Most People Say The Economy Is Unfair (And Government Doesn't Care)

 

The charts above are from the New York Times / Ipsos Poll -- done between January 2nd and 10th of a nationwide sample of 2,128 adults, with a 2.6 point margin of error.

Trump Isn’t The Cause Of What Ails America. He’s The Consequence.

Most Americans are upset at how the economy works only for the few and not the many. Robert Reich explains how this happened: 

Donald Trump isn’t the cause of what ails America. He’s the consequence. The real causes go back four decades.

FOR THREE DECADES after World War II, America created the largest middle class the world had ever seen. During those years, the earnings of the typical American worker doubled, just as the size of the American economy doubled.

Over the last 40 years, by contrast, the size of the economy has more than doubled again, but the earnings of the typical American have barely budged (adjusted for inflation). Most of the gains have gone to the top. 

In the 1950s and 1960s, the CEOs of large corporations earned an average of about 20 times the pay of their typical worker. Now they rake in over 300 times the pay of an average worker.

In the 1950s and 1960s, the richest 1 percent of Americans took home about 10 percent of the nation’s total income. Today they take home more than the bottom 90 percent put together.

Then, the economy generated hope. Hard work paid off. The living standards of most people improved through their working lives. Their children enjoyed better lives than they had. Most felt that the rules of the economic game were basically fair.

Although many women, Black people, and Latinos were still blocked from getting a fair share of the economy’s gains, the nation committed itself to changing this. New laws guaranteed equal opportunity, barred discrimination, promoted affirmative action, and expanded educational opportunity for all.

Today, confidence in the economic system has sharply declined. Its apparent arbitrariness and unfairness have undermined the public’s faith in it. Cynicism abounds. Equal opportunity is no longer high on the nation’s agenda.

 Recent American history can be divided into five periods:

1. 1946-1979, we grew together. Almost everyone gained ground.

   
   

2. 1980-2008, the great U-turn. Most economic gains began going to the top.

   
   

3. 2008-2010, the financial crisis. The banks were bailed out but millions of Americans lost their jobs, homes, and savings. The experience revealed the gross inequalities of wealth and power that underlay the new economy. This caused widespread disillusionment with the system.

   
   

4. 2010-2016, anger at the establishment. Both Bernie Sanders and Donald Trump emerged as anti-establishment candidates — although Trump’s anti-establishment persona was fake (and still is).

    

5. 2016-2050, the choice between oligarchy and democracy. The 2024 election represented a lurch toward oligarchy, but I believe Trump and his oligarchy will overreach, and we’ll choose a more robust democracy. 

***

WHEN MOST PEOPLE STOP BELIEVING that they and their children have a fair chance to make it, the tacit social contract begins to unravel. And a nation becomes susceptible to demagogues such as Donald Trump peddling the politics of hate. 

Many of the most vocal proponents of the “free market” — including Elon Musk, executives of large corporations and their ubiquitous lawyers and lobbyists, denizens of Wall Street and their political lackeys, and numerous multimillionaires and billionaires — have been actively reorganizing the market for their own benefit.

The consequence has been a market created by those with great wealth for the purpose of further increasing their wealth.

This has resulted in ever-larger upward distributions inside the market, from the middle class, working class, and poor to a wealthy minority at the top. 

Because these distributions occur inside the market, they have largely escaped notice. We tend to debate only downward “redistributions” that occur outside the market, through taxing the rich and transferring some benefits to the poor and working class. 

Musk and Trump want to reduce such redistributions. 

But the hidden upward redistributions inside the market are arguably larger.

This is why it’s so important that those of us who care about social justice speak out and explain what has happened. And why it’s crucial that Democrats focus on reversing the staggering inequalities of this era and getting big money out of politics. 

Otherwise, the only explanation most Americans receive for what has happened comes from Trump authoritarians who falsely blame immigrants, “socialists,” the “deep state,” “woke”ism, Democrats, Black people, women, and other countries. 

And the only agenda most Americans receive for remedying what has occurred is by backing Trump and Musk and their lurch toward fascism.

 

My friends, the underlying issue is not the size of government. It’s whom the government is for. The fundamental choice is democracy or oligarchy.

