Category: Abandonment of Middle Class

Democratic Party Messaging

The Daily Escape:

Pikes Peak, Colorado Springs, CO – December 2024 photo by Monica Breckenridge.

The Democrats are meeting this week to decide on who will lead them into the 2026 midterms and the 2028 general election. Wrongo thinks it’s time for a revolution.

The key question is how do Democrats go back to winning presidential elections? And it may not be the way you think. From Jon V. Last:

“Since Trump’s emergence in 2016 the opposition has responded by acting as if it were still 2015. The Biden administration pursued a vigorous, bipartisan agenda filled with popular legislation designed to promote economic growth across the board. Biden spent money on infrastructure and manufacturing—much of it in red states and rural areas where Democrats had little support.

The Biden administration’s theory was that by governing from the center and focusing on employment and economic growth, Democrats could retain the support of the majority….”

But that theory didn’t work, and Trump won, running on zero ideas about growth, prosperity, or progress. His campaign was posited on the infliction of pain to outsiders. Trump didn’t promise to improve the lives of his voters. He promised to punish the people his voters wanted to hurt. That was the entirety of his electoral proposition, and none of it was subtext. Instead it was bold-face, ALL CAPS text.

Last says it worked because America has changed and the majority of voters are no longer motivated by wanting progress for themselves. Instead they’re motivated primarily by anger that out-groups—the people they do not like—might be succeeding or getting benefits they’re not getting.

If this is true, and at least some evidence suggests it is, how do Democrats persuade voters not to be quite so angry and to vote for them?  From Brian Beutler: (emphasis by Wrongo)

“…winning the next election will require Democrats to persuade some as-yet unpersuaded voters that they’re worth voting for. Whatever policies Democrats think are popular, whatever affects they associate with normalness and affability, if they can’t do the delicate work of changing a mind, they can’t get anywhere.”

More:

“Democrats are about to have as little power as they’ve had at any time in the past two decades for a simple reason: Most Americans weren’t convinced that they’d be better off under Democratic rule. That’s it. And there’s no shortcut back to power that avoids the difficult task of convincing people to change their minds.”

More: (emphasis by Wrongo)

“The Democrats need more and better communicators, and, crucially, it needs the people who don’t understand their potential to influence conventional wisdom and public opinion to get with the times. Most persuasion doesn’t happen person to person, it is mediated. When it does happen person to person, it is most often between people who already know each other, and usually one of those people is regurgitating ideas they picked up….And the ripest targets are no longer classic swing voters who are happy to talk politics with strangers….”

Couple all of this with the problem of where people get their news, and you have Dems digging out of a ditch partially of their own making. What Democrats are missing more than anything is creative thinking about how to reach people who will never answer a telephone call from a number they don’t recognize, never answer the door for a canvasser, and never form lasting political beliefs by watching or reading professional newscasts (because they rarely, if ever do).

This time around, Democrats either need their leaders to adapt, or else they need new leaders.

Jon Last thinks what will win votes in this environment is a lefty demagogue akin to what Bernie Sanders has been selling for years with his “millionaires and billionaires” rants. Sanders’s pitches resonated with younger voters. He got quite a lot of traction in 2016, but Democratic Party primary voters were not ready for him.

Who should the Dems support to lead them into the next round of elections? It should be a group of people in the 30’s, 40’s and 50’s. And thank God there is at least some movement among “younger” Democrats on the Hill to challenge the party’s gerontocracy.

Billy Ray is a screenwriter. His Captain Phillips screenplay earned him an Oscar nomination. He thinks the Democrats’ storytelling ought to start with:

“Whoever is going to be our next presidential candidate needs to look to the American people and say, ‘You matter. Not me, not Trump. You matter. You matter to your family, you matter to your community, you matter to your country,’” he adds. “‘You matter to our collective future, and you matter to me. And what I’m going to do for the next four years is just work for working families. I’m going to do the things that made the Democratic Party your party for so long.’”

Working families. Who among the Democrats out there can build on and carry this message home?

Evolve or Die, Dems.

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Implications Of Brian Thompson’s Assassination

The Daily Escape:

Bear Trap Gap, NC – November 2024 photo by Mandy Gallimore

“If you want things to stay as they are, things will have to change”– Il Gattopardo

If you’re on social media, a concerning number of people seem to openly support gunning down a “corporate rich guy” in broad daylight. Brian Thompson, the CEO of United Healthcare was murdered in what appears to be a targeted killing. And the comments about it on the internet underscore there is kind of a depravity circulating in too many Americans.

This, after two attempts to assassinate Trump during the campaign. Which stirred up similar, although more muted reaction on social media.

The killer left anti-insurance messages on the shell casings of the bullets that killed Thompson, using the words: “deny,” “defend” and “depose”. Those words are references to the ways insurance companies avoid paying for care.

An excellent summary by Bob Lefsetz:

“And we thought the revolution would arrive as a result of the red/blue divide. When in truth, it’s all about income inequality. Please don’t criticize me for having sympathy for those screwed by the insurance companies. If I were in charge, there’d be no guns at all, or a law akin to that in Australia. But one would posit that the shooter is pissed because the insurance company didn’t pay.

But that’s what insurance companies do, not pay. That’s their business model. Even assuming you can see the doctor of your choice, which is rare.”

Yes, not pay whenever possible is what insurance companies do.

To be clear, this is why advanced societies have tended to create broad publicly funded social safety net programs. It’s not because their bleeding heart politicians love giving away money. It’s because making sure people have humane standards of living keeps them from becoming desperate and doing stuff like this. During the Great Depression, capitalists agreed—grudgingly—to the New Deal because they were afraid otherwise the country would “go Communist”.

