Republicans have convinced their voters that Obama's "policies" are to blame for sluggish wage growth. They need to do better math.
The new Federal Jobs Report came out Friday and the results, to an objective observer (meaning not a Republican one) were somewhat mixed. The upside of the Labor Department report was that 292,000 new jobs were created during December—a seriously positive number that means almost 300,000 more people have jobs now than had jobs in late November. The downside of the report was that wages/salaries for everyday Americans continue to flatline.
In “normal” times, this kind of jobs report would signal an upcoming, measurable increase in consumption and housing—historically, the two primary drivers of economic expansion and job-growth in the U.S. But, in “normal” times, wages/salaries are not flatlining in an economy that added 300,000 jobs in the previous month. Hence, given the stagnant state of wages/salaries, it is improbable that such growth will be of “measurable” quality because its only real driver will be the newly-employed. Relative to them, the already-employed don’t have any more money to spend than they did the month before. (In other words, don’t listen to that cheery, overly-optimistic in-house analyst!)
So, you rightly ask, if everyday Americans didn’t get a make-a-difference share of the wealth created by economic growth strong enough to create 300,000 jobs, who did?
The answer is simple: Given that our our economic/financial system is rigged at both the macro and micro levels, the rewards of that growth left the most wealthy 5% of Americans even more wealthy and left the rest of us even further behind relative to wealth/capital/income/opportunity inequality.
Republicans, of course, ignored both the increase in job numbers and the continuing upward distribution of income in order to seize on the issue of stagnant wages/salaries as a cudgel with which to batter “the Obama economy.” And, right on cue, internet message boards and right-wing radio shows were flooded with comments from conservatives in the hinterlands looking to get in on the fun of throwing darts at the president. The latter only confirmed that the Republican base of middle- and working-class white people is woefully ignorant about the economic/financial issues it faces and either unable or unwilling to do the math for itself.
The likes of Donald Trump (huckster), Paul Ryan (faux-policy wonk), Marco Rubio (lightweight frat boy) and Grover Norquist (tool of Big Wealth & Big Business) tell them that the policies of Barack Obama are responsible for them “falling further and further behind every year.” And, though neither Donald nor Paul nor Marco nor Grover ever provide specifics that connect the dots between growing inequality and the president’s “economic policies,” Republican voters simply accept their claims at face value.
Were any Republican to do their own math, however, they would discover that their ideological heroes have spent the past 35 years pushing the very policies—or, better, rigging the very system—that have/has resulted in the economic rewards of the American economy accruing only to the multiple in-country and offshore portfolios of the top 10% of American income-earners.
How severe has this upward redistribution of income been?
While the Economic Policy Institute notes that, between 1978 and 2012, worker compensation grew just 5.4%, the Keystone Research Center notes that, during virtually the same period of time, CEO compensation rose by—wait for it!—876%. Indeed, while the purchasing power of CEO compensation rose exponentially during those years, the Bureau of Labor Statistics confirms that the present hourly wage, adjusted for inflation, has the same purchasing power as it did in 1979.
In other words, were Republican voters to do their own math, they would find that there is no such thing as an “Obama economy.” The inequality gap and the concomitant salary/wage stagnation that exists today began, to a minor extent, in the early 1970’s. But the widening of the gap relative to wealth, capital, income and opportunity began a rocket ride to the stratosphere with the Reagan policies—tax law became far more regressive, anti-labor policies were instituted, expansion of both social welfare and access to credible healthcare were severely limited—of the1980’s. And Republicans have not looked back since, doubling-down in each of these policy areas at every opportunity.
Nobel-laureate Paul Krugman notes that the conservative effort to blame lower wages and rising inequality primarily on “competition from emerging-economy exports”—read, Obama trade policy—is nonsense. While it is a minor factor, he says, Republicans are using it as a canard to distract those hurt by the Republican policies that are actually at fault: “Soaring incomes at the top were achieved…by squeezing those below:
 cutting wages,  slashing benefits,  crushing unions, and  diverting a rising share of national resources to financial wheeling and dealing…Perhaps more important still,  the wealthy exert a vastly disproportionate effect on policy. And elite priorities—obsessive concern with budget deficits, with the supposed need to slash social programs—have done a lot to deepen [wage stagnation and income inequality].” Add to his equation the fact that, between 2001-2007, capital gains accounted for 80% of the increase in household income in the top 20% of income-earners and you can understand why (1) Republicans so adamantly oppose any increase in the tax on capital gains and (2) how regressive tax policy becomes a major factor in generating inequality in its every form.
What fascinates me, however, is a growing sense among Wall Street investor-types that salary/wage stagnation and rampant inequality are, to put it plainly, “bad for business.”
Both Warren Buffett and the idiosyncratic Bill Gross—co-founder of PIMCO who is now with Janus Financial—share the belief that, as Gross writes, “…almost all remedies proposed by global authorities to date have approached the problem [of inequality] from the standpoint of favoring capital as opposed to labor.” He continues by saying that, ultimately, “return on capital investment…[is] dependent on returns to labor in the form of jobs and real wage gains. If Main Street is unemployed and under compensated, capital can only travel so far down Prosperity Road.”
And, to put an exclamation point on his thesis, he ends by saying, “Investors/policymakers of the world wake up—you’re killing the proletariat goose that lays your golden eggs.”
Which begs the question: “Are Republicans more committed to the interests of Wall Street and Big Money or to what Timothy Noah hilariously characterizes as “an absolutist, borderline-psychopathic ideology—pushing to dismantle as much of the federal government as they can get their hands on?”
Which begs an even more interesting question: “Could it be that Wall Street—still looking out for its own interests, of course—is more concerned about the plight of the American worker than the Republican Party?” Were I part of the Republican base, I believe I’d get my calculator out and begin doing the math for myself.