This post examines the correlation between the economic conditions of the average American, the growing concentration of wealth among the 1/10th of 1% and the both major political parties’ embrace of neoliberal policies.
Economic Policy Institute produced the graphic at left. It shows that in the aftermath of World War II through the early 1970s, workers got paid more as the economy grew. Median hourly compensation rose in tandem with productivity (the amount of economic output workers could produce per hour). But note what happens in the mid-70’s. Recall that in the post on Tuesday, we noted that the decline in Democratic control of State legislatures and Senate and House seats began to decline steadily in the late 70s. The premise of the piece was that this Democratic Party defection corresponded with the adoption of neoliberal policies that contributed to an extraordinary accumulation of wealth.
In short, while the economy grew, the only people benefiting from it were the wealthy. As I thought about this chart, I thought of how people in the Rust Belt experience this disparity on a daily basis, working two jobs to earn 50% of what they used to earn in one, fretting about their dwindling savings as they grow closer and closer to an age when continuing to work will be less and less realistic. And then I think of the messaging from Trump and his promise to ‘make America great again,’ against the Democratic Party decision to not visit the Rust Belt toward the end of the campaign and to adopt the message “we don’t need to make America great again; it is already great.” I can almost hear the voices from Rust Belt folks: “Great for whom?” The chart below answers that question.
Notice the two peak periods where the 0.1% of the population received the greatest proportion of the wealth. In 1928 just before the great depression and in 2008 just before the collapse of the finance industry. Whereas in 1928 it took 8 decades for the 0.1% to reach 12% of total income, the one-tenth of one percent took just four years to recoup their losses after the cratering of the economy in 2008. Also notice again that the 0.1% had perhaps their best stretch in US history beginning in 1993 during the Clinton administration and the Democratic Party’s full-throttled embrace of neoliberalism.Click here for more charts from the Economic Policy Institute.
Since the Clinton era, Democrats have been effective architects of policies that increase the wealth and power of those on the top of the economic pyramid.
From an article published by Counterpunch written before the mid-term elections in 2015: “Yet it’s the historical contradiction Democrats are trapped in that explains how and why Bill Clinton and Obama pursued a neoliberal agenda that dashed the hopes of their supporters, resulting in the biggest midterm losses in Congress of any president in the modern era. It also explains why the Democrats will likely lose the U.S. Senate in November 2014.”
Counterpunch goes on: “Bill Clinton campaigned as a “New Democrat”: tough on crime, fiscally responsible, and stern with welfare recipients. Clinton effectively fulfilled the Reagan Revolution by gutting welfare, passing NAFTA, deregulating telecommunications and the finance sector, and ramping up government spying, policing, and immigrant detention. Clinton could grant the right-wing’s wish list because the Democratic base was conditioned to supporting any deal no matter how bad because the Republicans would supposedly be worse. Yet Clinton needed Republicans to pass NAFTA because the Democrats controlled Congress. He threw millions of poor women and children off welfare to shore up his right flank in advance of the 1996 election.”
In another Counterpunch : “Democrats offer a bit more funding, miniscule compared to military spending and corporate welfare, for food stamps, homelessness, and energy assistance. But the commitment to neoliberalism leaves the programs vulnerable. Obama readily cut tens of billions of dollars in social welfare to appease Republicans complaining about a $17.9 billion national debt.” Naomi Klein described this minuscule support for social welfare as ‘a few solar panels here and a few more childcare slots there.’ In both 1996 and again with Obama, we find the Democrats trying to ‘shore up strength’ with policies that play to the most conservative wing of the Democratic Party. And while the slogans of the Party remain centered on change we can believe in or putting people first, as the charts above depict, the policies promoted by these Presidents and the Democratic Party significantly eroded the economic and social well-being of the majority.
Finally, one last excerpt related to Obama and his legacy: “That will shape his legacy: the real unemployment rate is still at 12 percent, and since 2008, 5.5 million more Americans live in poverty and the median household income has declined 4.6 percent. Corporate profits are at their highest level since record-keeping began in 1929, the effective corporate tax rate is lower than any point since Hoover was president, and workers are taking home the smallest share of national income in 65 years.” Click here to read an utterly fascinating analysis.
Over the last two weeks, Retake has examined Democratic policies, alliances, and priorities in the context of both the well-being of the American people and their identification with and support for the Democratic Party. If the Democratic Party is to reverse the trend of election losses leading to decreasing representation in state and national legislatures, it seems clear that adjustments to the message, alliances and policy priorities need to occur. Retake wants to be part of the conversation about how this might be achieved and with Rep. Ben Ray Lujan so well-placed within national Democratic leadership, we need to explore how we can work together to move the Party. The conversation will begin at our Town Hall on Saturday, August 19th from 3-5pm at the Center for Progress & Justice, 1420 Cerrillos. The Town Hall will be focused on an open conversation with Richard Ellenberg and how progressives can most effective impact the direction of the Party. Click here for details and to RSVP on Facebook or email us at email@example.com. For a description of what we are planning for the Town Hall, click here.
Paul & Roxanne