We have no clarity on the actual motive behind the killing, but all signs point to it being linked to dissatisfaction with our health insurance system. And we need to remember that Brian Thompson was a human being with a family. So calling his death justified is despicable.

It’s the health insurance payment system and healthcare pricing for goods and services that is despicable.

From STAT:

“The public’s dissatisfaction has never been higher. Recent polling data show the health care system is as unpopular now as it was before the Affordable Care Act went into effect 15 years ago — a time when insurers could decline to cover people if they had any number of pre-existing health conditions and nearly 49 million people lacked insurance. A survey from Gallup released Friday reveals that “Americans’ positive rating of the quality of health care in the U.S. is now at its lowest point” since 2001.”

More:

“Roughly 25 million Americans remain uninsured. Tens of millions of others have health insurance but can’t afford their deductibles, coinsurance, or copays due to the high prices of tests, surgeries, and prescription drugs….These barriers aren’t just a nuisance — they can have real effects on patients’ health.”

The KFF foundation reports that 100 million Americans have medical debt, and its highly doubtful that they can afford to pay it down. Even people with platinum forms of coverage face long waits coordinating the complex and uncoordinated delivery of their health care, as Wrongo knows firsthand.

After getting care, patients are inundated with medical bills they don’t understand — perplexed why their insurer isn’t advocating on their behalf, and fearful that hospitals and other providers will send them to collections or sue them.

It’s all part of a health care system that is projected to spend $5 trillion this year, eating further into workers’ wages. Those who feel most aggrieved often are the sickest. Most people are generally satisfied with their health insurance. However, people who have more health conditions and therefore need to get care more frequently don’t like their coverage nearly as much as healthier people, according to polling from KFF.

So, the more they know you, the more they dislike you. People are feeling a sense of helplessness in trying to address this mammoth commercial insurance industry that’s putting restraints on people’s ability to get care. When you feel that sense of helplessness is when you end up having situations like this. People don’t really know what else to do.

The murder of the CEO and the public’s reaction reveals that:

  • Americans are blindingly angry, and not just with the healthcare system.
  • Due process is no longer trusted. Have enough money and you’re likely to buy your way out of a bad situation. The FTC says Twitter must comply with the consent decree and Elon Musk just doesn’t do it. The government is no match for the rich. Money can insulate you from so much.
  • Vigilante justice has become a solution in some places because of the lack of due process.

We’re entering a period that is very similar to the Gilded Age of the 1880s and the 1930s.

Our social contract is in free fall. And the Trump administration’s proposed cabinet officers will make it worse.

What will happen in a country with 400 million guns and 320 million people? Things may go downhill quickly. Never forget, most change is fomented by individuals. A fruit vendor in Tunisia ignited the Arab Spring.

Is this the start of change in America? One person gunning down an insurance company executive?

Wrongo doesn’t condone the shooting. At this point we have no motive. But what we do know makes you think about our broken health care system and the overcompensation of the people who run it. They’re getting rich on our illnesses. They take our money and then, don’t pay.

Ain’t that America.

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Where 2024 Went Wrong

The Daily Escape:

If you’re planning on being a part of the resistance, you need to start from having a few ideas about what went wrong and why in 2024.

Plenty of people have ideas about what we should be doing next. Rachael Bitecofer’s latest “Identity Politics and Microtargeting Killed The Party’s Brand” raises a great concern expressed by many Democrats, that the Party no longer identifies with the working class, and the working class isn’t who it used to be. It’s much bigger and much more diverse.

Bitecofer’s big idea is that the culture wars were the prime driver of the 2024 election. The culture wars were created after the era of Individual Freedom that arose in the 1950s and 1960s. The Democratic Party had morphed into an alliance, merging a Party of liberal Whites and racist White Southerners into one big coalition that by staying together, dominated Congress for decades.

By the 1960s, the activism of MLK. Jr and thousands of other civil rights activists forced the Democratic Party to choose: Either preserve their large coalition or end segregation. After the assassination of JFK, LBJ sided with civil rights for Blacks signing both the Civil Rights Act of 1964 and the Voting Rights Acts of 1965. In doing so, this set off the realignment that would lead to total domination of the South by the Republican Party a few decades later.

Nixon’s Southern Strategy recognized that white Southern conservatives were there for the taking, and they took them. Meanwhile, the Democrats began to absorb liberal Republicans, predominantly in the North East and West Coast. Ideological liberals became Democrats and ideological conservatives became Republicans. And the today’s 270 Electoral College map dominated by the handful of swing states became the norm for success in American presidential elections.

From Bitecofer:

“In building their new multi-racial coalition Democrats…turned to something called identity politics. Identity politics is…based on a particular identity, such as ethnicity, race, nationality, religion, denomination, gender, sexual orientation, social background, caste, and social class….as the new Democratic Party became a multi-racial coalition hyper-focused on gaining civil rights for marginalized groups…”

This chart represents the outcome of Democrats following a microtargeting strategy for the past 30+ years:

This one graph tells us exactly why Democrats lost. First and foremost, it tells us that the Democratic Party is a brand “that stands up for marginalized groups.”

Let’s focus on the time window on the graph. As you can see, the Democrats used to have a massive advantage with the working class which began to erode around the time of the Reagan Revolution and round two of Nixon’s Southern strategy. Please keep in mind, the erosion also corresponds with the diversification of America both in terms of ethnicity and gender and reflects in part the backlash to civil rights.

From Bitecofer about the working class:

“Donald Trump just accomplished the same thing by focusing most of his ads on scary trans people and the data don’t lie, millions of ads repeating the sex changes for prisoners broke through.”

