Category: Economic Policy

What’s South Carolina’s Democratic Primary Telling Us?

The Daily Escape:

After the storm, Southern AZ – February 2024 photo by Leila Shehab

Welcome to the Monday Wake Up Call. Let‘s start with a quick review of the South Carolina Democratic primary: Biden won. He swept every county, garnering 96% of the vote overall and 95% or better in every county. At the watch party, people were headed out the doors less than an hour after polls closed. Here’s an MSNBC screen grab that says it all:

With the Biden vote so dominant and the race so noncompetitive, turnout was low, at 131,000. In 2020, with no competitive Republican primary and 12 Democrats on the ballot, 536,949 people voted. That means we didn’t learn very much about voter engagement for 2024.

And once again, the advance polling couldn’t be trusted. Here’s what Emerson College found on Jan. 5, 2024 just four weeks prior to the primary:

This meant that there were 23% undecided in early January. We all know that there are months to go before the general election this fall. It seems certain that Biden and the Democrats are currently testing the effectiveness of messages across the various voting cohorts in the US.

Democratic politicians and MSNBC pundits keep hammering on Trump’s threat to democracy. But how to tell the story about Biden’s first term in ways that normal people can understand? Is the implied threat of an authoritarian takeover by Trump enough to propel turnout in the fall? Or should the message focus on how much better off people are three years on from Trump?

The continued strength of the broader economy is finally starting to break through to people’s consciousness. But Biden and the Democrats still have to sell the Biden recovery and not flinch from fears that voters won’t buy it because they don’t feel it. Anat Shenker-Osorio famously said in an article in 2017 for The Hill, that Democrats shouldn’t just take the country’s temperature, they should change it.

Ezra Klein offered thoughts about American’s need to vote for stability:

“Biden and his allies are framing this election as order against chaos. The party that gets things done against the party that will make America come undone.”

More:

“…Democrats are right that voters are craving stability. But…Trump is leading in many polls because voters believe that he is the one who might offer it. What Trump is pitching….is a push for order — ‘I am going to be the one who secures the border. I’m going to be the one that cracks down on crime. I’m going to be the one that tries to stabilize your prices.’”

More:

“I’ve struggled with this portrayal of Trump as the candidate of stability. I doubt it can survive the gale-force winds of the actual campaign he will run, of the things people will hear and see from him when they tune in to the election.”

Finally:

“…Democrats are having trouble persuading voters of their central pitch: that they are the party of stability. It does not feel like a stable time. It is not Biden’s fault that the world is tumultuous. But that does not mean he will not be blamed for it.”

That’s where Wrongo parts ways with Ezra. He’s not certain that voters who yearn for stability will cast their lonely eyes on Trump. Think about how effective Nikki Haley’s message is that chaos follows wherever Trump goes. Trump’s base isn’t buying that, but that criticism was successful for Haley with Independents in New Hampshire, and will be effective with the “never Trumpers”.

As far as what will motivate 2024 voters to turn out? Wrongo is struggling with how to balance the need to defend America from the authoritarian Right and the kitchen table issues. Wrongo was in high school when the John Birchers were insisting that the threat of creeping communism required a militarist leader to keep America safe. That led to the Republicans nominating Barry Goldwater, at the time a member of the radical Right. The Birchers’ Republican heirs today have moved beyond Goldwater. They hunger for a fascist strong man.

Do average voters see this threat, or are they fretting so much about overpaying for their rent and groceries to care?

And the stability argument resonates with Wrongo. This Sunday brings the Super Bowl, which used to be the one television event that would still unite America. But a significant minority of Americans now think it’s a PsyOp to make Trump lose the election. Klein says in his article that:

“The cliché used to be that Democrats fell in love and Republicans fell in line. The reality, in recent years, has been that Democrats fall in line and Republicans fall apart.”

Time to wake up America! The choice whenever voting starts in your precinct this fall is between chaos and stability. We must stay obsessed with turning out Independents and unaffiliated, along with the Republican “never Trumpers” whose collective votes will ultimately determine the 2024 election.

Biden has to lead the way, and he’s got to do more interviews even though it increases exposure to his age as an issue.

