Hillary Clinton's surprising loss in last night's Michigan primary may prove critically important, but not for reasons that have anything to do with who becomes the Democratic presidential nominee. On Bernie Sanders' big night, a night in which he and his supporters can justifiably take great pride, he won 70 delegates; thanks to her victory in Mississippi and close second in Michigan, Clinton won 100. To paraphrase King Pyrrhus, any more "victories" like that and Sanders is doomed, yet such victories are all that Sanders can hope to achieve.
Nonetheless, the victory of a socialist in the Democratic primary in Michigan, paired with the victory of a populist, anti-trade Donald Trump on the Republican side, tells us something important. It tells us that in an absurd, circus-like yet very real fashion, we are having a valuable debate about America's future that will have repercussions well past November. It tells us that as ugly as it gets at times, this democracy thing is actually working. The American people are making themselves heard, and are forcing change.
What do I mean by "making themselves heard"? Listen to former GOP congressman Joe Scarborough as he commits the cardinal sin, as he says what was unsayable as recently as six months ago:
“The problem with the Republican Party over the past 30 years is they haven’t — and I’ll say, WE haven’t — developed a message that appeals to working class Americans economically in a way that Donald Trump’s does. We talk about cutting capital gains taxes that the 10,000 people in the crowd cheering for Donald Trump, they are never going to get a capital gains cut because it doesn’t apply.”
“We talk about getting rid of the death tax. The death tax is not going to impact the 10,000 people in the crowd for Donald Trump. We talk about how great free-trade deals are. Those free-trade deals never trickle down to those 10,000 people in Donald Trump’s rallies.
" .... herein lies the problem with the Republican Party. It never trickles down! Those people in Trump’s crowds, those are all the ones that lost the jobs when they get moved to Mexico and elsewhere. The Republican donor class are the ones that got rich off of it because their capital moved overseas and they made higher profits.”
It never trickles down?
It.
Never.
Trickles.
Down.
As proof, here's what has happened to median household income in Michigan since 1999:
That's a loss of $14,000 in household income annually in a 15-year period, a calamitous decline of 21 percent of purchasing power throughout much of Michigan society. And if Republicans had succeeded in their efforts to block the bailout of the U.S. auto industry in 2008-09, it's safe to say that the decline would have been much much worse. No wonder they're in a foul mood, ready to take hope from whomever offers it. (Note also that much of the decline occurred long before the collapse of Wall Street, during the supposedly good years of the 2000s. That tells you that the decline is not the result of some temporary hiccup in the system. This is the outcome produced by the system when it is working as intended.)
The operating premise of the past 35 years, beginning with the election of Ronald Reagan, has been simple: If we allow and even encourage the accumulation of vast amounts of capital at the top, if we rearrange our tax policies and regulatory regimes to maximize investor profit, we would create an economic boom that would lift all Americans. And we've pursued that course with a vengeance.
In 1981, when Reagan took office, the top 0.1 percent of Americans controlled 8 percent of the nation's wealth.
By 2012, their share of the nation's wealth had almost tripled:
In short, we carried out the experiment, but the promised results have not appeared. We have a rising tide that lifts all yachts, but not much else.
Before we move on, let me throw two more charts at you, the first describing the falling share of economy productivity that goes to workers through wages, salary and benefits, the second that describes the stunning rise of after-tax corporate profits. They are two sides of the same coin:
As those charts demonstrate, the frustrations that the American people are expressing through their votes are absolutely, completely justified. They're mad and worried, and they have every reason to be. And of course it's not just Michigan, which in some ways has done better at holding onto manufacturing jobs than other places. For example, while some people like to point to Detroit and Flint as symbols of dysfunction, Georgia and the South are littered with hundreds of little Detroits, desperate small towns and depopulating rural areas where the mills have closed and incomes have collapsed and the average lifespan is in retreat. It's just that very few people notice or care.
Those people didn't lose those jobs because they were lazy, or preferred to live off welfare, or because unions had made their workplaces uncompetitive. They lost those jobs because people in China and Vietnam and India were eager to do those same jobs for 90 percent less pay, and because those jobs that weren't lured offshore by dramatically lower-cost labor disappeared because they could now be done by robots. From their point of view, those people did everything that they were supposed to do and played by the rules, and they got screwed as a result.