More: (emphasis by Wrongo)

“Now, that’s a great brand to have if you’re…an ideological liberal who cares deeply about the rights of the powerless!! The issue is just about a quarter of the electorate is liberal and psychologically predisposed to care about marginalized groups. The rest of the electorate doesn’t get the warm fuzzies we get from marginalized groups, because most humans are hardwired to prefer in groups over out groups and Republican strategists have exploited this expertly.”

Bitecofer argues that what matters for marginalized groups is policy, and that policy only comes from power. The way to represent marginalized groups is by wielding the power to represent them in majorities, not by identity politics in campaigns.

Bitecofer’s central point is that working class voters no longer primarily vote on economics. They did at one time, but those days were done as soon as cultural issues emerged and segregation was ended by the federal government. Here’s how the working class has grown and diversified over the last few decades:

Can the GOP, a Party financed by industry and bankers, permanently “represent the working class”? Maybe so, if the GOP can keep them distracted enough from the economic warfare they are conducting against them by leveraging grievance politics as a backlash to the Dem’s identity politics strategy.

Bitecofer closes with this:

“If we are lucky enough to get another election in this country, the messaging must focus on telling America the story of what happened to all their money, their rural communities, their paychecks, and their health under Republican Party governance.”

A prime part of the coming resistance is to return the GOP Party back to being at war with working America.

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Oops, Boeing Does It Again

The Daily Escape:

Lenticular cloud at sunrise, Salton City, CA – May 2024 photo by Paulette Donnellon

At a time when Boeing is facing calls by the flying public as well as from governments to return to its focus on safety, the company has scored an “own goal” by deciding to pick a fight with its in-house firefighters union, who help to keep Boeing itself safe.

From The Stand, a Seattle-based newsletter about working people:

“The more than 120 fire fighters who protect Boeing employees and facilities in Washington state — members of the International Association of Fire Fighters (IAFF) Local I-66 — are struggling to get a fair contract from the Arlington, Virginia-based company.”

At the heart of the dispute is Boeing’s insistence on raising the time it takes for firefighters to reach the maximum pay scale from 14 years to 19 years. Negotiations have been ongoing through a federal mediator for more than two months, with no deal reached. Nineteen years is nearly the entire work span of a firefighter’s career. If this deal is accepted, they will hit the top of their pay scale and retire soon after. It’s understandable why that would be good for the company. From Boeing: (emphasis by Wrongo)

“Despite extensive discussions through an impartial federal mediator, we did not reach an agreement with the union….We are disappointed the union chose not to even bring our offer to its members for one final vote….We have now locked out members of the bargaining unit and fully implemented our contingency plan with highly qualified firefighters performing the work of IAFF members.”

More from The Stand:

“Boeing’s “last, best and final offer” to the fire fighters was rejected by more than 80% of IAFF I-66 members. The union says the offer failed to address fire fighters’ concerns about short staffing, pay that’s significantly lower than local fire departments, and step increases that take 19 years to reach the top of the pay scale…”

Obviously, “Safety First” remains Boeing’s motto. Maybe that’s Safety of our bonuses First. This also reminds Wrongo of the old saw:

“Socialism is the fire department saving your house. Capitalism is the insurance company denying your claim.”

Continuing Boeing’s recent tradition of quality operations (?) and stable management, they’ve now moved on to scab firefighters for their burning needs. The entire Boeing firefighting staff is 125 people. So think about the negotiations on how many years should exist between pay step increases: Boeing’s demand makes no effort to meet somewhere in the middle. Wrongo isn’t sure what is driving the Boeing Board of Directors: The union only has 125 members, so the amount of money Boeing would pay if they employed a “meet in the middle” settlement seems tiny compared to the scale of Boeing’s total expenses.

It’s also awful for Boeing’s Board that this was reported in the media on the same day that the FAA announced another investigation into Boeing over falsified recordkeeping in its 787 program: (emphasis by Wrongo)

“In an email to Boeing’s South Carolina employees on April 29, Scott Stocker, who leads the 787 program, said a worker observed an “irregularity” in a required test of the wing-to-body join and reported it to his manager…..After receiving the report, we quickly reviewed the matter and learned that several people had been violating Company policies by not performing a required test, but recording the work as having been completed…”

Son of a door plug! The world is watching in real time how difficult it can be to turn a huge company’s culture around, particularly when the members of the firm’s C-Suite whose major function in the corporation is its financial performance doesn’t see the maintenance of that culture as a huge problem. It may take many years for Boeing to pull out of this nosedive, or they may fail entirely.

In the meantime, do you feel their planes are safe enough to fly?

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State Of The Union Speech Mop-Up

The Daily Escape:

Morrow Bay, CA – March 2024 photo by Slocoastpix

(This is most likely the only column this week, as Wrongo is working on an outside project.)

Today let’s cover a few disparate topics that are about clean-up from the Biden State of the Union address. The Hollywood Reporter reports on Biden’s viewership ratings with this headline:

“The 2024 State of the Union address drew a larger TV audience than the 2023 address.”

Biden’s speech averaged 32.23 million viewers across 14 broadcast and cable outlets, almost 5 million more viewers than the 2023 State of the Union. Viewership rose on all of the largest outlets by about 18%.  More:

“The vast majority of viewers — 28.47 million — watched the State of the Union on the big four broadcast networks (ABC, CBS, Fox and NBC) and the three largest cable news outlets (CNN, Fox News and MSNBC). All seven outlets drew a bigger audience than they did for last year’s address.”

So much for viewer apathy. One big surprise to Wrongo is that Fox News led with 5.84 million viewers, beating out the 5.24 million for ABC, which had the largest viewership among the broadcast networks. NBC’s 4.47 million viewers finished third, followed by MSNBC at 4.43 million, (its largest audience ever for a State of the Union).

Why would Fox have more viewers when their network demographics skew far more to the Right than the others? Did they tune in hoping to see a Biden senior moment?

