“It’s over. Not one word about economic inequality, climate change, Citizens United or student debt,” Sen. Bernie Sanders (I-Vt.) tweeted as the two-hour-long Republican presidential debate wrapped up Thursday night. “That’s why the Rs are so out of touch.”
The comment from the Democratic presidential candidate was the most retweeted reaction from the GOP debate. The morning after the Republican debate nightmare, dominated by the candidate, Donald Trump, who the Republican establishment is intent on destroying, the Bureau of Labor Statistics released a monthly job report showing the economy added 215,000 jobs, setting a new record of 65 months of consecutive private sector jobs growth, and finally replacing all the jobs lost in the Great Recession. Unemployment is down to 5.3 percent, nearing what the Federal Reserve would consider full employment.
The contrast between the Republican disarray and the continued economic growth has rekindled a celebratory sense among Democrats. President Obama heads into his last months in office having, in New York Times columnist Paul Krugman’s formulation, “failed to fail” the way market fundamentalists predicted. He notes that Obama’s jobs record stacks up with that of Reagan’s “Morning in America” that conservatives tout as the gold standard. The jobs report also strengthened pressure on the Federal Reserve to begin raising interest rates – slowly and cautiously – around September. That too would signal that the economy has finally recovered and its time to unwind emergency measures.
But what is roiling American politics is the simple reality that most Americans are a long way from celebrating a recovery that most haven’t enjoyed. In area after area, this economy is failing Americans.
Jobs: Bloomberg estimates that, despite the months of growth, we are still missing 2.4 million jobs. That’s the number needed simply to hit the Fed goal of a 5.1 percent unemployment rate while providing full-time jobs for those forced to work part-time and employing those who want jobs but have given up. In fact, the percentage of the population employed remains depressed, and given the retirement crisis that boomers will face, we’re likely to need far more jobs than that to reach full employment. Black unemployment remains almost twice that of whites, and black youth unemployment is at levels that virtually insure a lost generation.
Wages: Despite states and localities that have begun to lift the minimum wage, workers still aren’t sharing in the supposed recovery. Average hourly earnings for production and nonsupervisory employees were up just 1.9 percent in July from a year earlier, not enough to cover rising costs of food, housing, college, and health care. From 2010 to 2013, the Federal Reserve reports household incomes declined for every income level, except the top 10 percent.
Home Ownership: U.S. homeownership continues to decline, now reaching levels not seen since 1989. We see the revival of housing bubble prices in various hot housing markets and rents are rising rapidly in metropolitan areas. The rate of ownership among millennials – burdened by college debts – is near bottom. Not surprisingly, student debt burdens have a bigger impact on home ownership among young African Americans, who have little family wealth to draw on, than among whites.
Wealth Inequality: Wealth inequality just keeps getting worse. It has now reached 1929 levels. On predistribution – the distribution of income earned before tax and spending policies are added in – the U.S. ranks about the same as most developed countries. But while conservatives rail about the 47 percent of takers, the reality is that virtually every nation does better in redistribution through tax and income policies. Once those are added, the U.S. ranks among the most unequal in the industrial world. By international standards, our taxes are low and our social welfare programs – from retirement plans like Social Security, health care, unemployment and disability benefits – are far less generous. As a report from the establishment Organisation for Economic Co-operation and Development concludes, inequality has reached such extremes that it is now undermining growth in the economy.
So before the Federal Reserve declares the economy in recovery and begins raising interest rates to slow it down, and before Democrats proclaim a new morning in America, sobriety is in order. Bernie Sanders isn’t rising in the polls because of a big campaign war chest. Hillary Clinton has made inequality a centerpiece of her campaign for a reason. When Donald Trump, with all of his grotesqueries, rails against “loser” trade deals and corrupted politicians, he hits a chord.
The reality is that the rules have been rigged. The very structures of this economy – from its trade and tax policies to its corporate governance to the assault on workers to the starvation of public investment in everything from decent schools to modern infrastructure – are skewed to favor profits over wages, the few over the many. This won’t get changed by politics as usual. Getting the growth we need for full employment and for lifting people into the middle class will require fundamental reforms. And, as Sanders noted, that is the debate that Republicans failed to address. Their circus is drawing a big crowd, but the show appalls.