To help you wake up, watch and listen to Doreen Shaffer & the Skatalites tune, “You’re Wondering Now”. This was covered and popularized by the UK group The Specials in the 1980s. The Skatalites did this in 1968. But they were covering “You’re Wondering Now” by Andy and Joey, another Jamaican group who first performed it in 1963. Ska is a happy sounding form of music that featured a bass line on the off beat. In the early 1960s it was the dominant music genre in Jamaica and was also popular with the British mods. Shaffer’s voice is pure and wonderful:

Sample Lyrics:

You’re wondering now, what to do, now you know this is the end
You’re wondering how, you will pay, for the way you did behave

Curtain has fallen, now you’re on your own
I won’t return, forever you will wait

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Cartoons Of The Week

From Paul Thornton of the LA Times: (emphasis by Wrongo)

“I know the story of Trump’s march to a third GOP nomination barely registered among those who’ve closely followed political news since 2015 — but still, please let it surprise you. Please let the fact that a man who tried to topple American democracy on Jan. 6, 2021, is now the second-most likely person to lead it after noon on Jan. 20, 2025, shake you to your core. German democracy held out for nine years after Hitler’s Beer Hall Putsch in 1923; Trump’s likely nomination puts us on course to halve the time it took Germany to empower (or in our case, re-empower) its fascist leader of a failed coup.”

It was a bad week for Trump and a good week for Biden. Trump’s week was bad enough that he may soon be renting Mar-a-Lago from E. Jean Carroll. Also, it shows us that Trump can lose to an 80-year-old. On to cartoons.

Biden’s “bad” economy continues to set records:

Elephant reacts badly to December’s GDP numbers:

When it comes to Trump, the Elephant is all talk and no tusk:

House Republicans say immigration deal is dead on arrival:

Why isn’t the media covering Abbott’s insurrection?

Trump loses:

The Alabama execution:

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Another Reason Why People Think The Economy Sucks

The Daily Escape:

Sunrise, Camden Harbor, Camden, ME – January 2024 photo by Daniel F. Dishner Photography

The Economic Policy Institute (EPI) has crunched the latest Social Security Administration (SSA) wage data. It shows the average American workers haven’t made much money since the 1970s:

“The latest SSA data demonstrates how vastly unequal earnings growth has been between 1979 and 2022. Over that period, inflation-adjusted annual earnings for the top 1% and top 0.1% skyrocketed by 171.7% and 344.4%, respectively, while earnings for the bottom 90% grew just 32.9%.”

That’s 33% over 43 years, less than 1% per year. The largest share of total earnings in the US economy have accumulated at the top of the wage ladder. The EPI is describing  “labor market earnings”, the pay (including benefits) of the 80% of workers who are not managers or supervisors at work. For decades before 1980, these workers’ hourly pay largely tracked economy-wide productivity growth.

When productivity growth slowed significantly, hourly pay growth collapsed even faster, leading to a growing gap between these typical workers’ pay and overall growth. That difference in missing pay for typical workers went to workers at the top or to business owners.

The EPI study shows that if you’re in the bottom 90% of wage earners, you’ve seen annual wage growth of less than 1% per year over the past 43 years. If you’re in the “upper middle class” things were very different. Here’s a chart from EPI:

Average wages in the 95th to 99th percentile have almost doubled, from $120K to $234K (all figures are in 2022 dollars). But this leaves out the real winners, the top 1%. Average wages for them went from $289K in 1979 to $786K in 2022. But even this huge growth is eclipsed by the wages of the top .1%, which increased an astounding 344%, going from $634K to $2.82 million.

Note that the data are for average annual wages which for the bottom 90% were $40,845 in 2022. Data on average wages are all that’s available, but it’s misleading. The MEDIAN wage for all workers is around $34k. That means half the bottom 90% are making LESS than 34k. Also, median household income is around $76k; which is two people working in the same household.

The media and the rest of us really have no idea how little the average person is earning.

And this is just income from wages. People at or near the top of the pyramid own the vast majority of the equity capital in the US — the top 10% of households own 85% of the total corporate stock owned by households.

The economic debate in America since the 1880s has been between those in favor of lightly regulated heavily financialized consumer capitalism, with some very modest income redistribution, sufficient — barely — to keep the losers in that economy from starving or freezing to death.

The other side are the Republicans who think England in the Industrial Revolution, is a model for what America ought to look like today. And Chase’s CEO Jamie Dimon says we should listen to Republicans more. He’s specifically talking about NATO and immigration.

