Inequality – Page 10 – The Wrongologist

100% of Jobs Created Since 2005 Were For Contractors or Temps

And that’s why so many Americans are scared. Neil Irwin in the NYT’s Upshot brought us the bad news that 9.4 million new jobs created during the period from 2005-2015 were temp jobs or contracting jobs.

What’s worse is that those jobs add up to more than 100% of the jobs created by the US economy during that period. That means there was an overall decline of about 400,000 in people working as employees for an American corporation during those 10 years.

The news is based on a study by labor economists Lawrence F. Katz of Harvard and Alan B. Krueger of Princeton that found that the percentage of workers in “alternative work arrangements” — including working for temporary help agencies, as independent contractors, for contract firms, or on-call — was 15.8% of total employment in 2015, up from 10.1% a decade earlier. More from Irwin:

By contrast, from 1995 to 2005, the proportion had edged up only slightly, to 10.1% from 9.3%. (The data are based on a person’s main job, so someone with a full-time position who does freelance work on the side would count as a conventional employee.)

This raises bigger questions about how employers managed to shift much the burden of providing our social safety net to workers, and about the economic and technological forces driving the shift.

The change has profound implications for social insurance. More so than in many advanced countries, corporations in the US carry a large share of the burden of providing their workers with health insurance and paid medical leave when employees are sick. US corporate employers pay for workers’ compensation insurance, and for unemployment insurance benefits for those who are laid off.

These are part of the government-sponsored safety net in other countries.

In addition, US employers help fund their workers’ retirement, formerly, through pensions, but now more commonly, through 401(k) plans. These are also part of the government safety net elsewhere.

While the Affordable Care Act has made it easier for independent contractors to get insurance, there’s little doubt that these workers are now carrying more of the financial burden of protecting themselves from misfortune than they would have shouldered with a more traditional company-employee relationship.

Perhaps most significant, the implicit contract between an employer and an employee is that there is a relatively high bar for firing employees. If the economy turns down or business slows, a contract worker is far more likely to be out of a job or out of the job faster, than a conventional employee.

This is a large factor in the growing job insecurity we see since the Great Recession.

Moreover, the study shows it was likely that companies caused this shift in terms of employment, not employees who were looking for more freedom and flexibility. If 2005 to 2015 had been a period when workers had a lot of power in the job market that might have been plausible, but it wasn’t. More from Irwin:

The unemployment rate was above 7% for nearly half of the period, from the end of 2008 to late 2013. Employers had the upper hand. That suggests it’s more likely that employers were driving the shift to these alternate arrangements.

So, companies took advantage of the weak job market since the Great Recession. In addition, improvements in technology have enabled the shift. New technology allows remote measurement of how successful each worker is, regardless of their location, and it allows the employer to monitor contractor progress, giving the company the power it needs to move to contracting, or to a temp workforce.

Making employees into contractors benefits only the employers, not the workers, and it may help explain the disconnect between the anger and insecurity we see on the 2016 presidential campaign trail, and the clearly positive employment and economic news we’ve seen each month for the past few years.

Both are true, and that has profound implications, both politically and economically, for the next 10 years. A big question for the next decade is whether the rise in temp employment was a one-time shift, or whether it will continue in the years ahead, even in a tightening labor market.

At risk is whether employer-provided social insurance that has been a backbone of the 20th-century American middle class economy will still be with us in the 21^st century.

And if the shift to contracting continues,and we become more of a 1099 nation, it is a certainty that we will see a growing populist, anti-corporate electorate.

Is Trump Our Next Andrew Jackson?

(This is our second column about how the history of a progressive Democratic President has meaning today. You can read the first here)

From Politico:

America has never seen a presidential candidate like this before. Detractors point to his lack of political experience, his poor grasp of policy, his alleged autocratic leanings and his shady past. They believe this man without much of a political platform (but with interesting hair) has neither the qualifications nor the temperament to be president. Yet in defiance of conventional wisdom, he is leading his three main rivals in the race for the White House, and party bigwigs are at a loss how to respond.

No, it’s not Donald Trump. It’s Andrew Jackson, and the year is 1824.

We think of Jackson as the quintessential American populist, a president who took on the banks (well, one bank, the Second National Bank, yesteryear’s Fed). Jackson was a general in the Army, the guy who won the Battle of New Orleans against the British. He was a lawyer, elected into the House of Representatives, and a Senator from Tennessee, all before he was a two-term President.

