Trump was an election surprise. Expect more.

The Trump election likely signals a new era of extreme voter discontent and improbable national election results. Why? Because the so-called American Dream — that each generation would live better than its predecessor — has ended for most of our citizens. Half of the young adults in this country will earn less over their lifetimes than their parents did. Indeed, the whole idea of rising living standards, which defined this country for so long, is a thing of the past for most Americans. More and more voters realize this and are angry about it.

.. Are wages rising? Looking back over the past 40 years, the answer is no.

According to the Hamilton Project, overall U.S. wages, adjusted for inflation, are essentially flat over this period — registering about 0.2 percent growth. Which means that purchasing power, a good proxy for living standards, is flat, too.

 .. The 2016 Federal Reserve Board survey of household well-being found that 46 percent of U.S. adults could not meet a $400 emergency expense without borrowing or selling something they owned.
And a stunning one quarter of adults cannot pay their monthly bills in full.
.. A series of powerful, entrenched factors have brought the American Dream to an end. Economists generally cite
  • globalization,
  • accelerating technology,
  • increased income inequality and
  • the decline of unions.
What’s noteworthy is that these are long-term pressures that show no signs of abating.
.. there continues to be a debate among political scientists and sociologists as to whether these income pressures or cultural factors such as a rebellion against the establishment contributed more to the Trump upset. But, in reality, the two factors are interrelated. Household financial troubles increase cultural resentment and the sense that there are two Americas. Especially with the share of national income going to the lower 80 percent of earners at a 100-year low.

Making Canada Great Again

Ottawa out-Trumps Trump on Nafta and trade.

Throughout his presidential campaign, Donald Trump liked to bang on about how Mexicans are stealing American jobs, and he called the North American Free Trade Agreement “maybe the worst trade deal ever signed anywhere but certainly ever signed in this country.” Now someone on the other side of the U.S. border is finally agreeing with him.

But it isn’t Mexico. It’s Canada. And this is probably not what Mr. Trump expected when he forced Nafta’s trading partners back to the negotiating table. As part of this renegotiation, the Canadians are now complaining that U.S. labor laws are unfair to Canada. Specifically, the Globe and Mail reports that Canadian negotiators spent Sunday’s talks in Mexico City trying to persuade their U.S. counterparts to pass a federal law negating the right-to-work laws that now prevail in 28 U.S. states.

It’s time to balance the power between workers and employers

The central issue in American politics is the economic security of the middle class and their sense of opportunity for their children. As long as a substantial majority of American adults believe that their children will not live as well as they did, our politics will remain bitter and divisive.

..  average hourly earnings last month rose by all of 3 cents — little more than a 0.1 percent bump. For the past year, they rose by only 2.5 percent. In contrast, profits of the S&P 500 are rising at a 16 percent annual rate.

.. Technology has given some employers — depending on the type of work involved — more scope for replacing American workers with foreign workers (think outsourcing) or with automation (think boarding-pass kiosks at airports) or by drawing on the gig economy (think Uber drivers). So their leverage to hold down wages has increased.

.. other factors have decreased the leverage of workers. For a variety of reasons, including reduced

  • availability of mortgage credit and the loss of equity in existing homes, it is harder than it used to be to move to opportunity.
  • Diminished savings in the wake of the 2008 financial crisis means many families cannot afford even a brief interruption in work. Closely related is the observation that workers as
  • consumers appear more likely than years ago to have to purchase from monopolies — such as a consolidated airline sector or local health-care providers — rather than from firms engaged in fierce price competition. That means their paychecks do not go as far.

Workers seeking gigs on their own are inevitably less secure than a group collectively representing their interests. The decline in unionism is also a contributor to the pervasive sense that our political system is too often for sale to the highest bidder.

What Will Trump Do to American Workers?

With Steve Bannon out of the White House, it’s clearer than ever that Donald Trump’s promise to be a populist fighting for ordinary workers was worth about as much as any other Trump promise — that is, nothing.

His agenda, such as it is, amounts to reverse Robin Hood with extra racism — the conventional Republican strategy of taking from struggling families to give to the rich, while distracting lower-income whites by attacking Those People, with the only difference being just how blatantly he plays the race card.

.. So is the Trump agenda dead? Not necessarily, because trickle-down has never been the whole story of the Republican assault on workers. Or to put it another way: Don’t just watch Congress, keep your eyes on what federal agencies are doing.

.. According to the Congressional Budget Office, back in 1980 the top 1 percent paid 33 percent of its income in federal taxes. Under Reagan, that share briefly fell below 25 percent. But as of 2013, the most recent year covered, Obama’s tax hikes had brought federal taxes on the 1 percent back up to 34 percent of income.

.. Medicaid, which in 1980 covered only 7 percent of nonelderly Americans. Today that number is up to 21 percent.

.. While the rich still pay taxes and the safety net has in some ways gotten stronger, the decades since Reagan have nonetheless been marked by vastly increased inequality, with stagnating wages for most, but soaring incomes for a tiny elite. How did that happen?

Yes, globalization probably played some role, as did technology. But other wealthy countries, just as exposed to the winds of global change, haven’t seen anything like America’s headlong rush into a new Gilded Age. To understand what happened to us, and in particular to American workers, you need to look at policy

.. truck drivers, whose pay used to make them members of the middle class. No more: Their real wages have fallen about a third since the 1970s, with most of the decline taking place during the Reagan years.

.. What happened to truckers was, basically, the collapse of their bargaining power due in part to a changed ideological climate — not least at the National Labor Relations Board — that encouraged private employers to fight unionization, and in part to deregulation that undercut the position of unionized firms.

