Tucker Carlson Is Right About America’s Elites And Working Class

Tucker Carlson Is Right About America’s Elites And Working Class

America’s working class is being hurt, and it isn’t entirely their fault. The elites who made laws and welfare programs that are ruining their lives should bear responsibility for that.
Willis L. Krumholz
By

Responding to Mitt Romney’s bashing of President Trump in the Washington Post, Tucker Carlson criticized our elites for being self-serving, uninterested in serious policy fixes, and unable to admit they are wrong about a host of issues.

Tucker focused on the chasm between elites’ policy priorities—corporate tax cuts, and keeping the U.S. military in Syria—and working Americans’ policy priorities. “Our leaders don’t care. We are ruled by mercenaries who feel no long-term obligation to the people they rule,” said Carlson. He criticized the Republican Party for seeking to “make the world safe for banking, while simultaneously prosecuting even more foreign wars.”

Carlson said Middle America is in crisis. People aren’t happy, and cheaper iPhones won’t do the trick. Carlson noted one of the biggest lies is that you can separate economics from things that matter, like family, faith, and culture. He went on to talk about the crisis of American family breakdown, and how that is intertwined with working-class men’s stagnant wages. “Culture and economics are inseparably intertwined,” Carlson said.

It’s All the Working Class’s Fault

Carlson really hit a nerve. The ladies on “The View” and CNN’s Brian Stelter bashed Carlson as a Neanderthal for saying women want marriageable men, which is partly why stagnant working-class male wages are a problem. Never Trump National Review writer David French took issue with Carlson’s monologue too. His response article begins: “Carlson accurately identifies certain maladies, but they are maladies that public policy can’t cure.”

French argues the economy is basically fine for everyone, so doing the right thing and making good choices will lead to good outcomes. Ergo, if you suffer from flat wages, family breakdown, or poverty, it is entirely your own fault. Then French claims manufacturing jobs haven’t really “disappeared,” and says marriage is not a luxury, it is a ticket to affluence. In other words, the poor and working class are relatively less well off because they choose not to marry.

Overall, French says Carlson’s plea is just another example of a populists’ elevation of the political over the personal. French then countered Carlson’s point that policymakers are ignoring America’s working class by noting that America gives a lot to charity.

Yet absolutely none of the trends French highlights are solely due to the “free market,” or an amalgamation of individuals’ choices. All are negatively influenced by public policy, and could be positively influenced by thoughtful public policy.

French Is Wrong about Family Breakdown

For starters, French’s claims about charity being equivalent to a public policy focus is a straw man. Some “charitable” organizations can be entirely self-serving. And even the best charity is hard-pressed to replace the bedrock of civil society, our families. Carlson knows Americans give a lot to charity. He is instead talking about public policy that is indifferent to family breakdown.

On marriage and families, French is even more wrong. Yes, if you are poor and get married, that is statistically an automatic ticket into the middle class. But the story doesn’t end there. It is much more accurate to say that America’s poor and working class don’t get married because they are poor and working class.

Individually, people always have a choice, but overall the marriage divide isn’t a choice. It is a systemic problem associated with poverty, and largely caused by stupid decisions policymakers made long ago.

The vast majority of America’s marriage decline is concentrated among poor and working-class Americans. As marriage rates plummeted among America’s poor, the institution has remained resilient among America’s upper-middle and upper class, who still marry at rates similar to those 50 years ago.

Among the poorest Americans, marriage has all but disappeared. Poor Americans want to be married, but they don’t see it as attainable. Poorer Americans also want children, a goal that is attainable without marriage, thus the skyrocketing rate of non-marital births among poor whites and minorities over the past century. Today, 40 percent of American children are born out of wedlock, and one-third of American children are fatherless.

Fatherlessness is the greatest predictor of a child being stuck in poverty, spending time in jail as an adult, or mental health difficulties, among a whole host of other problems. Fatherless kids are even at a greater risk of abuse. David Autor and David Figlio studied, and rejected, the idea that these effects are due to dangerous neighborhoods or poor schools. They concluded that “neighborhoods and schools are less important than the ‘direct effect of family structure itself.’”

