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The Democratic Strategist

Political Strategy for a Permanent Democratic Majority

Month: November 2012

Oh, so that’s what really happened on election day.

Victor Davis Hanson explaining Romney’s defeat:

Mitt Romney was a glittering Sir Galahad who, given his impressive horse, armor, and lance, along with his decency and piety, assumed that he could win a joust in a fair charge against the other team’s knight. Instead he waded into a sudden fray where he was swarmed, mobbed, cut off, pulled off his magnificent steed, had his matchless armor yanked away by a mob of foot soldiers, and then, once stripped clean, was clubbed and maced beyond recognition.

States with Election Day Registration Led Turnout in ’12

By now everyone should know that early voting was of tremendous benefit to Democrats, and Republicans spent a lot of time, money and effort trying to get rid of it in the 2012 election. Early voting is important for progressive. But so are opportunities for late voting, as well as late voter registration, especially election day voter registration.
States that have some form of election day voter registration include: Idaho, Iowa, Maine, Minnesota, Montana, New Hampshire, Wisconsin, Wyoming, and Washington DC. Connecticut and Rhode Island have Election Day registration only for presidential elections. Only North Dakota has no voter registration requirement at all.
Certified voter turnout figures results in some states will not be released until December or even January, as uncounted absentee and provisional ballots are tallied. But, for the 19 states that have reported their totals, it’s clear that states with election day voter registration still lead the way in boosting turnout. Here are the rankings of the 19 states in terms of “Voter Eligible Population Highest Office Turnout Rate,” according to calculations by Dr. Michael McDonald of George Mason University:
MN (75.7%); NH (70.1); IA (69.); MD (66.2); MI (64.7); FL (63.5); DE (62.7); ND (60.6); LA (60.4); VT (60.4); ID (59.6); SD (59.4); WY (58.9); GA (58.3); RI (58.0); SC (56.6); KY (55.3); AR (50.5); and HI (44.2).
Although Wisconsin is not in McDonald’s data, it’s estimated that WI, which also has election day voter registration, had 70+ percent eligible voter turnout, according to the state’s Government Accountability board. Thus, the four states with the highest turnout of eligible voters all had election day voter registration. However, Amanda Terkel reports that Governor Scott Walker is now proposing to eliminate it in Wisconsin, and citizens groups are organizing to protect it.
Studies by Demos indicate that, In 2004, voter turnout in election day voter registration states was 12 percent higher than states that did not have it and 10-12 percent higher in the ’06 mid-term elections. If there is any voter reform Republicans fear more than early voting, it is election day registration.

Dems’ Edge in GOTV Technology Vexes GOP

Democrats should enjoy an edge in GOTV information and technology for at least a couple more elections, suggests Nate Silver in his FiveThirtyEight post, “In Silicon Valley, Technology Talent Gap Threatens G.O.P. Campaigns.” Silver explains:

Companies like Google and Apple do not have their own precincts on Election Day. However, it is possible to make some inferences about just how overwhelmingly Democratic are the employees at these companies, based on fund-raising data. (The Federal Election Commission requires that donors to presidential campaigns disclose their employer when they make a campaign contribution.)
Among employees who work for Google, Mr. Obama received about $720,000 in itemized contributions this year, compared with only $25,000 for Mr. Romney. That means that Mr. Obama collected almost 97 percent of the money between the two major candidates…Apple employees gave 91 percent of their dollars to Mr. Obama. At eBay, Mr. Obama received 89 percent of the money from employees.
…Mr. Obama’s popularity among the staff at these companies holds even for those which are not headquartered in California. About 81 percent of contributions at Microsoft, which is headquartered in Redmond, Wash., went to Mr. Obama. So did 77 percent of those at I.B.M., which is based in Armonk, N.Y.