Second, Sen. Katie Britt (R-Jesus) lied in her rebuttal for the GOP.

Third, Umir Haque’s newsletter, the issue has some good insights that Wrongo hasn’t seen elsewhere. About leadership: (emphasis, parenthesis and brackets by Wrongo)

“We recently discussed the difference between occupying a leadership position—and being accepted as a leader. This Biden’s been hid[den] away by the Democratic machine….Those roaring, electrified [people attending the speech)? Those surging positivity ratings? That’s…going from merely occupying the position, to being accepted as a leader.”

More:

“Biden quietly proposed something very much like a new America. A new American social contract. The ideas came so fast and furious that they were almost easy to miss, sandwiched between philosophy and persuasion.”

More:

“…most State of the Unions aren’t like that. They’re pretty boring because Presidents tout their accomplishments. They’re backwards looking…sort of performance reviews….This one really was…profoundly different.”

Haque who lives in the UK, says that the ideas Biden put forth, are very popular in Europe:

  • Taxing billionaires, which is part of a new movement, arising mostly in Europe, to reduce inequality, by having a global tax on the ultra-rich.
  • Taxing executive compensation on salaries over $1 million by making them no longer tax deductible. This is also linked to recent moves by European nations to make economies more equal again.
  • Giving home buyers tax credits. This is a first step towards fixing America’s badly broken housing market…..many European nations are trying to fix that through incentives like this.
  • Lowering drug prices. One of Biden’s most revolutionary policy ideas was to let the government negotiate prices for many more drugs—this is a big deal, because of course Americans are ripped off incredibly badly by their version of “healthcare.” This would bring the US in line with other Western nations.

More: (brackets by Wrongo)

“if you read between the lines….Biden [is] recognizing how badly broken many aspects of the American social contract [are] —healthcare, housing, inequality, salaries, taxes—and how all that adds up to an incredibly precarious life even [if you are] at or above the median [income].”

More:

“Taxing billionaires, limiting salaries, intervening in broken markets, giving people actual support—none of these are ideas we associate in the slightest with
American politics. They’re the stuff of social democracy, and Biden’s setting out a sort of lightweight…social democratic vision. It’s not quite one fully, but what it does…is begin to put America on the path to becoming one, like the rest of the Western world.”

This sets a clear distinction between the Parties in 2024. Democrats since Bill Clinton have not had a clear definition of what they stand for: What do they stand for? What’s their overarching idea? Are they after a just society, and a good life for all Americans?

This theory of the good life, the just society, and how they’re linked now has Biden championing a politics that isn’t simply another version of “life’s about winners and losers”. Haque thinks this is an incredibly important evolution in US politics.

Will Biden’s move leftward bring enough votes to win in November? We have to hope it will. Conservative Republican Peter Wehner in the NYT reminds us that there’s just 34 weeks to the election:

“The next 34 weeks are among the more consequential in the life of this nation. Mr. Trump was a clear danger in 2016; he’s much more of a danger now. The former president is more vengeful, more bitter and more unstable than he was, which is saying something…..He’s already shown he’ll overturn an election, support a violent insurrection and even allow his vice president to be hanged. There’s nothing he won’t do. It’s up to the rest of us to keep him from doing it.”

It’s time on this Monday morning, to wake up America! IF he gets to run the country, Trump will act like a juvenile delinquent, flipping over as many of the cafeteria lunch tables as he can. In a nutshell, that’s his MAGA platform. And like the Zombie Apocalypse come to life, sooner or later all Republicans who hold public office will endorse him.

The rest of us have to put aside our ideological differences and support Biden. To help you wake up watch and listen to The Clash perform “(White Man) in Hammersmith Palais” from their 1979 album “The Clash”. This is far from their best, but it’s on point for today’s column:

This song is from a time when the youth began to realize that sticking together was actually a better idea than allowing themselves to be divided. That has to come back.

Sample Lyric:

White youth, black youth
Better find another solution
Why not phone up Robin Hood
And ask him for some wealth distribution

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35% of Americans Meet The Criteria To Be Middle Class.

The Daily Escape:

Stoney Brook Grist Mill, Brewster, MA – February 2024 photo by Michael Kerouac

Wrongo and Ms. Right spent Sunday with one of our daughters and son-in-law. We spoke about the Ezra Klein op-ed in the NYT about why Biden should step aside. One of Klein’s points is that in presidential campaigns, the candidate is always the campaign’s biggest asset, and that Biden isn’t being used by Democrats as if he is their biggest asset.

Elsewhere, some pundits are saying that the Democrats need to forget campaigning on policy: Dems always try to find things people like and tell them they’re going to help them — and after that, show them the candidate’s character, biography, and qualifications for office.

Instead, the Republicans campaign by appealing more to emotion than intellect, using a negative message to develop enthusiasm.

While Wrongo is happy that Dems want to campaign again on an anti-Trump message, he still thinks policy is the right way to appeal to at least two types of voters: Those who rarely vote, and those who voted Democratic last time but are less enthusiastic this time. These voters think our political system hasn’t produced results for them, and they’re looking for promises to change that in order to get their votes.

While we keep touting Biden’s economic performance, Wrongo recently found a very important poll taken last November by the WaPo that asked Americans how they defined being in the middle class:

“About 9 in 10 US adults said that six individual indicators of financial security and stability were necessary parts of being middle class….Smaller majorities thought other milestones, such as homeownership and a job with paid sick leave, were necessary.”

They also asked how many of those markers of being in the middle class people said they had achieved, and the results are a staggering rejection of how well the US economy is working for many people:

“Just over a third of Americans met all six markers of a middle-class lifestyle. While about 9 in 10 Americans had health insurance, only three-quarters had health insurance and a steady job. With each added measure of financial security, more Americans slipped away from the middle-class ideal.”