Too Many Americans Don't Understand Economics

The chart above is from a Harris Poll done for The Guardian. It was done between May 10th and 12th of a nationwide sample of 2,119 U.S. adults. 

Sadly, it shows that a huge segment of the U.S. population doesn't seem to understand economics (and that misunderstanding crosses party lines). About 67% of Republicans, 53% of Independents, and 49% of Democrats say the United States is currently in the middle of a recession. IT IS NOT!

Just the opposite is happening - the economy is booming!

I understand that too many Americans are being squeezed by high prices and low wages. But your inability to keep up with the rising prices doesn't mean the country is in a recession. It means you wages are too low thanks to an unfair economy instituted and maintained by Republican officials.

Republican economic policy allows the rich to hog most of the rising productivity and corporations to price-gouge consumers. 

Don't blame President Biden and Democrats. They tried to raise the minimum wage, make it easier to unionize, help with childcare, and reduce poverty - but all those initiatives were killed by Republicans (who only want to keep funneling more money to the rich).

The country is not in a recession and inflation is coming down. But neither helps in an unfair economy. The economy needs to be fixed to benefit all Americans instead of just the rich. But that won't happen as long as Republicans have enough power to block all changes.

People Know The Economy Is Good - And Know It's Unfair

The chart above reflects the result of the newest Monmouth University Poll - done between February 8th and 12th of a nationwide sample of 902 adults, with a 4.1 point margin of error.

Right-wing news sources have been telling Americans the economy is bad. Major media sources have been reporting the economy is good. Which is it?

The major indicators (GDP growth, Unemployment rate, inflation rate, etc.) are all good. In fact, the U.S. economy is doing better than the economies of any of our friends (in Europe and Asia).

Note on the chart above though that the economy is not necessarily good for everyone. Only 33% say their family has benefitted some or a lot from the good economy. About 64% say the opposite. Why, if we have such a good economy, are most people not benefitting from it?

It's because a good economy doesn't mean it's a fair economy, and the U.S. economy is very unfair. The top 10% (and especially the top 1%) are doing very well in this good economy. But most of the bottom 90% of Americans are not. They are struggling to keep up with inflation (even though the inflation rate is falling).

Why is this? It's because the Republicans have had the power to control economic policy since about 1980, and they have a very simplistic economic viewpoint. They believe the key to a good economy is making sure those at the top can make more. They believe the rich will then share their new wealth with everyone else. Unfortunately, that view doesn't consider one important ingredient - GREED.

This GOP "trickle-down" theory of economics has never worked. Those at the top have seen their bank accounts fattened immensely, but they have not allowed much, if any, to trickle down to the masses.

Before 1980, the economy was much fairer. Rising productivity was shared between the wealthy, middle and working classes. Everyone benefitted. But after the GOP policies were enacted, the economic playing field was tilted to benefit the rich (to the detriment of everyone else).

Democrats have been trying to tell voters that the economy is good. They need to stop saying that, because the economy is good only for a few. They need to concentrate on how unfair the economy is, and explain to voters how they can make the economy more fair for everyone. After all, for someone not benefitting from a good economy, it's not a good economy.

 

The Economy Is Great For The Rich But Not For Most Others

Al indicators show the American economy is doing very well. Inflation is down, unemployment remains very low, the Gross Domestic Product is high, the Stock Market is nearing an all-time high, and sales are brisk in this holiday season.

But poll after poll has shown that a significant majority of Americans say the economy is bad. Why the disconnect? Are U.S. citizens just too ignorant to recognize a good economy? Not at all!

The truth is that the economy has reached an epic stage of unfairness. The economy is good for the rich, and great for the super-rich. But the bottom 90% is not feeling the benefits of the good economy. They still struggle with even the low inflation. They have trouble with rising child care and medical/drug costs. And their salaries are not keeping pace.

The real problem is not a bad economy, but an unfair economy -- an economy that only benefits the rich. The gap between the top 10% and the bottom 90% has grown enormous -- surpassing the unfairness of the pre-Depression Gilded Age.