With such numbers, it’s hard to see how Republicans close the GOTV technology gap in time for the 2014, or perhaps even the 2016 elections. As Silver concludes, “It does not require an algorithm to deduce that the sort of employees who may be willing to donate substantial money to a political campaign may also be those who would consider working for it.”
it’s not just the excellence of Democratic GOTV technology that made a major difference; there’s also the dismal failure of Gov. Romney’s widely dissed ‘Project Orca’ GOTV machine. All in all, however, the Dems had a much larger ‘talent pool,’ from which to recruit for their technology infrastructure — and that may have provided a pivotal advantage.

The Very Strange Regression of the Fiscal Talks

It’s hard to ignore the ongoing negotiations over the “fiscal cliff” or “fiscal staircase” or “austerity bomb” or whatever you choose to call it. But it’s also hard to avoid vertigo if you pay close attention to MSM coverage of alleged developments. I’ve been covering this as often as news merits at Washington Monthly.
The media framing of the negotiations has been maddening, to say the least. Republicans who are willing to adopt the repudiated revenue strategy of defeated GOP presidential candidate Mitt Romney (revenue increases via loophole closings but not rate increases) are said to be brave rebels against the tyranny of Grover Norquist. Meanwhile, it’s acceptable for Republicans to maintain the demand that Obamacare be repealed or significantly scaled back, even though the legislation provides the one true hope for “entitlement reform” via reduced health care costs.
Now insider reports indicate that Republicans are only going to be willing to cut a deal if Democrats first propose Medicare savings (you know, the kind that involves benefit cuts rather than health care cost containment). That’s partly because such cuts are unpopular, but also because Republicans have spent the last two election cycles posing as saviors of Medicare benefits against cuts made by Obama.
And despite media lionization of random Republicans suggesting that the party might as well bend on high-end tax rates, the bulk of GOP congressmen and conservative activists are insisting as strongly as ever that they’d prefer the “fiscal cliff” to a compromise on tax rates.
Thus, the early post-election optimism about a “grand bargain” is quickly fading, leaving the two parties more or less as they were before election day. And you know what that means: more hysteria about the fiscal cliff! Makes you want to just howl.

Dems take note: there are some encouraging signs that the Obama team is not going to put the massive campaign organization into a deep freeze like they did after 2008. This could make a major difference in 2014 and beyond.

One of the most significant – and least explained – strategic errors the Obama team made after the 2008 election was to essentially demobilize the massive campaign organization they had developed during the campaign. Had they not done so, that powerful grass roots organization could have provided a progressive-democratic counterweight to the tea party, it could have mobilized support for the health care reform bill and it could have played a significant role in minimizing the Democratic losses in the 2010 elections.
As a result, it is encouraging to note that the Obama team does not seem to be contemplating a similar demobilization of the 2012 campaign organization after this recent election. Two weeks ago Obama for America sent out an e-mail asking supporters to fill out a survey describing their experiences in the campaign and expressing in their own words how they would like to see the organization operate in the future.
Over a million Obama supporters replied to the questionnaire – an absolutely stunning number, it should be noted — and apparently many if not most strongly advocated for an energetic, ongoing role for the organization. Here is how a follow up e-mail from OFA characterized the response:

Here are a few comments from supporters like you about the road ahead. We fought for the chance to continue moving our country forward for the next four years, and it’s up to each one of us to follow through on this remarkable opportunity:
“This organization has tapped into the enthusiasm of Americans that were previously on the sidelines of the political process. These Americans are now fully engaged and aware of the policies that are being advanced that will impact their lives and the lives of future generations. They are excited, ready, and willing to do whatever is within their power to influence policy makers to pass legislation that reflects and responds to the issues of our times.” — Rita, Virginia
“Create an engaged community of people that keeps the momentum alive and ensures that progressive policy is implemented at local, state, and national levels. Community here is the operative word! Build and enhance local organizing groups. Would be happy to be included in a local group and lead such a group.” — Merida, Illinois
“Don’t let the energy of the re-election slip through your fingers. This is a very powerful network of people.” — Joel, Texas

