Tuesday, November 11, 2014

The Great Wage Slowdown For Which Neither Party Has A Plan

The average middle class worker earns less today than when Obama took office.  That is one of the reasons why the Democratic Party was clobbered in the mid-term elections.  Neither party has offered a plan to rectify the situation, but that did not matter to Republicans.  They ran against a president that they have successfully discredited.  Nothing inspires their base more than hatred for the other team.  The Democratic Party has not inspired its traditional base, and it doesn't have George Bush to run against.  Both party's talk about reforming education, which seldom works,  and other solutions which may be useful in the long run, but the public is not interested in the long term.  Some states and localities increased the minimum wage enough to make a difference, but democratic candidates did not capitalize on republican opposition to an increase in the minimum wage.

The Republican Party has traditionally positioned itself as the tax cutting party.  In fact, they have made major changes to the tax code.  Their tax cutting strategy is very simple.  The made major cuts in taxes that benefit business and the super rich, and they threw a few bones to the middle class in the process.  President Obama made some progress in reducing the tax breaks for the super rich, while retaining the middle class tax cuts, but the public still believes that the tax code favors the super rich.  Tax cuts for the middle class,  partially paid for by higher taxes on the super rich, offer a short term solution for middle class households whose wages have not grown.  That would be a winning political strategy for Democrats but it would make it more difficult for the party to raise money for its political campaigns.  The super rich donate to both political parties.  There are a few enlightened billionaires, who believe that they should pay higher taxes, but they are few in number.

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