Rep. Ro Khanna is right. It is a mistake for Democrats to just try to convince Americans that they are wrong about the economy. They know better. Instead, Democrats must recognize the unfairness of the economy, and convince voters that they have solutions for that unfairness. If they don't, then voters will do what they normally do in a bad economic situation -- punish the party that occupies the White House.

That would be a mistake, because it's the Republicans that have created the unfairness with their "trickle-down" economic policy -- a policy that promised everyone would benefit from policies that gave more money to the rich. They said it would trickle down and make life better for everyone, but that did not happen. The rich got richer, but no one else benefitted.

Democrats must convince voters that they can make life better for the bottom 90%. And they do have solutions that would do that. 

* They would raise the minimum wage above the current poverty wage (putting upward pressure on all wages). 

* They would save Social Security and Medicare by fully funding them -- not cutting them as Republicans want to do.

* They would help working families by helping to pay child care costs.

* They would make it even easier for Americans to get and keep heal insurance.

* They would make sure the rich pay their fair share of taxes, while refusing to raise taxes on the middle and working classes.

* They would fight the monopolization of businesses, which allows unfair price-gouging.

There are solutions to the unfairness of the U.S. economy, but Democrats must convince the voting public that they have the solutions. If they don't, they could lost in 2024, and that would just make things worse for most Americans -- because the Republicans are still invested in their "trickle-down" version of economics.

Democrats would be making a mistake to just boast about a good economy. They must convince voters they could make the economy fairer and better for everyone.  

The Economy Has Improved - And Become More Unfair

The U.S. economy has improved under President Biden. But most Americans are feeling it, because the rich have sucked up most of the improvement, leaving the rest of Americans to struggle. Robert Reich  (pictured) explains:

We learned last Thursday that the U.S. economy grew at an annualized 2 percent rate in the first quarter of this year. That’s well above economists’ expectations of around 1.4 percent. 

But if you didn’t get this news, you’re not alone. Good economic news doesn’t make it through the negative sludge of Fox News or Newsmax. It almost doesn’t get through the mainstream media, either.

 

There’s more good news on the economy. In the four years of Donald Trump’s administration, total spending on manufacturing facilities grew by 5 percent. During the first two years of Biden’s administration, manufacturing investment more than doubled. And about 800,000 manufacturing jobs were created.

These remarkable results are the outcome of Biden policies — the Inflation Reduction Act and its green technology provisions, the infrastructure bill, and the CHIPS Act.

What about inflation? Biden’s stimulative spending did boost inflation. But the news that’s not getting through to most Americans is that inflation is dropping. It has declined significantly from its mid-2022 highs above 9 percent. Consumer prices are now rising by about 4.9 percent annually — still a problem, but not nearly the problem it was. Inflation in the United States is now well under the levels in European nations that made no comparable efforts to stimulate their own economies.

I continue to believe that much of the remaining inflation is due to the outsized profit margins that many major businesses have seized for themselves. Even the IMF recently found this. I wish Biden would make an issue of those profit margins. They’re enriching those at the top while imposing a big penalty on everyone else. 

And wages? For a while, real (adjusted for inflation) wages really were falling, and many economists were worried about rapidly rising unit labor costs. But now that inflation is subsiding, unit labor costs are moving in the opposite direction, and real wages are picking up again. 

So why do so many Americans continue to think the economy is awful? According to the Gallup economic confidence index, Americans haven’t felt this bad about the economy since the global financial crisis in 2008 and 2009. In an NBC News survey conducted a few weeks ago, at least 74 percent of Americans said the country is on the wrong track. The University of Michigan’s Consumer Sentiment Index is also pessimistic. 

Given all this, it’s not surprising that Joe Biden’s approval numbers have been stuck at around 43 percent. 

That’s bad news for an incumbent president running for reelection. History shows that presidents tend to lose reelection bids when about 70 percent of Americans think the country is on the wrong track. They tend to win when fewer than half of Americans think that.

So the obvious question is, why are Americans are feeling so bad about an economy that’s relatively good?