We’re going to put your survey responses to good use. Over the next month or two, a team of campaign staff from across the country is working on a project to document and analyze the work we did over the past 19 months, identifying both strengths and areas for improvement. Our goal is to pass along what we’ve learned from the 2012 campaign.
You’re the reason President Barack Obama was re-elected in 2012, and your input from surveys and calls is crucial to this project. So please stay tuned. We’re putting together a final report that will be available to the public, so that your voices continue to shape the future.
Jeremy Bird
National Field Director
Obama for America

The fact that OFA will issue a public report is particularly significant. The publication of that document will provide the platform for a massive intra-Democratic discussion and a springboard for establishing the OFA field organization into a permanent grass roots base of activists and supporters for the Democratic Party.
There will be some complicated decisions required. A new and innovative grass roots Democratic organization should not be built as simply another multi-issue progressive organization, duplicating efforts that are already in existence, nor should it be just a passive fundraising/GOTV tool of the DNC that only operates for a few months before elections. It needs to combine elements of both these models as well as incorporating useful operational lessons from the Tea Party movement as well.
For the moment, however, the critical fact is that a national conversation among the coalition of Obama supporters about the future of the organization will indeed take place and provide the opportunity to convert the impressive organization created in 2012 into an ongoing grass-roots foundation for the Democratic Party.
Having promised to have a public discussion of a public report, OFA is no longer in a position to repeat the massive mistake they made in 2008 when they allowed the vast energy, excitement and enthusiasm of the campaign to dissipate. All Dems should closely follow and be ready to actively contribute to the discussion that will inevitably emerge when the final report is issued.

Political Strategy Notes

Greg Sargent’s Plum Line report on President Obama’s campaign to take the fiscal cliff negotiations to the peeps notes that “A new Post poll out this morning confirms again that the public is on the side of Obama and Dems in this battle. Sixty percent of Americans favor raising taxes on incomes over $250,000. Sixty three percent of independents, 65 percent of moderates, and even 47 percent of conservatives, agree. By contrast, 67 percent of Americans oppose raising the Medicare eligibility age — as do 68 percent of Republicans and 68 percent of conservatives. And a plurality opposes reducing deductions — the preferred GOP approach. ”
Stuart Rothenberg’s “Supermajority Within Reach for Senate Democrats” at Roll Call should provoke some shivers at the NRSCC. But they may find some comfort in Reid Wilson’s “Senate Democrats Face Another Daunting Numbers Game” at the National Journal. Larry J. Sabato and Kyle Kondik get down to individual upcoming senate races at the Crystal ball.
If you haven’t seen it already, take a look at this clip of Pulitzer-Prize journalist Thomas Ricks calling Fox News out on their shilling for the GOP in distorting the Benghazi story. But reports that now he’s dissing MSNBC seem like a pointless exercise in false equivalence.
The “more disturbed than I was before” remarks of Sens. McCain, Graham and Ayotte have the bogus smell of an agreement they made before their interview with Susan Rice, perhaps to justify their call to squander millions of taxpayer dollars on an unnecessary Special Select Committee to hype the Benghazi tragedy. None of them had much to say when dozens of American civilians were killed in Iraq as a result of poor security during the Bush administration. Maddow puts it in perspective right here.
The Daily Texan editorial board has a pretty good overview of the role of the youth vote in the presidential election.
At HuffPo, Ian Gray reports on the controversy surrounding Ex-Florida GOP Chair Jim Greer’s outing of the GOP’s voter suppression: “The Republican Party, the strategists, the consultants, they firmly believe that early voting is bad for Republican Party candidates…It’s done for one reason and one reason only…’We’ve got to cut down on early voting because early voting is not good for us.”
Kos makes a persuasive case that the election proves that Democratic victories in the future will be all about working the base and ignoring so-called ‘independents.’
Linda Greenhouse has an interesting opinion piece at The New York Times about the importance of Scotusblog as the unrivaled source for the best reporting on the U.S. Supreme Court — and the irony of its credentialing difficulties. Now that it’s been gobbled up by Bloomberg, the hope is that its quality won’t suffer.
Those who thought the Romney campaign’s election post-mortem statements couldn’t get more bizarre, should read Benjy Sarlin’s Talking Points Memo post, “Top Romney Adviser Brags About Losing Poor, Minority Voters To Obama.”
It would be a good thing if this was more than just making nice, and President Obama found something substantial for Gov. Romney to do. (other than Ambassador to the U.K. or heading the S.E.C.)

