Inequality – The Wrongologist

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.”

“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.

The Crypto Bro Vote

The Daily Escape:

When Trump pivoted to being pro-crypto, everyone thought it was just another scam to make a few extra shekels in advance of election. From The Atlantic:

“…more than 1 million people tuned in for the launch of World Liberty Financial, a new crypto project promoted by Trump and his family. The former president has been posting about it on social media for several weeks.”

“Trump wasn’t always this pro-crypto. He once referred to bitcoin as a scam….This summer, he appeared at a bitcoin conference and declared that the United States ‘will be the crypto capital of the planet’”

But his embrace may be more calculated than that. You shouldn’t be surprised to learn that crypto companies are bankrolling Republican campaigns this election. The New Yorker has a detailed story about how Silicon Valley’s crypto boys went all in on Sen. Adam Schiff in part by crushing Rep. Katie Porter’s attempt to become the Democratic nominee for the California Senate race:

“…Katie Porter was…futzing around on her computer when she learned that she was the target of a vast techno-political conspiracy….Now she was in a highly competitive race to replace the California senator Dianne Feinstein, who had died a few months earlier. The primary was in three weeks.

A text from a campaign staffer popped up on Porter’s screen. The staffer had just learned that a group named Fairshake was buying airtime in order to mount a last-minute blitz to oppose her candidacy. Indeed, the group was planning to spend roughly ten million dollars.”

“Porter…had raised thirty million dollars to bankroll her entire campaign, and that had taken years. The idea that some unknown group would swoop in and spend a fortune attacking her…seemed ludicrous: “I was, like, ‘What the heck is Fairshake?’ ”

Fairshake is a super PAC funded primarily by three tech firms involved in the cryptocurrency industry. The pro-crypto PAC has raised more than $200 million for 2024’s election cycles, per OpenSecrets, with tens of millions of dollars flooding in from crypto giants Coinbase and Ripple, as well as the Menlo Park CA venture firm Andreessen Horowitz.

Fairshake’s thinking was: If Porter lost and other politicians saw how much money the industry had available to spend on elections, they’d be more likely to become pro-crypto. The stakes, for the big donors, are existential — regulatory acceptance would boost the value of their companies’ assets and the use of their services.

The PAC dumped about $10 million into the race, a third of the $30 million Porter had for her campaign. She hadn’t ever heard of the group, but its attack ads called her “a fake,” a “liar” and a “bully.” Fairshake selected Porter from a list of high-profile options, hoping to make an example. She lost and will be out of Congress when it convenes in January.

An unnamed political operative told the New Yorker:

“Porter was a perfect choice because she let crypto declare, ‘If you are even slightly critical of us, we won’t just kill you…we’ll end your career.’ From a political perspective, it was a masterpiece.”

Fairshake’s scare campaign appears to have worked. The House of Representatives passed a pro-crypto bill, with bipartisan support, in May. Candidates with Fairshake’s support won their primaries in 85% of the cases.

This has made its way into the presidential campaign: Trump backs crypto and Harris has signaled her support for it as well.

Trump may be on to something, since this could be a bigger factor in the election than we realize. The New Yorker quotes Coinbase as saying that fifty-two million Americans own cryptocurrencies. Those polls indicated that 60% of crypto owners were millennials or Gen Z-ers, and 41% were people of color, key demographics for each Party.

Coinbase also launched an advocacy organization, Stand with Crypto, which is advertised to Coinbase’s millions of US customers every time they log in, and which urges cryptocurrency owners to contact their lawmakers.

Sherrod Brown (D-OH) is running for reelection, where Fairshake has directed forty million dollars to ads in support of his opponent.

In total, Fairshake and affiliated PACs have already spent more than a hundred million dollars on political races in 2024, including $43 million on Senate races in Ohio and West Virginia, and $7 million on four congressional races in North Carolina, Colorado, Alaska, and Iowa.

The big question is whether the bro vote is overhyped? Will these crypto bros turn out to vote?

Trump’s best chance at success in November requires minimizing his losses among women and suburbanites while building a coalition that includes a historic number of male and working-class voters in his corner. As a result, we’re seeing both campaigns and their allies attempt to reach men in unprecedented and unconventional ways online. (A reminder: Young men historically vote at lower rates than young women.)

