On my last couple of visits to the USA, I've been shocked by how many people I met that are working three jobs to make ends meet. Everywhere I went, there were "Help wanted" signs, but for low-paying jobs, with short hours and no benefits. So yes, unemployment is low-but that is made irrelevant by the fact wages and benefits are even lower. Getting a job is not the challenge, it's paying for rent and health-care that is the problem.
This is why the false choice of Reaganomics/Free-Market Capitalism vs. Socialism is a useless way to frame the economic debate in the 21st Century. When the stock market goes up or corporations make a profit, that does not mean the money is getting to the average American. Billionaire Hedge Fund Manager Ray Dalio talks about us really having 2 economies: One that is making enormous gains for corporations and wealthy individuals, and another that remains flat or moving downward for the vast majority of Americans. Great distinction! This makes a lot of sense to me, but unfortunately both Liberal and Conservative news outlets report on the economy as if it's 1978 and so our politics talks about economics in a Cold War Capitalism vs. Socialism framework that is totally out of date.
A few things to think about:
-The average American cannot handle an unexpected $500 bill
-The average American only has about $120,000 saved for retirement at a time when people are living into their 80's and 90's. That covers about one year of retirement.
-The stock market is on an unprecedented hot-streak, but that money is being hoarded by corporations or going to purchase stock (not getting into the main economy).
-Many jobs are being lost due to automation. This always happens, but what makes this different is that technology is not just replacing rote, service jobs or hard labor jobs. Today's Artificial Intelligence can replace journalists, lawyers, and other high-skilled, white-collar labor. These are also machines that can learn and teach themselves new skills.
-In most places, 30% of American's money goes into housing with just about every market over-priced. Some of our key cities are becoming unlivable for the normal person with normal wages.
-The number one concern of Americans is paying for health-care. Few are prepared, and advances in health care mean many elderly (and their children who have to take care of them in old age) are looking at living longer, but paying astronomical prices for medical services and convalescent care.
-College has gone up 500% over the price of inflation since 1987 while professor wages have dropped and the hiring of under-qualified and poorly paid adjunct professors is the norm.
-The US had a $4 trillion national debt when Reagan left office. It is now $22 trillion with Trump adding an unnecessary billion in the last few months to cover losses over an unnecessary trade war (socialism for farmers). $19 Trillion was the point of no return where it's not possible to pay it back (heading into Greece territory).
-Think of the amount of money each family rich or poor has to spend on technological upgrades, computers, phones etc. In many cases, these are not optional. This is what is required to do your work, do your banking, and stay in contact in a globalized world. It's a large added expense that no one had in 1980.
-Due to the internet, the rich are able to see a lot more clearly what the rich have that they do not (a great recipe for revolution and populism).
-While 50% of Americans own stock, most own only a little bit of stock and get wiped out during the market crashes every 7-9 years or through fees. The stock market investors that truly win are the ones with large amounts of money and who can afford financial and tax specialists. That's where the big gains are.
The period after World War II was the fastest period of economic growth in US history and established the Middle Class. Tax rates were also very high. Elvis paid 95% in taxes and was happy to do it. Republicans like Eisenhower expected tax levels to be high and that's what helped to recover from the extreme imbalance of the 50 year rich-poor imbalance that led to the Great Depression.
When the economy tanks in the next couple of years (not "if"), or way of discussing American's economy is going to have to get a lot more sophisticated than just "Capitalism vs. Socialism" arguments. Countries that succeed in the 21st Century will value 1) an entrepreneurial environment 2) Corporate Responsibility 3) Taxes 4) Unions 5) Government involvement--especially in infrastructure and education.
Countries like Singapore, Switzerland, China, and the Scandinavian countries are ahead of the curve. They see that it is not one thing or the other. It's both. Meanwhile, in the US, our political and economic discussions seem to be stuck in 1980. The longer it takes for us to mature our discussion and make it more nuanced; the longer it will take for the US to economically recover.