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Democrats Should Run Against the Trump Economy

Trump's only "strength" is also a weakness.
September 17, 2019
Democrats Should Run Against the Trump Economy
(GettyImages / Shutterstock)

One thing stands between Donald Trump and the richly-deserved ignominy of a single term: the economy.

Trump will attempt to rally his base through race-baiting and immigrant bashing. But that won’t suffice. Only an ostensibly strong economy can garner the last cadre of working-class voters he needs, while persuading the more fortunate swing voters obsessed with their 401(k)s to countenance his epochal incompetence and instability.

Take away the economy, and Trump is dead moron walking.

Tempting the gods Trump tweets:

But while a majority of Americans still believe the economy is fairly strong, a recent Quinnipiac poll finds that a plurality—37 percent – also believe it’s getting worse, a new development which reverses prior trends. And a recent Washington Post poll shows that 60 percent of Americans now anticipate a recession.

For Trump a recession would be a lethal deus ex machina, recasting his indiscriminate trade war as a game of Russian roulette, played by an idiot, aimed at America’s head.

But, for Democrats, such an electorally fortuitous misfortune may not arrive on schedule. Beginning now, they must attack the Trump economy as it exists today.

For openers, we have not one economy but (at least) two. The GDP no longer measures our overall economic health. Wealth disparity and income inequality have driven a wedge between the beneficiaries and everyone else: most notably, the recovery of 2008 largely bypassed the young, the non-white, and the mass of Americans earning less $60,000 a year.

The gap between American workers and CEOs barely scratches the surface. Half of all jobs pay under $19 per hour; one-third under $15. The paltry wage growth for ordinary Americans is swamped by the rising cost of healthcare, housing, education, and household debt. Random misfortune strikes these citizens one by one; the next recession will render them economic flotsam.

As of now, millions of Americans are standing on a trapdoor.

In this regard, Trump’s move to punish applicants for citizenship who have received public assistance is—even by Trumpian standards—diversionary and dishonest. Seventy percent of those receiving public assistance are working families and individuals. In truth, American taxpayers are subsidizing giant enterprises like McDonald’s, Walmart, and Amazon so that they can continue to underpay American workers.

This trend has long been developing for decades. Since 1979, worker productivity has increased by 70 percent, while wages grew 12 percent. Between 2003 and 2013 wages for the bottom 70 percent of Americans actually declined. In 1968, the Economic Policy Institute has found, the minimum wage could support a family of three; today it condemns a two-person family to poverty.

The result? Over time we have shifted the burden of supporting workers from employers to taxpayers, reducing millions of Americans to welfare recipients. For them, the American dream has become a waking nightmare.

Not least for America’s young people. Writes Annie Lowrey in the Atlantic, “For adults between the ages of 22 and 38 . . . the last recession never really ended.” They are heading toward middle-age without becoming middle-class: Too many are swamped with student debt, mired in the gig economy, or otherwise so ill-paid that they cannot attain the traditional means of wealth accumulation—homeownership or investment in the stock market that Trump, like Atlas bearing the world on his shoulders, touts as dependent on him alone. As millennials’ miasma deepens, it will start enveloping the economy writ large.

And God help their kids—assuming they can afford any. Our traditional expectations of each generation doing better than the last are on the precipice of a freefall.

Millennials are the canary in Trump’s coal mine. The work of Harvard economist Raj Chetty reveals a checkerboard of selective prosperity—reflecting other variants which include race, location, and access to the knowledge economy.

To take just a smattering of data points: In 2002, African Americans earned 80 percent of what whites did; today that number has slipped to 76 percent. The history of redlining means that fewer African-Americans have benefited from home ownership—which is the most broad-based means of wealth creation. Between 2002 in 2013, inflation-adjusted wages for autoworkers fell by 26 percent; since then, they’ve stagnated. Wages are rising in New York City and falling in Mississippi.

As a political matter, the takeaway is obvious: the American economy, which Trump claims as his own, is marooning critical voting blocs.

Prominent among these is America’s working class. As Steven Greenhouse observes, we are the only advanced economy which doesn’t guarantee maternity leave. Of three-dozen industrialized countries, we have the lowest minimum wage as a percentage of the median wage. And, save for Latvia, America has the highest percentage of low-wage workers.