Let’s get into the findings. Here’s the WaPo chart about what factors Americans think it takes to be in the middle class:

It’s arbitrary to pick six, but they were the most frequently mentioned. A secure job. The ability to save. To afford an emergency. Paying the bills without worrying. Healthcare. Retirement. It’s a sensible list. And in the poll, huge majorities agreed those are the key criteria for a middle class life.

The Very Big Problem with this is that when the WaPo asked the same respondents if they had the ability to meet those criteria, the numbers are startling. Here’s the second WaPo chart:

Just 35% of people say that they meet the criteria that almost everyone, (~90%) agree should make someone middle class. If that’s true, America needs to redefine “middle” class. The majority in this survey did not have the financial security associated with being in the middle class. More from WaPo:

“The most common barrier was a comfortable retirement, something that about half of middle-income Americans over 35 felt they were on track to achieve.”

Think about what this research is really showing us. America no longer has a middle class. While ~90% of people agree on what a middle class life is, only a minority can afford it. This means we have a “phantom” middle class: Americans want to be middle class, but only a minority of them are. So what class does that make the majority?

What this research appears to show is that America is building something more like a permanent underclass.

Acknowledging this issue would be a great starting point for Biden to gain traction with low propensity voters and with the Gen X and younger voters who make up most of the low enthusiasm cohort of Democratic voters.

As Anat Shenker-Osorio puts it:

“Democrats rely on polling to take the temperature; Republicans use polling to change it.”

This time around the Democrats need to emulate Republicans who work at moving the needle instead of chasing it. And this middle class problem is an issue that will move the needle.

Fortune Magazine’s Tiffani Potesta writes that Gen Xers personify the problem of middle class life:  (emphasis by Wrongo)

“Gen Xers expect to keep working longer than they planned–and will be the first generation to go into retirement with less financial security than their parents and grandparents.”

Gen X will be the first to reach retirement under a new paradigm: the widespread move from Defined Benefit plans to Defined Contribution or 401(k) plans in the US. This is a barely cited yet fundamental societal change that shifted the responsibility to save for retirement from employers to individual employees. More:

“…the numbers do not add up: Gen Xers reported that on average they will need roughly $1.1 million in savings to retire comfortably, yet they expect to stop working with only about $660,000 saved–a savings gap of around $450,000.”

Still more:

“According to a report from the National Institute on Retirement Security, the average account balance in 2020 for private retirement accounts among working Gen Xers was $129,994. This is woefully short of the amount of savings most of us will need to be secure in retirement.”

What’s worse is that the median account balance was scarier: $10,000–and 40% have zero savings.

For a society to be staring at the next few generations not being able to retire and not to be members of the middle class is very troubling, particularly in terms of what’s likely to happen if that’s the case. Losing our middle class is almost a sure path to autocracy, possibly through the rise of fascism and/or authoritarianism.

Biden and the Democrats need to acknowledge these problems are real and pledge to do everything possible to return America to having a true, bell-curve shaped middle class. They can run generally against Trump as “order vs. chaos”, but Trump is running on “America’s decline”, which includes the financial insecurity of millions of Americans. Biden needs to call that out specifically, along with ideas on how to fix the problem. That would make financial insecurity an issue for Democrats equal to abortion, something that targets a specific group and encourages them to get to the polls in November.

If Bernie Sanders isn’t too old to rage against economic insecurity, then Biden is old enough to do the same.

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Why People Say The Economy Is Terrible

The Daily Escape:

First snow, Doubling Point Lighthouse, Kennebec River, ME – December 2023 photo by Rick Berk Photography

Wrongo may have stumbled upon the reason why people say the economy is bad when so many economists say it isn’t. From a LendingClub report from last May: (emphasis by Wrongo)

“For some Americans, earning a six-figure income doesn’t guarantee a comfortable lifestyle….many Americans are struggling to make ends meet — with 61% of those surveyed saying they feel stretched too thin, and 49% of those earning $100,000 or more saying they’re living paycheck to paycheck.”

This ties together with other information, some of which comes from the issue, who reported this from the Aspen Institute: (emphasis by Wrongo)

“Though routinely positive cash flow is the starting point for financial stability, it remains largely out of reach for many Americans. Even before the fallout of the COVID-19 pandemic, nearly half (46.5%) of households reported that their income did not exceed their spending over the course of a year. For households with annual income of less than $30,000, this number increases to three in five (61.5%).”

Now there may be many reasons why people spend beyond their means. Some seem to be unable to defer gratification until there’s money in the bank, so they buy on credit. There was a $48.5 billion jump in spending from September to October 2023. For others who make less than a living wage, the problem isn’t one of choice, it’s existential.

The searing takeaway from the above is that negative personal cashflow was a problem even before the post-Covid inflation drove prices through the roof in America. The Aspen Institute provides this handy chart showing how individuals build financial security:

Financial security starts with having a routinely positive cashflow. But, nearly 50% of Americans today aren’t cash flow positive (see quote above), while 49% of people earning more than $100k are living paycheck to paycheck.

This dovetails with Wrongo’s Monday column which showed that “Nearly 3 in 10 Americans say they have had to forgo seeing a doctor in the past year due to costs.” If you’re one of the 7.5% of uninsured Americans, and have money in your checking account that isn’t going to necessities, you can definitely go to the doctor.

Aspen has another chart that shows the breakdown of who lives paycheck to paycheck by income levels:

Seventy-four percent of those making less than $50k are living paycheck to paycheck, and while the percentage gets smaller as annual income rises, it’s still 48.7% for people making more than $100k, in an economy where the median income is around $54K!  FYI, the percentage of Americans who make $50k or less is 37.8%.

