In 1992, an adviser to Bill Clinton’s campaign for president posted a sign that included the phrase “(It’s) The Economy, Stupid.” In 2018, as Republicans emphasize some misleading economic statistics, I think Democrats at all levels should change the reminder just slightly: “It’s the Inequality, Stupid.”
Writer Frank Rich of New York Magazine identifies the 2008 Great Recession as a major cause of current anger and distrust of government. A recent article in The Atlantic Monthly describes the effects of the recession simply: it left the U.S. “poorer and more unequal” than before. During that period, about 8 million jobs were lost and about 10 million homes suffered foreclosure.
In 2017, the Federal Reserve of Minneapolis identified one of the three factors causing the recession as an unregulated “shadow banking system” that encouraged the risky, lucrative practices that left millions of mortgages “underwater.” Since the recession, average Americans have suffered from flat wages while soaring corporate profits helped the richest 10 percent of Americans increase their income to about 50 percent of the total, the largest percentage in over 100 years. The wealthiest 1 percent of Americans saw their income increase by about 10 percent; everyone else saw theirs drop. The Federal Reserve of St. Louis concluded that income inequality in 2013 rose to its highest level since the 1920s.
Rich suggests that people are angry at the government because it did not protect them from the disaster of the recession, punished no one involved in its creation, and has taken no steps to ensure it won’t happen again. Instead, our government propped up the huge banks, insurance companies, and financial firms that caused the problem in the first place. The result? The “American Dream,” involving a good job, owning a home, and a belief that Americans had a “shared core of values” that could solve even the worst crises in an equitable way, “has been shattered.” This is in contrast to the Great Depression, the only economic crisis worse than 2008, when government took strong steps to reform financial practices and assist those whose lives were torn apart.
It’s no surprise that two grass roots movements related to the inequality and inefficiency of the tax structure materialized in response: the Tea Party and Occupy Wall Street. Although they inhabited opposite sides of the political street, both were fueled by the greatest gulf between the very rich and the middle- and lower-classes in the history of America.
Largely forgotten is the impetus for the anti-tax Tea Party movement in 2009: taxpayers were asked for more money to assist those with unsustainable mortgages after billions had already gone to the financial firms who caused the crisis. I understand the angry reaction but see it as misguided. To me, resisting the use of taxes paid by average Americans for corporate bailouts makes more sense than fighting assistance for the middle-class workers most directly affected.
Occupy Wall Street began in the fall of 2011 when some tried to focus attention on the continuing transfer of wealth from the 99 percent to the 1 percent. With ill-defined goals and often chaotic behavior, it attracted minimal support from those whose homes and jobs had been erased or downsized. One proposal lost in the dismissive news coverage was a 0.5 percent tax on Wall Street transactions, often called a Robin Hood tax, that could raise about $300 billion per year, more than enough to address many of the pressing issues of our time.
Today, Republicans and President Trump claim economic success in a rising stock market. However, the wealthiest 10 percent own 81 percent of all stock, with the next 10 percent responsible for another 11 percent. The bottom 80 percent of Americans only account for 8 percent of stock ownership. A rising stock market may be an economic success for the wealthiest Americans, but it does little or nothing to help average Americans.
A low unemployment rate, about 4 percent, is another talking point for Republicans. But just creating jobs for workers displaced by the recession isn’t enough: they need to be jobs that pay a living – or middle-class – wage. Employers have taken the opportunity since the recession to increase profits without raising pay rates by using more advanced technology and cheap foreign labor. Pew Research finds that one out of four workers make $10 or less per hour. Working full-time at that rate means a worker and family still live below the federal poverty level. Minimum needs for food, clothing and shelter are not easily managed by 25 percent of Americans even though they work full-time. In 2018 America, jobs aren’t the problem, but good jobs, ones beyond fast-food service or stocking retail shelves, are.
The inequality in income and wealth affects and infects every facet of our society and is certainly the elephant in the room for elections in the near future. But there is an entire zoo full of other issues crowding us as well. Rich notes that many people feel “Everything in our country is broken,” including health care, education, law enforcement, and race relations, all of which involve issues of inequality related to income and wealth.
Democrats need to address these inequalities with policies offering improvements in the lives of the 80 percent or more who have fallen further behind in recent years. I am not the first to note that political campaigns and government processes have been overwhelmed by negativity in recent years. I hope this trend reached a peak in the 2016 election with the NeverTrump and NeverHillary factions, both defined solely by negative intentions, and both crucial in the campaign and election.
Simply pointing out problems is a weak long-term political strategy. A negative, NeverTrump or NeverRepublican message won’t be sufficient to win multiple elections or build a solid base of supporters to carry our country into the next decades as a strong democracy, an equitable society, and a world leader. I hope that Democratic candidates can translate their newest slogan, “For the People,” into a positive message that addresses the economic and other inequalities that currently drain the life from our powerful, vibrant, and diverse society.
Allen Woods is a freelance writer and author living in Greenfield. Comments are welcome here or at his book’s web site,
www.theswordandscabbard.com or awoods2846@gmail.com.