As it turns out, that old saw about how a frog slowly boiled in water never jumps, isn't true. The frog jumps. Recent surveys show that over 80% of Americans believe the country is on the wrong track. Increasing percentages of Americans identify themselves as democrats. They too are "ready to jump."
In order to convince them to jump, we need to provide them with the coherent, persuasive, intellectual underpinnings of why the Right Wing has failed, and why they should embrace a new New Deal.
There is an absolutely compelling case to be made, but too often among the blogosphere, that case seems to be marginalized, and drowned out by the shouts of "The Sky is Falling!" More than one economic blogger I respect has gone overboard calling for the Apocalypse, only to have to explain why it keeps getting delayed.
The case to be made isn't Armageddon. It is Inequality of Economic Opportunity, that has already, slowly but inexoribly, eaten into the standard of living of average Americans.
Armageddon was supposed to be imminent when "America: What Went Wrong?" was written in 1991. It didn't happen. By 1992, "Bankruptcy 1995" made a specific prediction of the year of the cataclysm. It didn't happen. People like Robert Prechter and Joseph Granville predicted imminent stock market crashes throughout the 1990s. It didn't happen. When the dot-com bubble burst in 2000, there were more predictions of immediate economic ruin. It didn't happen. Even highly recommended diarists here have been shouting doom and gloom for a long time.
Now, it could very well be that disaster -- of devastating inflation or deep recession -- is around the corner, but is that what people have to be persuaded of in order to vote for a Democratic economic agenda? Relying on the idea that an economic Apocalypse is imminent makes us look like tin-hatters every time cataclysm doesn't show up on average Americans' front doorstep. And it isn't the case we need to make.
The progressive economic case is straightforward: the 28 years since Ronald Reagan's election have resulted in the middle class suffering, and suffering more acutely as time has gone on. Reagan used the hoary old line that "a rising tide lifts all boats" but we have seen in the generation since, that it just isn't so. The rich got bigger and more ornate yachts, while everybody else had to make do with the same old dinghy, a dinghy ever more difficult to maintain. And every year, about 10% of those dinghies get a hole, spring a leak and sink.
The case to be made isn't Armageddon. It is Inequality of Economic Opportunity: the corporations and the wealthy have gotten the benefits, and the average American has taken on the risk and picked up the bill.
The case is compelling. The percentage of wealth concentrated on big corporations and financial institutions compared with labor is at a high not seen since the 1920s:
And not only is the Gini Coefficient of inequality in society growing, the US is getting closer to the economic stratification of Mexico or Brazil, than to the relative equality of Europe, Canada or Japan:
It's not a case of the average American's wealth growing, just more slowly than that of the wealthy. Rather, the middle class hasn't made any economic progress at all in the last 10 years, and is about to see their wealth decline again in this recession:
And measured by quintiles, the lowest 20% has actually lost ground since the GOP came to power.
Such job growth as there is, has been concentrated in low wage industries:
This situation is only going to worsen, because the Bush economy never managed to create enough jobs to keep up with population growth. In the graph below, to keep up with population growth since 2000, the economy should have added ~13.5 million jobs. It only added ~6 million, and with the new recession, close to half a million have been lost again.
This is a permanent loss in middle class earning power.
To try to keep up, Americans have been taking on ever more debt:
Add on to that the fact that it is necessities: housing, medical care, and education the costs of which have spiraled seemingly out of control during the GOP ascendency.
Meanwhile pension plans have evaporated. And while CEOs get golden parachutes even for poor performance, if the company files for bankruptcy, it can
suspend benefits or terminate that pension plan. Indeed, the average American now lives in a society where each year about 1 in 10 households faces a 50% or more loss of income. But when large financial institutions get in trouble, savers are punished in order to bail them out with low interest rates, if they aren't bailed out directly. The problem isn't Armageddon, it is inequality. Specifically, there is one set of rules for the Lords of Finance, and another set for the peon on Main Street. Finance is "too big to fail". The little guy or gal gets crushed, and has to deal with an onerous new Bankruptcy Law to boot. So profound is this inequality of economic opportunity that there is less social mobility now in America than there is in Europe.
This can't go on forever. And for the young, already it hasn't. Crushed by debt, the average 35 year old maleis less well off now than his forebear of the 1970s.
This is an absolutely stunning, devastating indictment of GOP economic policies. After 28 years, the statistics and the graphs can no longer be ignored. The historical record has been made. They have worked to engorge those already wealthy, while leaving all the risk on the backs of the middle and working classes.
Profit has been privatized and risk left to the public, again and again and again.
The frog is ready to jump. A pro-middle class agenda is all we need to create a generation of progressive middle Americans who will vote Democratic. That agenda isn't too hard to imagine: an increase in progressive taxation. A re-commitment to reasonably priced higher education. An end to the system whereby your medical insurance and care depend on your job and medical costs are exploding. The re-invigoration of Usury Laws and action against predatory payday lending. A firm commitment to minimize leverage and speculative bubbles in the financial markets. Methods to make sure existing regulations are enforced. Real reform of the Bankruptcy Law to discourage unsuitable lending, and protect pensioins from predation during bankruptcy reorganizations. Enacting a VAT or similar tax to capture profits from overseas outsourcing and to make sure thefunds are directed at those in the US who suffered as a result. A commitment to rebuilding and modernizing our physical infrastructure. Sufficient budget discipline that progressive needs can be funded while the nation's long term financial well being is safeguarded.
It is neither necessary nor particularly productive to base the appeal of progressive economic solutions on the idea that the four horsemen of the economic Apocalypse -- insolvency due to national debt, or hyper-inflation, or peak oil, or Great Depression 2 -- are just around the corner. Telling the truth about the slow, decades long assault on average Americans will suffice.