More from LendingClub: (brackets and emphasis by Wrongo)

“The share of consumers in the US earning over $100,000 per year who live paycheck to paycheck increased 7 percentage points in April year over year. High-income consumers are particularly likely to live in urban areas, at 36%, and these tendencies toward higher incomes…[don’t] prevent almost 70% of urban dwellers from saying they live paycheck to paycheck.”

It’s hard not to conclude that the majority of Americans are currently experiencing dire financial conditions, including many who live with negative cashflow. When your cashflow is negative, you either cut back, borrow or sell assets. For most people selling assets isn’t a real choice. So while some cut back, the majority borrow to make ends meet. According to the issue, the:

“…highest risk, and most expensive forms of debt are now growing fastest. Payday loans, online insta-loans, and so forth. That means that people are exhausting the more mundane forms of debt—credit cards, bank loans, government loans, etcetera.”

This squares with a report by Achieve, a personal debt management firm, that shows:

“In the first nine months of 2023, the average monthly participation in debt resolution programs increased by 119% compared to 2020, even though the average earnings rose by approximately 37% during the same period.”

It gets worse:

“In 2023, the typical household income of individuals enrolled in debt resolution programs was $59,900, which is a notable increase from $43,598 three years prior.”

Americans are earning 37% more but are still struggling with debt. Not a pretty picture to take before the voters.

Meanwhile, Democrats still are touting how “strong” the economy is. The aggregate numbers hide terrible personal experiences that are happening out of sight of our politicians and surprisingly, our economists. However, it’s clear from the polls that few Americans are buying that message apart from the true believers, the media and pundits.

The disconnect between economic data and the lived experience of average people needs to be addressed by Biden and the Democrats. If nothing is done to at least acknowledge the actual problems of many Americans specifically, their negative personal cashflow, these angry folks will certainly tilt toward giving Trump another chance.

Let’s give the issue the last word:

“What is this? What do we call it when the majority of people can’t make ends meet, as in, they’re literally spending more than they make, because they don’t make enough to live a stable or secure life?

Today the averages are hiding a truth: that a near-majority of American citizens are financially underwater. These are big numbers. The Census Bureau says as of now, 258.3 million Americans are adults. And the Aspen Institute says that 46.5% of them can’t make ends meet. That’s 120 million of us that are going deeper in debt every month.

That can only happen when those at the very top are skimming off more than 100% of the growth in the economy. This suggests that Biden et al need to run on policy that will help the majority of voters, not simply the moneyed people who finance political campaigns.

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Suicides Hit A Record

The Daily Escape:

San Juan river cuts through monocline ridge, UT – November 2023 drone photo by Hilary Bralove. It is believed by many that the Navajo people based their rug and basket weaving patterns on what they saw in these geologic formations.

The temporary truce in the Israel/Hamas war is over. Reprobate Congresscritter George Santos (R-NY) was ousted from the House, and former Supreme Court Justice Sandra Day O’Connor died. She was the swing vote in the Bush v. Gore case that stopped the Florida recount and handed the 2000 presidential election to GW Bush. This was the first time that Republicans realized that if they controlled the Court, they could fix elections.

But on a pretty Saturday in southern New England, let’s turn our attention to a news article that hasn’t gotten much interest. From the issue, we learn that:

“More people died from suicide in the United States last year than any other year on record, dating to at least 1941, according to provisional data from the US Centers for Disease Control and Prevention.”

They quote the Kaiser Family Foundation who measure the suicide deaths per 100,000 of population: (brackets by Wrongo)

“Suicide deaths are increasing fastest among people of color, younger individuals, and people who live in rural areas. Between 2011 and 2021, suicide death rates increased substantially among people of color, with the highest increase among AIAN people [American Indian and Alaska Native people]  (70% increase, from 16.5 to 28.1 per 100,000), followed by Black (58% increase, from 5.5 to 8.7 per 100,000), and Hispanic (39% increase, 5.7 to 7.9 per 100,000) people….The suicide death rate also increased in adolescents (48% increase, from 4.4 to 6.5 per 100,000) and young adults (39% increase, from 13.0 to 18.1 per 100,000) between 2011 and 2021….”

Suicide rates are up by nearly 50% in adolescents over the last decade, while suicides among Black people are up by almost 60%. These aren’t trends, they’re explosive changes. What we’re seeing in the data is our world in chaos.

Wrongo often says that American life has fallen apart over the past 30 years. People struggle to pay their bills; many do that by accumulating debt. For some, that struggle turns them to embrace demagogues, people who scapegoat innocents, or promise to take their rights away, robbing them of  their personhood.

When we see suicide rising particularly among groups who struggle the most for their existence, it says that something has gone terribly wrong with the American model. And in the suicide statistics, there is confirmation that our nearly Darwinian model is what’s wrong. Adolescents and minorities aren’t committing suicide at these rates because they can’t get therapy, but because they feel as if there’s little or no future for them. Sadly, they are told by many pundits and politicians that everything’s fine.

Perhaps this partially explains why Biden seems to be doing so badly in polls of young voters.

As one of the commenters at the issue says:

“It shouldn’t be ‘The pursuit of happiness’ it should be ‘The amelioration of misery’. Being free to pursue happiness when there isn’t enough…left to go around doesn’t do ‘We the people’ any good.”

So, it’s time to forget about Santos, Kissinger and Hamas for a few minutes. Tune in to your Saturday Soother, where we try to get distance from the news for long enough to be able to handle whatever’s coming next.

Here on the Fields of Wrong, we’ve completed our fall clean-up and now it’s on to putting up the deer fencing that protects the bushes around the Mansion. The tree is up and illuminated, and the first members of our family are coming to see it today.