Displacing People’s Familial Habits of Self-Support

Yes, adults can always “choose” marriage. But bad choices affect future generations, and make it harder for children to make the right choice once they are adults. Not having married parents, in effect, tends to socially disable children. That’s a big reason social mobility in America is at an all-time low. If you were born into the wrong station, it becomes harder to make those right choices. And wrong choices become much more damaging, and difficult to undo, although it’s still up to you to avoid those wrong choices.

Heavy government incentives also make the right choice harder for too many Americans. Cash welfare started during the New Deal, but took off in the early 1960s, when Great Society welfare programs began to compete mightily with earnings from working-class men, paying out specifically when there was no man in the home.

Here’s Harvard’s Paul Peterson: “Some programs actively discouraged marriage. Welfare assistance went to mothers so long as no male was boarding in the household. Access to food stamps and Medicaid was automatic only if the welfare assistance met government approval. Once a family income crossed a specific threshold, access to these resources disappeared. Marriage to an employed male, even one earning the minimum wage, placed at risk a mother’s economic well-being.”

The benefits available—if only dad left the home—were extremely generous. According to Peterson, analysts at the time “estimated that in 1975 a household head would have to earn $20,000 a year to have more resources than what could be obtained from Great Society programs.”  In today’s dollars, that’s more than $90,000 per year in earnings.

Although today’s welfare no longer explicitly prohibits a father in the home, marriage is still heavily dis-incentivized. That’s because welfare is given out if a family is below an income threshold, and combining two adults’ incomes makes rising above that threshold more likely.

Great Society welfare programs began to compete with earnings from working-class men, paying out specifically when there was no man in the home.

So not only are elites doing nothing to address this issue, they caused the problem in the first place. In Minnesota, the child-care benefit program alone can have a marriage penalty totaling close to $20,000 per year, for a family with two small children (according to this author’s calculations). That program wasn’t signed into law by a Democrat, it was signed into law by George H.W. Bush. Now, federal programs including Obamacare’s subsidies have marriage penalties that reach well up into the middle class, and income brackets subject to these penalties are now starting to experience declining marriage rates and increased fatherlessness.

Carlson says de-industrialization, and the resulting dent to working-men’s wages, which started in the 1970s, is a big contributor to fatherlessness. It may be, but the breakdown of the poor American family started during welfare expansion in the 1960s, before heavy offshoring, although it did worsen in the 1970s and 1980s.

Either way, the plight of the American blue-collar worker provides another example of a group of Americans being hammered by policy choices beyond their control.

Federal Spending and Inflation Is Stealing Savings

Median U.S. wages have barely budged for 30 years. Many Americans have even seen declining purchasing power over this time. And that’s assuming we believe the federal government’s inflation statistics—if the federal government is underestimating inflation in the long run, the slide in earnings power is even worse.

So today the average American has little savings, and is loaded with debt. Only about 40 percent of Americans have enough savings to cover a $1,000 emergency. Half of Americans will likely struggle in retirement. U.S. consumer debt is at an all-time high, too. It used to be made up of mortgage debt, but so many people lost their houses in the last recession that consumer debt has shifted to auto and student-loans.

America’s working class used to deposit their money at the bank and receive a positive return after inflation.

Again, these problems began to arise five decades ago. The household leverage ratio in the U.S. went from a steady 80 percent pre-1970, to 130 percent by 1990, to an unstable 220 percent in pre-crisis 2008. Household debt increased right along with U.S. government debt. Total government, business, household, and financial debt was about 1.8 times national income (GDP) in 1980, compared with 3.5 times today.

That deserves some emphasis. For much of this county’s history, total debt hovered around a healthy 1.5 times national income. In just 40 years, that historical ratio increased by two turns, to 3.5 times national income.

The American blue-collar worker has borne the brunt of all these problems. French might say it is these people’s fault for not saving enough. But America’s working class used to deposit their money at the bank and receive a positive return after inflation. Why save when you get a negative return after inflation?

Or Americans could invest their money, but today we have serial stock market bubbles that have repeatedly wiped out nest eggs (it can take decades to make your money back after a market crash, even assuming the reinvestment of dividends, when factoring in inflation). Although it is a choice to take out debt to try to maintain one’s standard of living, can you really blame people when the alternative is slipping into poverty despite working? Plus, ultra-low interest rates make debt cheap. At this point, it is just a matter of supply and demand. Cheap debt equals more debt.

