If America is ever going to reach her potential the Democratic Party must lead a progressive revolution that ultimately leads to Democratic control of the Presidency, both houses of Congress and the Supreme Court. This is because the Republican Party is deeply committed to trickle-down economics and we have roughly forty years of evidence that this economic approach simply does not work to create broad-based prosperity for most Americans.
House Speaker Paul Ryan, arguably the Republican Party’s chief cheerleader for this economic approach, recently demonstrated yet again his party’s commitment to trickle-down by crediting the tax cuts in the GOP tax bill for a secretary’s recent $1.50 weekly salary increase. This sad public relations disaster perfectly illustrates the ineffectiveness and insensitivity of this economic philosophy. The time is now right for Democrats to join forces with rational Republicans to finally end our nation’s long fascination with trickle-down economics.
After the election of Ronald Reagan in 1980, the Reagan Administration and a majority in our Congress decided to try out a form of laissez-faire economics called “supply side” by supporters and “trickle-down” by detractors, in an effort to rescue the nation from the grip of a serious recession that consisted of high unemployment and double digit inflation. This economic approach later known as “Reaganomics,” featured tax cuts for the wealthy and deregulation of business. The theory behind this economic strategy is simple: if the government helps the wealthy create more wealth, the wealthy will in turn create enough good jobs to grow our economy to such a degree that it will create a state of economic bliss that will eventually eradicate our socioeconomic problems.
By the woefully inadequate traditional economic measures, such as the unemployment rate, job creation, and the inflation rate, Reaganomics was successful. Reagan’s approach ended the recession, led to the addition of millions of new jobs and the creation of wealth for thousands of Americans. Reagan’s economic approach was so politically successful that it altered the economic approach of not only the United States but much of the advanced world. Bill Clinton’s Wall Street-friendly “new Democrat” approach was greatly influenced by Reaganomics. However, if we take a deeper look at our country since the beginning of the Reagan upward redistribution of wealth, this approach does not survive close scrutiny.
We know that most of the jobs created during Reagan’s swinging 80s and Clinton’s rocking 90s were low-paying service industry and temporary employment jobs from which workers could not earn a living. We know that wages for most Americans in the middle class have been compressed since we adopted the trickle-down economic approach and many of the manufacturing sector jobs that funded the middle class expansion of the 20th century either expired due to technological advancement or globalization in the form of cheaper foreign labor. Most importantly, we know that today America boasts the largest wealth and income inequality gap of any nation the world has ever known, a sure sign of a dysfunctional economy. Sadly, the traditional economic indicators our government reports to the media do not tell this story. This harsh reality has only recently seen the light of day.
In these embarrassingly ugly facts lie the root causes of virtually all of our socioeconomic problems: poverty, unemployment, underemployment, racial conflict, police misconduct and human-caused climate damage just to name a few. Despite the past popularity of the trickle-down approach, today most Americans appear to be moved by the real-world problems faced by the unfortunate souls stuck in the middle and lower classes. For many years, virtually all polls that dared to ask Americans which direction our country is headed in have shown that most Americans believe that we are on the wrong track. Additionally, we know that most Americans do not support the recently passed GOP tax bill which despite President Trump’s populist promises is yet another blueprint for trickle-down economics. For most Americans, our government’s application of trickle-down economics has been a recipe for disaster and the public appears to know this.
Ahead of the impending mid-term congressional election and the 2020 presidential election, Democrats must embrace an economic platform designed to reverse the effects of Reaganomics and close the wealth and income inequality gap. Thanks to the atrocious effects of trickle-down economics this task will require considerably less political courage than it used to require. This is because many Americans no longer accept the untenable free market capitalism versus intervening government socialism choice sold to them so skillfully over the past few decades by the trickle-down supporting Republicans. Thanks to the hard work of progressive truth-tellers such as economists Robert Reich and Ha Joon Chang, Americans now know that there is no such thing as a free market economy devoid of government intervention. They accept the fact that the only issue that is open for serious debate is how much government intervention a well-functioning economy requires, the shape it takes and its effectiveness. If Democrats want to regain political relevance they should make ending wealth and income inequality the party’s central issue for the foreseeable future. Finally, Democrats should spend a significant amount of time seriously considering leveling measures, such as a national living wage, a universal basic income, regulation of the financial sector and large corporations and financial aid for small businesses.
Published in Daily Times, February 19th 2018.