Federal Reserve Chair Jerome Powell says that the “growth of economic activity has slowed.” The usually optimistic International Monetary Fund projects U.S. economic growth will drop to 1.8 percent in 2020 — despite trillion-dollar annual deficits and the Fed putting off any more interest rate hikes for the rest of the year. If Powell and the projections are right, the long recovery that began after the Obama administration saved an economy that was in free fall is nearing its end.
Yet, President Donald Trump trumpets the “best economy” ever, touting low unemployment. So this is what we get at the height of recovery? This is as good as it gets?
It’s true that wages have begun to rise a bit, with demand for workers and minimum-wage hikes in states and localities finally giving a boost to those on the bottom. But the average weekly pay has grown less than 1 percent per year for the decade. Low-wage workers’ hourly pay in 2017 barely surpassed what they earned in 1979, while that of high-wage workers has increased nearly 50 percent. Inequality is at extremes not seen since 1928. Workers are still not capturing a fair share of the increased productivity that they help to create.
And while incomes have stagnated, key costs have soared. Health care remains remarkably expensive; millions go without insurance or are underinsured. Gallup reports that since Trump took office, the number of Americans without health insurance has increased by a stunning 7 million. Female, younger and lower-income workers have seen a greater decline than those who are male, older and/or wealthier. Life expectancy has declined for the third year in a row. The lack of health care explains part of that. The savage opioid epidemic — a disease of despair — accounts for another chunk.
Student debt continues to build; 44 million Americans hold $1.5 trillion in student loans, second only to housing debt. For borrowers leaving school in 2017, the average debt was at $28,650. Not surprisingly, given the financial pressures, nearly one-third of 18- to 34-year-olds live with their parents. Delinquency and default — devastating reversals for young borrowers — are rising; 7.7 million borrowers are either in default or in forbearance, racking up higher debts.
Our retirement crisis grows worse as well: 45 percent of Americans report that they have zero savings for retirement. A similar amount, not surprisingly, expects to be financially insecure when elderly. Companies continue to eliminate pension plans. Most small businesses don’t even offer 401(k) plans.
Nor have we used the recovery to head off real and growing challenges. The threat of climate change grows by the season. Our infrastructure remains dangerously decrepit. Trump’s top end and corporate tax cuts worsened inequality without producing a surge in investment, as corporations used the tax breaks to pay out dividends or buy back their own stocks, boosting executive bonuses.
This list could go on. And, under current assumptions, these are the “good times.” Trump wants “his people” to applaud all the “winning” that he’s doing. He wants credit for the good economy. But he’s basically stayed with the traditional conservative Republican playbook — cutting taxes for the wealthiest first, slashing protections for workers and consumers, throwing money at the Pentagon while seeking to cut back domestic investments, remaining bizarrely in denial about climate change.
Progressive Democrats have begun to call for bold reforms — Medicare for all, the Green New Deal, a $15 minimum wage, empowering workers, getting big money out of politics and reversing growing corporate concentration — not because, as Republicans put it, Democrats have lurched into socialism. Nor is it because of Trump derangement syndrome, although that surely is widespread. It’s because the current arrangement doesn’t work for working people — even when it is as good as it gets. Americans aren’t tired of “winning”; they are tired of struggling hard merely to stay afloat. Trumpism has failed them even at the height of the recovery. It’s time for a completely new deal.
Katrina vanden Heuvel, editor and publisher of the Nation magazine, writes a weekly online column for The Washington Post.