For Trump, it seems this targeted outreach to the tech bros segment of the electorate is essential. If he can’t win record numbers of men, it’s unlikely he can win the White House.

For the Harris campaign, the male-focused outreach efforts are happening in addition to major campaigns and organizing programs designed to reach more dependable parts of their coalition who turn out more dependably.

In a way, this is proof that American governance and legislation have become so perverted by money that it is nearly impossible for people other than billionaires to further their agendas. It’s particularly dangerous given that the US economy has bestowed lavish riches on a tiny group of disaffected, unaccountable technologists.

Today’s startup founders and venture capitalists are, like the nouveaux riches of previous eras, using their wealth for selfish aims. In doing so, they have revealed themselves to be as ruthless as the robber barons and industrial tyrants of a century ago—not coincidentally, the last time that income inequality was as extreme as it is today.

Harris Needs To Speak To Gen Z’s Reality

The Daily Escape:

Before tackling the major subject for today, Wrongo wants to briefly cover something you probably missed. There was an abortion ruling in Georgia that overturned the state’s anti-abortion law. The judge plowed new ground with his reasoning: (emphasis by Wrongo)

“While the State’s interest in protecting ‘unborn’ life is compelling, until that life can be sustained by the State — and not solely by the woman compelled by the Act to do the State’s work — the balance of rights favors the woman….Women are not some piece of collectively owned community property the disposition of which is decided by majority vote. Forcing a woman to carry an unwanted, not-yet-viable fetus to term violates her constitutional rights to liberty and privacy, even taking into consideration whatever bundle of rights the not-yet-viable fetus may have….It is not for a legislator, a judge, or a Commander from The Handmaid’s Tale to tell these women what to do with their bodies during this period when the fetus cannot survive outside the womb any more so than society could — or should — force them to serve as a human tissue bank or to give up a kidney for the benefit of another….When someone other than the pregnant woman is able to sustain the fetus, then — and only then — should those other voices have a say in the discussion about the decisions the pregnant woman makes concerning her body and what is growing within it.”

The ruling is unlikely to be the final word on abortion access in Georgia, since the case will ultimately be decided by the Georgia Supreme Court.

The judge has a solid argument: Why does society have an interest in a viable fetus when we know society won’t lift a finger to financially and medically support the newborn? Why allow the government to intervene at a time when the costs involved for the mother to continue with the pregnancy increase substantially?

Let’s move to a powerful idea that emerged in the VP debate. Wrongo thinks the key to winning the election will be how Harris reaches out to Gen Z (those born between 1997 and 2012). PBS Newshour interviewed Kyla Scanlon, who reminds us that Gen Z now has more people in the workforce than the Boomer generation, but they aren’t faring as well. Scanlon says that Gen Z has had a tough go of it, being essentially born into the tech bubble, growing up during the Great Recession and then graduating or being in college during the pandemic.

From Scanlon: (brackets by Wrongo)

“…I think for a lot of Gen Z’ers, rent is definitely not as affordable as it used to be. Real wages have increased, so [have] wages adjusted for inflation, but rent has increased much more. And that’s sort of the foundation of how everyone experiences the economy. It’s where you live and how you have to pay for where you live….people look at the price of rent, they look at the price of gas, they look at the price of food, they just look at the inflation that we have experienced over the past few years, and it’s sometimes just not enough to even make those real wage gains worth it.”

“It’s also the cost of childcare, eldercare, these things that are economically quite painful, but don’t necessarily show up in traditional economic measurements like GDP….They’re things that are… hidden costs that people experience.”

Scanlon also talked about the negative bias in the media that’s driving how people feel about their economic circumstances. Media sentiment on the economy has trended either skeptical or negative for a very long time, so people are reading negative headlines despite the economists and pundits saying the economy is OK. This is a big disconnect for the younger generations who get most of their news from social media.

In the debate, Vance said a few things that certainly resonate with Gen Z and others. He noted three things in particular:

People are struggling to pay the bills. Times are tough.
The American Dream is fading, and feels unattainable.
We should stop shipping jobs offshore.

It’s hard to disagree with any of that, and Harris shouldn’t cede any of this ground to Trump. How hard is it to build this into your stump speech? She could easily acknowledge that we’re in the midst of a global cost of living crisis. The biggest one in half a century.

But it was left to Vance and Scanlon to say the things that most Americans feel.