So, not quite the same resume as the Short-Fingered Vulgarian.

Jackson was born in the backwoods of the South, his father died before he was born, and his mother raised him with the collective support of her family. He was the first member of his family to be born in the New World. He lost one brother in combat during the Revolution; another died as a POW. His mother died while nursing American prisoners. Jackson was, by today’s standards, a child soldier.

He was also the greatest war hero of his generation. And he once took a musket ball in the chest before killing a rival in a duel.

Can you picture Mr. Foul-Mouthed Comb-Over participating in a duel?

Jackson ran for president three times, winning a least a plurality of the popular vote each time. But in his first try in 1824, the election was decided in the House of Representatives, and the presidency went to John Quincy Adams.

Jackson was a fabulous campaigner. Tens of thousands flocked to see this charismatic outsider who positioned himself as a steadfast defender of the Republic. Jackson’s rallies dwarfed those of his rivals, yet he had plenty of baggage.

Jackson was, his rivals believed, more of a celebrity than a serious candidate. They learned a tough lesson, as are Trump’s Republican rivals today.

The dominant political party in 1824 were the Democratic-Republicans. It was the party of Thomas Jefferson. Founded in the 1790s, it believed in an agrarian-based, decentralized, democratic government. The party opposed the Federalists who had authored and ratified the US Constitution. By 1830, the Democratic-Republican Party had been split in two. Adams, in league with Henry Clay, favored modernization, banks, and federal spending for roads, which the Andrew Jackson faction (the Democrats) opposed.

We see a similar party split looming on both sides today. And there are other parallels. The 1820’s were a time of discontent, financial panics, threats of rebellion, and outbursts of violence. Both the agrarian and new industrial classes felt that the central government was either hostile, or indifferent to their needs. They felt that equal rights for all had been replaced by a plutocratic class who kept most of the benefits to itself.

Today, Jackson is less likely to be portrayed as the champion of the working class than as a big-time slaveholder and Indian fighter. His infamous policy of Indian Removal supported the confiscation of Native American lands and their eviction west of the Mississippi. This led to the “Trail of Tears” the forced removal of nearly 125,000 Native Americans from Georgia, Tennessee, Alabama, North Carolina and Florida.

There is a similarity between Jackson’s Indian Relocation act and Trump’s proposed “deport all illegal Hispanics” policy. A big difference between Trump and Jackson is that Jackson was pro-immigrant; he enjoyed political support in the cities of the North, particularly among the Irish immigrants who had recently arrived in the US.

Jackson started out with very limited resources, whereas Trump has inherited wealth. Jackson took on the greatest army in the world at the time, and won. Trump led pranks at his military high school.

Jackson worked his way up the political ladder and had considerable experience in government at local, state and national levels, while Trump ran one losing campaign, and is now embarked on a second.

Jackson was opposed to big banks, whereas Trump owes his success to the big banks.

2016 shapes up as a change election, like 1932, 1860 or Jackson’s in 1828. As in 1828, the Establishment Republicans may finally see what 40 years of promising their base one thing, and then doing exactly the opposite reaps.

That same threat is facing the Democrats.

“The Oven is Preheating, But Your Goose is Not Yet Cooked.”

The quote above is from “City on Fire” (Knopf, 2015) a novel by Garth Risk Hallberg that describes NYC in the 1970s when it was both dangerous and in decay. And it aptly describes the current phase of American politics. What we are seeing with Trump, and to a lesser extent with Sanders, is that angry white working class people have decided to overturn our election process.

Maybe not in 2016, but certainly by 2020.

It shouldn’t be difficult to understand, since wages for working class white males peaked in 1968, 48 years ago. For their entire working lives, conditions for working class males have been getting worse. Here is a chart from the WSJ:

White Men in Labor Force

For white working-class men in their 30s and 40s, in what should be the prime decades for working and raising a family, participation in the labor force dropped from 96% in 1968 to 79% in 2015. Over that same period, the portion of these men who were married dropped from 86% to 52%. (The numbers for nonwhite working-class males show declines as well, though not as steep, and not as continuous.)

1890s Progressivism: When the Movement Worked

Last week, Wrongo read “The Bully Pulpit: Theodore Roosevelt, William Howard Taft, and the Golden Age of Journalism” by Doris Kearns Goodwin (Simon and Schuster, 2013). The book covers the birth of the Progressive Era, a period of social activism and political reform across the US, from the 1890s to 1920.

