But let’s not overlook Mayor Pete Buttigieg. He has a moderate demeanor, but he’s been advocating hard-left policies.
South Bend Mayor Pete Buttigieg, a 2020 Democratic presidential hopeful, said the governing philosophy of Republicans such as former President Ronald Reagan, who signed across-the-board tax rate cuts to grow the economy, should not be repeated in the future. “What we’ve seen is that the rising tide rose, right? GDP went up. Growth went up. Productivity went up — big numbers went up and most of our boats didn’t budge. For 90 percent of Americans, you start the clock right around the time I’m born. Income didn’t move at all — so lower to middle income, really, almost all of us,” Buttigieg said.
Is this true? Have Americans been on a treadmill?
We can easily answer that question because I was at “FEEcon” this past weekend, an annual conference organized by the Foundation for Economic Education.
There were plenty of great presentations (including, I hope, my remarks on the economics of protectionism).
I was most impressed, however, by Professor Antony Davies, who gave some upbeat remarks about living standards.
But do those headlines reflect reality?
But cash is only part of total compensation.
By the way, I don’t think this is unalloyed good news.
A big reason for the difference between cash income and total compensation is that we have an exclusion in the tax code that encourages the over-provision of fringe benefits (which, in turn, contributes to the third-party payer problem).
But I don’t want to digress too much. The key point is that workers have seen healthy increases in compensation, notwithstanding the fact that I wish it was more in the form of wages.
Now let’s look at some more headlines from Davies’ presentation.
Is that true?
And then he shares the same data for every five-year period since 1970 to show that the middle class has shrunk.
Let’s close with two more slides, both of which look at 100 years of data.
As you can see, even a minimum-wage worker is much better off today than an average worker 100 years ago (with the exception of movie tickets).
Since we just looked at long-run data, let’s close today’s column with some short-run numbers.
In a column for the U.K.-based Guardian, Michael Strain of the American Enterprise Institute explains that capitalism currently is delivering some very positive results for ordinary people.
This is a strange time to be debating whether capitalism is broken, at least in the United States. The economy has added jobs every month since October 2010 for a total of over 20m net new payroll jobs. The unemployment rate is below 4%, lower than it has been since 1969. Wage growth is finally accelerating, clocking in at a rate well above 3% a year for typical workers. The workforce participation rate for people ages 25 to 54 has increased by 1.6 percentage points since 2015, wiping out half a decade of decline. There are more job openings than unemployed workers in the US. …So much for a stagnant economy. …Since 2016, weekly earnings for the bottom 10% of full-time workers have grown more than 50% faster than for workers at the median. The unemployment rate for adults without a high school degree is further below its long-term average than the rate for college-educated workers.
By the way, I’m not trying to be a Pollyanna with rose-colored glasses.
We have numerous bad policies that are hindering prosperity. If we reduced the size and scope of Washington, we could enjoy even greater levels of prosperity.
But we shouldn’t make the perfect the enemy of the good. The United States is one of the world’s most market-oriented nations.
This tweet nicely captures the choice we face in the real world. We have “almost capitalism,” which has made the U.S. a rich nation.
Some politicians, such as Mayor Pete and Crazy Bernie, would prefer to move the nation toward “almost socialism.”
They don’t intend (I hope!) to go too far in that direction, but incremental moves in the wrong direction will cause incremental weakening of American prosperity.
And they’re dead wrong on the issue of income growth.
P.S. Many of the Democrats say we should copy the statist policies of various European nations. I wish a journalist would ask them why we should copy the policies of nations that have lower living standards.