Gen Z and their younger cohorts mistakenly think that the economy is a zero sum game, meaning that if China is doing well or immigrants are coming here and finding work, that regular Americans must be doing worse, even though the economic statistics say otherwise.

Harris needs to deliver an economic message that’s grounded in the reality that Gen Z and others are experiencing. It can be as simple as acknowledging what Vance or Scanlon called out as problems for many younger Americans.

All she needs to do is “Just Say It”.

Many of Wrongo’s 12 grandchildren (17-32 years-old) largely feel that the American Dream is beyond their reach. They’re certain Social Security won’t be there for them. Most think that they’ll never own a home.

Why can’t Harris speak to this? Harris and the Dems talk vaguely about “the opportunity economy” but a more emotional and empathetic call out is required. People with economic problems need to trust the head of the ticket, and that trust starts with acknowledging their reality: That things aren’t as good for the younger generations as the economic statistics say they are.

The Dems have an actual track record: Investing in infrastructure and encouraging domestic production of strategic goods. Investment in manufacturing is at an all time high. We’re starting to produce advanced chips in Arizona. Unions are stronger than in recent years.

Harris needs to show empathy for those in Gen Z (and younger) who are not fully participating in the opportunity economy.

It will help her win in November.

The Gap Between Economic Statistics (good) vs. People’s Perception Of Economic Situation (terrible)

The Daily Escape:

Monument Valley, Navajo Tribal Park, AZ – May, 2024 photo by Hung Ton

From The Lever:

“Americans paid roughly 25% more on groceries and dining out this March than they paid in January 2020, outpacing the rate of general inflation. Over that same period, the companies behind the country’s 10 largest grocery and restaurant brands have together returned or pledged to return more than $77 billion to shareholders.”

“In March 2024, consumers spent 95% more for a carton of eggs, 33% more for a pound of ground beef, and 22% more for a gallon of milk than they did before the pandemic.”

According to an analysis by Food and Water Watch, a corporate watchdog group, food costs for an average family of four living on a “thrifty” budget increased 50% from January 2020 to January 2024, from $654 to $976 a month.

When economists and pundits talk about the disconnect between America’s overall economic performance and how badly Americans view the economy, this unprecedented spike in food costs is at the heart of the problem.

In 2021, as food costs were skyrocketing, America’s biggest chains and grocery brands blamed the price hikes on supply chain issues and economy-wide inflation. But these same companies have expanded profits and quietly authorized billions of dollars in stock buyback programs and dividend payouts to shareholders.

Former PepsiCo CFO Hugh Johnston told Bloomberg last year that consecutive double-digit price hikes on the company’s products in recent years were “just there to cover inflation”. But in 2023, PepsiCo reported $91 billion in net revenue, a 35% increase over prepandemic income. And it used $7.7 billion of its profits to repurchase stock and issue dividends. Those buybacks increased by a whopping 843% compared to 2021.

More from The Lever: (emphasis by Wrongo)

“Matt Gardner, senior fellow at the Institute of Taxation and Economic Policy, a tax policy advocacy group, said buybacks boomed right before the pandemic when Trump-era tax cuts left corporations with extra cash on hand.”

Advocates for the Republican tax cuts said that companies would reinvest that tax windfall back into the economy via manufacturing and jobs (more trickle down). But many began plowing money into buybacks instead.

Tyson Foods more than doubled its profit margins between 2021 and 2022 after hiking prices for beef, pork, and chicken by 30%. The company claims it raised prices because it needed to offset increased costs in labor, transportation, and grain for animal feed. But data from earnings reports show that while increased operating costs set the company back $1.5 billion dollars in 2022, price increases expanded profits by $2 billion, meaning consumers covered Tyson’s inflation costs plus they also shelled out $500 million more. That year, Tyson repurchased $702 million of its own shares and raised dividends by 4%.

Some Americans trying to save money by eating fast foods have seen those prices increase too. A study of the country’s biggest fast food brands by Finance Buzz found that at all of them, menu prices have outpaced inflation. The Food Institute’s survey shows that: (emphasis by Wrongo)

“Due to inflated costs, 78% of respondents say they now view fast-food as a luxury. The percentage increases to 80% or higher among those making less than $30,000 a year.”

These high food costs have been largely caused by the food industry increasing prices faster than their costs.