Chait: Boehner’s Inability to Bargain Helps Dems

If you read just one article today about the ‘fiscal cliff’ negotiations, a good choice would be Jonathan Chait’s “Another GOP Leader Recognizes Reality” at New York Magazine, which takes an insightful look at who has the edge. Chait observes:

The showdown over the “fiscal cliff” has taken its first major turn, as Representative Tom Cole — a former minority whip and still a leading House Republican — is now urging his party to extend the Bush tax cuts for income under $250,000 a year. Meanwhile, Ari Fleischer is spinning this move as a big Republican win.
It’s not. It’s a recognition by at least some Republicans that their strategy of using the threat of an economic crisis to improve their bargaining position is likely to fail.
The key factor driving the entire negotiation is the baseline. The baseline determines what policies you can assume will happen, as against those you need to bargain for. Republicans want to bargain from a baseline of current tax policies — i.e., the tax code that has been in effect since George W. Bush’s tax cuts in 2001 in 2003. Democrats want to negotiate from a baseline that assumes the tax cuts that benefit only people earning more than a quarter of a million dollars have expired.

Chait goes on to explain that some Republicans are still entertaining delusions of having big leverage in the negotiations, but the smarter ones are accepting the reality: “At least some Republicans understand that this isn’t a gun aimed at Obama’s head. It’s a gun aimed at their own. (Cole: “Some people think that’s our leverage in the debate. It’s the Democrats’ leverage in the debate.”).”
At this juncture, it’s still unclear whether the delusionals or the realists will carry the day within the GOP. But it puts Speaker Boehner in a tough bind. As Chait concludes:

Let’s put all the pieces together. House Republicans remain about as crazed and intransigent as ever, and as a result John Boehner remains almost totally unable to bargain. Cooler heads within the party see this intransigence careening toward a political debacle for the party that will wind up handing Obama even more leverage, and they’re looking toward the path of least resistance to avoid such a debacle. That path is to extend most of the Bush tax cuts, spin it as a partial win, and live to fight another day.

Democrats shouldn’t get too cocky about the negotiations, since we want to keep public opinion on our side. But the president and Democratic congressional leaders clearly have the leverage for a favorable outcome.

How ‘Trojan Horse’ Strategy Strengthened Obama’s Current Edge

David Corn’s “The Myth of the Obama Cave-In” in Mother Jones is one of the most perceptive analyses of President Obama’s legislative and economic strategy yet written. Corn, a solid left-progressive and author of “Showdown: The Inside Story of How Obama Battled the GOP To Set Up the 2012 Election,” tells the story of how the President shrewdly took the heat from his left flank and let the Republicans crow about how they forced the President to accept a renewal of the Bush tax cuts during his first term. In reality, however, Obama achieved something of immediate benefit to working people and laid the groundwork for a host of progressive reforms that were not likely to pass had the President chosen to let the tax cuts expire. Corn explains, citing:

…a notion that took root within the mainstream media and progressive circles: Obama surrendered in the lame-duck session of late 2010, when he and the Republicans tussled over continuing George W. Bush’s tax breaks for the well-heeled. In this view, weeks after the president’s party was trounced in the midterm congressional elections and weeks before the tea partyized GOPers were to take control of the House, Obama, who had vowed during the 2008 campaign to kill those tax cuts, acceded to Republican demands for continuing tax relief for those pocketing more than $250,000 a year. The establishment media reported that Obama had lost the showdown; liberal House Democrats and progressives off Capitol Hill complained Obama had turned his back on his promise and blinked. There was grousing that Obama either had no taste for a political battle or no spine (or both) and that he had sold out a fundamental principle.

