The Tribune Democrat, Johnstown, PA

William Lloyd

January 12, 2014

William Lloyd | GOP must now turn its focus to have-nots

JOHNSTOWN — Judged by traditional standards, the economy improved in 2013.

Although overall growth was sluggish, it exceeded most forecasts. The unemployment rate declined significantly. The stock market closed on a record high. Home values continued to recover. The growth in inflation was modest. Even health care costs rose much more slowly than before the Great Recession.

Despite the positive signs, 79 percent of the respondents to a December Washington Post-ABC News poll stated that the economy is still in a recession. The likely reason for the apparent contradiction is a simple fact: The economic status of most Americans is stuck in neutral, at best.

According to the U.S. Census Bureau, the top 5 percent of U.S. households are earning about as much as they did before the Great Recession. In contrast, the typical U.S. household is earning 8 percent less than before the recession.

That the annual income of most Americans is stagnant helps explain the intense opposition to recent increases in the state gas tax and in local property taxes. Regardless of how necessary these increases may be, they amount to a pay cut for many households. That’s one of the reasons why the Republican promise of “no new taxes” is so appealing to blue-collar voters.

The top-heavy recovery from the Great Recession continues a long-term trend that has seen the wealthy gain disproportionately. For example, Census Bureau data shows that the share of the country’s income received by the top 5 percent of households was only 17 percent in 1967, but is more than 22 percent today.

Furthermore, according to University of California-Berkeley economist Emman-uel Saez, this trend has resulted in the highest-earning 10 percent of Americans receiving a bigger share of the country’s income in 2012 than at any time since at least 1917.

Some observers have likened the current income inequality in the U.S. to the “Gilded Age” of the late 1800s and early 1900s, when a handful of industrialists, railroad tycoons and bankers amassed huge fortunes while their workers lagged far behind. Interestingly, it was progressive elements in the Republican Party, including President Theodore Roosevelt, who led the movement to break up the monopolies and expand worker and consumer rights.

Unfortunately, today’s national Republican Party has demonstrated little interest in following the Teddy Roosevelt precedent.

The radio talk-show hosts and cable television “talking heads,” who drive the Republican agenda, routinely dismiss complaints about income inequality as “class warfare.” That’s an easy – and predictable – argument for them to make. Because most of them are much wealthier than the rest of us, they have a vested interest in preserving the status quo.

At their 2012 national convention, Republicans presented many inspiring speakers who rose from humble backgrounds to the top in business or government. Night after night, the convention message was that every person can succeed if he or she just works hard enough.

However, contrary to the Republican gospel, hard work does not guarantee success. Some people are simply luckier than others; they have the right contacts or are in the right place at the right time to take advantage of opportunities. Others are knocked off the ladder of success when a factory closes or when someone in the family has a heart attack, is diagnosed with cancer or suffers a disabling injury.

Some ambitious students must change their career goals because they cannot afford the expensive colleges that are the ticket to more lucrative jobs.

According to the Washington Post-ABC News poll, 57 percent of Americans want the federal government to pursue policies to reduce the gap between the wealthy and the less well-off; 64 percent believe that current policies favor the wealthy.

Nevertheless, in 2013, Congressional Republicans refused to close even one special-interest tax loophole in order to continue federal benefits for the long-term unemployed. They stymied the enactment of a new Farm Bill by insisting on deep cuts in food stamps. They also resisted an increase in the minimum wage.

Congressional Republicans are correct that some people do not help themselves as much as they could. However, with unemployment around 7 percent, it is doubtful that many of the long-term unemployed are passing up jobs for which they are qualified. Most able-bodied adults on food stamps are either laid off or are working for low wages. All the employees in minimum wage jobs are working; they simply are not earning enough to make ends meet.

In 2014, Congressional Republicans should be as zealous in helping the truly needy as they have been in protecting the privileged few.

William Lloyd of Somerset represented Somerset County in the state House of Representatives (1981-1998) and served as the state’s Small Business Advocate (November 2003-October 2011). He writes a monthly column for The Tribune-Democrat.

 

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