For context about the times, does any of this sound familiar?

The gap between rich and poor has never been wider…legislative stalemate paralyzes the country…corporations resist federal regulations…spectacular mergers produce giant companies…the influence of money in politics deepens…bombs explode in crowded streets…small wars proliferate far from our shores…a dizzying array of inventions speeds the pace of daily life.

That was the political landscape in the 1890s. This was the time of the Gilded Age, a time of income and wealth inequality. From 1860 to 1900, the wealthiest 2% of American households owned more than a third of the nation’s wealth, while the top 10% owned roughly three-fourths of it. The bottom 40% had no wealth at all.

“The Bully Pulpit” tries to do three things simultaneously: It is a biography of Theodore Roosevelt, and a biography of William Howard Taft; third, it introduces us to McClure’s magazine and the rise of Muckraking journalism. The muckrakers were investigative reporters who exposed corrupt politicians and business leaders at all levels. Goodwin includes mini-bios of Ida Tarbell, Lincoln Steffens, Ray Stannard Baker and William A. White, all of whom were titans of investigative journalism at the time. A key finding by Goodwin is how TR encouraged the Muckrakers. He offered them access and friendship, and received information about the problems they were investigating, a synergy that enabled both to influence policy and politics for 30 years.

Consider the times: Corporations were ascendant. Politicians were reluctant to involve the federal government too heavily in the private sector. In general, they accepted the concept of laissez-faire, opposing government interference in the economy except to maintain law and order. This attitude started to change during the depression of the 1890s when small businesses, farmers, and labor movements began asking the government to intercede on their behalf.

By the start of the 20th century, the middle class was leery of the emerging corporate giants called “Trusts”. The Trusts consolidated businesses, using horizontal (controlling competitors) or vertical integration (controlling supply and distribution), and thus, created monopolies. For example, John D. Rockefeller drove other oil companies out of business and created a giant oil company, Standard Oil.

The Progressives argued the need for government regulation of business practices to ensure competition and free enterprise. Under President Benjamin Harrison, Congress regulated railroads in 1887 (the Interstate Commerce Act), and in 1890, the Sherman Antitrust Act, which prevented large firms from controlling a single industry. But, these laws were not rigorously enforced until Teddy Roosevelt, vice president under McKinley, became president after McKinley’s assassination in 1901.

Roosevelt and William Howard Taft became close friends when both were part of the Harrison administration in 1888. Taft became a key member of President Roosevelt’s cabinet, and later his handpicked successor, in the election of 1908. While TR thought Taft a “genuine Progressive”, Taft was not the politician that TR was, and he was by temperament, more conservative. In 1910, TR broke bitterly with Taft on a series of issues and when in the 1912 nomination process, Roosevelt failed to block Taft’s re-nomination, he launched the Bull Moose Party. This ultimately led to them both losing in 1912 to Democrat Woodrow Wilson, who also ran as a Progressive.

This wave of reforms was continued by Wilson. The legacy of the Progressive Era includes the Pure Food and Drug act, the progressive income tax, direct election of senators and the women’s vote.

All of this makes “Bully Pulpit” a very long book at 928 pages. But, it is a very worthwhile read, particularly since many of the same issues we face today were in full flower back then. And it is remarkable how similar the political and ideological arguments of the time are nearly identical to the arguments today.

The book gives us some hope that, at one time, divided government could morph into a movement that won by embracing progressive values. That happened because interest groups, including farmers, small businesses and unions joined together with local governments, journalists like the Muckrakers, and sympathetic politicians of both parties to energize a movement that was directed at solving specific problems – the consequences of the Gilded Age.

Can it happen again? Can investigative journalism return, or is it dead?

Tomorrow, we will take a look at why Progressivism died and was then reborn under another Roosevelt.

Hillary’s Under-reported Uphill Slough

Wrongo didn’t watch the Democratic debate because it was up against the series finale of “Downton Abbey”. Some think that the effort to bury the Dem debates in popular TV time slots is a conscious decision by DNC Chair, Debbie Wasserman Schultz, designed to make Bernie Sanders less competitive with Hillary Clinton.

Conscious or not, few people are watching these debates.