However, explains Corn, “that narrative was wrong when it emerged–and it is not the key to predicting what Obama will do in the present predicament.” Corn adds:

…Obama didn’t wave the white flag in 2010. He turned a face-off over the Bush tax cuts into an opportunity to enact a second stimulus that he otherwise could not get past Senate Republicans. His failure at that time was not that he mustered insufficient mettle; he failed to convey to the world that he had jujitsued the GOPers.
…A game of chicken was on. Obama and the Democrats claimed the Republicans were holding tax cuts for the middle class hostage. (No tax breaks for the rich, then no tax breaks for anyone else.) And the GOPers were daring Obama to stick to his position, see all the tax cuts perish, and end up being blamed for a rise in taxes for everyone.
…In the fall of 2010–both before and after the midterm elections–Obama and his aides cooked up a different script. Fretting that the slow recovery was bottoming out, they had been searching for ways to juice up the economy. But they knew the notion of additional stimulus was a political nonstarter. Though Obama’s original stimulus had worked, raising employment levels by millions of jobs (according to the nonpartisan Congressional Budget Office), Obama had lost that message war. The idea of government spending to boost the economy had become discredited. (See the tea party victories in the congressional elections.)
Obama’s aides, though, also knew that by the end of the year there would be some legislation regarding the Bush tax cuts–however that knotty issue was to be resolved–and they came up with a plan to turn this measure into something of a Trojan horse that could contain (or hide) various stimulative measures. Before the midterm elections, Obama’s economic team began compiling a list of possibilities, including a payroll tax cut and various tax credits.
At a postelection meeting with labor leaders and progressive activists, several of whom were itching for a tax cut fight with the Republicans, White House aides were blunt. To win these stimulative shots, Summers told them, we’re going to have to give up on killing the tax cuts for the rich. “Getting more for our people is more important than getting less for their people,” he said at the meeting.

The heat from the left was formidable, and many progressives began to angrily denounce the deal as a sell-out. Corn notes, however, that “Obama was willing to eschew the fight his Democratic comrades yearned for in order to win something bigger and better: more stimulus to aid the ailing economy.” Corn adds:

…Obama was looking to rack up other accomplishments during this lame-duck session, before the House would be in the hands of tea partiers. He was hoping to end the Pentagon’s Don’t Ask, Don’t Tell policy, to ratify the New START nuclear arms reduction treaty, and pass the DREAM Act reforming immigration law. If he went DEFCON-1 on taxes with the Republicans, there would be no opportunity to steer these other measures through Congress in the holiday season, as it was wrapping up its business. It was quite clear: a bare-knuckles brawl on taxes would mean no more stimulus and no chance to abolish Don’t Ask, Don’t Tell, ratify that treaty, or pass any other legislation.
So Obama went after a deal. And what Biden cooked up with McConnell was pretty good for the White House. The package would extend the Bush tax cuts for all taxpayers for two years and would reduce estate taxes for the wealthy (a move many Democrats couldn’t stand), but it also included a payroll tax cut, a child tax credit, additional unemployment insurance, renewable energy grants, and other stimulative measures. A White House chart noted that Obama had won $238 billion of stimulus in return for yielding on $114 billion in high-income tax cuts.

“In policy terms,” Corn explains, “Obama clearly had gotten the better deal.” However, “the media depicted the compromise as a loss for Obama, and progressive Democrats squawked mightily about the continuation of the tax cuts.” However, adds Corn, “This was not full capitulation. It was a strategic retreat to accomplish a bigger mission.” Corn quotes President Obama:

Well, two years ago, the economy was in a different situation. We were still very much in the early parts of recovering from the worst economic crisis since the Great Depression. And ultimately, we came together not only to extend the Bush tax cuts, but also a wide range of policies that were going to be good for the economy at that point–unemployment insurance extensions, payroll tax extension–all of which made a difference, and is part of the reason why what we’ve seen now is 32 consecutive months of job growth and over 5.5 million jobs created and the unemployment rate coming down…What I said at the time is what I meant, which is this was a one-time proposition. And what I have told leaders privately as well as publicly is that we cannot afford to extend the Bush tax cuts for the wealthy. What we can do is make sure that middle-class taxes don’t go up.

