Now that Attorney General William Barr has issued his summary report on the Mueller investigation of Trump, the Russians and the 2016 election, the talking heads at “liberal” media might refocus from Trump’s distraction show to the nation’s structural and economic crises. Additional – and disturbing – revelations about Trump are likely to be revealed in the next year-and-a-half, but the social and economic issues that are now only secondary concerns among Democratic candidates — compared to Trump and Russia-gate – will likely only increase in significance as the 2020 election approaches. Many economists, including Paul Krugman, are concerned that U.S. – and global — economic growth is slowing and a likely recession will hit later this year or next, just in time for the election.
Two of the many issues confronting the U.S. are of special consideration – wage stagnation and infrastructure erosion. In simplest terms, these separate issues illuminate the deeper social and economic crisis the nation faces:
+ According to a 2018 Pew Research report, “After adjusting for inflation, however, today’s average hourly wage has just about the same purchasing power it did in 1978, following a long slide in the 1980s and early 1990s and bumpy, inconsistent growth since then.” It adds, “In fact, in real terms average hourly earnings peaked more than 45 years ago: The $4.03-an-hour rate recorded in January 1973 had the same purchasing power that $23.68 would today.”
+ The American Society of Civil Engineers’ “2017 Infrastructure Report Card” gave the U.S. a grade of “D+” in terms of the state of the country’s roads, bridges, dams, airports, schools and more, unchanged from its previous 2013 assessment. It estimated the country needs to spend some $4.5 trillion by 2025 to improve its infrastructure.
An assessment of the stated plans and policies of some of the leading Democratic presidential candidates will illuminate their failure to grasp what’s happening, the bankruptcy of the Democratic establishment and why – now that his “collusion” in Russia-gate is off the table – Trump might be reelected.
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The following profiles provide brief assessments of the reported positions of eight (plus one) Democratic presidential candidates. As the march to the November 2020 election speeds-up, each candidate – and others – will hopefully present more detailed and comprehensive economic policy plans. To date, all the candidates seem pathetically similar, offering neoliberal proposals that extend that policies of (Bill) Clinton and Obama.
None dare call for a fundamental restructuring of the American economy that would not simply address the issues of inequality and infrastructure but address the deeper structural crisis the U.S. faces in a post-Great Recession global world order.
Cory Booker is promoting the American Opportunity Accounts Act that seeks to mitigate the growing wealth gap between American families by creating a seed savings account for every American child when they are born.
His proposal would create a “baby bond” program under which every child born in the U.S. would receive a federal “opportunity account” containing $1,000, which they could not touch until they turned 18. The money would be managed by the Treasury, with the aim of earning a small annual return.He estimates that a child born into poverty could end up with approximately $46,000 to her name by the time she became an adult.
He introduced the Fixing America’s Surface Transportation (FAST) Act in 2015 and supports the Gateway Project for trains under the Hudson River.
Tulsi Gabbard calls for tax cuts on small businesses and farmers along with an increase in corporate taxes. In addition, she’s called for lower military spending and a cut in spending for nuclear weapons.
In 2018, she introduced legislation to exempt Hawaii from regulations that threaten federal funding for the state’s Essential Air Service (EAS) communities.
Kirsten Gillibrand is promoting Medicare-for-all at 50 years and that companies offer universal paid parental leave.In 2018, together with Sen. Charles Schumer, she announced $46 million in federal funding for six water infrastructure improvement projects across the New York Rochester-Finger Lakes Region.
Kamela Harris is calling for a significant reduction in taxes for low- and moderate-income households. Forbes claims she “doesn’t really say how she’d fund her generous tax cuts.”
In 2017, Harris wrote: “Here’s the truth: infrastructure spending isn’t a transportation issue for most Americans — it’s a human rights issue.”
Amy Klobuchar calls for measures to address “the growing issue of income inequality by making it easier for American families to be able to afford a home, send their kids to college and pay the bills.” Among the measures she identifies are (i) increasing the federal minimum wage, (ii) making college more affordable and (iii) making health care more affordable.