A major reason for this is that American labor unions have dramatically weakened—a trend which Trump and Republicans are trying to accelerate.

From a peak of 35 percent in the 1950’s, union membership is now just 10.5 percent of the workforce. Trump’s administration has repealed rules protecting worker safety, extending overtime pay, and requiring investment firms to act in the best interests of workers when supervising 401(k) plans. Meanwhile, Republicans have fought to pass right-to-work laws making the payment of union dues optional—thereby accelerating the imbalance of bargaining and political power between unions and corporations which, in turn, feeds income inequality and wage stagnation.

This economic and political Darwinism matters to American workers—and to Democrats. In Winner-Take-All Politics Jacob S. Hacker and Paul Pierson note that “While there are many ‘progressive’ groups in the American universe of organized interests, labor is the only major one focused on the broad economic concerns of those with modest incomes.”

The fallout from union decline proliferates—not just in deficient wages but also the exploitation of unpaid interns, longer hours, compulsory arbitration agreements favorable to employers, non-compete clauses which limit worker mobility, downsizing which sacrifices jobs to shareholder profits, supervisors who protect their own job security by stifling unions, and treating employees as independent contractors so employers can deny them labor protections and benefits. The result is creeping predation: the calculated exploitation of some Americans to benefit others. As Steven Greenhouse says, “the share of national income going to business profits has climbed to its highest level since World War II, while workers’ share of income . . . has slid to its lowest level since the 1940s.”

The result includes feelings of hopelessness and despair. A journalist who explored working conditions by taking jobs at McDonalds and Amazon reports exhaustedly watching The Muppet Christmas Carol, and realizing that “Scrooge literally has a better time–off policy than Amazon.”

All of this raises a question that Democrats should aim at Donald Trump: “Is this your measure of economic health?”

To be fair, these conditions preceded Trump. In the 1980s, Milton Friedman helped define—and confine—the purposes of economic policy as cheap goods for consumers and more profits for shareholders.

Antitrust expert Tim Wu nails the problem with Friedman’s view of the world:

There is some logic to this: we all buy things, after all, most of us own at least some stock.

But these priorities also generate an internal conflict, for they neglect, repress and even enslave our other selves: our identities as employees, producers, family members, citizens. And in recent years—as jobs become increasingly unpleasant and unstable, as smaller towns and regional economies are gutted, as essential industries like the pharmaceutical and telecommunications sectors engage in outlandish profiteering, and above all, as economic inequality becomes the trademark of our nation—the conflict seems to have reached a breaking point.

Wu concludes: “[W]hat the United States desperately needs is a vision of economic health more consistent with what we know makes life worth living.”

Wu captures the rising sentiment that capitalism needs a humanizing reformation—and that there is something economically misshapen when the Dow keeps rising but wages do not. Perhaps sensing mass disquiet, even corporate CEOs have begun acknowledging that our economy is askew. Recently, the Business Round Table issued a statement declaring that corporate responsibility transcends shareholder profitability. Speaking for the group, Jamie Dimon stated the obvious: “Many Americans are struggling. Too often hard work is not rewarded.”

Democrats should animate these good intentions. William Galston puts it well: “The vibrant markets on which growth depends are systems of rules backed by public power as well as social norms. Wise policies are needed to ensure the fruits of growth are widely shared. When these conditions are satisfied, market economies tend to generate not only broad improvements in living standards but also growing middle classes that the poor can hope to enter.”

In 2020, that means insisting that our economy serve as the glue for an equitable and stable society which rewards the efforts, and unleashes the talents, of the many through a government which serves Americans as a whole. Again, Galston:

Theodore Roosevelt once wrote that “there can be no real political democracy without something approaching an economic democracy.” The truth is that the two work hand-in-hand. For democracy helps foster economic democracy as a people work to make the country more egalitarian. And a more economically equal society feeds into political democracy, as no one accumulates so much power that they can dominate government or their fellow citizens.

Blue-collar workers may have drifted toward Trump and the GOP, but they still hold liberal views on economic issues. Democrats must speak to Trump’s manifest failure to improve the lives of ordinary Americans.