One thing that is overstated in the Democratic primary process is Bernie’s uphill slough with African Americans. The accepted pundit logic is that he does so badly with AA’s that he has no chance to win.

What is overlooked in that analysis is that the 20 primaries held so far have split 12-8 in favor of Clinton (based on who won the majority of committed state delegates). Clinton does have a big lead in delegates, 1130 to Sanders’s 499.

So, consider what Bernie has been able to accomplish. In winning 8 states, he’s exposed a Clinton weakness: She doesn’t do well among the most committed white Democrats – the kind of folks who turn out for caucuses in states like Iowa, Minnesota, and Colorado.

And then there is the under-reported uphill slough by Hillary Clinton: That the Sanders campaign is out raising Clinton’s funds. He’s raising his money from ordinary citizens (five million individual donations at this point). And, unlike Clinton, WaPo reports that he does it easily:

Sanders outraised Clinton again in February for the second month in a row, bringing in $42.7 million to her $30 million. On the last day of the month alone, he brought in $6 million online as the campaign used social media to egg on his backers to give, give and give again.

The WaPo also reported that Clinton has had to take two days off the campaign trail to raise money in California for use against Sanders in the primaries. And in a one-week stretch later this month, she is scheduled to make seven fundraising stops in six states — Georgia, Tennessee, Connecticut, Virginia, Washington and California.

Bernie’s funds-raising power has triggered concern among some Clinton allies that it will weaken her — not only because she must spend so much money competing against him, but also because he is criticizing her in ways that could dampen enthusiasm for her in the fall. She may risk donor fatigue when the general election gets under way.

Perhaps one reason why Clinton may risk donor fatigue in the late stages of the election is that she has already tapped many large potential investors. From 2013-15, she earned $21.4 million in speaking fees from 91 organizations. Those funds did not go into her campaign, or into one of her Super PACs. The funds went into her own accounts, making her a member of the 1%.

You can see the listing of the organizations that paid her an average of $235k per speech here.

As Scott Lemieux of LGM said, paying people six figures (plus luxury perks) to deliver rote speeches is one of the more egregious mechanisms by which America’s overcompensated elites reward each other.

Monday Wake Up Call – March 7, 2016

Today’s wake-up call is for the Republican Party.

Beginning with Barry Goldwater in 1964, the Republican Party began its deal with the Devil by starting their catering to those on the farthest Right edge of the political spectrum, inviting people who traffic in anger, hatred, religious zealotry, and fearmongering of those not like them, inside the GOP tent.

The election of Ronald Reagan helped bring these zealots some legitimacy, not because he was one of them, but because he had courted them in his first run for the White House.

We forget that in 1976, an evangelical Christian who taught Sunday school, and who endeavored to follow Christ in his daily life ran for President and won. But, despite Jimmy Carter’s strong Christian beliefs, Evangelicals went heavily for Ronald Reagan in 1980. Because they admired his Christian faith? No, his faith seemed situational. But he projected what they perceived as strength and leadership.

Evangelicals ignored one of their own in favor of a secular Republican who talked tough and affected an air of someone who could talk tough when events called for toughness. Turns out that for Evangelicals, like many groups, are primarily concerned with political power; their need for a theologically-sound candidate takes a back seat whenever it has to.

That’s the reality today, as it was back then. Trump is barely Christian, and Cruz is solidly Christian, but the politics of the Christian Right demands fealty to a political agenda that tolerates hatred, exclusion, and intolerance. Therefore, Trump and Cruz quality.

The contrast between the Democratic and Republican parties couldn’t be more sharply defined.

Since the late 1800s, when businesses were undertaking tremendous consolidation, leading to the formation of trusts, Republicans supported business, despite the fact that business was beginning to prey on people and overshadow the government.

After the brief Republican Progressive period from 1890-1917, in which Republicans were the force behind “trust-busting”, they have advanced an increasingly exclusionary and discriminatory agenda, denying a collective responsibility to care for our fellow human beings in favor of elevating corporate interests along with their view of individual liberties above all else. Government is an instrument designed to show strength, project American power, and enforce a neo-liberal, dog-eat-dog economic worldview, one that will take the social contract back to where it was in the early 1900’s.

Democrats understood that government needs to be more than a police and fire department. One of the most important roles assumed by government was ensuring that we create a level playing field for all citizens, that corporations were not first among equals in America. They also believed that we must look after those who are down on their luck by providing a social safety net.