And this has been the GOP’s pitch forever:

Democrats need to address the negative impacts of US wage distribution as part of their 2024 pitch to keep the presidency, and return to controlling the House and Senate in November.

The Fields of Wrong are covered in snow, mostly due to temperatures being below freezing for the past several days. We had a tree fall into the road during the big windstorm last Sunday. Now it sits, snow-covered, on our property waiting for our next chain sawing event.

It’s Saturday, and professional football will be all over the television for the rest of the weekend. Good luck to those of you who follow one of the remaining eight teams. It’s time for our Saturday Soother, where we  try to forget about the Red Sea, the New Hampshire primaries and funding the government, and instead try to calm ourselves for a few moments. Hopefully we’ll be in better shape to launch into the roller coaster ride of next week’s horrors.

Take a few minutes and grab a chair by a window. Now, watch and listen as John Williams is persuaded to conduct the National Symphony Orchestra in a performance of his “Imperial March” from Star Wars during a gala to celebrate his 90th Birthday.

There are many seriously talented people on the stage, including track star Florence Joyner, cellist Yo-Yo Ma, Steven Spielberg, violinist Anne-Sophie Mutter, and Star Wars actor, Daisy Ridley. Williams is 91, still going strong, and an example to those who think young Biden is too old to run again. Bravo, Maestro:

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A New Year Brings New Work

The Daily Escape:

Merced River, Yosemite NP, CA – December 2023 photo by Graham Holmes Photography

We’ve enjoyed a few days away from the news, seeing kids and grandkids while eating non-stop and playing games in the living room. But it’s nearing the time when we will need to refocus on the state of our country. These are overstimulated times, as the abuse of all caps and exclamation-points around the internet shows us.

It’s doubtful, as the song goes, that “Next year, all our troubles will be out of sight“. It seems that next year will be very much like 2023 where the “bad vibes” were everywhere, despite all of the good news about the economy.

Here’s one finding from a poll by YouGov  that was performed between December 11th and 14th of a nationwide sample of 1,000 adult citizens, with a 4± point margin of error:

The bad vibes were overwhelmingly felt by Republicans, 66% of whom felt that 2023 was “One of the worst years in American history” even though it clearly was not.  From the NYT:

“The “vibe” is bad, voters can’t see that the economy is good.”

The economy is really good. Unemployment is near its historic low. Inflation is nearly controlled. While the Fed raised interest rates rapidly to slow economic growth, we are now likely to experience a soft landing of the economy. Back in December 2022, the Financial Times (paywalled) published a survey that showed 85% of economists were projecting a recession in 2023. But it didn’t happen, largely due to US fiscal policy (adding money to people’s pockets) overriding the impact of the Fed’s desire for a restrictive monetary policy.

Maybe people believing that the economy was bad shouldn’t be surprising. FOX, along with other media have been telling people non-stop that the economy is a problem (and using inflation as the proof). With few exceptions the Democrats haven’t responded clearly. Biden tried to brand the economy as Bidenomics, but neither he nor the Democrats mention every day how great the economy is.

Without hearing from the Dems, most Americans hear that the economy is bad and nobody contradicts that. So one side uses proper messaging techniques and the other side wonders why they’re unpopular. This is true for the Dems on issue after issue.

Heading into 2024, Wrongo is putting on his armor, because next year’s not going to be easy. In fact it’s going to be a shitshow. We know that we’re having an absolutely make or break election for president. Control of Congress is on the line as well. It’s now becoming clear that unless there’s a legal miracle, Trump will not be judged guilty in any of his pending criminal cases prior to the election.

That means it’s up to us voters to get the 2024 election right: Overwhelming turnout, hammering the message locally and not simply relying on the national Democratic apparatus to get things done for us at the local level. If we fail, it’s hard to see how America recovers fast enough to keep the entire world from turning to chaos with a Trump win.

From Rick Wilson: (emphasis by Wrongo)

“If I could weigh one magic wand and accomplish one simple change in the minds of anti-Trump voters, Republican or Democrat, it would be this: stop believing in miracles. Miracles are in short supply….It’s taken me a while to overcome the hope that something derails Trump….But nothing does. He is a protean force in American culture now, seemingly beyond all sanction. He is not going to jail….He won’t be disqualified from the ballot in any states when the Supreme Court is done. Trump is going to be the nominee; he is going to lure the media into his narrative frame once again.”

