White House Antics Raise Anxiety Levels
Wednesday, May 17th, 2017 @ 3:27PM
Republican U.S. Senator Bob Corker representing Tennessee said it best when he described the current state of the White House as being in a downward spiral. This blogpost is not long enough to detail all the chaos that has emanated from 1600 Pennsylvania Avenue in recent weeks. Many Americans are experiencing varying degrees of anxiety because no one knows what to expect from day to day. In the meantime, the business of the nation remains in limbo as so much energy is devoted to addressing Mr. Trump’s nonstop controversies.
In the process, we forget that President Donald Trump was elected because there are pressing economic issues confronting the nation. Although President Obama did a good job keeping the country afloat, many issues such as stagnant wages, economic inequality, decaying infrastructure, inadequate affordable housing, and healthcare instability remain significant challenges as the population ages. Republicans stymied Obama’s efforts to address these problems. Sixty million Americans voted for Mr. Trump—particularly in the rust belt states that won him the Electoral College—because they saw Democratic nominee Hillary Clinton as more of the same and believed Trump would do more to improve the fortunes of working class Americans. Many young people and African Americans were discouraged and stayed home ensuring his surprising and narrow victory.
Not only were Republicans successful in regaining the White House they were able to retain both chambers of Congress which allowed them to appoint Supreme Court Justice Neil Gorsuch as the crucial deciding vote. They also hold 33 governorships and control both houses in 32 state legislatures. There are 24 states in which Republicans control both the governor’s mansion and the state legislature compared to 7 states controlled by Democrats. Why does that matter? Because Republicans conservative policies are based on their belief that individuals should provide for themselves without the help of government. They promote meritocracy in a society in which privilege trumps any notion of equal opportunity and their policies reward an increasingly smaller percentage of wealthy people who they see as examples of success. Those who live in poverty do so because they are not motivated to take advantage of the bountiful opportunities for success available to all.
Thus, Republicans are likely to promote supply-side tax cuts that give huge breaks to the wealthy and corporations who they believe will create industry and jobs. Nearly four decades of trickle-down economics beginning with President Ronald Reagan have not resulted in greater economic growth but rather have helped create the vast economic inequality that exist today. Conservatives view programs such as Social Security, Medicare and the Affordable Care Act as socialism, government-controlled, and redistributive from hardworking income earners to the unmotivated and undeserving poor. As a result, the top 10 percent averages nine times as much income as the bottom 90 percent and the top one percent averages more than 38 times more income the bottom 90 percent.
The distribution of wealth is worse. According to the Congressional Budget Office, in 2013 the top 10 percent held 76 percent of the wealth in the United States. Americans in the 51st to the 90th percentile held 23 percent of wealth leaving one percent of wealth in the United States controlled by the bottom half of the population. In 1989, the segments held respectively 67, 30, and 3 percent of wealth. The result has been a hollowing of the middle class. A paper by the International Monetary Fund (IMF) found that households in the United States averaging 50 to 150 percent of median income—a proxy for the middle class) were reduced from 58 percent in 1970 to 47 percent in 2014. During 1998 to 2013, economic inequality caused a 3.5 percent decline in consumption—approximately one year’s consumption.
These trends will not change until the nation’s policies change. Proposed tax reform by President Trump and/or Congressional Republicans offers more of the same which will exacerbate an already tenuous situation. It’s time for new voices and new ideas—well, maybe not entirely new, the economy functioned more equitably during periods of greater progressive taxation. Although a Congressional Research Service (CRS) report was inconclusive about any correlation between tax rates and economic growth, it found the fastest economic growth during the 1950’s when the top marginal tax rate was above 90 percent. The danger is Americans will become paralyzed by our anxieties and those of us who are doing well will retreat into our safe zones to wait out this latest political trauma.