Government was not to be primarily an instrument for projecting power and protecting the influential, but rather one of ensuring the American social contract, while protecting our citizens from the abuses of big business.

After years of courting the Radical Right, thinking that they could be kept under control, Establishment Republicans now understand that, not only do they no longer have control, the inmates are now running the asylum – poorly. Faced with the reality that the bill for their deal with the Devil has come due, Republicans trotted out Mitt Romney to make the case against The Donald, who responded with crude personal insults and inappropriate sexual innuendo:

COW Trump Miracle Worker

Congratulations, Republicans, you have only yourselves to blame. Now, you desperately need a Wrongo Wake up Call. To help you wake up, let’s return to the “small hands” innuendo of the last GOP debate.

Here are the Talking Heads doing “Born Under Punches” live in Rome in 1980, from their great album, “Remain in Light”. This 8-minute live version is worth your time, since it includes spectacular guest guitar work by Adrian Belew, who played with Frank Zappa and King Crimson.

Some think the guitar that Belew is playing was originally jimmy Hendrix’s (the one he burned at the Monterey Pop festival). Frank Zappa repaired it, and loaned it to Adrian Belew, whose main influence was Hendrix.

The bassist in the white dress is Tina Weymouth who is (still) married to Chris Franz, the Talking Heads guitarist. Here are some sample lyrics:

Take a look at these hands
Take a look at these hands
The hand speaks, the hand of a government man
Well I’m a tumbler born under punches, I’m so thin

Hmmm. Is Trump a government man?

Those who view the Wrongologist in email can view the video here.

Are Trump and Sanders a Ripple of Populism, or a Wave?

Since sophomoric jokes have failed to derail Donald Trump’s presidential campaign (e.g., running silly pictures of Trump, mocking his soundbites while ignoring his policies and his authoritarian condemnations), let’s try understanding what’s happening.

So, is Trump a problem, or just a symptom of the problem? And folks, what is the problem? The Donald captured the essence of “the problem” in his Super Tuesday victory speech: (Brackets and emphasis by the Wrongologist)

People in the middle-income groups are making less money than they were 12 years ago. And in her speech, [Hillary Clinton] said, ‘they’re making less money.’ Well, she’s been there with Obama for a long period of time. Why hasn’t she done anything about it?

Trump for the win! He asks a question that neither Hillary Clinton, or the Establishments of both parties, have a satisfying way to answer (so far), something like what we said about John Kerry being “for the war before he was against it.”

The nation’s real problems are those articulated by Bernie Sanders, but he is not a messenger who can win in the fall. But his popularity, and that of Donald Trump show that we are looking at the swelling of a populist wave in America. Maybe it is still far from the beach; maybe it is just a ripple. We will know in November, but early signs are that the wave could be big when it hits us.

Consider Trump’s victory in the Massachusetts primary – 310,847 voted for Donald Trump. That gave him 49.3% of the vote in a five-candidate race. A pretty overwhelming endorsement, even considering that independents can vote in either primary, and many use that option to vote against a candidate.

The next day, Massachusetts’ Republican Governor Charlie Baker refused to endorse him. He said that he did not vote for Trump on Tuesday and:

I’m not going to vote for him in November.

Charlie Baker is immensely popular with pretty much every segment of the state’s voting population; his job approval numbers are about 70%. He’s perceived as highly competent at running the government, he’s socially liberal, and people just plain like him. So, Baker doesn’t need the Trump wing of the GOP.

Trump isn’t going to carry Massachusetts in November, Clinton and Sanders totaled 1,190,500 votes between them. But the current populist resurgence will not end with Bernie’s failure to win the Democratic nomination, or with a Trump general election loss in November, because the underlying anger isn’t going away. Remember that Trump and Sanders totaled 897,500 votes in MA, to Hillary’s 603,800. From Fabius Maximus:

Populism’s resurgence has, as always, terrified our ruling elites and their servants. Since most journalists don’t understand it, Campaign 2016 is a series of surprises to them.

Maximus goes on to say that from the start of Trump’s campaign, the similarities between Trump and Andrew Jackson were obvious: Trump’s isolationist foreign policy (but bellicose towards threats), his hostility to minorities and Wall Street bankers, his concern for the poor, his appeal to national greatness — these same views also astonished the elites in 1830 when Andrew Jackson rode the wave to the White House. The 1830 elites despised Jackson like today’s elites despise Trump today.

