Whatever the outcome of the 2016 presidential election, the summer of 2015 will be remembered as the summer of Trump and Sanders. The other candidates, especially the Republicans, could learn a lesson from the two renegades, who have figured out how to capitalize on the fact that America is in a funk even as its economy improves.
Unemployment is at a seven-year low, and job growth is steady, but 65 percent of respondents in the latest NBC/Wall Street Journal poll say the country is on the wrong track. Six years ago, at the low point of the recession, the figure was 49 percent—when unemployment was 9.5 percent. It’s 5.3 percent today.
Nearly all of the 2016 presidential candidates agree that middle-class stagnation is a key source of America’s foul mood. But Trump and Sanders have done more than the others to blame well-connected, powerful interests for that stagnation. Sanders rails against banks, and Trump against entire countries. They have pledged a fight against forces over which everyday Americans feel they have no control, while the majority of other candidates speak as thoughtful managers and policy wonks. Hillary Clinton and GOP favorites Jeb Bush, Scott Walker, and Marco Rubio engage economic issues as capable policymakers.
But to many Americans, low wages and low-quality jobs are symptoms of a deeper problem in which, to use Elizabeth Warren’s words, the game is rigged. Banks and corporations, foreign governments, and our own government are profiting from policies they have shaped with politicians at the expense of ordinary people. Sanders’s promise to break up the banks or Trump’s promise to take on China (all by himself, apparently) strike a chord with frustrated voters who feel helpless and want someone to fight for them.
The feeling that the powerful are rigging the game against the rest of us runs deep. According to Gallup, the share of Americans who say they are satisfied with the freedom they have to choose the direction of their lives has dropped steadily over the past decade, while the percentage of Americans who believe the U.S. government is corrupt has grown. For nearly 50 years until 2000, more than 80 percent of Americans said the United States offers plenty of opportunity to get ahead, but that figure steadily dropped to roughly 50 percent in recent years. In Pew’s political typology study last year the vast majority of Americans, including steadfast conservatives and “young outsiders” who lean right on many issues, believe too much power is concentrated in the hands of too few companies. A smaller yet still significant share of people in the survey believes our current economic system favors the powerful. All of these trends stand against the backdrop of flagging confidence in institutions. With the exception of the military and small business, every institution Gallup tracks suffers from lower public support than its historical average, with the presidency, the courts, and Congress near the bottom along with banks.
Middle America’s anxieties are not unfounded. The regulatory state and big business are getting bigger together as government policy increasingly favors the powerful. From 1994 to 2013 Fortune 100 companies grew their share of nominal GDP from 33 to 46 percent, while federal regulations grew nearly 30 percent. Vast new regulatory powers at the Departments of the Treasury and Health and Human Services are making banks and insurance companies fewer and larger. This distention of the regulatory state has exerted a downward pressure on income and growth over the years. According to a 2013 study, if we’d had the same regulatory system we had a half-century ago, we would have seen growth of 2 percent more per year, which effectively means the economy would be more than three times larger today than it is.
Democrats have done a better job than Republicans talking about Americans’ feeling of disempowerment. The ascendant progressivism of Elizabeth Warren and Bernie Sanders, which Hillary Clinton is embracing even if not persuasively, uses economic security as its framework for fighting back against the forces of inequity in America. Their view relies on a more muscular redistributive state and old-fashioned tools of the left such as confiscatory taxes, higher minimum wages, and stricter labor laws. When Hillary Clinton threatened to impose “workforce protections” on sharing-economy companies such as Uber and Airbnb in her July economic address, she was using the language of economic security.