GOOD ECONOMIC NEWS IS AWKWARD FOR DEMOCRATS’ 2020 HOPEFULS
Candidates are simply wrong to deny credit to President Trump, Andy Puzder writes.
WASHINGTON With the U.S. economy producing another strong jobs report for June, Democratic presidential hopefuls face a difficult task: how to avoid crediting President Donald Trump.
For months, when faced with positive economic news, Democrats have tended to say either that Trump was lucky to inherit a recovering economy from the Obama administration or that the economy was only benefiting the rich. But with Joe Biden, Barack Obama’s vice-president, in the race, crediting the Obama administration is losing its appeal for his rivals.
While Biden is happy to tout the economic blessings from “the Obama-biden administration,” many of his opponents have no alternative but to double down on waging class warfare. For working-class Americans who are seeing their wages increase, financial security rising and plenty of jobs available for just about anybody who wants one, the message from these Democratic presidential hopefuls is simple: You’re wrong.
The first Democratic presidential debate started with a moderator asking Sen. Elizabeth Warren, a Democrat from Massachusetts, whether her various big-government economic proposals would create economic risks “at a time when 71 per cent of Americans say the economy is doing well.” Warren responded, “Who is this economy really working for? It’s doing great for a thinner and thinner slice at the top.”
Only progressive math could turn 71 per cent into “a thinner and thinner slice at the top.” This remarkable percentage came from a March CNN poll that recorded an 18-year high in the percentage of Americans giving the economy positive marks.
The “thinner and thinner slice” in the poll was the 27 per cent of Americans who gave the economy negative marks — the lowest number since February 2001.
The CNN poll reflects more than public opinion, it reflects reality. In June, according to the Bureau of Labor Statistics, a historic high of 157 million people were employed and fewer than six million people were unemployed (a recent low last seen nearly 18 years ago, when the labour force had 20 million fewer people). The result was an unemployment rate of four per cent or less for 16 consecutive months, a streak last matched nearly 50 years ago.
Nonetheless, the demand for workers remains at historic highs, with 1.4 million more job openings than people unemployed in May (the 15th straight month with job openings exceeding unemployed).
The demand for workers is driving wages at rates last seen in 2009. According to the BLS, wages for all nonfarm employees rose 3.1 per cent in June, compared with June a year ago. Wages for production and nonsupervisory employees (workers, in other words) increased 3.4 per cent. Workers who were employed 40 hours per week saw their incomes increase an average of US$1,500 over the past year.
Those production and nonsupervisory employees make up 80 per cent of the workforce, which means that year-overyear wages for higher-compensated supervisory employees — the remaining 20 per cent — increased at a far slower 1.9 per cent.
If your concern is economic justice, all of this should be great news. The only way to truly reduce income inequality is for the incomes of the lower-wage earners to increase faster than the incomes of higher earners. That is exactly what’s happening.
Don’t tell that to the Democratic presidential hopefuls, however. On July 7, Sen. Cory Booker of New Jersey wrote on Twitter: “This economy is not working for average Americans. It’s about time we had a president who champions working people.” The “economic justice” section of the campaign website for Sen. Kamala Harris of California says, “Our economy isn’t working for working people” and her “first priority as president will be to give working and middle-class families an overdue income boost.”
Last month, Sen. Bernie Sanders, an independent from Vermont, gave a speech at George Washington University specifically to define and defend his brand of democratic socialism. “It is not just that the very rich are getting much richer,” Sanders said. “It is that tens of millions of working-class people, in the wealthiest country on Earth, are suffering under incredible economic hardship, desperately trying to survive.”
Perhaps the most succinct encapsulation of how the candidates view the nation’s economy is a line favoured by New York Mayor Bill de Blasio: “There’s plenty of money in this country, it’s just in the wrong hands.”
It’s difficult to overstate either the disdain these presidential hopefuls harbour for the U.S. economic system or their willingness to ignore its benefits. At the very least, it’s a politically risky stance. A recent Gallup poll found that while less than a third of Americans take pride in the U.S. political system, 89 per cent of Republicans and 64 per cent of Democrats are proud of America’s economic achievements.
Trump’s policies of lowering taxes, reducing regulations and encouraging domestic energy production have spurred economic growth that is reflected in the president’s rising approval rating. Democratic presidential contenders who keep asking American voters “Who are you going to believe, me or your lying wallet?” might not like the answer.
The Washington Post
Andy Puzder is the former CEO of CKE Restaurants and the author of The Capitalist Comeback.