More:

“The miracles in politics are the ones we make. They come from work planning, preparation, organization, and focus. Nothing will set the Democratic Party back further and faster than the fantasy that somehow the law or fate will take Trump out of their way. This one will take a lot of work at every return, and there are no shortcuts.”

The DNC sends us their mealy-mouthed-please-send-money-now emails every week. They must up their game if they hope to win. Also, Wrongo can’t understand why so many Americans can’t see the handwriting on the wall. This isn’t a time for third parties, it isn’t a time to “send a message” to Biden.

The best defense for our democracy is to speak out and encourage everyone we know to vote.

We close this year with our final seasonal Christmas musical presentation, selections from the 2023 Christmas Carols Concert at London’s Royal Albert Hall. This is snippets of the whole carols, which may disappoint some:

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Cartoons Of The Week

It’s the start of a brand new week with shopping opportunities! And you can watch our Senate and House members leave for their undeserved vacation without doing much. Try that at your house. On to cartoons.

Trump told us what he plans to do:

Trump thinks he has an “It’s Easy” button:

Voters then and now:

The Republican Party sleeps through a real crisis:

The MAGAts are all in:

The economy sucks and the checkout lines are too long:

Tuberville feels he’s entitled to more obstruction:

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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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Wake Up To Monday’s Hot Links

The Daily Escape:

Cypress trees, Lake Verritt, LA – November 2023 photo by Rick Berk Photography. Note the egret in the background.

For today’s Wake Up Call, we return to a staple of yesteryear, some hot links that caught Wrongo’s eye over the past few days.

Wrongo isn’t happy with how the Ukraine War has slipped from the consciousness of America’s media and thereby, from our view. Saturday’s WSJ offered an intriguing idea with its column, “Does the West Have a Double Standard for Ukraine and Gaza?” (free link). The article makes two excellent points. First, how these two wars have divided the world. Here’s a view of the division:

From the WSJ: (emphasis by Wrongo)

“Outrage and political mobilization have become subordinated to geopolitical allegiances—a selective empathy that often treats ordinary Ukrainians, Palestinians and Israelis as pawns in a larger ideological battle within Western societies and between the West and rivals such as China and Russia.”

Second, the article concludes by saying that the main difference between the two wars is that the Israeli-Palestinian conflict, with all its complexities, lacks the moral clarity of the Ukrainian resistance to Russia. They quote British lawmaker Alex Sobel:

“There is no moral justification for the Russian invasion. Zero. It’s just about Russian imperialism….But in Israel and Palestine, it’s about the fact that there are two peoples on a very small amount of land, and political and military elites on both sides are unwilling to settle for what’s on offer.”

Yes, America may have the moral high ground in both cases, and views can differ on how both wars are being waged. But as the article says in its second paragraph:

“The Russian invasion of Ukraine in February 2022 was unprovoked, while Israel sent troops into Gaza because of a mass slaughter of Israeli civilians…”.

Make of the article what you will, but it’s important to think through why you (like Biden) think both wars are morally equivalent.

Link #2 is apropos of the COP28 conference now underway in Dubai. Grist Magazine has an article: “Where could millions of EV batteries retire? Solar farms.” As solar energy expands, it’s becoming more common to use batteries to store the power as it’s generated and transmit it through the grid later. One new idea is to source that battery back up at least in part from used electric vehicle batteries:

“Electric vehicle batteries are typically replaced when they reach 70 to 80% of their capacity, largely because the range they provide at that point begins to dwindle. Almost all of the critical materials inside them, including lithium, nickel, and cobalt, are reusable. A growing domestic recycling industry, supported by billions of dollars in loans from the Energy Department and incentives in the Inflation Reduction Act, is being built to prepare for what will one day be tens of millions of retired EV battery packs.”

More:

“Before they are disassembled…studies show that around three quarters of decommissioned packs are suitable for a second life as stationary storage.”

Apparently there are already at least 3 gigawatt-hours of decommissioned EV battery packs sitting around in the US that could be deployed, and that the volume of them being removed from cars is doubling every two years.

Link #3 also shows the impact of the Inflation Reduction Act. Wolf Richter writes that:

“In October, $18.5 billion were plowed into construction of manufacturing plants in the US ($246 billion annualized), up by 73% from a year ago, by 136% from two years ago, and by 166% from October 2019.”

