I had dinner the other night with two close fellow Democratic friends both of whom are more progressive than me to varying degrees. They were both adamant that the economy in the US was great, particularly in Denver. This is a refrain I have heard at all levels of the Democratic party at rallies, the county convention, privately, on social media, at the national convention, and in Secretary Clinton’s stump speech. And to a certain extent they are right. If you have money and an upper middle class job or better, things are pretty good.
“The stock market is way up from 2009!” Being up since a historic down is great. It is what in business we call, “beating a good comparable”. But, it is worth noting that the market is flat for the last 18 months with bond and CD rates at record lows. Anyone on a fixed income is either eating into their capital or investing inappropriately in a stock market with too high a risk profile.
The unemployment rate at a normalized rate off a historic high is great, but wages are down, underemployment is high, and labor participation is at historic lows. Again, there is more to a great economy than beating a few cherry picked comps.
Why are businesses flush with cash and access to cheap capital refusing to invest? Because in this one area Bernie Sanders is right. The economy is working for some, but not the majority, and in particular the working class and poor. If the great mass of Americans are not spending money on goods and services, business will not invest in new plants, equipment, and people.
So rather than Republican economic measures, let me use a classical Democratic, dare I say Progressive economic measure right off the FDR memorial in Washington, DC. I toured the Community Food Share yesterday, which is Boulder County’s main food bank. For the last six years Val and I have been minor supporters and boosters of this great organization. Community Food Share is the largest provider of food to shelters and individuals in Boulder County, Colorado. Depending on how you calculate poverty Boulder is one of the richest counties or the richest county in one of the richest states in the United States.
Yet, one in six residents of Boulder live in poverty. Fourteen thousand children in Boulder are living in poverty with food insecurity. And every single year both the amount of poverty and the amount of food needed and distributed grows. It crosses every demographic for age and race. Community Food Share is distributing nine million pounds of food per year.
Does that sound like a “great economy”? Does that sound like the 1960s or 1990s where these rates were heading down?
So, understand when you defend the current administration’s economic record as “great” or say “Denver, Boulder, San Francisco, New York” are booming you are betraying your core values for an election message. A message that is neither Progressive or Moderate or even Democratic. Even with a terrible candidate like Trump there is a reason poor and working class whites are abandoning the Democratic Party. It is that our party continues to maintain economic growth below 3% GDP is GREAT!
The historical record is clear. Below 3% growth in the US will not reduce poverty or provide upwardly mobile employment for the poor and working poor. It is at best a work in progress.
Based on the best analysis (see FiveThirtyEight) Trump’s campaign seems close to failure while still 90 days out. It will take some major outside event, such as a terrorist attack or a 2008 style economic collapse to create an opening. But if such an opening arises, Democrats going around saying an economy is great, while it is actively hurting working people and the poor will feed right into his campaign.
It is fine to say President Obama’s efforts in 2009 -2010 righted the ship and prevented a depression. Fine to say he does not receive enough credit for those efforts. But, is wrong and electorally dangerous to say his policies have resulted in a robust economy.