.. Does anyone doubt that financial deregulation played an important role in surging incomes at the very top of the income distribution?

Comments:

Nothing in his history as a developer showed any inclination to a friend of working people:

  • He bought foreign steel because it was cheaper;
  • he imported foreign workers because he could pay them less and they are more vulnerable;
  • he stiffed small contractors because they couldn’t fight back.

.. I bristle when i hear the chattering class call Trump a populist. He’s not. Like the entire GOP, he is a classist, mouthing platitudes to fool the masses but acting as reverse Robin Hoods when it really counts. The entire charade of repealing ACA is a prime example

.. Populists are politicians who fight to help people who need the federal government to protect them against the rich and powerful.

.. James J: .. For those who do not know and associate with members of the working class, voting against one’s own economic self interest is a head-scratcher. But today’s working class is not your father’s working class. It certainly is not MY father’s working class.

Dad, because of The Depression and then war in Europe, never graduated high school. But he was an avid reader — our small working class home in a Midwest auto town was filled with books, newspapers and magazines of all varieties. He and our neighbors were union and they knew the issues.

Today’s working class has an appetite for information, but the source of that info is polluted. It comes from outlets owned by the same corporate billionaires who are picking workers’ pockets for 40 hours a week.

The outlets — Fox News, Breitbart… — are managed by very intelligent, very schooled and very slick pros. They play the intellectually lazy and proudly uneducated like a symphony; the best cons are the ones where the marks walk away thinking they got the best of the deal.

Today’s working class thinks it understands complex issues because its members read Tweets and listen to manipulating right-wing talk radio all day.

And once whipped into a hateful lather by millionaires con artists like Rush and Hannity and Bannon, economic self interest disappears behind a fog of anger and dogma.

Liberalism’s Summer of ’17

Liberals whine about being governed by Trump. Pity those governed by them.

Many of those now climbing over the Democrats’ blue walls were willing to live under the original liberal governance model that existed before 1960 because it recognized the legitimacy of private economic life. The wealthy agreed then to pay their “fair share.”

.. Defenders of the liberal model argue that cities like New York, San Francisco and Los Angeles are changing into sophisticated, cosmopolitan hubs that attract a new class of young professionals who will restore urban America. Instead, many of these urban revivals are producing a phenomenon economists now call “racially concentrated areas of affluence,” or RCAAs.

An area gets RCAAed when the residents who pack themselves into it are mostly white people whose median incomes are unprecedentedly greater than the city’s poverty level. Some of the most RCAAed cities are liberal duchies like Boston, Baltimore, Chicago and Philadelphia.

Today, private economic life, especially that of the urban middle class, is no longer a partner in the liberal model. It’s merely a “revenue source” for a system whose patronage is open-ended welfare and largely uncapped public-employee pensions. I’d describe the liberal-progressive governing strategy as ruin and rule.

.. Not widely noticed is that liberalism’s claimed beneficiaries—black Americans—are also fleeing its failures. Demographers have documented significant black out-migration from New York, Michigan, California and Illinois into Florida, Georgia, Texas and North Carolina. North to south.

.. They are now asking the federal government, meaning taxpayers who live in parts of the U.S. not hostile to capitalism, to give them nearly $15 billion to replace the 100-year-old train tunnel beneath the Hudson River. Why should they? Why send money to a moribund, dysfunctional urban liberal politics that will never—as in, not ever—clean up its act or reform?

Maybe we need a new default solution to the urban crisis: Let internal migration redistribute the U.S. population away from liberalism’s smug but falling-apart plutonomies.

Uber’s CEO Leaves, but Its Battles Won’t Go Away

Co-founder Travis Kalanick departs but for Uber battles remain

“We saw how Travis treated his drivers,” said Sayah Baaroun, head of a driver’s union in France, referring to an incident where Mr. Kalanick was videotaped arguing with an Uber driver. “But for us, the larger battle continues.” Mr. Kalanick later said he was “ashamed” of the behavior capture on the video.

.. Still, Uber’s aggressiveness around the world has often been viewed as interlinked with Mr. Kalanick’s own personality, and the change of leadership could offer a fresh start with some of the authorities with which Uber has tangled. Dave Ashton, co-founder of French car-booking app SnapCar, said Mr. Kalanick’s departure is “an astute move by the board” that could “repair Uber’s reputation and help the company mature.”

Tax Revenge in Kansas

Republicans and unions raise rates higher than in Massachusetts.

 The press accounts gleefully talk of how “moderate Republicans” joined with Democrats to raise taxes to address exploding state deficits. But substitute “Republicans backed by teachers unions” for moderate Republicans, and the real picture comes into focus.
At bottom the Kansas tax vote was as much about unions getting even with the Governor over his education reforms, which included making it easier to fire bad teachers.
.. the 2012 tax cuts that reduced the top rate on personal income taxes to 4.9% from 6.45% and eliminated income tax for small businesses filing as individuals.
.. Mr. Brownback was unlucky in his timing, given the hits to the agricultural and energy industries that count for much of the state economy.
.. Mr. Brownback’s reform mistake was that in eliminating taxes on “pass-through” small businesses, the Governor created a loophole that allowed law firms, accounting agencies, consultants and many others to declare wage income to be business profit and pay little or nothing. This caused lower tax revenues than Mr. Brownback predicted
.. public unions support the state GOP’s liberal wing.
.. The one relevant Kansas lesson is that Republicans in Washington need to be careful how they write any tax reform for “pass-through” businesses. One way to do that is to avoid letting pass-through tax rates get too much lower than rates on wage and salary income