Wednesday, June 6, 2018

Economic populism. Cultural populism.

The rich get richer. 


The stock market is up and unemployment is down.

I worked for thirty years as a Financial Advisor helping people who had investible assets. 

About 10% of people in Southern Oregon have investable assets that find its way to the stock market in any significant amount, but more realistically, the "investor class" here locally is the top one or two percent. They are the ones who profited from the rising stock market.
Click. Washington Post.

What kind of people are in the top one percent of income?  Physicians and other well paid professionals. Businessmen with good businesses. Households with two well paid professionals. It takes about $350,000 a year meet the minimum income threshold of being in the top one percent in Oregon.  

Some people have investable money without having had a big income, most commonly because someone owned a home in a place where real estate prices went crazy, e.g. San Francisco, then sold it and moved here.

The great stock market climb after 2009 was good for my former clients. Trump's first year, 2017, with its own strong stock market gains added to the good news. Then the new tax bill passed--even more good news for the top 1%. 

It has been good to be rich.

Who is paying for the big tax cut on corporations and the wealthiest? Our children, and people who aren't getting their cut of the deal.

This presents a problem for Democrats: how to react to the strong stock market and low unemployment. (They already blew the chance to take credit for it. Trump claims it.)

A message of accusation against the rich has the problem that although most of the monetary benefit went to the wealthy, the psychological effect did in fact trickle down. The employee who sees her $50,000 401k climb to $60,000 is thrilled by the 20% rise. A person who has spent a lifetime saving $50,000 does not consider it, nor the few dollars a month extra in a paycheck, a crumb, as Nancy Pelosi put it. 

Democrats have a difficult story to tell: Trump is not doing enough and that the benefits are mostly going to the top. Trump and Bernie Sanders each sent messages of economic populism and the elections showed it has powerful appeal. But Trump's presidency sends multiple confirmations that Trump serves the rich and famous, not the average American worker and taxpayer. He is not governing as an economic populist. The increase in the estate tax threshold to $22 million for a couple will seem crazy high to that employee with her $60,000 IRA. He did not expand health care access, nor lower Rx costs, nor allow refining of student loans. Tariffs will hurt more people than they help. And people do understand that the tax bill helped the richest the most.

There is a risk to Democrats in criticizing the wealthy. Most people want to be rich; after all, they buy lottery tickets. Americans admire the rich. They are celebrities. As the cliche' observes, Americans in poverty don't identify with their condition, but rather consider themselves simply to be temporarily inconvenienced millionaires. 

But they suspect the system is rigged against them. Bernie Sanders carried that message. Trump's behavior and governance has confirmed it. Trump has allied with the interest groups who keep the system rigged.


The Atlantic. Click
The Democratic problem is that a tax bill is harder to understand and experience emotionally than is the ethno-nationalism that Trump is promoting. Trump is in full distraction mode. He points to the Deep State in the FBI, out to get him. The bad guys are immigrants, look at MS-13. The Mexicans.The Chinese.The black guys who take a knee. The Californians. The universities. Those are the problems facing America, he says.

They are cultural symbols, and if he is on the side of the white working man on race and the flag, then he must be on their side on money.

It is far from hopeless for Democrats. Americans think that social and economic mobility are part of what makes America great, and there has been a long trend of lower social mobility that fuels political discontent. The rich get richer and everyone else is stuck. It is a big issue, and that issue has become embedded in the national consciousness. Democrats can be the opportunity party, and the one that points out that Trump is helping the rich rig the system. 

They have evidence to point to. Donald Trump is on the wrong side of that message. 

3 comments:

  1. I'd like to see how Jamie McLeod-Skinner might apply these insightful lessons in her race against Greg Walden.

    ReplyDelete
  2. She needs a campaign manager like Peter Sage.

    ReplyDelete
  3. Trump and his enablers, following in the footsteps of Richard Nixon and Ronald Reagan, are effective politicians in that they appeal to the most basic human instinct — fight / flight. They have continued the old tradition in American politics — provide the white working class a bogeyman to fear and hate, and distract them from how they are getting screwed by the system.

    In the 1850s the Know Nothing Party rose to prominence on an anti immigrant, anti Catholic platform, spreading fear that Irish Catholic immigration would lead to America being controlled by the Papacy (replace Catholic with Muslim and Papacy with Sharia). In the 1920s, following huge waves of immigration from Southern and Eastern Europe, Ellis Island was essentially shut down by Congress and immigration slowed to a trickle — based on fear stoked against Jewish leftists and Italian mobsters. Nixon’s southern strategy picked up on the fear of Southern Whites that they were losing their social status due to African American empowerment following the Civil Rights advances of the 1950s and 1960s. And in Northern Cities, open housing laws and school desegregation led to massive white flight from cities, predating the continued flight due to the riots of the mid-60’s.

    And let’s not forget the Viet Nam War - which split this country apart in ways we are still experiencing. Educated middle class college students growing their hair, listening to rock and roll music and flaunting sexual mores while the children of the working class went off to fight a war that was ultimately lost. Lots of grist for the right wing hate mill there. And let’s not forget Bush the Elder’s use of Willie Horton as an avatar for fear of African Americans.

    And even here in Oregon, the Republicans turn public employee unions into the bogeyman that is destroying our state budget, distracting from the relatively low state corporate income tax.Persuading someone to hate and fear is easy work, especially when you can dehumanize the object of the hate and fear using racism and xenophobia.

    Asking someone to come to a logical conclusion about how tax policy or environmental regulation are adversely impacting their family is a tougher climb.

    Used to be that the left had a bogeyman too — the rich and powerful. But the dogma of the left, Socialist theory, has to a great extent been delegitimized in America (although Bernie Sanders certainly seemed to bring it back in 2016).

    A Bernie’ite versus Trump election would have been an interesting battle of the bogeymen - Trump’s racist xenophobia v. Bernie’s fat cat plutocracy.

    Aside from Hilary Clinton having been a flawed candidate and lousy campaigner, her message was nuanced and didn’t play on an emotional or visceral plane, as did Trump’s and Sanders’ Her message was essentially that government can even the playing field and provide opportunities like education, job training, tax credits, housing credits, etc., so everyone can get an equal shot. The problem with this messages is that it tells people the government will help you, but ultimately, your future is in your own hands. If you want to succeed in the post-industrial society, it's up to you to get the education, job training necessary, and you might have to leave the town you grew up in and move to where the jobs are. That’s a much harder sell than hate and fear: “The Chinese stole your jobs and the liberals on the coasts helped them do it."

    Democrats and Progressives forget that elections aren’t won in the brain, they are won in the heart and in the gut. Bill Clinton and Barrack Obama were able to appeal to the heart and the brain. Good policy is not enough.

    ReplyDelete

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