While it’s a beautiful day in the northeast, it makes sense for you to stay indoors for now. Start by brewing up a mug of “The Antidote” coffee ($19.50/12oz.) from Apocalypse Coffee in Melbourne, FL. Now grab a comfy chair by a south facing window and watch and listen to Schubert’s “Serenade”. Written two years before his death, it’s a perfect example of the melancholic music Schubert was so well known for:

 

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Democrats Need New Messaging

The Daily Escape:

Cholla Cactus at sunrise, Joshua Tree NP – November 2023 photo by Michelle Strong

Yesterday’s column described how confusing current polling data is with less than a year to go before the 2024 presidential election. We can easily overdose on polls, but in general, they seem to be pointing toward a very difficult re-election for Biden.

At the risk of contributing to the OD, here’s another example of terrible poll for Biden. It comes from Democratic stalwarts Democracy Corps, run by James Carville and Stanley Greenberg:

“President Biden trails Donald Trump by 5 points in the battleground states and loses at least another point when we include the independent candidates who get 17% of the vote. Biden is trying to win these states where three quarters believe the country is on the wrong track and 48% say, “I will never vote for Biden.”

What to make of all this? Wrongo thinks it’s time to take a different approach to the Democrat’s messaging. Let’s start with a quick look at the NYT’s David Leonhardt’s new book, “Ours Was the Shining Future”. Leonhardt’s most striking contention is based on a study of census and income tax data by the Harvard economist Raj Chetty: Where once the great majority of Americans could hope to earn more than their parents, now only half are likely to. From The Atlantic:

“Of Americans born in 1940, 92% went on to earn more than their parents; among those born in 1980, just 50% did. Over the course of a few decades, the chances of achieving the American dream went from a near-guarantee to a coin flip.”

As we said yesterday, the American Dream is fading. Leonhardt says that the Democrats have largely abandoned fighting for basic economic improvements for the working class. Some of the defining progressive triumphs of the 20th century, from labor victories by unions and Social Security under FDR to the Great Society programs of LBJ, were milestones in securing a voting majority. More from The Atlantic:

“Ronald Reagan took office promising to restore growth by paring back government, slashing taxes on the rich and corporations…gutting business regulations and antitrust enforcement. The idea…was that a rising tide would lift all boats. Instead, inequality soared while living standards stagnated and life expectancy fell behind…peer countries.”

Today, a child born in Norway or the UK has a far better chance of out-earning their parents than one born in the US. More context from The Atlantic: (emphasis by Wrongo)

“From the 1930s until the late ’60s, Democrats dominated national politics. They used their power to pass…progressive legislation that transformed the American economy. But their coalition, which included southern Dixiecrats as well as northern liberals, fractured after…Johnson signed the Civil Rights Act of 1964 and the Voting Rights Act of 1965. Richard Nixon’s “southern strategy” exploited that rift and changed the electoral map. Since then, no Democratic presidential candidate has won a majority of the white vote.”

The Atlantic makes another great point: (emphasis by Wrongo)

“The civil-rights revolution also changed white Americans’ economic attitudes. In 1956, 65% of white people said they believed the government ought to guarantee a job to anyone who wanted one and to provide a minimum standard of living. By 1964, that number had sunk to 35%.”

America’s mid-century economy could have created growth and equality, but racial suppression and racial progress led to where we remain today.

Leonhardt argues that what Thomas Piketty called the “Brahmin left” must stop demonizing working-class people who do not share its views on cultural issues such as abortion, immigration, affirmative action and patriotism. From Leonhardt:

“A less self-righteous and more tolerant left could build what successfully increased access to the American Dream in the past: a broad grass-roots movement focused on core economic issues such as strengthening unions, improving wages and working conditions, raising corporate taxes, and decreasing corporate concentration.”

Can the Dems adapt both their priorities and messaging to meet people where they are today?

The priorities must change first. What would it take to establish the right priorities for the future? Stripping away the wedge issues that confuse and divide us, America’s priorities should be Health, Education, Retirement and Environment (“HERE”). It’s an acronym that sells itself: “Vote Here”.

(hat tip to friend of the blog, Rene S. for the HERE concept.)

Wrongo hears from young family members and others that all of the HERE elements are causing very real concerns. Affordable health care coverage still falls short. Regarding education, college costs barely seem to be worth shouldering the huge debt burdens that come with it.

Most young people think that they have no real way to save for retirement early in their careers when there’s the most bang for the buck. They also feel that Social Security won’t be there for them. From the NYT:

“In a Nationwide Retirement Institute survey, 45% of adults younger than 27 said they didn’t believe they would receive any money from the program.”

Today, only about 10% of Americans working in the private sector participate in a defined-benefit pension plan, while roughly 50% contribute to 401(k)-type, defined-contribution plans.

Finally, people today feel that their elders have created an existential environmental threat that will be tossed into their laps. A problem for which there may not be a solution.

As Leonhardt argues, these HERE problems should have always been priorities for Democrats. But for decades, the Party hasn’t been willing to pay today’s political price for a long term gain in voter loyalty. That is, until Biden started working on them in 2020.

But every media outlet continues to harp on inflation and the national debt. Much of what would be helpful in creating a HERE focus as a priority for Democrats depends at least somewhat on government spending. No one can argue that our national debt is high. It is arguable whether it can safely go higher or if it must be reigned in at current levels.

To help you think about that, we collected $4.5 trillion in taxes in 2022, down half a $trillion vs. what we collected in 2021. Estimates are that the Trump tax cuts cost about $350 billion in lost revenue/year.

Looking at tax collections as a percentage of GDP, it’s less than 17% in the US, well below our historical average of 19.5%. There are arguments to keep taxes low, but if you compare the US percentage to other nations, Germany has a ratio of 24%, while the UK’s is 27% and Australia’s is 30%.