One reason, I think, is a general sense of dread — centering on Trump, DeSantis, and Republican lawmakers in Congress — that seems to affect everything else. (I don’t know about you, but I sometimes have difficulty getting to sleep, worried about the rise of authoritarian fascism in America.) A recent study found that headlines have grown starkly more negative, conveying anger and fear. 

Then, too, there’s a kind of national pandemic-related PTSD from which many of us are still suffering. 

But I think the deeper reason Americans don’t feel very good about the economy is that is that the vast population of working non-college grads — some two-thirds of Americans — are still bogged down in dead-end jobs lacking any economic security, while struggling with many costs (such as housing, child care, and education) that continue to soar.

 

In other words, the economy is getting better overall — but overall has become a less and less useful gauge as the rich get richer, the poor grow poorer, and the working middle is under worsening siege.

U.S. Has Returned To The "Gilded Age" (& That's Not Good)

Thanks to the Republican Trickle-Down economic policies, that favor the rich over everyone else, the U.S. has returned to the "Gilded Age" -- a very unfair economy!

Here is how Robert Reich describes it:

American families have been relying on three coping mechanisms to maintain their standard of living despite stagnant real wages since the start of the 1980s.

First, wives and mothers have gone into paid work. For many women, this has been a blessing. Yet according to a 2021 survey, more than half of married mothers would prefer to have one parent in the home full-time with children aged 5 or younger. 

Second, everyone has put in longer hours. On average, Americans now devote more hours to their jobs than workers in any other rich country. 

Third, Americans have gone deeply into debt. Americans held $599 billion in consumer debt in December 1985. By December 2022, it was $4.8 trillion. 

Through it all, the American economy has continued to grow — yet its fruits have been going to a smaller and smaller number at the top. 

Economies aren’t zero-sum games where the rich can do better only at the expense of everyone else, of course. But power is a zero-sum game. The more of it at the top, the less anywhere else. And great wealth easily morphs into great power.

After a tweet that Elon Musk posted during Sunday’s Super Bowl game failed to achieve as much engagement as a tweet from President Joe Biden, Musk (who purchased Twitter last October for $44 billion) reportedly demanded that Twitter change its algorithm to artificially inflate Musk’s tweets by a factor of 1,000. (Many who do not follow Musk are also being served his tweets in their feed through the “For you” tab of the app’s homepage.) Last week, Musk fired a principal engineer at Twitter who told him that the reason his tweets had lost viewers is that interest in the erratic CEO is waning. Musk is also allowing the return of previously banned accounts like that of Donald Trump.

Is it a problem that the richest person in the world buys one of the biggest megaphones in the world and then alters it so his words are seen by more people than those of the president of the United States, and unilaterally decides to allow back a former president who attempted a coup?

American capitalism has returned to where it was at the turn of the 20th century, when most of the gains went to a handful of “robber barons” who wielded nearly unlimited power over the economy and politics. 

It is well to remind ourselves of the warning by the progressive Herbert Croly, who wrote in 1906 (in his great The Promise of American Life):

Americans are just beginning to learn that the great freedom which the individual property-owner has enjoyed is having the inevitable result of all unrestrained exercise of freedom. It has tended to create a powerful but limited class whose chief object it is to hold and to increase the power which they have gained; and this unexpected result has presented the American democracy with the most difficult and radical of its problems. Is it to the interest of the American people as a democracy to permit the increase or the perpetuation of the power gained by this aristocracy of money?

 

 A candid consideration of the foregoing question will, I believe, result in a negative answer. A democracy has as much interest in regulating for its own benefit the distribution of economic power as it has the distribution of political power, and the consequences of ignoring this interest would be as fatal in one case as in the other. In both instances regulation in the democratic interest is as far as possible from meaning the annihilation of individual liberty; but in both instances individual liberty should be subjected to conditions which will continue to keep it efficient and generally serviceable. Individual economic power is not any more dangerous than individual political power—provided it is not held too absolutely and for too long a time. But in both cases the interest of the community as a whole should be dominant; and the interest of the whole community demands a considerable concentration of economic power and responsibility, but only for the ultimate purpose of its more efficient exercise and the better distribution of its fruits.

What do you think? Is it time for a wealth tax, or even something more drastic?