As background on the election, the historic low in discussions of issues on governing is unusual. Some believe that’s due to Donald Trump’s lack of knowledge of governance and his comfort in diverting to emphasis on uncouth attacks on opponents and defense of his past actions. Others see his behavior as just his way of serving the interests of supporters. Nonetheless, concerns of his millions of supporters warrant full attention of Americans, especially Democrats.
They express wrath about the Washington Establishment and the lack of governance. They feel they work hard to achieve the American Dream but obtain little reward. Government hasn’t acted to improve their lot, especially with more good-paying jobs.
On the shortage of good-paying jobs, since the 2010 deep employment trough following the recession, we’ve seen 14 million jobs created. But too many paid too little. General underpayment of jobs, income inequality, is the big problem.
Income inequality has clear-cut, direct adverse effects on most Americans, from lowest incomes right up through the middle class and into lower managements. It stems from inadequate compensation, inadequate sharing of profits and consequent inadequate economic demand. It amounts to killing the goose that lays the golden eggs.
Over the period 1990-2015, income inequality’s most conservative measure — the difference of real mean and real median compensations — amounted to just under $36 trillion largely lost from the economy. These trillions held by the very wealthy made little contribution to the deficient economic demand. They have proven time and again not to trickle down in large measure directly into investments in education, infrastructure and other private job creating programs.
Minimum-wage and earned-income credit increases are often pushed as solutions of the inequality. They are helpful, but actionable increases are too small to correct the problem. Job creation should increase demand and alleviate some income inequality. For the short- to medium-term, Democrats prefer Keynesian jumpstart investments for job creation, while Republicans prefer trickle-down policies. Alone, neither has provided a stable, long-term, healthy economy. Until higher compensations are provided, deficient demand will continue stifling sustained, healthy economic growth. To provide the higher compensations enhanced profit sharing will be required.
But in America, profit sharing is at best of tertiary importance and at worst squeezed for short-term gains. It seems that increased profit sharing will require legislation. In what should be a common cause, smooth cooperation on the optional approaches face daunting backdrops. For income inequality tracks back to over a century but cooperation on the common cause has not emerged. Inequality endures due to solid, long-standing GOP support of advantages for corporations, the wealthy and investors over workers along with opposition to employee representation.
When real median income closely tracked productivity in 1945-1974, income inequality was minimal. Inequality then took on non-ending growth while real median income essentially stagnated through to today. Meanwhile productivity and upper incomes soared 80+ percent and average incomes grew 40 percent.
To support families, breadwinners had to increase working hours, often working two jobs. And when that was insufficient, women had to join the workplace. With stagnation of median income through the Reagan and into the Bush trickle-down periods, families turned to irresponsible borrowing. They were easily bated by poorly regulated, unethical, even unlawful lending of big banks, mortgage institutions and insurance companies. Then the failing Bush economy with the bursting of the housing bubble created by excessive lending brought the Great Recession in ’07-’08.
Needless to say, the good-paying jobs we need require a long-term, stable, healthy economy. That likely will necessitate not only elevated compensations from stronger profit sharing but also robust collective bargaining and living minimum wages tied to real average income.
On Trump supporters’ concern for lack of governance, certainly today’s polarization of ideologies confronts governance with very high hurdles. But contrary to Republican mantra that President Obama would not work with them, the first-term president showed the patience of Job trying to get middle-ground agreements. In stopping a tragic economic meltdown from failed banks, the president-elect lent his support of the Bush bank bailout.
Shortly thereafter, a day after Obama’s inaugural, GOP leaders met with K Street and unified their ongoing plans for comprehensive obstruction. One Republican leader said, “If he is for it, we must be against it.” Then early in his first term while the Great Recession wreaked havoc on Americans, Republicans were inflexible on his recovery act. Democrats had no choice but accept making it too small and directing too much into pork-belly projects.
These past eight years, Republicans carried out their obstruction plans, stopping many of Obama’s important initiatives. They blocked unprecedented numbers of his nominees while sliming many. In the past four years, the Republican Congresses held governance hostage by resolutely blocking important Obama initiatives. This lack of governance angered Americans, driving millions of them to support Trump in his wrestle to take the nomination from the GOP establishment.
With the constant obstructionism, Democrats should have forcefully and ceaselessly dubbed Republicans as “Do Nothings.” They should have organized and laid the nation’s woes squarely at the feet of the Republicans. Instead, it was the GOP that mobilized its influence with the media, and many astounded rank and file Democrats found themselves being blamed for the nations’ problems.
Meanwhile, weak Democratic party leaders, their big donors, PACs and expensive consultants did little or nothing to organize and inform the public about ruinous trickle-down policies and Do Nothing obstructionism. This contrasts markedly with President Truman’s textbook branding of the 80th Congress as the “Do Nothing Congress,” and how his courageous campaigning against Do Nothing obstructionism demolished the GOP 80th Congress in 1948.
In the past few years Democratic leaders should have acted accordingly. By engaging the public and media with vigorous, major nationwide accountability programs, we likely would be on the verge of seeing GOP Do Nothings routed from both houses of congress. That would provide a Democratic Congress the means to act with caring Republicans in alleviating income inequality and investing in a stable, prosperous American economy. That would provide aspiring Americans real, fair opportunities for the self-made prosperity the Founders so much envisioned.
Jim Woodbrey, Ph.D., is a retired research scientist, inventor and business developer. A former Senior Vice Chair and currently member of the Executive Committee of the Arizona Democratic Party, he was named the Arizona Democrat of the Year in 2008. As former Senior Vice President of the Democratic Club of the Santa Rita Area he was most active in increasing the membership from about 75 to over 300, making it the largest political club in Arizona.