It is impossible to deny that America and the rest of the world are more economically unequal than ever before. The three wealthiest Americans possess a higher net worth than the entire bottom half of U.S. society. In cities like New York, poverty is soaring.
In theory, Democrats in blue states are supposed to represent the poor and the working class, but the record shows a different reality. During the Obama administration, 95% of income gains went to the top one percent. Bill Clinton abolished welfare as we knew it and brought us the North American Free Trade Agreement, which eliminated countless good-paying factory jobs. Today’s California – led by Gavin Newsom – is now the most glaring example of income inequality. Despite spectacular wealth, the Golden State is the nation’s poorest based on the sky-high cost of living.
In each instance, Democrats relied on an unfettered market to address society’s ills. Barack Obama believed that the market could make healthcare more affordable. Clinton believed that mass incarceration and a smaller safety net would create incentives, solving poor people’s problems. And Newsom now believes that the free market can solve California’s affordable housing crisis.
Democrats once mocked Ronald Reagan’s trickle-down theory – that if you showered privileges on the super-rich, it would trickle down to the underprivileged. But what did they actually learn from the Reagan era?
While trickle-down Democrats sound different than Reagan, they have a whole lot in common. The belief in the supernatural power of the marketplace to solve all problems is based on a false premise that unregulated capitalism meets human needs rather than extracting profit for privileged elites.
There is no doubt that capitalism can advance innovation and economic vitality. But gorging on too much of a good thing makes you sick. People should be free to pursue great wealth as long as their urge is necessarily constrained by the resources that are required to feed, house, educate, and treat everyone. That is an investment in the quality of life for society as a whole, but it is not the case today.
The failure to house California’s population is the most glaring example of trickle-down economics gone wrong. Rather than regulating rents that keep increasing, Newsom has fought tooth and nail against rent control. Instead of requiring developers to include truly affordable units in their mega-projects, they have been granted a king’s ransom in government incentives and exemptions. Even this giant wealth transfer wasn’t enough: California taxpayers also have shelled out tens of billions to the affordable housing industrial complex that has been wasted on stopgap band-aids or $1-million-per-apartment boondoggles.
The result? The greatest homeless crisis since the Great Depression. And there is no end in sight. Democrats like Newsom continue to kowtow to Big Real Estate. From Nathan Click to Jim Deboo and Ace Smith, Newsom’s inner circle is all on the take from the California Apartment Association, which vehemently opposes any form of rent control.
Is it so hard to understand why the poor and the working class feel betrayed? They have faithfully given their votes to Democrats for decades, only for their leaders to turn around and pander to billionaire real estate interests. Conditions have become so extreme that tens of millions of people are desperate for answers, but all they get from trickle-down Democrats are the same, warmed-over vulture capitalist non-solutions to their problems.
If change is to come, it will have to come from the bottom up. Corporate Democrats who owe their offices to the super-rich won’t challenge the hegemony of American billionaires. The creative policy fixes to issues like housing, which is a human right, will come from citizen action that demands better from our elected officials. It will come from ballot initiatives like the one that expands rent control, which is up for debate in California this year.
Otherwise, Americans will turn to reactionary policies that only increase suffering. The choice is ours.
