Summary: Here we explore an important root cause of the rising stress on the US political regime, which combines with other similar problems to create a situation exploitable by extreme political movements — of the sort we associate with lesser nations, not America. Unless we wake up and act, we might find America has become one of them.
Why so much dissatisfaction today, so that both Democratic and Republican parties have rebellions (challenges to the parties’ power structure)? Polls show a pervasive loss of public confidence in America’s institutions (except, disturbingly, the policy and military), which contributes to the stress on the regime.
Also significant is the slowing rate of economic growth (a similar dynamic contributed to the rise of populism and progressivism during 1873-1932). To learn about this see the interactive graphs at the Regional Economic Analysis Project (REAP). Perhaps the most important metric for people is the annual growth of real per capita personal income during the Boomer’s years. Note that our memories do not well match the facts of the past.
- 1960-69: 3.5% — The golden years,
- 1970-79: 2.3% — The terrible 1970s,
- 1980-98: 2.2% — The Reagan Revolution (tax cuts!),
- 1990-99: 2.0% — The tech boom,
- 2000-09: 1.2% — The Bush Jr. years (tax cuts!),
- 2010-14: 1.4% — First half of the Obama years (partial reverse of Bush Jr. tax cuts).
The sad reality is slowing growth, decade after decade. We have tried various nostrums; none have worked. Worse, these are mean growth rates. Median growth would be lower (less affected by rising inequality) and better reflect results for average Americans
The distribution of this growth was, as always, uneven — but regional distribution is surprising. The economic stars by this metric were (in decreasing order) North Dakota, Mississippi, Arkansas, South Dakota, South Carolina, Virginia, Vermont, Tennessee, New Hampshire, North Carolina, and Louisiana. There is no obvious pattern. For example, South Dakota’s fortunes varied with North Dakota’s, strong in five of these six decades (not the 1980s) — despite it having little oil production.
Washington DC was #21. New York was #34. California was #47.
The Bad News
Look at growth during 2010-2014. The few economic stars in America: North Dakota, Wyoming, Oklahoma, and Texas. Nebraska was in the next tier (?). The other states varied from slow to slower growth.
The common element among the stars: petroleum. With spot WTI oil at aprox. $30 and natural gas at $2.20, these booms are dead. They’ll be joining the other states in stagnation-vile.
The worse news
After 1970 most of this slowing income growth went to the top 10%. Most of that went to the top 1%. Most of that went to the top 0.1%.
Slowing economic growth and rising income inequality are distinct phenomena, with different causes. For most Americans they are the hammer and anvil we live between. Combined with falling legitimacy of the US political regime, it creates a problem while diminishing the government’s ability to cope with it. This creates a situation exploitable by extreme political movements.
Especially since neither of the major political parties has much interest in any of these three problems (i.e., their remedies are not remotely proportional to the size of these problems). Interesting times lie ahead of America. Unless we get involved, re-taking the reins, they might be sad interesting times.
For More Information
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