The Way Back - F. H. Buckley

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requires an answer from Republicans, and indeed all Americans, whatever their political label. The problem, however, is that the Republican Party tends to sniff its delicate nose at the issue. That’s not surprising, for were it to declare class warfare it would be clobbered by the majority of people who haven’t shared in the wealth gains of the super-rich. But by ignoring the question, the Republican establishment has handed the Democrats a hammer with which to pound it. Obama’s Osawatomie speech about income inequality proved highly attractive to voters, and the 2012 election showed that no viable political party could wish away the issue.

      Obama’s speech spoke to the greatest worry of the voters, that of economic insecurity. The unemployment rate had risen to its highest level in 30 years, and appeared to have declined only because millions of Americans stopped looking for work. Were they to be counted as jobless, the unemployment figure would be much higher. Five years after the Great Recession began, the unemployment rate was 7.6 percent in 2012. That’s not good, but if one included the “discouraged workers” who wanted a job but had given up looking for one the figure was 8.1 percent. Add to that people “marginally attached to the labor force” who weren’t working or looking for work but who did work sometime in the prior 12 months and the figure was 8.9 percent. Finally, toss in people working part time because they could not find full time work and the figure jumps to 13.8 percent.8 That’s 21 million people who were un- or under-employed, as many as the total number of adults in New York and New Jersey. Of those employed, many were given the choice between a pink slip and a “permatemp” job in which they were given their old job back as an independent contractor, but without employment benefits and sometimes with a cut in salary. Even if they kept the same pay as before, what they lost was the sense of a secure job and faith in the future. Today, permatemp jobs account for about 10 percent of the American workforce. Add them to the number of un- or under-employed people and now you’re talking about the total adult population of New York, New Jersey and Pennsylvania.9

      Yale political scientist Jacob Hacker has developed an Economic Security Index that measures the percent of Americans who experienced a major drop in their available family income.10 This is defined as a 25 percent decline in income, after deducting for medical expenses and excluding people with the financial resources to deal with the decline. Fourteen percent of Americans experienced such an income loss in 1986, but that number gradually and steadily rose over the next quarter century, and by 2010 included 62 million Americans, more than 20 percent of the total population and more people than the total population of twenty-seven states. For African-Americans, the figures were even more alarming: 27 percent of them lost a quarter of their income in 2010, and 22 percent lost a third of their income.

      The Economic Security Index is an objective measure of income decline, and understates the number of Americans who feel insecure. During the Great Recession, many of us learned that we were at risk of losing our jobs, and that sent a chill up our backs. In addition, most people have seen their wealth decline, leaving them with a sense of life on the edge. A quarter of Americans reportedly have no emergency savings, nothing to fall back on, while only 40 percent have enough to last three months without any income.11 Americans at the median (or midpoint) of the earnings scale had a family net worth of $77,300 in 2010, a decline of nearly $50,000 from 2007 and less even than they had in 1989 (in inflation-adjusted dollars).12 In comparative rankings, this had moved the average American down several notches, below the Norwegians, Australians, Danes, Swedes, and Canadians.13 The loss of wealth magnifies concerns about insecurity, for as Amy Sullivan observes, “a shriveled nest egg can turn a stint of unemployment from an inconvenience into a catastrophe.”14

      All this helps to explain the growing sense that America is in decline, that its glory days are a thing of the past. We have had many economic downturns in the past, but what is different this time is the fear that we will not bounce back, that something is structurally wrong, and that we must adjust to diminished expectations. A CNN poll reports that six in ten Americans believe that the American Dream is out of reach, that children won’t be better off than their parents.15 That’s new, and it’s an omen of a transformative political change, particularly for the most fragile of Americans.

      Income immobility wasn’t a hot political issue in the immediate past. In 2005 Alberto Alesina and George-Marios Angeletos reported that Americans believed that where you end up depends on your own skills and efforts. In Europe, people thought otherwise: They believed it was more a matter of luck, family ties and whom you know. The difference in beliefs about mobility, said Alesina and Angeletos, accounted for why Europeans were more likely than Americans to support governmental wealth redistribution schemes.16 But is this going to continue? The question is what will happen to American politics when reality sinks in. Perhaps it already has, and that was what the 2012 election was all about. In a 2014 survey, 60 percent of Americans and 75 percent of Democrats told the Pew Research Center that the country’s economic system unfairly favors the wealthy. Only 38 percent said that the rich acquired their wealth because they worked harder than others. What mattered, said 51 percent, was that the rich had had more advantages.17 It’s not the same country that Alesina and Angeletos had described only a few years earlier.

      In 2012 people brought their anxieties to the polling stations. Four years after the Great Recession began, with the most anemic of recoveries, voters overwhelmingly thought the economy was the most important issue facing the country. So did the two parties, but they offered different messages to voters about what was to be done. Republicans campaigned on a platform of entrepreneurship and wealth creation, while Democrats countered with a message that spoke to economic insecurities and the safety net provided by the government. Mitt Romney announced a 59-point economic recovery plan, while the Democrats projected a sense of concern for the poor and an outrage at the malefactors of great wealth. And the Democrats won.

      In the midst of the campaign, Jimmy Carter’s grandson secretly taped Mitt Romney at a Republican fundraiser, recording the candidate’s innermost thoughts about the campaign.

       There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe that government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you name it. That’s an entitlement. And the government should give it to them. And they will vote for this president no matter what.18

      The video, released by the liberal Mother Jones magazine, was a bombshell. In a troubled time, voters believed they had heard how Republicans really felt about the country’s poor,19 and this from the person who had said, “I like to fire people” and, “I’m not concerned about the very poor.” The 47 percent included the infirm, the elderly, those who had paid their way in the past and those who could not find work despite their best efforts, but all were seen as shiftless wastrels. The 47 percent figure was even too low—much too low—since it excluded those who had benefited from the disguised government subsidies of what Suzanne Mettler calls the “submerged state”—the home mortgage interest and pension tax deductions, the student loan programs, the government support for the drug industry.20 Romney came away looking heartless and mean-spirited, and in his rich-versus-them pitch to wealthy right-wing donors he also seemed divisive, contemptuous of the ordinary voter whose support he was soliciting. More than that, if he thought that the Democrats had a lock on nearly half the voters, he had seemingly just conceded the election. In his book about the 2012 presidential election, Dan Balz describes the video as the campaign’s turning point.21

      The Republicans could not recover with a platform of wealth creation which fell flat amongst those who thought that any wealth that was created would go to the super-rich and not to them, that the promise of equal opportunity was tarnished and that a class system had insinuated itself in the folds of what was supposed to be a classless society. And so the Democrats succeeded in shifting the blame for a bad economy from their shoulders. Fifty-nine percent of voters said the economic system favors the rich and of these 70 percent supported

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