The stock market continues to soar. My financial advisor ignores me when I wring my hands and tell her to change my asset allocation so that I have less stock. By ignoring me, she's brought me a lot more money. But I would just feel so much safer in more bonds and real estate and less sticks. Because, everyone knows this asshole is going to crash the market at some point. And that comes fast and hard and it's too late when that death spiral begins. Every time I can get her to put even a small amount more into bonds, I feel a sense of accomplishment. I'm having dinner with her in a week or two and I'll tell her to lighten up on the stocks some more. Meanwhile, though, I'm certain she's not as big a Bernie fan as I am. Although she loathes Trump.This morning, the Financial Times reported that 56% of all equities (in terms of value) in this country are owned by just 1% of Americans... and yet Trump's whole campaign is going to eventually come down to "the economy, the economy, the economy." Without a doubt Bernie is best equipped to go toe to toe him on that, not Steyer and not the more venal billionaire Bloomberg, let alone clowns and empty suits like Mayo, Status Quo Joe or Klobuchar. Presidents don't react jobs by Trump's policies and administration created 1.5 million fewer jobs in his first three years in office than predecessor Barack Obama did in his final three. Newly revised figures from Trump’s own Department of Labor show that 6.6 million new jobs were created in the first 36 months of Trump’s tenure, compared with 8.1 million in the final 36 months of Obama’s-- a decline of 19% under Trump. During the SOTU address, when Trump said "If we hadn’t reversed the failed economic policies of the previous administration, the world would not now be witnessing this great economic success," he was-- as he does constantly-- lying and gaslighting.Last week, writing for The Atlantic, Annie Lowrey noted that "in one of the best decades the American economy has ever recorded, families were bled dry: The Great Affordability Crisis Breaking America. "In the 2010s," she wrote, "the national unemployment rate dropped from a high of 9.9 percent to its current rate of just 3.5 percent. The economy expanded each and every year. Wages picked up for high-income workers as soon as the Great Recession ended, and picked up for lower-income workers in the second half of the decade. Americans’ confidence in the economy hit its highest point since 2000, right before the dot-com bubble burst. The headline economic numbers looked good, if not great. But beyond the headline economic numbers, a multifarious and strangely invisible economic crisis metastasized: Let’s call it the Great Affordability Crisis. This crisis involved not just what families earned but the other half of the ledger, too-- how they spent their earnings. In one of the best decades the American economy has ever recorded, families were bled dry by landlords, hospital administrators, university bursars, and child-care centers. For millions, a roaring economy felt precarious or downright terrible."
Viewing the economy through a cost-of-living paradigm helps explain why roughly two in five American adults would struggle to come up with $400 in an emergency so many years after the Great Recession ended. It helps explain why one in five adults is unable to pay the current month’s bills in full. It demonstrates why a surprise furnace-repair bill, parking ticket, court fee, or medical expense remains ruinous for so many American families, despite all the wealth this country has generated. Fully one in three households is classified as “financially fragile.”Along with the rise of inequality, the slowdown in productivity growth, and the shrinking of the middle class, the spiraling cost of living has become a central facet of American economic life. It is a crisis amenable to policy solutions at the state, local, and federal levels-- with all of the 2020 candidates, President Donald Trump included, teasing or pushing sweeping solutions for the problem. But absent those solutions, it looks certain to get worse for the foreseeable future-- leaving households fragile, exacerbating the country’s inequality, slowing down growth, smothering productivity, and putting families’ dreams of security out of reach.The price of housing represents the most acute part of this crisis. In metro areas such as the Bay Area, Seattle, and Boston, severe supply shortages have led to soaring prices—millions of low- and middle-income families are no longer able to purchase centrally located homes. The median asking price for a single-family home in San Francisco has reached $1.6 million; even with today’s low interest rates, that would require a monthly mortgage payment of roughly $6,000, assuming that a family puts down the standard 20 percent. In Manhattan, listings for sale now ask an average of nearly $1,800 per square foot.The housing cost crises in the Bay Area and New York might