Anyone looking out for those left behind?

Journal Star, Peoria,

Posted Nov. 18, 2014 @ 7:58 pm
Updated Nov 18, 2014 at 7:59 PM

http://www.pjstar.com/article/20141118/Opinion/141119060#ixzz3JgomzLrC

There has always been an element of truth to the old saw, “The rich get richer, and the poor get poorer,” but that gap is becoming increasingly pronounced in modern America.

The Federal Reserve has released numbers showing that only the nation’s wealthiest made out between 2010-2013, with inflation-adjusted incomes rising 2 percent for the top 10 percent. Everyone else lost ground. With the most severe wage declines in the very middle of the middle class. Those in the 40th to 60th percentile now have 6 percent less spending power, on average, than they did at the end of the last decade, with those in the 20-40 range down 7 percent. Overall, U.S. families fell back 5 percent. It’s no surprise, as that follows the pattern of the last 30-plus years. Anyone else notice that sales tax revenues across the region are down? Well, of course they are.

Supposedly the message of the 2014 midterm elections was that the Left Behind are unhappy and took it out on Democrats who were not getting the job done for them, which is fair enough. So now it falls to Republicans to go to bat for those average Americans, to which they have tended to take the approach of cutting the so-called “job producers” a break — as in a tax break, as in fewer regulations — with the resulting improvement in their bottom lines hypothetically filtering down in welcome wage news to everybody else. Nominal tax rates have fluctuated but effective tax rates have consistently fallen for the investment class.

While there is an element of truth to the contention that only more robust economic growth can cure many of the above-mentioned ills — without it, we’re just sunk, period — we wish experience conditioned us to be more confident that the latter always follows the former. Instead, what the last several decades have brought and taught is a discrediting of trickledown economic theory, with the majority of American workers far more likely to share in the pain than in the gain.

Indeed, how often have we heard in bad times that employers simply cannot afford to pay workers more? OK, makes sense. And so they wait for the good times, only to hear that those bosses must now guard against the inevitable downturn. It’s the classic Catch-22, lose no matter what. Yes, globalization and automation factor significantly into the Left Behind status of so many. And sometimes people are their own worst enemies, engaging in self-defeating behaviors. Of course, for some reason that doesn’t always apply at the top, where bonuses have been known to flow whether the performance justifies them or not.

Economists can get tongue-tied describing why things are the way they are, but sometimes they discount the simplest explanation of all — the fundamental human flaw of greed, which every now and again the Gordon Gekkos of the world will try to twist into a virtue. If anyone wonders why the economic justice message of a Pope Francis seems to be resonating in so many corners of the world, including this one, perhaps that’s why.

Page 2 of 2 - So victorious Republicans should be careful not to misread the mood and mindset of the electorate. Indeed, on the same Nov. 4 those Americans were sending Republicans to Congress in majorities not seen since 1928, they also were approving statewide referendum after statewide referendum to raise the minimum wage, which Republicans tend to oppose. Those two realities are not compatible.

As such, it may be a wise move, politically speaking, for Republicans to defy recent type, to channel their inner Teddy Roosevelt and make the struggling middle class an immediate policy priority. They might lock those votes up for a generation if they do. If not, well, arguably the Americans they just won over are exceedingly impatient, and they can hand the keys back to Democrats two years from now.

Journal Star, Peoria
Read more: http://www.pjstar.com/article/20141118/Opinion/141119060#ixzz3JgqaVDUQ