The Economics Fueling Trump, Sanders

SMITH BRAIN TRUST — “America is witnessing a political supernova — voter flirtation with Donald Trump and Bernie Sanders — because both political parties have failed ordinary folks,” says economist Peter Morici at the University of Maryland’s Robert H. Smith School of Business. Those words are in Morici’s column on the eve of Trump’s and Sanders’ New Hampshire primary victories. With the results in, Morici says Trump would set himself up for the GOP nomination and the White House by making “moderate governor” John Kasich his running mate.

“Kasich, like Trump, is not an ideology-pure conservative,” he says. “Rather both are malleable personalities interested in workable solutions — for example, instead of denying poor folks health care for partisan reasons, the governor implemented the Medicaid provisions of the Affordable Care Act expansion in Ohio.”

Meanwhile, Morici notes that Sanders beat Hillary Clinton yesterday across all demographic categories, including women, except voters over 65. “But she still has a commanding hold on minority voters who are much more important in Democratic primaries elsewhere going forward,” he says.

But dissatisfaction with both parties, coupled with perceptions of Sanders and Trump as political outsiders, has fueled their early momentum. 

Morici says positive signs in the economy — jobs growth for 64 straight months, 4.9 percent unemployment and nominal wages rising — are misleading. “Jobs growth was twice the pace during Ronald Reagan’s presidency and the official unemployment rate is so low because 7 million American men ages 25 to 54 have quit looking for work altogether and don’t get counted,” he says.  Plus, “family incomes, after accounting for inflation, are down $1,650 under Obama.” 

Bankers and corporate elites are doing great, but most young people, he says, are taking a beating: “Unable to find satisfying and adequately paying work, buy a home or afford a decent apartment and now forced to purchase expensive and often inadequate insurance on Affordable Care Act exchanges, it is no surprise that many young people — including young women — reject Hillary Clinton’s clarion call to continue the Obama revolution. And they find Sanders’ message to break up the big banks, scuttle the present health care system in favor of a British-style national health service, and generally reorder America’s economic system darn appealing.”

For Clinton to ward off Sanders, “she will have to continue to emphasize positions that younger women embrace, such as the proposed Paycheck Fairness Act, and issues important to African Americans and Hispanics — police behavior and social issues beyond simple economic justice.”

Meanwhile, the GOP establishment “offers threadbare bromides — free trade, tax cuts and deregulation — that have been tried and failed,” Morici says. “If Trump moderates his rhetoric and, with the help of Kasich, polishes his pragmatism on taxes, health care, immigration and national security, he offers both sexes what they want most — a change in direction from the slow-growth policies of Presidents Obama and Bush and the promise of a more effective national security policy.”