Here in Georgia, for example, Trump got 35 percent of the GOP vote overall. But among white voters without a college degree, it was 47 percent. Among those with a household income of less than $50,000, he got 49 percent. Among those in South Georgia and along the coast, he got 47 percent. In rural Georgia he got 51 percent.
Now, I'm not going to tell you that the Democratic Party has all the answers to such problems; it certainly does not. With his relentless candor, Sanders has been invaluable in forcing this debate, but the solutions that he offers are not politically or economically realistic. Clinton has been yanked out of her political comfort zone by Sanders' success, but her ties to and past financial dependence upon Wall Street are legitimate causes for doubt about how well she really "gets it," and how committed she will prove once in office.
But it at least the Democrats accept government as a legitimate tool in attempting to craft and implement those answers. That's a start. With the eccentric and dangerous exception of Trump, the Republicans do not. Marco Rubio, John Kasich and Ted Cruz all talk with varying degrees of sincerity about the economic problems facing many Americans, from stagnant wages to student loans. But in the end, expressing sympathy is as far as they allow themselves to go.
When the conversation turns to what can actually be done to address those problems, we hear the same ideology we have heard from the GOP for 40 years: The problems of working class and middle-class America can be solved by further empowerment and further enrichment of those already reaping enormous rewards in both real and relative terms, coupled with further diminishment of government programs -- from Social Security to Medicare to student loan programs to infrastructure investment -- that have given Americans some measure of security and insulation from the cruel vagaries of the economic system.
Cruz, for example, is the only Republican candidate with even a shot at stopping Trump. According to the conservative Tax Foundation, the tax plan that Cruz champions would add $3.6 trillion to the national debt over the next decade, and would increase after-tax income for the bottom 90 percent of Americans by a whopping 2.4 percent. Meanwhile, after-tax income for the top 1 percent would jump by 29.6 percent.¹ It is a massive tax-redistribution scheme, dressed up for the masses with a crowd-pleasing promise to abolish the IRS.
It is ludicrous to look at the charts above, to listen to the pain and fear being expressed by voters, and to respond with a tax plan that completely ignores economic reality of the past 35 years and in fact would intensify the problem. But that's where the establishment GOP --and yes, in this context Cruz is very much establishment -- still finds itself.
I mentioned above that what we're witnessing is the democratic system at work, bizarre as it sometimes is. But so far that is only partly true. Yes, the people are speaking, and they are making themselves heard even over the din of literally billions of dollars in campaign rhetoric funded by mega-donors who are trying to drown them out. That's only half the battle, and the easy half at that.
What we need now are leaders capable of transforming that fear and pain into economically and politically realistic policies. We need leaders who are willing to abandon an ideology that has failed and experiment with new approaches more relevant to our times. And frankly, that leadership isn't going to come from the Republican Party, not immediately, not in this cycle. They've got some things to work out first, and I honestly wish them well. We're going to need them.
For the time being though, the rebuttal to destructive Trumpism will have to come from the Democrats, and more specifically Clinton. She has never been a great political synthesizer, but between now and November that is going to have to change.
For example, the results out of Michigan are being interpreted as a bipartisan rejection of the post-WWII consensus in favor of free trade, and that analysis is probably accurate. Among allegedly pro-business GOP voters, 55 percent told exit pollsters that free trade costs the country more jobs than it gains. Among Democrats it was 58 percent. Assuming that Trump is the GOP candidate this fall, that gives him a powerful election-year argument in an important state, and it won't be easily brushed aside.
If we as a nation hope to sustain political support for free trade -- and we should -- then we will need to do far more than give lip service to those whose lives and futures and careers are being gutted by that approach. If that requires that the so-called "winners" subsidize the so-called "losers" with basic health care and retirement security, we will have to do that. If it means that we invest more heavily in both our physical and human infrastructure, to improve the quality of life for all rather than a few, that's a price that free-trade advocates should willingly pay.
Because if the political system is not capable of producing such leadership and policies, then yes, the door swings open for charlatans such as Trump to march through.
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¹The numbers cited are from the Tax Foundation's "static analysis," meaning based on the economy as it currently exists. It also provides a separate set of numbers, based on a projection that further enriching the already very wealthy would produce dramatic economic gains for everybody. You are welcome to continue to believe that, if you wish, but the economic experiment run over the past 35 years would argue against it.
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