Voters are mad as hell, in part because they are afraid they are going to have to take it for a lot longer. Much of the angst is economic. The American Dream of a good job at good wages, a well-funded retirement and well-educated, upwardly-mobile kids seems like it is a thing of the past, or something only available to the prosperous elite.
If you are saving for retirement or approaching it or, God forbid, already retired, you probably have the willies. Most people no longer receive a guaranteed pension for life but have rather been shunted into 401(k)s that suffer in concert with the economy and markets. Retirees have to wait longer for Social Security than they used to and face living longer on less. They know at least one party wants to replace Social Security with even more risky, market–correlated investments. And Medicare and Social Security are both heading for bankruptcy. Solutions suggested include giving old people less benefits, rather than taxing workers more or eliminating government spending on trillion-dollar wars.
Last year if you had your nest egg (if you had the luxury of a nest egg) in large cap stocks, your return was .92%, in small cap stocks you lost -4.41%. If you had your retirement money in overseas markets, you lost -4.72%, and if you had it in bonds you earned a mighty .55%. It is hard to see how returns like that will help you accrue enough to fund a decent retirement. And if you are already in or near retirement you realize the alleged 2015 inflation rate of .7% ate up almost all of your gains.
You also can’t help noticing that the actual inflation rate of things you buy is a lot larger than the government calculated seven-tenths of a percent. The costs of owning a home rose 3.2% in 2015, medical costs are said to have risen 3.3%, but medical insurance for many people went up a lot more than that. The cost of gas at the pump went down, but mysteriously my natural gas bill and electric bill went up. How about yours?
Young people are all too aware of the soaring inflation in a college education that forces many to take out crushing loans or abandon their educational dreams. For the five years between 2011-2016, a student trying to get a degree would have seen the cost of his private school education rise 11%, at a public school 13%, at a two-year school 14%. In other words, double or triple the supposed inflation rate.
Seniors are aware of a similar discrepancy between the inflation rate they experience and the inflation rate the government uses to calculate their Social Security cost of living increase. For 2016 they will receive no more money than in 2015, and in each of the previous two years the increase was a paltry 1.5%. Meanwhile jobs that pay a middle class wage have dwindled, yet austerity is a habit Americans have not willingly embraced since my parents’ parsimonious depression-era generation. The result is a rising household debt load to match that being run by the federal government. Rather than change our ways we seem to be embracing Micawberesque magical thinking. Something will turn up tomorrow.
The candidates drawing the most passionate fans in 2016 don’t offer solutions but scapegoats. Unfair Chinese competition, illegal Mexican immigrants, welfare queen African-Americans, a weakling president, a gridlocked Congress, a rigged game that bails out banks but lets their victims lose their homes. A nanny state that overtaxes overregulates and is driving us to ruination. The voice of the demagogue is heard in the land. Is it a coincidence that Bernie Sanders, who promises a free college education, got 67% of democratic voters between 18 and 44 in Michigan, or that Trump got the bulk of angry white collar men over 55 in the same state. They are serving pie in the sky designed to appeal to those constituencies. Nobody wants to hear hard truths.
Like, we will have to work harder and expect less for it. In a global competition we are falling behind because our education system is badly outdated and underfunded, and our students unwilling to work as hard as the competition. Having government services, a giant defense establishment and lower taxes at the same time does not compute. Cracking down on economic and environmental malefactors while cutting pesky regulations is also a contradiction.
In fact it looks like we are in for a long hard period of adaptation to changed circumstances. We can realize change happens and is difficult. Some people win. Some lose. A society can help those falling behind with the transition to a new world or throw the laggards to the wolves. We can face the music and get on with it, or we can pretend we can turn back the clock to a mythical golden age. But delay will only make the denouement worse.
The worst thing about the campaign of 2016 is that almost none of the dozen and a half candidates has come anywhere near telling voters the hard facts of our economic dilemma and suggesting realistic ways to deal with it, except possibly John Kasich who has at least insisted the federal budget has got to be controlled. No surprise that the voters have turned a deaf ear to his report from the land of the dismal science. The unreality of Reality TV is a lot more fun to believe in. Until the lights go out.