The shrinking field of candidates to take on Donald Trump in November paints a picture of the economy that doesn’t match reality.
Actually, contends every 2020 Democratic presidential hopeful, the economy is in really bad shape. It is only working for the wealthiest among us, while leaving behind the poor, the working class, and the shrinking middle class.
Now, I suppose one could forgive the socialist contingent of the party for offering knee-jerk class-based bromides — their entire worldview, after all, is centered on class struggle — but even alleged moderates such as Joe Biden are falling back on economic arguments that are wholly disconnected from anything resembling reality.
Democrats could simply say: “Yes, it’s true that the economy has been doing rather well for most Americans since Barack Obama saved it from the nefarious clutches of the Republican party, but it’s important that we never forget the men and women — and especially minorities — who’ve yet to benefit from this recent economic uptick. We can do better!”
That, of course, would mean implicitly admitting that easing regulatory oversight, cutting taxes, and leaving the economy largely alone can be a successful formula for growth, which won’t do. So, instead, the Left continues to be consumed by the zero-sum fallacies of “inequality” to such an extent that it often sounds like it’s more interested in punishing the wealthy than in lifting the poor.
As far as I can tell, not a single moderator or reporter has ever asked Bernie Sanders or Elizabeth Warren to explain exactly how instituting a punitive tax on the rich will create higher wages for low earners. Can either point to any time in history when tax hikes triggered organic wage growth or an increase in self-sufficiency among Americans?
Wages for the lowest-end earners, in fact, have grown faster than they have for higher-wage earners in recent years. Some of it is due to new minimum-wage laws — which, though they benefit very few, are a luxury we might be able to afford with a humming economy — and a tight job market that’s putting upward pressure on salaries.
Smart people kept telling us that unemployment wouldn’t go much lower than 4.7 percent. They told us tax hikes would hurt the economy. Well, the jobless rate averaged 3.7 percent through last year, and it’s now at 3.5, which is lower than at any other time since 1969. There are more open jobs than there are people trying to find a job.
In the last debate, Tom Steyer claimed that “90 percent of Americans have not had a raise for 40 years.” Politicians have been peddling the “wage stagnation” myth for a decade now. The notion that Americans make no more than their grandparents conveniently ignores a big expansion of employee-based benefits, increased efficiency, and technological advances that have, by any genuine real-world measure, vastly improved the economic life of the average American.
Yet, in last night’s debate, Biden again asserted, to applause, that the middle class was “being clobbered” and “killed.” (The middle class is actually quite alive. It isn’t losing ground to poverty. It has been losing ground to the upper-middle class for 40 years, however.)
Democrats will also demonize the profit-mongering villains of “Wall Street” for their supposed complicity in these supposed problems. Last year the S&P 500 rose by 29 percent, the NASDAQ by 35 percent, and the Dow Jones Industrial Average by 22 percent. For many progressives and an increasing number of populist conservatives, this kind of success merely reaffirms that bankers are profiting at the expense of average citizens. As Alexandria Ocasio-Cortez helpfully points out: “Economics 101 reminder: The stock market is NOT the economy.”
It’s true, the stock market is not the economy. But more Americans than ever are invested in it. When Ocasio-Cortez was born, fewer than 30 percent of Americans owned any form of stock; now that number is over 50 percent. More than that, Americans are increasingly reliant on their 401(k)s and pensions to live comfortably during retirement. Millions of other Americans depend on college-savings funds to help pay for their kids’ educations. And even those without a stock portfolio benefit from a vibrant market, which generates profits that are invested in hiring, innovation, and salaries while helping move money from unprofitable sectors to more profitable ones.
This chaotic churning of money turns off technocrats. Rather than taking the view that the growing economy is a messy but neutral marketplace where ingenuity and opportunity can create comfort and wealth, they see it as giant pile of money that should be “invested” in massive, state-mandated social-engineering projects. As far as I can tell, both Sanders and Warren are interested in effectively nationalizing large chunks of the health-care and energy sectors. And yet the media continue to cover the Democratic primary debates where such ideas are the currency of the realm as if they were completely normal.
They are not. A number of Democrats today argue that we should institute wide-ranging regulatory regimes such as the Green New Deal, which, whatever form it ends up taking, would necessitate the biggest tax increase in American history. There was not a single Democrat on the debate stage this week who didn’t support deliberately limiting and inflating the cost of our most efficient and affordable energy sources. This is not an ordinary debate.
Now, whether we’re living in the greatest economy the nation has ever experienced, as Donald Trump often contends, is up for debate. It’s safe to say we’ve been experiencing one of the strongest stretches in modern history since back when gridlock hit D.C. during the Obama administration.
The salient question is how many Americans really believe the economy is in bad shape. A recent CNN poll found that 76 percent believed that the economy was very or somewhat good — an almost a ten-point jump from a year earlier, and the highest level recorded since 2001. A Gallup poll finds historic highs in economic-confidence indicators as well.
Perhaps precisely because they’re confident in its health, only 11 percent view the economy as one of the most vital issues facing the country, per Gallup. This may well end up working against Trump’s reelection efforts. But it doesn’t justify the Democrats’ misleadingly gloomy depiction of American capitalism, because nothing can.