More:

“The US is the second largest manufacturing country by output, behind China and has a greater share of global production than the next three countries combined, Germany, Japan, and India.”

All of this construction spending will take time to turn into production. When these new plants are up and running and producing at scale, manufacturing’s share of US GDP will rise. And much of the new construction is happening in fly-over America, which can use the help.

Finding factory workers in sufficient numbers to support the new capacity will be a key. America has energy in abundance and has robotic manufacturing. So pulling production from overseas with fewer workers needed will be a giant plus for the US.

Link #4 is a downer. Civic Science says in this week’s 3 things to know column, that “Nearly 3 in 10 Americans say they have had to forgo seeing a doctor in the past year due to costs.” Here’s their chart”:

Civic Science says that 12% of US adults have had to miss or make a late payment on medical bills in the last 90 days, a two percentage point increase over September 2022.

A far larger percentage of Americans – 27% of the general population and about 30% of respondents under 55 years old or with an annual household income under $100,000 – report they could not go to a doctor in the past 12 months because they could not afford the cost. Gen Z adults and households making between $25K-$50K are more likely to have held off seeing a doctor due to cost (34% and 31% respectively).

We all know that medical costs have continued to rise and that medical debt is the leading cause of personal bankruptcy in the US. If Congress was really interested in helping provide for the general welfare, they would deal with this out of control problem.

Time to wake up America! There’s plenty going on that isn’t getting visibility in the mainstream media or on social media. You have to cast your net widely to be on top of the good and bad happening in the US.

To help you wake up, we turn to Shane MacGowan, frontman for the Irish group the Pogues who died last week. He left behind a body of work that merged traditional Irish music and punk rock. He wrote many songs that could easily be mistaken for traditional Irish tunes including this one, which was also used as the music for wakes by the Baltimore Police Department in the great, great HBO series, “The Wire“. Here’s “The Body Of An American” from their 1986 album, “Poguetry in Motion”:

RIP Shane.

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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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America’s Confusing Opinion Polling

The Daily Escape:

Oak Creek, Sedona AZ – November 2023 photo by Jim Lupton

Over single malt and martinis, our Thanksgiving guests talked about what a confusing time we’re living in. Americans are angry and anxious, and the polls continue to show problems for Biden across the board, despite that overall, the economy is fine.

Inflation has slowed significantly. Wages are increasing. Unemployment is near a half-century low. Job satisfaction is up. Yet Americans don’t necessarily see it that way From the NYT:

“In the recent New York Times/Siena College poll of voters in six swing states, eight in 10 said the economy was fair or poor. Just 2% said it was excellent. Majorities of every group of Americans — across gender, race, age, education, geography, income and party — had an unfavorable view.

To make the disconnect even more confusing, people are not acting the way they do when they believe the economy is bad. They are spending, vacationing and job-switching the way they do when they believe it’s good.”

Continuing with the confusion, the new WSJ/NORC survey of the American dream—the proposition that anyone who works hard can get ahead regardless of their background, has moved out of reach for many Americans. Only 36% of voters in the survey (conducted between Oct. 19-23 with a margin of error of ± 4%) says that the American dream still holds true: (emphasis by Wrongo)

“The American dream seemed most remote to young adults and women in the survey…..46% of men but only 28% of women said the ideal of advancement for hard work still holds true, as did 48% of voters aged 65 or older but only about 28% of those under age 50 agreed.”

And people think the dream is growing more remote. When last year’s WSJ poll  asked whether people who work hard were likely to get ahead, 68% said yes—nearly twice as many as in this year’s poll (36%). More from the NYT:

“Economic difficulties are greater for those without a college degree, who are the majority of Americans. They earn less, receive fewer benefits from employers and have more physically demanding jobs.”

Voters without a college degree are Trump’s strongest cohort.

Adding to the cloudy forecast, the Economist/YouGov weekly tracking poll of registered voters says most people are happy with their jobs:

  • Overall, how satisfied or dissatisfied are you with the way things are going in your life today? Satisfied 64%, Dissatisfied 35%
  • How happy would you say you are with your current job? Great deal/somewhat 80%, A little/not at all 19%.
  • Do you consider yourself paid fairly or underpaid in your job? Paid fairly 56%, Underpaid 38%.
  • Do you think your family income will increase or decrease in 2024? Increase 45%, stay the same 41%, decrease 15%.