If we raised our tax revenue to 24% of GDP, which is where Germany is now, we would eliminate the US deficit.

There’s a great deal of tension in the electorate between perception and reality. And it’s not caused by partisanship: Democrats and independents are also exhibiting a disconnect, too.

Democrats have to return to being the party of FDR and LBJ. They need to adopt the HERE priorities and build programs around them.

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How Can America Handle The Costs Of Elder Care?

The Daily Escape:

The start of US Highway 6, outside of Bishop, CA – September 2023 photo by Steve Wolfe

(There will be no Saturday Soother this week. Wrongo is on the road.)

Millions of older Americans from the Silent Generation and the Baby Boomers are facing a dilemma as they “age in place.” They must figure out how to pay for increasingly complex medical care. The NYT quotes Richard W. Johnson, director of the program on retirement policy at the Urban Institute:

“People are exposed to the possibility of depleting almost all their wealth….”

The prospect of dying broke is an imminent threat for the Boomers. About 10,000 of them turn 65 every day between now and 2030. They’re expecting to live into their 80s and 90s at the same time as the price tag for long-term care (LTC) is exploding. Currently LTC expense is outpacing inflation and approaching a half-trillion dollars a year, according to federal researchers.

By 2050, the population of Americans 65 and older is projected to increase by more than 50% to 86 million. The number of people 85 or older will nearly triple to 19 million. The Times has a chart of how many of those who need long-term care will die broke:

Some older Americans have prepared for this possible future by purchasing LTC insurance back when it was still affordable. Since then they’ve paid the monthly premiums, even as those premiums continued to rise. But this isn’t the norm. Many adults have no plan at all or assume that Medicare, which kicks in at age 65, will cover their health costs. But Medicare doesn’t cover the kind of long-term daily care, whether in the home or in a full-time nursing facility, that millions of elderly Americans require.

For that, you either pay out-of-pocket or you spend down your assets until you have less than $2,000 in assets in order to qualify for Medicaid. Remember that Medicaid provides health care, including home health care, to more than 80 million low-income Americans.

And even if you qualify, the waiting list for home care assistance for those on Medicaid tops 800,000 people and has an average wait time of more than three years.

Here is a snapshot of how long-term care is paid for in the US:

Governments provide 71.4% of the total. The largest non-government source is people who pay out-of-pocket, and private insurance is becoming increasingly expensive. More from the NYT:

“The boomer generation is jogging and cycling into retirement, equipped with hip and knee replacements that have slowed their aging. And they are loath to enter the institutional setting of a nursing home. But they face major expenses for the in-between years: falling along a spectrum between good health and needing round-the-clock care in a nursing home.”

That has led them to enter assisted-living centers run by for-profit companies and private equity funds. The NYT says that about 850,000 people aged 65 or older now live in these facilities and when in them,  they are largely ineligible for federal funds. Some facilities provide only basics like help getting dressed and taking medication while others offer luxury amenities like day trips, gourmet meals, and spas.

In either case, the bills can be staggering. More:

“Half of the nation’s assisted-living facilities cost at least $54,000 a year, according to Genworth, a long-term care insurer. That rises substantially in many metropolitan areas with lofty real estate prices. Specialized settings, like locked memory care units for those with dementia, can cost twice as much.”

Home care is costly, too. According to Genworth, agencies charge about $27 an hour for a home health aide. Hiring someone who spends six or seven hours a day cleaning and helping an older person get out of bed or take medications can add up to $60,000 a year.

It’s worse for people with dementia because they need more services. The number who are developing dementia has soared, as have their needs. Five million to seven million Americans over age 65 have dementia, and that’s expected to grow to nearly 12 million by 2040.

The financial threat posed by dementia also weighs heavily on adult children who in many cases become guardians of aged parents. The Times included this chart:

The reality is that families go broke either caring for, or finding care for their loved ones. The alternative: Women in the family give up their lives and jobs to care for their family members instead, which worsens the gender wage gap.

The NYT article makes it clear that older Americans receive far less government support than their peers in other countries. The “why” question is easily answered: It’s a combination of the concerted effort for any public support to be demonized as “welfare”. It’s also partly the result of our failed experiment with long term care insurance. The politicians’ idea was that “the market” would take care of it, so government help for retirees could be limited to Medicaid-paid nursing homes.

But, the LTC insurance industry has largely imploded. Insurers had little experience with the product and grossly overestimated the lapse rates. If a policyholder stops paying, the insurer gets to keep the money and use it to provide services to everyone remaining in the pool. The surprise was that very few people stopped paying. A second miscalculation was that people who held these policies were living longer than forecasted. Longer life equaled higher and larger payouts (insurers also benefit when customers die before they’ve used up all the policy benefits).

A final factor is the rising levels of dementia described above.

And since demand for support outside of family members exceeds the supply of beds, nursing homes and assisted living facilities that aren’t terrible want residents to join during the independent living phase (which requires very little care, so those fees subsidize intensive nursing home care). Many of these facilities require a $400,000-$500,000 buy-in, which may not be refundable at death, even if the resident is current on their monthly fees.

There’s got to be a better way. Medicaid can’t be the only option to pay for LTC. Congress needs to establish a better system for middle-class Americans to finance LTC.

How we handle the growing costs of long-term care is just another reminder that we get LITTLE for our tax dollars beyond a giant military. Americans are responsible for their own medical care, childcare, college tuition, retirement and nursing home care. Some or all of which are provided in other rich countries.

This is a loudly ticking time bomb, and the demographics of the problem won’t change for decades. And yet, the Republicans seem bent on making it worse. They’re actively trying to bring about their dream of privatizing Social Security and Medicare.

Wake up America! We have real problems to solve.

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