Things To Come

Here’s David Brooks’s assessment in his New York Times column of President Trump’s 2020 State of the Union address:

Trump’s speech reframes the election around this core question: Is capitalism basically working or is it basically broken?

Trump can run on the proposition that it’s basically working. He has a lot of evidence on his side: The unemployment rate is the lowest in decades. Wages are rising. The typical family income is higher than it has ever been.

Americans seem to accept this position. Confidence in the economy is higher now than at any moment since the Clinton administration. According to Gallup, 59 percent of Americans say they are better off than they were a year ago. Three-quarters of Americans expect to be even better off a year from now.

Democrats, by contrast, have congregated around the message that capitalism is fundamentally broken and that the economy is bad. As Matthew Yglesias noted recently in Vox, when Democrats were asked in the PBS NewsHour/Politico debate if the economy was good, they all gave the same answer.

Joe Biden: “I don’t think [Americans] really do like the economy. Look at the middle-class neighborhoods. The middle class is getting killed. The middle class is getting crushed.” Pete Buttigieg: “This economy is not working for most of us.” Elizabeth Warren: “A rising G.D.P., rise in corporate profits, is not being felt by millions of families across the country.” And so on down the line.

An opposition party can retake the White House in a time of rising economic conditions, but it can’t do it by denouncing capitalism and it can’t do it by denying the felt reality of a majority of Americans.

Democrats now face a choice. Which is the higher risk? Nominating Bernie Sanders or not nominating him? Neither is risk-free.

My take: blue collar workers are being “crushed” by illegal immigrants workers while middle class workers are being “crushed” by legal immigrant workers. Most of the workers brought in by the outsourcing companies are not the skilled workers for which the H1-B program was developed but entry level workers. That doesn’t augment the middle class; it supplants it.

Financialization of the economy is hammering both blue collar and middle class Americans. Business investment ain’t what it used to be. We can hardly expect what passes for much of business investment these days to have the some results as investing in expanded facilities would.

Capitalism isn’t fundamentally broken. It’s falling into disuse.