All of which puts the President in a stronger position to challenge the Bush tax cuts this time around. As Corn concludes, “What happened two years ago is not an indication that Obama is likely to yield in the new face-off, but that he will be assessing the political dynamics in gridlocked Washington and be willing to bargain hard for a good deal with true benefits. That’s not caving in. It’s governing.”

Lux: Dems Must Press Obama to Leverage His Power for Change

The following excerpt by Democratic strategist Mike Lux, author of The Progressive Revolution: How the Best in America Came to Be, is cross-posted from HuffPo:
Progressive organizations based in DC have historically focused most of their attention and political muscle on fighting legislative fights, getting Congress and the President to get new legislation passed or stop legislation they don’t like from passing. That will of course need to be part of the progressive movement’s agenda over the next two years, especially when it comes to fiscal policy and immigration reform, but with the House in the hands of far right Republicans and the Senate rarely able to move at all, I believe that with a few exceptions, much more of our attention needs to be focused on pushing the President to use the power he has to use executive action to improve the economy and fight for the middle class.
Case in point: there was an important article on the front page of the Washington Post on the 23rd, an article about how several of the leading economists in the country had advised the President in the first term that the biggest reason the economy hadn’t recovered as well as hoped was the overhang of unsustainable housing debt on homeowners because of the collapse of the housing bubble. In a revealing sequence, the story describes how the President opened the meeting saying he wanted to hear their honest policy advice not bound by what they thought was politically feasible, that the gathered economic experts strongly encouraged him to do more to explore a far bigger mortgage debt forgiveness plan, and that Treasury Secretary Geithner immediately said nothing that ambitious was politically possible because you couldn’t get a bill through Congress.
Although this particular meeting had not been reported before the WP piece on Friday, the recommendations by these top economists are hardly news: mortgage debt writedowns have been something that a wide range of economists from right to left have been pushing ever since the collapse of the bubble. The weakness of policy initiatives in this area is undoubtedly the biggest economic mistake the administration made in the first term. But there is a bigger problem that the story of this meeting highlights as well. Throughout Obama’s first term, according to administration officials and those economic policy people who have met with the administration that I have talked with, a variety of administration officials led by Geithner have been consistent voices of saying why things can’t get done when it comes to policies that would be tougher on Wall Street banks and/or spur the housing market’s recovery (which, not coincidentally, would also cost the biggest banks a lot of money at least in the short term). Sometimes Geithner’s excuse, as it was reported to be in the meeting with top economists, is that nothing can’t get through Congress; sometimes it is just that the administration lacks the power to act for a wide variety of other reasons. Of course the first excuse doesn’t explain why the administration did not lift a finger to help their closest Senate ally, Obama’s mentor in the Senate Dick Durbin, pass the so-called “cramdown” bill, which would have made it far easier for judges to force banks to write down mortgage debt- the bill’s failure prompting Durbin’s famous complaint that “the banks own this place”. And it doesn’t explain Geithner and the administration’s failure to support many of the strongest amendments on the Senate floor and in conference committee during the fight to pass financial reform. While it is true that there are plenty of things which will not pass Congress, when the administration had a legitimate shot at getting things done that would have helped the economy’s banking and housing problems, the sad truth is that they just failed to do them too much of the time.

