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America's reckoning and Donald Trump

By Dr. Peter Morici                                                                                                  
web posted May 16, 2016

America's economy is a mess and social fabric fraying.

Powerful computers, handheld devices, robots and artificial intelligence make our lives easier and workers more productive but destroy jobs at an alarming pace. The new opportunities created require a better education than most Americans receive.

These pressures are exacerbated by competition from Germany and other northern European countries where job training is better and Asia where labor is much cheaper. This is multiplied yet again by Washington's failure to negotiate good international trade agreements and adequately defend Americans from foreign cheating on those agreements.

Politicians at all levels—obsessed with political correctness, victimhood and identity politics—have dumped billions into failing public schools and universities, financed an increasing array of entitlements instead of adequate public investments in R&D and the infrastructure needed to support a technology-based economy, sowed divisions and suspicion among ethnic groups, between men and women, and the successful and those deserving a genuine hand up.

No surprise, high schools churn out students unprepared for college or vocational programs, and many university graduates lack the critical thinking and technical skills needed to prosper in a technology-intensive workplace. Businesses constantly complain about the shortage of adequately skilled job applicants.

Since 2000, annual GDP growth has slowed to 1.7 percent, new business startups and the percentage of adults working are down and average annual family incomes have slipped $4000. During the Reagan-Clinton years, the economy grew at twice the rate and otherwise performed much better.

The middle class is shrinking, suicides and drug abuse are up, fertility has dropped precipitously, millions of college graduates are stuck at places like Starbucks, and home ownership is at a 48 year low.

The Obama Administration has doubled down on the policies that manufactured these conditions. It intensified pressures on businesses and universities on racial and gender quotas, and imposed political indoctrination of employees and students through mandatory diversity and sexual harassment training and the like.

It has expanded Medicaid, food stamps, the earned income tax credit and other income support programs, and increased loans and grants to students ill-prepared to acquire much of anything at college except burdensome debt and an impulse to vote for more government handouts.

Now, Hillary Clinton wants to further expand these initiatives, for example, by generalizing to the national level the California Fair Pay Act, which would require businesses of all sizes to justify virtually every hiring and salary decision to the Labor Department, jacking up the minimum wage to unstainable levels, extending Medicare to Americans over 50, establishing broad federal funding for child care, and making tuition, room and board virtually free to students at state universities. All this funded by further raising what are among the highest taxes on business in the industrialized world.

Donald Trump indicts the tyranny and destructive consequences of political correctness and identity politics but no politician can run and win the presidency by promising to cut social programs. He does promise to do something about bad trade agreements and high taxes smothering new business startups and investment.

Trump's language may be crude but after 40 plus years in the trenches of academia, managing bureaucrats and in policy battles of Washington and advising corporate leaders, I can attest he is absolutely right.

The big problem he or any Republican faces running for president is that too many poorly- educated Americans, minorities and women have become dependent on government largess and preferences for employment opportunities, and none can speak honestly without being branded a racist, sexist, homophobe and otherwise ridiculed to their demise in the New York Times, Washington Post and major network newscasts.

Simply, there are more Americans on the dole and in government mandated sinecures than engaged in productive activities.

The takers can outvote the makers to block any effort to end the madness.

This is the kind of dysfunction that brought down Rome. ESR

Peter Morici is an economist and business professor at the University of Maryland, and a national columnist. He tweets @pmorici1

 

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