But the same Economist/YouGov poll gives a different impression when you ask about the American economy more broadly:

  • Do you think the economy is shrinking or growing? Growing 22%, staying the same 25%, shrinking 37%. That’s 47% thinking its growing or staying the same. (The reality: The economy has grown at 3% on average under Biden, the highest for any President since Clinton.)
  • Are the number of jobs in the US increasing (42%), staying the same (36%) or decreasing (22%)? (The reality: 14 million new jobs have been created under Biden.)
  • How would you describe the current state of the American economy? Excellent/good 30%, fair/poor 64%. (The reality: We’ve had the fastest job growth perhaps ever, very strong GDP growth, inflation is way down, wage growth is very strong, and the annual deficit is way down from Trump’s presidency.)

What’s going on here? These data suggest something tragic – either the American people have no idea what is happening in the country, or what they do know is deeply wrong.

A final nail in this conundrum. Ed Kilgore in NY Magazine says that the youth vote is swinging against Biden:

“Until recently, Democrats’ biggest concern about the 2024 youth vote was that millennial and Gen-Z voters …might not turn out in great enough numbers to reelect Joe Biden. Young voters were…the largest and most rapidly growing segment of the Democratic base in the last election. But now public-opinion surveys are beginning to unveil a far more terrifying possibility: Trump could carry the youth vote next year.”

The latest national NBC News poll finds President Joe Biden trailing Trump among young voters ages 18 to 34 — with Trump getting support from 46% of these young voters and Biden getting 42%, while:

“CNN’s recent national poll had Trump ahead of Biden by 1 point among voters ages 18 to 34.

Quinnipiac University had Biden ahead by 9 points in that subgroup.

The national Fox News poll had Biden up 7 points among that age group.”

Hard to know what to believe from those surveys. More from Kilgore:

“According to Pew’s validated voters analysis (which is a lot more precise than exit polls), Biden won under-30 voters by a 59% to 35% margin in 2020. Biden actually won the next age cohort, voters 30 to 49 years old, by a 55% to 43% margin.”

So, what’s wrong? It’s important to note that yesterday’s younger voters aren’t today’s. From Nate Silver:

“Fully a third of voters in the age 18-29 bracket in the 2020 election (everyone aged 26 or older) will have aged out of it by 2024, as will two-thirds of the age 18-to-29 voters from the 2016 election and all of them from 2012.”

Silver says, So if you’re thinking “did all those young voters who backed Obama in 2012 really just turn on Biden?” Those voters have aged into the 30-to-41 age bracket.

We need to remember that today’s young voters share the national unhappiness with the performance of the economy, and many are particularly affected by high cost of living and higher interest rates that make buying a home or a car difficult. Some are angry at Biden for his inability (thanks to the Supreme Court) to cancel student-loan debts. And most notoriously, young voters don’t share Biden’s strong identification with Israel in its ongoing war with Hamas (a new NBC poll shows 70% of 18-to-34-year-old voters disapprove of Biden’s handling of the war).

And there’s this tidbit from the NYT:

“Younger people…had concerns specific to their phase of life. In the poll, 93% of them rated the economy unfavorably, more than any other age group.”

What exactly are kids in their 20’s supposed to be feeling at this stage of life? Unless you come from money, your 20’s are a financial struggle. Wrongo’s certainly were, and that’s decades ago when the economy was great. This isn’t to dismiss today’s very real economic uncertainties. Wrongo’s own grandchildren run the gamut of (relative) struggle financially.

The single most persuasive way to convince young people that Trump isn’t the right answer is to show them what he’ll do in his own words. Many of them are too young to know much about Trump. Some of today’s college freshmen were just 14 or 15 when he was in office.

It’s Monday, and it’s time to wake up America! People need to pay attention. Once again, it will come down to effective messaging for the Dems. They must help voters understand who will serve their interests and who will literally crush their interests.

To help you wake up watch and listen to William Devaughn’s “Be Thankful For What You’ve Got”. It sold nearly two million copies in 1974. It takes us back to a time when there was more optimism in America. If you lived or worked in NYC in the1970s, the video will also take you back to a difficult period in the city’s history. In its own way, it’s a great Thanksgiving song:

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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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