Politico had an interesting headline this weekend: “The Democrats’ wage problem.”
Democrats were gleeful this week when Donald Trump blurted out in Tuesday’s debate that “wages [are] too high.” But as Hillary Clinton, Bernie Sanders and Martin O’Malley prepare to debate Saturday night, the Democrats have a wage problem of their own: American incomes have dropped during the Obama presidency.
It’s a vulnerability that Republicans haven’t figured out how to exploit, and it’s clearly one of the biggest weaknesses in the Obama economic recovery.
In 2014, the last year for which Census data are available, median household income was $1,656 lower than it was in January 2009, when President Barack Obama took office. A recent survey by the private firm Sentier Research showed household income finally rose this year above its level in June 2009, when the Great Recession ended — but only by 1.3 percent. That’s a terrible record for any presidency. But that such stagnation occurred during a Democratic one is potentially a big problem for Democratic candidates, and especially for Clinton, who’s running on her role in that administration.
“I think that there are two phenomena here,” said Stuart Stevens, a senior strategist in Mitt Romney’s 2012 campaign. “Those who normally are the most articulate, passionate voices for those who are doing least well in the economy have been muted over the past seven years” because they don’t want to undercut Obama. That should create an opening for Republicans.
Sadly, Politico judges Republicans as serious about wages only if they propose an increase in the minimum wage. Even more sadly, some do. That does nothing to increase purchasing power. It will only increase unemployment.
While deregulation and lower taxes will help if they are done dramatically enough, the real problem is simply dismissed:
“Wages for the bottom 90 percent of the economy have been stagnant for 40 years,” Mike Huckabee said at Tuesday’s debate. Huckabee blamed the Federal Reserve. He favors a return to the gold standard, along with Ted Cruz and Rand Paul. But this position, long favored by many in the party’s more conservative wing, has never stirred much excitement among voters.
It won’t stir much excitement among voters because the media across the ideological spectrum is dedicated to propagandizing for the Fed. But Rand Paul, Ted Cruz, and Mike Huckabee are right: the Federal Reserve is the cause of the widening income gap.
As Bob Allen wrote in January of 2014 here at Political Outcast:
Yes, I realize most people’s eyes glaze over when you begin to talk about the Federal Reserve—such an important part of the economic picture in America, and our system of education never touches upon it—but unless the populace dispels its ignorance, we will continue as slaves to the real masters—those at the very height of power and money.
The system represented by, and fostered by, the Federal Reserve is what undergirds economic inequality of the worst sort—they earn wealth not by lifting everyone up, but by skimming off the top of everyone else’s hard work and service.
The private shareholders of the Federal Reserve need to lose their privileged position. End unjust income inequality by ending the Fed.
More people than ever care about the Federal Reserve. But the media continues to discount their concerns.