Democrats and the liberal media are doing a remarkable job of painting a constitutionally elected president as illegitimate and in the midterms, putting Republicans on the defensive on gun rights, immigration and other social issues. However, their lightning rapier is inequality and the socialist remedies Bernie Sanders and his acolytes offer.
President Trump has engineered more robust growth but that doesn’t move the needle quickly enough for economically distressed Americans. Their problems have been festering too long for quick fixes.
A Minneapolis Federal Reserve Bank study shows income inequality significantly worsened in the 1970s and 1980s as Great Society measures gained traction: easy access to student loans, welfare, food stamps and Medicaid drove up college and health care costs and corrupted historically strong cultures of self-reliance.
The recent financial crisis devastated those citizens. Instead of fixing what was broke, President Obama won a second term by doubling down on entitlements. Now one in 20 working-age adults receive Social Security disability benefits and many have easier access to food stamps and Medicaid.
He reveled in creating scapegoats. He orchestrated a predatory culture on campuses, in corporate human resource departments and from the media.
Consequently, average household wealth and incomes recovered from the financial crisis by the end of his first term and have continued to grow, but by denying the root causes of inequality, Mr. Obama aggravated the problem. Incomes and wealth are now even more skewed to the top 10 percent of households — read the privileged elites on the two coasts and at universities that contribute mightily to the Democratic base.
The housing market, where most ordinary folks have wealth stored, has recovered more slowly than equities, where upper-income Americans have a larger stake. And land values have recovered more around the big coastal cities and around research universities than in the Rust Bowl and rural areas.
Economic growth driven more by technology (software instead of machinery) and globalization has concentrated economic opportunity with similar demographic and geographic biases.
All this has been exacerbated by bad trade deals and environmental policies championed by the Clinton, Bush and Obama administrations that widen the trade deficits, necessitate ever increasing federal deficits to keep the economy rolling and make China America’s creditor.
Similarly, Obama-era bank regulations, Dodd-Frank, and the Fed’s easy money policies made inequality worse, too. Arbitrarily strict capital requirements discourage banks from originating mortgages any place other than high-income, high-wealth communities — read the citadels of highly-educated, liberal voters on the two coasts and around university research hubs. And those encourage lending to large corporations at the expense of smaller manufacturers and working class Americans.
Mr. Obama’s embellishment of entitlements and his racial profiling in university admissions and anti-male discrimination in education have created a new leisure class. Record numbers of able bodied prime working age men are poorly prepared for any kind of decently paying employment and rely on public largess to enable their carefully cultivated tastes for daytime TV and computer games. Families in West Virginia or in coastal ghettos won’t catch up if their men are denied proper training and forced to leech off others.
Mr. Hyde is ever lurking when Dr. Jekyll trifles with nature — or where liberals mess with free markets. Overall, the Minneapolis Fed study shows the relative wealth position of African-Americans is no better today than just prior to the Civil Rights Era.
Now the liberals want to win back control of Congress by offering free health, free higher education and a guaranteed annual income — no one has to work because the robots will do all the sweating.
Of course, they will roll back Mr. Trump’s efforts to fix trade deals and implement sensible regulatory and environmental policies. Then their executive class can be respectable at teas with European leaders hosted by the WTO and Greenpeace, and negotiate terms of surrender with China.
Peter Morici is an economist and business professor at the University of Maryland, and a national columnist.