Jacksonians were the first populists in America to gain power. Even today, their strain of suspicion of federal power, skepticism about both domestic and foreign do-gooding (welfare at home, foreign aid abroad), opposition to federal taxes, but obstinately fond of federal programs seen as primarily helping the middle class (Social Security and Medicare, mortgage interest subsidies) continues.

These “Crabgrass Jacksonians” constitute a large political bloc in America. Crabgrass Jacksonianism sees the contemporary homeowner working on his/her modest suburban lawn, as a hero of the American story.

The Establishments of both parties may have fun demonizing their populists, but they ignore the similarities between the strategies of Trump and Sanders, and the appeal both have to significant numbers in both parties. Separately, progressives and populists are weak. If they can be combined as they were at the time of the New Deal, they can be a huge force for change.

US News reports that historical patterns and political data all show that the real presidential election battle takes place in just seven states: Florida, Ohio, Virginia, Colorado, Nevada, Iowa and New Hampshire. Based on recent Clinton vs. Trump head-to-head polls in these seven states, Trump is within striking distance of winning the general election against Clinton.

For those who believe a Trump presidency is not really possible in today’s America, you may want to re-think that proposition.

That populist wave may be closer to the beach than you think.

It’s Always Groundhog Day in America

Do Conservatives Have a Learning Disability? A few who read the Wrongologist are convinced that Wrongo is just a clueless, woolly-headed Progressive who hates America and the baby Jesus. None of that is true, except for the Progressive part.

From Krugman’s Monday column:

Marco Rubio has yet to win anything, but by losing less badly than other non-Trump candidates he has become the overwhelming choice of the Republican establishment.

PK points out that Rubio:

• Proposes tax cuts, like completely eliminating taxes on investment income — which would mean, for example, that Mitt Romney would end up owing zero in federal taxes.
• Proposes tax cuts that would be almost twice as big as George W. Bush’s as a percentage of GDP, despite the fact that Republicans have spent the Obama years warning incessantly that budget deficits will destroy America, any day now.
• Insists that his tax cuts would pay for themselves, by unleashing incredible economic growth. Never mind the complete absence of any evidence for this claim, or that the last two Democratic presidents, both of whom raised taxes on the rich, presided over better private-sector job growth than Mr. Bush did.
• Called for a balanced-budget amendment, which makes no sense, since he is calling for budget-busting tax cuts. Also this amendment would have been catastrophic during the Great Recession, when deficit spending helped bring us out of a crash.

Finally, Marco Roboto said a few days ago that it’s “not the Fed’s job to stimulate the economy” (although the law says that it is precisely their job). Krugman closes with: (brackets by the Wrongologist)

In short, Mr. Rubio is peddling crank economics. What’s interesting, however, is…he’s not pandering to ignorant voters; he’s pandering to an ignorant [GOP] elite.

It doesn’t require a Nobel Prize in Economics to see the entrenched divisions in our politics. But let’s focus today on the great coup by American Conservatism, convincing its followers that personal opinion counts for as much as any fact.

We live in an America that Conservatives have turned into an oligarchy. The system has been gamed to support the interests of the wealthy. Politicians are able to choose their voters through a cynical, manipulative gerrymandering re-redistricting process. The idea of “one man, one vote” has, via Citizens United, been turned into a largely meaningless exercise in which those with big bucks and an agenda pay to propagandize the American voter, many of whom are far more comfortable reacting emotionally, than thinking critically.

Conservatives like Rubio (and the rest of the GOP) have retreated into a content-free bubble, where they manufacture truth on the fly to suit their purpose. You know this since few on the Far Right put forward cogent, supportable arguments for their ideas, instead lazily relying on a smug arrogance which allows them to laugh off opposing ideas, as does Mr. Rubio.

The problem is, the vast majority of our electorate are largely oblivious to the nuances of the underlying issues. What information they have is derived from main stream media, or right wing propaganda organs, or social media.

Data are boring and unacceptable: My belief is superior to your data or to my own education. It is easier to just vote for the candidate promising to make America Great Again, ignoring the reality of the deep and nuanced causes of our problems.

The rigidity of the Republican doctrine on taxes as outlined by Rubio looks like an alternate version of the movie, “Groundhog Day“, where Bill Murray experiences a time loop in which he repeats his experience until he corrects the problems that had landed him in limbo.