Americans are largely supportive of efforts to regulate how much companies charge for food. In a new Data for Progress poll, 69% of respondents said the government “should do more to regulate grocery stores that raise prices to maximize profits.”

Sad to say, the Democrats will not do anything meaningful to bring down the cost of food.

And the higher expense of putting food on the table may partly explain the so-called “vibecession”. There’s a great divide in the US between how people see their personal financial situation (pretty good) and their view of the overall economy (terrible). Here’s another chart:

Data: Federal Reserve Survey of Household Economics and Decisionmaking; Chart: Axios Visuals

In the above poll by the Federal Reserve, respondents are asked to choose from four options when it comes to how they’re doing. The top two choices were “living comfortably” and “doing OK.” 72% of Americans landed in those categories.

Respondents are also asked about the financial well-being of the national economy — the top two choices, “excellent” and “good,” were chosen by only 22% of Americans. In addition, that gap between people’s perceptions of their financial well-being and that of the national economy has nearly doubled since 2019. From Axios: (brackets by Wrongo)

“This divide is showing up in plenty of surveys. The University of Michigan Consumer Sentiment Index for May [2024] came in lower than 84% of readings since 1978….Just 22% of respondents to a May Gallup poll said they were satisfied with the way things were going in the US, compared to 77% dissatisfied. That’s a wider gap than three-quarters of the time since they started asking the question in the 1970s. A Harris poll last month showed that 56% of Americans think we’re in a recession.”

Brian Beutler reminds us that if Trump were in office today — presiding over full employment while Americans enjoyed more purchasing power than ever before, and inflation was hovering steadily around three percent — he and Republican politicians would claim credit for building the greatest economy in US history.

But Biden and his handlers are vacillating about how to address the economy’s perception gap. From Beutler:

“Nevertheless, the emerging Democratic consensus seems to be that Biden should continue to ‘meet people where they are’: sympathize with the plight of the struggling, implicitly concede that the economy—which would poll through the roof with Republicans stealing credit for it—is actually bad.

Within the White House…aides are pushing for a message that makes empathy toward the economic plight of certain Americans more central….Some noticed a preview…when the president described the April inflation report…‘I know many families are struggling, and that even though we’ve made progress we have a lot more to do.’”

That can’t be right if we can swap Republicans for Democrats without changing anything else, and the perception gap would somehow magically go away.

But Biden shouldn’t be speaking as though the economy is one where more people need help when the truth is that fewer people need it. That would affirm the false notion that economic suffering is broadly based and something must be done to alleviate it.

The WaPo’s answer was an editorial saying that “Nearly everything Americans believe about the economy is wrong”. The same issue also had a story saying that people can’t make ends meet.

Are both of those things simultaneously true? Politicians better figure out which is primary (great economy) and which is secondary (bad personal financial situation).

We know that people are struggling to pay rent and mortgages and now, fast food’s a luxury. This is what is making many people think that this is the worst economy ever. And if you look closely this isn’t just “anecdotal”. The statistics supplied above seem to bear it out in some detail.

Biden needs to brag about the economy but he also must call out the food industry, and show people who are struggling that he’s trying to help.

Crime: Perception vs. Reality

The Daily Escape:

Saguaros and poppies, Catalina SP, Tucson, AZ – March 2024 photo by Paul J Van Helden

From Jeff Asher, a crime analyst based in New Orleans:

“Murder plummeted in the United States in 2023, likely at one of the fastest rates of decline ever recorded. What’s more, every type of Uniform Crime Report Part I crime with the exception of auto theft is likely down a considerable amount this year relative to last year according to newly reported data through September from the FBI.”

We all knew that crime rates skyrocketed between the mid-1960s and the late 1980s. Then they went into a slow 35-year decline. Now, homicide, violent crime, and property crime rates have returned to what they were prior to the latest 20-year increase. This means that if you’re under 55, crime rates have been falling for most of your adult life.

But America perceives that crime rates are high. A Gallup poll released last November found 77% of Americans believed there was more crime in America than the year before. And 63% felt there was either a “very” or “extremely” serious crime problem — the highest in the poll’s history going back to 2000.

