The forgotten American middle class spoke up, loud and clear, in Tuesday’s vote for an end to a policy world that focuses solely on elites and entitlements. In today’s Wall Street Journal, Daniel Henninger outlines the backlash these folks had to 2,900 days of a half-alive economy.
Let us be clear about the economic status of the American middle class, and indeed of the middle-class people in low-growth Europe responding to populist appeals there. Economic life isn’t bad weather. It is the result of politics. Wrong political decisions have economic consequences.
We didn’t have this sense of ennui or dissatisfaction during the growth years of the Reagan presidency in the 1980s or the Clinton presidency in the 1990s.
Barack Obama has been in charge of the U.S. economy for eight years. After passing a useless $830-billion stimulus his first year, Mr. Obama outsourced the economy to the Federal Reserve for seven years. The media let him off the hook for two terms, as if the London fog had caused what for large swaths of the middle class has been 2,900 days of an economy that remains half alive.
America’s Brexit? If so, Barack Obama and his heir-apparent Hillary Clinton were our Brussels—a crude, faraway power in Washington.
Donald Trump’s victory in blue Wisconsin was one of the election’s shockers. Well, 61% of Badger State voters said the economy was bad or “not so good.” After eight years of it, their vote was a rational choice, as was their decision to send economic reformer Ron Johnson back to the U.S. Senate.
In the case of GM, the forgotten man is the investing class that put up the risk capital that now owns 10.5%. It is the dealerships that took the risk to partner with GM and have been forced into closure. It is the auto companies left to compete against a taxpayer funded GM not knowing what policies and regulations are coming next (Ford, suppliers etc). It is the public and private investors that do not know if the rules will be changed again (look at how weak the S&P 500 and Dow are). It is the taxpayer burdened with in all likelihood higher taxes (the government didn’t make the $50 billion). All have incurred costs that can be measured in dollar terms today, and many that cannot be measured, that is, until it is too late. The damage of making rushed irrational decisions with other peoples’ money cannot be undone.
It concerns me how little regard Washington seems to have for the above mentioned group. New policies and regulations are already moving full steam ahead. The Wall Street Journal reports, “GM is still going to be looking for help in Washington, though. The company said earlier this year that it was seeking $7.7 billion in Energy Department loans to push ahead on more energy-efficient cars. To qualify for the money, it must be certified as ‘economically viable’ by the U.S. government, a step that could happen within weeks.” This is just the beginning. We have a new administration, fearful of failure, running a subsidized New GM that can undercut and outlast competitors, and create policy to push its progressive movement to the forefront. Stay tuned.
Recently Donald Trump explicitly acknowledged that he was fighting for the Forgotten Man during his campaign with the tweet embedded below.
Such a beautiful and important evening! The forgotten man and woman will never be forgotten again. We will all come together as never before
— Donald J. Trump (@realDonaldTrump) November 9, 2016