Sadly, in the GOP alternative version, they begin every presidential election cycle with a demand for lower taxes. The tax policy of the previous four years has no effect on this mantra. Nor do the economic trends of the time alter their robotic claim that lower taxes will cure all difficulties. In the Conservative view, a smaller tax bite will trigger an economic boom that offsets the costs of GOP tax cuts to our budget.

In the GOP version of “Groundhog Day”, the GOP doesn’t learn from its mistakes. Unfortunately, this means the entire country suffers from the inability or unwillingness of Republicans to learn from experience.

It’s time to turn off Fox News and set out on a walkabout in the reality-based world.

What NH Should Teach Us

The popular vote in NH was about 521,000. Of that number, 278k went to Republican candidates, and 243k went to Democrats. Bernie led all candidates with 145,700 votes, with Trump second at 97,300 votes. Hillary was third at 92,530.

For the record, the 2008 turnout was: 287,342 for the Democrats and 238,979 for the Republicans.

The media is all over the demographics of the NH primary, and how Bernie won all segments except for people over 65 years old, and those who make more than $200k, both of which went to Hillary.

But one headline from NH ought to be that the Dems performed 15% worse than eight years ago, while the GOP performed 14% better than they did when a NH resident (Romney) was on the ballot!

In Hillary’s post-primary speech, she said that there isn’t a huge difference between the two Democratic candidates. Bernie talked about how the party had to come together down the road to prevent a White House take-over by the GOP.

But are these candidates that similar?

Let’s hear from Benjamin Studebaker, who says that Sanders and Clinton represent two very different ideologies, a neo-liberal view represented by Ms. Clinton and an FDR big government program viewpoint represented by Mr. Sanders:

Each of these ideologies wants control of the Democratic Party so that its resources can be used to advance a different conception of what a good society looks like…This is not a matter of taste and these are not flavors of popcorn.

Studebaker thinks that Hillary is ideologically similar to Barack Obama, describing that in 2008: (emphasis by the Wrongologist)

The most prominent difference between them was the vote on the Iraq War. On economic policy, there never was a substantive difference. The major economic legislation passed under Obama (Dodd-Frank and the Affordable Care Act) did not address the structural inequality problem that the Democratic Party of the 30’s, 40’s, 50’s, 60’s…existed to confront.

In fact, while inequality decreased under FDR, Truman, JFK, and LBJ, it has increased under 3 Democrats: Carter, Clinton, and Obama. It also increased under 3 Republicans: Reagan, Bush I, and Bush II.

Now comes the Hill & Bernie show. Sanders is not running to try to implement a set of idealistic policies that a Republican-controlled Congress will block; he is running to take the Democratic Party away from its current leadership that is unwilling to deal with the systemic economic problems that have led to wage stagnation and the shrinking of the middle class in America.

But can he be successful? David Brooks said in the NYT:

Bernie Sanders…has been so blinded by his values that the reality of the situation does not seem to penetrate his mind.

OK, that must mean that Sanders has no shot. The conventional wisdom is that the Democratic Party cannot be reclaimed by the FDR/LBJ types, or that if it is reclaimed, it will lose in 2016.

But, in the 1968 and 1976 Republican primaries, a guy named Ronald Reagan ran to take the Republican Party back from the Richard Nixon types who went along with the Democrats on welfare and regulation. He was bidding to return the Republicans to their 1920’s Conservative roots. Everyone in the 60’s and 70’s knew that Reagan couldn’t pull that off. But he did.

How? Yesterday, we spoke of Movement Conservatism, where Republicans built a conceptual base, a popular base, a business base, and an institutional infrastructure of think tanks, and by the 2000s, Conservatives again controlled the Republican Party.

So, one lesson from the NH primary is that the contest for the 2016 presidential nomination is not just a contest to see who will lead the Democrats, it’s a contest to see what kind of party the Democrats are going to be in the coming decades, what ideology and what interests, causes, and issues the Democratic Party will prioritize.

The Republican Party faces exactly the same problem in 2016.

And these facts make the 2016 primaries far more important than in any other recent election.

This is about whether the Democratic Party is going to care about inequality for the next decade. We are making a historical decision between two distinct ideological paradigms, not a choice between flavors of popcorn.

Choose carefully.

The Wrongologist

Geopolitics, Power and Political Economy

Category: Inequality