Wrongo doesn’t truly believe the polls since Pew revealed that 12% of people under 30 and 24% of Hispanic people who opt into online polls claim they have a license to operate a nuclear submarine, but here’s a chart:

(This is based on Gallup’s annual Crime survey, conducted Oct. 2023)

The question is, why the disconnect? NPR quoted Jeff Asher:

“There’s never been a news story that said, ‘There were no robberies yesterday, nobody really shoplifted at Walgreens….Especially with murder, there’s no doubt that it is falling at [a] really fast pace right now.’”

One theory you might have is that since the Covid pandemic caused social disorder, dysfunction in our government, and all sorts of problems, including that spike in crime, you might expect crime to remain high even after the country went back to work and school.

Another theory is that when people say “crime“, they don’t exclusively mean “people breaking the law“. Instead maybe they mean “behavior which upsets me“. For example, when the Philadelphia DA tries to focus on eliminating bail for simple drug arrests, while opposing police corruption, he’s said to be soft on crime. Then Republicans (and Trump) tried to impeach him, saying that they’re being “tough on crime” and crime remains a politicized news story.

Another theory is that the narrative around homeless people drives perception of crime. The idea that “homeless people have been violent“, or simply that “homeless people live near me and I don’t want any shelters built nearby,” strengthens the perception that crime is everywhere. For people who feel that way, the statement “Crime is a big problem” is equivalent to the statement “I always see homeless people when I go into town”.

This may explain why crime rates “near me” are perceived to be substantially lower than how national crime is perceived. Few of the homeless are encamped in their suburbs.

If you look back on the 1980s, there were a large number of visible homeless people in Washington DC, and Reagan dismissed them as “homeless by choice“. Today, there are plenty of homeless people on the streets in every city. It’s important to remember that when St. Reagan was governor of California, he released mental patients onto the streets.

This was part of “deinstitutionalization”: The emptying of state psychiatric hospitals that began in the 1950s. As hospitals were shut down, patients were discharged with no place to get psychiatric care. They ended up on the streets, some eventually committing crimes that got them arrested.

In 1963, JFK signed the Mental Retardation Facilities and Community Health Centers Construction Act. (It turned out to be the last bill Kennedy would sign.) The law was designed to replace “custodial mental institutions” with community mental health centers, thus allowing patients to live—and get psychiatric care—in their communities.

However, a sufficient number of community mental health centers were never built.

In 1965, Medicaid accelerated the shift from inpatient to outpatient care: One key part of the Medicaid legislation stipulated that the federal government would not pay for inpatient care in psychiatric hospitals. This further pushed states to move patients out of their state facilities.

That’s when homeless people began to be visible to most of us.

Later, in the 1970s, Nixon declared a war on drugs, setting the stage for tough-on-crime policies. Laws, like mandatory minimum sentences for possession and other drug-related crimes, disproportionately affected people of color and pushed incarceration rates to record levels. Between 1972 and 2009, America’s prison population grew by 700%.

The homeless get blamed for the bad behavior of a small minority of their group. But since an awful lot of the dysfunctional are homeless because their families or friends couldn’t cope with their behavior, it’s logical that the general public would also find their behavior a problem.

And it’s more than just the homeless. In Wrongo’s small Connecticut town, long-time residents resent people who have moved in recently. They are appalled by the occasional drug arrest or stolen car that was left unlocked in a driveway.

This scales up to people in our town bellowing about CHICAGO!!!! Or LA or Portland, OR. They see the far enemy as young Black/Hispanic men in certain zip codes destroying each other. And just possibly turning their attention to our tight, white community here in the Litchfield Hills.

It’s a good thing that overall crime and especially violent crime rates are much lower than they were 30 years ago. But we’re still faced with the overriding perception that people see their families at greater risk now.

This has spilled over into how parents treat their children. NO parent today would allow their kids to get on a bike and roam miles from home. Everything is monitored. If you ask why, the near-universal response is: “It just isn’t safe out there. Not like it used to be.”

Used to be? Most kids were tooling around on their bikes Goonies-style during the 1980s, when crime nationwide was at its peak.

People just seem hell bent on seeing the world as a massively scary place, one filled with predators.

There are major political implications, when data aren’t facts, when truths are lies.

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.”

“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.”

“…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].”

“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

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.

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:

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:

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.

The Wrongologist

Geopolitics, Power and Political Economy

Category: Inequality

Harris Needs To Speak To Gen Z’s Reality

The Gap Between Economic Statistics (good) vs. People’s Perception Of Economic Situation (terrible)

Another Reason Why People Think The Economy Sucks