Four years ago, I wrote about how the pessimism inherent in the brands of populism bandied about by both Donald Trump and Bernie Sanders carried a lot of similarity and that they both misunderstood market mechanisms (albeit in distinctly different ways). In the same essay, I mentioned that sustained expansion would finally be reaching lower-income residents and lamented the risk of that growth misinforming a generation on the effectiveness of populist policies. Four years later, we are looking at a similar election with those exact same candidates leading arguments of which type of populism is best with both of them at the forefront of the political conversation. The only difference is a further minimization of the pragmatic voice and a level of divisiveness not seen since the era of civil rights legislation and the war in Vietnam.
The cherry on top of this distasteful cake is a loss of trust in both institutions and formerly unimpeachable sources of information. Fears of bias in the media abound and there is no shortage of those willing to play off of the emotions of their consumers to generate a few extra clicks. At the heart of it is the perfectly understandable belief that the people setting the rules of the game are looking out for themselves instead of normal people – the bulk of their constituents.
Many feel they do not have a fair shot at succeeding – at breaking out of their economic class – while big corporations are given every possible advantage. Others complain of the expenses of healthcare and housing or paying down student debt. Meanwhile, growth has been anemic for more than a decade. Unexpected extreme weather events are cropping up more frequently because of climate change. Problems are diverse and proposed solutions so disparate that keeping track has become much too time-consuming for the average person to maintain.
So, who broke American capitalism? Part of the answer is that it is not as broken as most believe and most of the problems are fixable. Food costs have dropped precipitously while quality has improved. Consumer goods such as clothing, shoes, electronics, and appliances are cheaper, more accessible, and more user friendly. Information has fallen to a cost of nearly zero (if you know where to look). Even healthcare, much-maligned, has improved average (big emphasis on average) health outcomes if you control for accidental deaths, gun violence, and the opioid epidemic. Finally, carbon density per unit of GDP has been falling for decades, giving some hope to environmentalists.
What, then, of the malfunctioning bits? How did the economy break? The answer is staring us in the face. We all broke it. We broke it by legislating for special interests (that includes our own), we broke it by trying to increase the lifespan of companies that provided a couple jobs at great expense to the government and the environment, and, worst of all, we broke it by letting big corporations set their own rules in ways that prevented the little guys from gaining a foothold. Halfway solutions and misunderstanding the problems have harmed far more than they have helped. Meanwhile, some with access have manipulated the system to gain unfair advantage, to extract wealth, or even to box others out so they might maintain a semblance of the past.
To better explain the situation as I understand it and my prescription for each ailment, I will be writing a series on this. Look out for more over the coming weeks and subscribe to my newsletter by clicking here to make sure you don’t miss anything.