clinton, Immigration, Poverty, Racism, Socialism, Unemployment Rate, Wage Stagnation |
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