With regard to infrastructure, she argues “I have long supported leveraging direct funding and public-private partnerships to rebuild and reinvest in our infrastructure. … It creates millions of jobs — good paying jobs that cannot be outsourced overseas.” She doesn’t appear to offer specific recommendations.
Beto O’Rourke called for stronger anti-trust regulations during his recent Senate run as a means to break up monopolies and encouraging companies to invest profits in their employees and communities. In 2018, he introduced legislation that would increase staffing and improve infrastructure at our ports of entry — the places where a significant amount of trade and travelers cross into this country.
Bernie Sanders has argued, “The United States currently has more income inequality than any other major developed country in the world, and the gap from everyone else to the wealthiest is wider than at any time since the 1920s.”
Sanders’ proposal, For the 99.8% Act, would expand the federal estate tax on the wealthiest 0.2 percent of Americans, imposing a top rate of 77 percent on estates worth more than $1 billion and generate $2.2 trillion in new revenues. His plan would enable making public colleges tuition free, increase Social Security benefits and help expand unions
Sanders says, “Our roads, bridges, dams, grids, and more have not kept up with the pace of our country’s growth, or the advances in technology. We have to take action.”
Elizabeth Warren has proposed the Accountable Capitalism Act, a “wealth tax” of 2 percent on net worth over $50 million and 3% over $1 billion on about 75,000 American households (less than 0.1%) that raise around $2.75 trillion over the ten-year budget window 2019-2028.
The conservative American Enterprise Institute warned, “there’s some reason to think the proposal would be a negative for economic growth. … A wealth tax reduces the savings leading to investment by lowering the net return on these investments. With the capital stock smaller than it would be otherwise productivity suffers.
She’s also called for Medicare-for-all and a sizable cash payment to most middle-class households and has offered many proposals dealing with infrastructure.
Joe Biden (the undeclared half candidate) is pushing tech education and increased bargaining power for American workers.
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Prior to the 2008 election, then-Federal Reserve chair Alan Greenspan was asked who he supported for president. “We are fortunate, thanks to globalization, policy decisions in the US have largely replaced by global market force,” he blustered. “National security aside, it hardly makes any difference who will the next president. The world is government by market forces.” Over the following couple of years “market forces” in the form of the subprime housing crash would devastate the U.S. (and European) economy.
Faced with a global crisis second only to the Great Depression of a half-century earlier, the financial elite who fostered the crisis escaped unharmed and none went to jail. While Bush floundered, Obama rode in on a white stallion to save capitalism. Working with the Clinton gang of deregulators led by Robert Rubin (for Sec. of Treasury and co-chair of Goldman Sachs) and his Hamilton Project colleagues, Obama protected the corporate oligarchy of 25 or so global banks by shifting the recovery burden to the American homeowner and middle-class taxpayers. Under Obama, the Great Recession recovery was bailed out by ever-mounting deficits that have been continued – if softened – under Trump.
The leading Democratic presidential candidates have broadly agreed on two issues — “expansion” of Medicare and changes in tax policy. With regard to Medicare, Gabbard, Harris, Sanders and Warren have called for what is known as “Medicare-for-all” while Booker, Gillibrand, Klobuchar and O’Rourke proposed different forms of Medicare expansion (e.g., Gillibrand at 50 years). With regard to taxes, there is real split between Sanders and Warren who proposed significant tax increases on the super-rich, and Gabbard and Harris who promoting modest tax cuts for specific sectors. And all consider the nation’s infrastructure needs as local projects and employment opportunities.
One can hope that Sanders and Warren will take a deeper, more systemic look at the U.S. economy and push other Democratic candidates to do the same. The Great Recession and its recovery did not mirror the Great Depression and its recovery. Where the earlier one was “saved” by WW-II that fostered the “American Century,” the most recent one has only deepened the inequality and social distress.
