May 12, 2019
by Steve Stofka
I spent the past week traveling with my sister to a family reunion near Dallas, Texas. In our travels, we passed through rural counties in southeast Colorado, western Oklahoma, and northwest and central Texas. In contrast to the signs of a brisk economy in the larger cities, some rural communities show signs of stress. Some roads leading off the main route need repair; some houses could use a fresh coat of paint; some stores have delayed maintenance. In some small towns most of the stores remain boarded up ten years after the financial crisis.
Candidates for the 2020 Presidential election must speak to
the two Americas. The Americans who produce the food we eat and the power that
lights our businesses and homes are not doing as well as those in the urban
corridors. Young people in rural America leave for the larger cities to find a
job or pursue an education. Older people with medical needs must move to larger
cities with hospital facilities available in an emergency.
Let’s turn to a proposal on the list of issues for the 2020 election – an increase in the Federal minimum wage. A person making a minimum wage of $15 an hour in Los Angeles earns a bit more than half of L.A.’s median household income (MHI). She may work 2-1/2 weeks to pay the rent on a one-bedroom apartment (Note #1). The MHI in rural America is about 20% less than the national average. In Limon, Colorado (population less than 1500), the MHI is about half of the national average (Note #2). $15 an hour in Limon is the MHI.
In 2009 and 2010, the Democrats controlled the Presidency, the
House and had a filibuster proof majority in the Senate. They could have enacted
a federal minimum wage that was indexed to the living costs in each county or
state. Why didn’t they fix the problem then? Because Democrats use the minimum
wage as an issue to help win elections. If Congress passes a minimum wage of
$15 an hour this year, they will have something new to run on in five years – a
raise in the minimum wage to $17 an hour. Voters must begin asking their
elected representatives for practical and flexible solutions, not political
banners like a federal mandated one-size-fits-all $15 minimum wage.
For decades after World War 2, Democratic Party politicians
who controlled the House refused to allow legislation that would index tax
rates to inflation. This resulted in “bracket creep” where cost of
living wage increases put working people in higher tax brackets automatically
(Note #3). The problem became acute during the high inflation decade of the
1970s and the issue helped Ronald Reagan take the White House on a promise to
fix the problem.
A week ago, I heard a Democratic Senator running for President say that they knew all along that Obamacare was just a start. The program was poorly drafted and poorly implemented and now we learn that Democrats knew all along that it was bad legislation? Will Medicare For All also be built on poor foundations and require a constant stream of legislative and agency fixes? This provides a lot of work for the folks in Washington who draft a lot of agency rules that require a lot of administrative cost to implement. Democrats are fond of federal solutions but show little expertise in managing the inevitable bloated bureaucracy that such solutions entail.
Some Democratic Party candidates are promising to fix the harsh
sentencing guidelines that they themselves passed in the 1990s, which fixed sentencing
guidelines enacted 25 years earlier by Democratic politicians in the 1960s and
1970s. This party’s platform consists of fixing its earlier mistakes.
According to a Washington Post analysis of election issues
(Note #4), some candidates are concerned about corporate power. A Democratic
president would have to work with the Senate’s Democratic Leader Chuck Schumer
whose main support comes from large financial corporations based in his home
state, New York. While a President Elizabeth Warren might propose regulatory
curbs on corporate power, Mr. Schumer would be gathering campaign donations
from the large banks who needed protection from those same regulations.
Large scale industrial power production has a significant effect on the climate. The few blue states that supported a Democratic candidate for President in the 2016 election also consume most of the final product of that power production. Have any candidates proposed solutions that lower the demand for power? Temperature control systems in commercial buildings could be set to a few degrees warmer in the summer and a few degrees cooler in the winter. That would have a significant impact on carbon production. Some candidates propose solutions that regulate the production and supply of power – not the demand for power. Most of that production occurs in states that supported a Republican candidate in the 2016 election. Proposals to install wind and wave generating stations in Democratic leaning coastal states in the northeast and northwest have been met with local resistance. Voters in the blue states want green solutions to be implemented in the red states, but not inconvenience residents of the blue states. Voters in the red states see through that hypocrisy.
A viable Democratic candidate must convince independent voters who are wary of political solutions from either party. Donald Trump won the Presidency without visiting rural folks on their home turf. He landed his plane near a staged rally and the folks came from miles around to hear him. Compare that approach with former Republican candidate Rick Santorum who visited many small towns in Iowa in the months before the 2012 Iowa primary. In small restaurants and rural post offices, Santorum listened to the concerns of voters. Trump’s approach was successful. Santorum was not. Go figure.
Trump convinced rural folks that he was going to go to Washington and drain the swamp. This in turn would help the economy in small town America so that those folks could get themselves a new roof, or a new pickup truck, fix the fence or get a few potholes patched. From what I saw, those folks are still waiting. Some rural folks may run out of patience with Trump by next year. The success of any Democratic candidate depends on that.
- One week’s take home pay of $550 x 2.5 weeks = $1375. A 1 BR in L.A. averages $1350 L.A. Curbed
- Areavibes.Com assessment of Limon, Colorado.
- Tax indexing
- Washington Post article on various election issues