How? Part of the answer is pledging to reverse a decline in union membership which has been disastrous for working people, and for the party itself. Democrats should embrace ideas such as requiring that union organizers have equal access to employees; barring right to work laws; raising the minimum wage; mandating federal contractors to pay $15 per hour; extending the protection of federal labor laws to agricultural and domestic workers; banning unfair arbitration and non-compete clauses; and requiring that corporate boards include worker representatives.

In sum, by promising to create more equity between employer and employee—and forcing Trump to stand against that.

Democrats must also confront other important areas in which Trump’s economy is failing millions of Americans.That requires advancing practical and achievable solutions which attract voters instead of scaring them off.

A prime example is healthcare. For the first time since the passage of the Affordable Care Act, the percentage of uninsured Americans has risen. It is political malpractice for Democrats to respond by proposing to take away private health insurance from millions of satisfied Americans.

The alternative is plain, and appealing: Medicare for all who want it. Stripped of credibility by his empty promises to repeal and replace Obamacare with something better, Trump will attack this at his peril.

Childcare is corroding budgets for millions of American families. In 28 states, the cost exceeds in-state tuition at public four-year colleges. This expense increased by 24 percent in the last decade; the average annual bill for full-time care is nearly $9,600.

Democrats have answers. One proposal would ensure that no family under 150 percent of state median income pays more than 7 percent for child care; families under 75 percent would pay nothing. A more flexible plan advanced by Senators Sherrod Brown and Michael Bennet would dramatically expand the Child Tax Credit by paying $300 per month per child up to 5-years-old, and $250 per kid kids up to age 16. This would lift middle-class and working families while rescuing an estimated 4 million kids from poverty. Let Trump call this socialism.

For millions of Americans, the high cost of housing is another budgetary sinkhole. An immediate source of relief would be a substantial increase in the Earned Income Tax Credit – another proposal by Senators Brown and Bennet. One awaits with interest the objections advanced by the author of a budget busting tax cut for corporations and the wealthy.

As for education, America will wait in vain for the University of Pennsylvania’s most distinguished and deserving alumni to release his college transcript—or for his proposals to improve educational opportunity for Americans at large. One can foresee his complaints about universal free college programs which would benefit the affluent. But what about universal pre-k; increased job-training for the new economy in high schools and community colleges; free community college tuition; expanded Pell grants to help students pay for colleges and graduate school; and alleviating student debt?

Unlike Fred Trump, most Americans are not able to afford Ivy League tuition—but they deserve a modicum of the opportunity Trump enjoyed as his birthright. That goes double for aspiring students who chose military service instead of running from it.

America’s self-proclaimed master builder has failed abysmally to rebuild our infrastructure. Democrats should call for a multibillion dollar investment in renewing roads, airports, ground transportation, energy grids, and rural broadband. These projects would reinvigorate our economy and create hundreds of thousands of jobs.

With respect to trade, it turns out that trade wars are not “easy to win.” Who knew? Aside, that is, from everyone with a basic understanding of the global marketplace.

Only idiots immune to advice must learn everything by experience; blinded by self-infatuation, narcissists never learn at all. Trump’s ill-conceived tariffs are hurting U.S. farmers and retarding job growth in manufacturing; soon enough they will bite consumers. Even when Trump negotiates a face-saving retreat with his Chinese betters, as he must, China will keep on stealing intellectual-property, and indulging in unfair trade practices. Only Trump will call that “winning”; Democrats should call out a trade war which hurts Americans more than China.

There lies the nub. When it comes to the economy, Trump is bereft of ideas beyond deregulation and tax cuts for the rich. Democrats should turn his only political strength into a weakness by exposing him for what he is: a gaseous incompetent who confused reality TV with the minefield of economic reality.

Their economic plan should be simple but inspiring: programs laser-focused on reviving the American dream of dignity, security, and opportunity for all. Too many Americans no longer own a piece of that, and need one. Trump is standing in their way.

Richard North Patterson

Richard North Patterson is a lawyer, political commentator and best-selling novelist. He is a former chairman of Common Cause and a member of the Council on Foreign Relations.