Something is amiss when these trying economic times are insufficient to unseat an incumbent president.
Some suggest the $800 billion stimulus plan and the automobile industry bailout helped solidify key sectors of the president’s electoral coalition. While this is very true, one must assess the underlying reason(s) for the success of these measures.
As I suggested in a previous column
, the share of wealth for the top 1 percent has grown at an extraordinary rate over the past three decades.
Fiscal and monetary measures have enabled this shift, producing an extremely bloated financial industry — one that focuses more on speculative price moves than on productive investment that increases employment and income. Financial assets are now worth nearly 10 times the entire economy, up from 4 times gross domestic product in 1980.
In addition, real median income (adjusted for inflation) has grown less than 1/5 of 1 percent each year over the past 30 years and tens of millions of Americans are unemployed, underemployed and/or receive government assistance.
Hence, the middle and lower class have come to believe that the economic rules of engagement are biased, and their future economic prospects are not strong. While many believe the president’s policies have been weak, on balance they are less certain of the Republican recommendations.
Conservative principles that promote fair, effective resource allocation need to be coupled with a deep understanding of the plight in the middle- and lower-socioeconomic strata. Measures that favor direct investment, employment and income growth while maintaining a strong safety net are critical.
Social issues played a more significant role in this election than many anticipated. Future social policies that adhere to specific principles might require more flexible interpretations that are communicated with greater empathy.
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