French Is Also Wrong about De-industrialization

What about U.S. de-industrialization? In a series of totally anecdotal tweets, French mentioned that if factory jobs were outsourced, it is because the factory couldn’t compete. Remember, French doubted the whole de-industrialization thing in the first place.

The American economy suffers from too little long-term investment, which should also be blamed on bad policy choices.

But this defies both evidence and reason. Yes, U.S. factory output is up overall, but oodles of production lines and jobs have been shipped overseas to areas with cheaper labor—chiefly China. French says automation is the cause for the sharp decline in factory jobs, and it is true that there is a debate among economists over whether China or automation is the primary culprit for factory job losses. But China caused a good chunk of it either way.

There is also ample evidence that more investment and automation would actually create more American jobs, with higher real wages, because this would boost productivity. In actuality, the American economy suffers from too little long-term investment, which should also be blamed on bad policy choices.

French is also wrong to say that offshoring to China is because of the “free market.” Low rates have meant huge mergers and acquisitions activity. But one of the only sectors not subject to control by a few powerful firms—and not making profits in excess of what would be the case in a normal competitive environment—is manufacturing.

In other words, there are barriers to entry among many industries, many created by policymakers, that are protected from offshoring. But manufacturing is not protected. This is also the result of policymakers’ choices.

This has allowed America to get away with overspending and building up huge debts, both private and government.

It is no mistake that America’s de-industrialization started when President Nixon took America off the Bretton Woods gold standard, which occurred around the same time America’s economy began opening up to foreign trade. In a normal international trading relationship, when a country receives American dollars in exchange for goods made overseas, that country would want to use the dollars to buy American goods. If America wasn’t making enough goods, or goods the rest of the world wanted, our currency would drop and we would all suffer a loss of purchasing power.

But because the dollar is the world’s primary reserve currency, other countries are more than happy to sit on dollars—often using these dollars to buy U.S. Treasurys—and not use those dollars to buy American goods. Countries can also suppress their own currencies, giving their exports an advantage, by building up their hoard of American dollars.

This has allowed America to get away with overspending and building up huge debts, both private and government. But in such a system, when America can keep buying from the rest of the world without our currency dropping, blue-collar Americans uniquely suffer from America’s collective bad policy choices.

An Ode to Populism

It matters whether French is right, because the dispute comes down to whether the system should continue to be tinkered with, or needs more radical overhaul. If families are disintegrating solely because of “culture,” or because individuals made bad choices, then radical policy changes will be ineffective or even harmful.

America needs elites, but our system won’t work unless these elites are smart and chivalrous enough to think beyond themselves.

But if families are fracturing even partly due to policymakers’ bad choices, then reforms are needed, and it is criminal that something wasn’t done long ago. The problem with deciding the latter is that it implicates a lot of people, including maybe French.

When Carlson uses the word “elite,” it isn’t some conspiracy word. It simply means the average or totality of decision makers, at the federal or state-level, and those who influence them. Unequivocally, this crowd has ignored important issues, and instead focused on tinkering with the tax code.

Welfare could be changed to boost poor married couples. America could pursue monetary reform, or go after other countries for currency manipulation. College debt hurts family formation, so higher education could be deflated. Health care was corporatist and broken before Obamacare. Why can’t Americans see the prices of the health care they consume before they consume it? And it is high time for a renewed antitrust push.

Politicians by and large don’t understand these things, or are unwilling to take on entrenched lobbies. That’s not good. America needs elites, but our system won’t work unless these elites are smart and chivalrous enough to think beyond themselves.

Count me, and I’m sure Carlson, among the growing number of Americans who will no longer accept tinkering around the edges, or countenance politicians pretending that a tax cut provides the answers that we seek. Far too often, many use “populist” to label anything they don’t like. But if being populist means we should care about America’s ailing working and middle class, here’s to the day when we’re all called populists.

Willis L. Krumholz is a fellow at Defense Priorities. He holds a JD and MBA degree from the University of St. Thomas, and works in the financial services industry. The views expressed are those of the author only. You can follow Willis on Twitter @WillKrumholz.
Photo John Ficara/FEMA

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