Creamer: Dems Must Defend 99 Percenters in Lame Duck Budget Battle

This article by Democratic strategist Robert Creamer, author of Stand Up Straight: How Progressives Can Win, is cross-posted from HuffPo:
To hear some pundits tell it, the Lame Duck budget battle is about the “unsustainable federal deficit,” or “entitlement reform,” or even “tax rates.” These characterizations make it sound like a contest between two competing sets of policies and programs.
But underlying all of the policy-speak, the Lame Duck budget battle is really about one question. Will the 1% of Americans who had the party that caused the deficit be asked to pay the bill?
The pain of “fixing” the deficit should not be distributed widely. It should be distributed fairly – to the people who caused the problem and reaped the benefit – the wealthiest people in America.
The Lame Duck battle goes right to the most important question facing our political and economic decision-makers at this moment in American history: will we continue to allow the wealthiest 1% of Americans to siphon off all of our economic growth for themselves, or will the benefits of that growth be widely spread to ordinary Americans? What portion of the goods and services produced by our society will go to the wealthiest 1% of Americans – and how much goes to everyone else?
From what some right wing pundits and “wise men” from the business community say, you’d think that America is poorer today than it was fifty years ago, when Medicare and Medicaid became part of our social contract – or 70 years ago when we created Social Security. Some of the “entitlement programs” we’ve had for decades are now “unsustainable” they say.
We no longer can afford to guarantee seniors a decent retirement? We can’t afford to guarantee every American the right to decent health care? We can’t afford to provide guaranteed pensions – or to provide a living wage to our workers so they can look forward to providing a better standard of living for their kids? We just can’t do big things anymore like build the Interstate Highway system, or send someone to the moon, or create the Internet? They claim that “we” – meaning most of us but certainly not the 1% — have to get used to the new “normal” of austerity and lowered expectations.
To put it bluntly, that is simply ridiculous.
To understand what is really going on all you have to know is three critical facts:
1). First, for the last three decades our per-person gross domestic product – the amount that the average person in America produces in goods and services — has consistently increased. That increase has been slowed by several economic downturns and by the Great Recession, but over time, we have more to go around today than we did thirty years ago.
In fact, real (adjusted for inflation) per capita gross domestic product (GDP) increased more than 80% over the period between 1975 and 2005. In the last ten years, before the Great Recession, it increased at an average rate of 1.8% per year. That means that if the benefits of economic growth were equally spread throughout our society, everyone should have been almost 20% better off (with compounding) in 2008 than they were in 1998.
2). But ordinary people weren’t better off. In fact, median family income actually dropped in the years before the recession. It fell from $52,301 (in 2009 dollars) in 2000 to $50,112 in 2008. And, of course it continued to drop as the recession set in. In fact, as a group, ordinary Americans haven’t had a raise in about 30 years.
How is that possible?
Was it – as the Right likes to argue – because of the growth of the Federal Government? Nope. In fact, the percentage of GDP going to federal spending actually dropped during the last four years of the Clinton Administration. When Bush took office it began to increase again as the Republicans increased spending on wars. Over the last 28 years, federal spending has averaged about 20.9% of the GDP and varied within a range of only about 5%, with the high being in 1983 (in the middle of the Reagan years) and the low in 2000 before Bush took office. It has never even come close to the 43.6% of GDP that it consumed during World War II in 1943 and 1944, or the 41.9% it consumed in 1945. The percent of GDP that goes to Federal spending went up in 2009 and 2010 – but that was mainly because the economy shrunk on the one hand, and a major, temporary stimulus bill was need on the other to prevent another Great Depression.
Was it because taxes have skyrocketed? No again. In fact, Bureau of Economic Analysis data indicates that Americans now pay 23.6% of income for state, local and federal taxes compared to 27% from the 1970’s through the 1990’s. In fact, the overall tax burden is the lower today than it has been since 1958.
Was it that labor became less productive? No. In fact, there has been a major gap between the increase in the productivity of our workforce and the increase in their wages. Even when wages were improving at the end of the Clinton years, productivity went up 2.5% per year and median hourly wages went up only 1.5%.
From 2000 to 2004, worker productivity exploded by an annual rate of 3.8% but hourly wages went up only 1% and median family income actually dropped .9%.
The bottom line is that people who work for a living (most of us) are getting a smaller and smaller slice of the nation’s economic pie.
In fact, wages and salaries now make up the lowest share of the nation’s gross domestic product since the government started keeping records in 1947. And corporate profits have climbed to their highest levels since the 1960’s.