be the country’s most obscene. But the problem is national, driven by a combination of stagnant wages, restrictive building codes, and underinvestment in construction, among other trends. Home prices are rising faster than wages in roughly 80 percent of American metro regions. In 2018, housing affordability declined in every one of the 160-some urban areas analyzed by the National Association of Realtors, save for Decatur, Illinois. Rising prices and housing shortages are squeezing families in Reno, Minneapolis, and Phoenix.The problem now even extends to rural areas, where income growth has lagged in the post-recession period. A recent report by the Pew Charitable Trusts found “sizable” increases in the number of households spending half or more of their income on housing in rural counties across the country. The housing crisis is hitting Bertie County, North Carolina, and Irion County, Texas, too.One central effect of the housing-cost crisis has been to turn the United States into a country of renters. The homeownership rate has fallen from a peak of nearly 70 percent in the mid-aughts to under 65 percent today; the numbers are more acute for Millennials, whose homeownership rate is 8 percentage points lower than that of their parents at the same age. Unable to buy, roughly 3.5 million younger families have kept renting-- delaying the Millennial and Gen X cohorts’ wealth accumulation, thus consigning them to worse net-worth trajectories for the rest of their lives. And renting, for many families, is not affordable, either: Nearly half of renters are facing uncomfortable monthly bills, and the cost of renting has risen faster than renters’ incomes for a full 20 years now.The cost-of-living crisis extends beyond housing. Health-care costs are exorbitant, too: Americans pay roughly twice as much for insurance and medical services as do citizens of other wealthy countries, but they don’t have better outcomes. In the post-recession period, premiums, deductibles, and out-of-pocket costs in general just kept rising, eating away at families’ budgets, casting millions into debt, and consigning millions more to bankruptcy.
Shan Chowdhury, the progressive candidate running in southeast Queens has made affordable housing his top campaign issue, along with affordable healthcare. "The cost of living is way too high and wages have remained stagnant," he told us today. "We have to ask ourselves who this country is changing for? The wealth disparities are greater today than it was 50 years ago. With crumbling student debt, low wages, inaccessible healthcare, jobs and opportunities-- we have to tip the power back to working families and out of the hands of billionaires who profit off our backs."Spokane area progressive Chris Armitage is running hard on Medicare-for-All. "Here in eastern Washington, folks share plenty of stories about their healthcare situations," he told me. "While in a local farming community, a woman told me about how her family of five. Three have diabetes, but they share a single insulin prescription each month. I wish this horrible situation was unique, or even uncommon, but the truth is many families in our rural communities lack the basic healthcare all humans need to live a full, productive life. Inaction in DC is killing people in our district. Our rural families deserve better. We are ready for Medicare for All because, as my former Commander said 'the best answer is the right answer, the second best answer is the wrong answer, and the worst answer is no answer." Rachel Ventura, a progressive candidate for Congress in the Chicagoland suburbs sits on the modern housing solutions committee in Will County and she told me they too have a housing crisis. "We just don’t have enough housing period. Affordable housing, transitional housing, starter homes, mid size, or high market homes are all on high demand. As our area grows the incomes are definitely not keeping up which is pushing more Chicago residents to move to our area furthering the problem. Our committee is looking at cargo homes, tiny homes, vertical building, and other solutions outside the box. Unfortunately the trade war and the race to the bottom labor practices have complicated the issue even more. It is no longer profitable to build homes in our area because they can’t buy quality products or hire qualified labor for the price people can afford. Instead our area builds more warehouses. Creating millions of living wage jobs is just the beginning. Just one more reason why we must pass the Green New Deal. I look forward to applying my knowledge from the local level to the federal level to create policies that help communities build and retrofit homes for the future."Young Turks founder and host Cenk Uygur is a first-time congressional candidate in the suburbs north of Los Angeles. "This current barbaric system," he told us this morning, "is crushing us on a daily basis. In some ways, I view my election as a rescue mission-- 45,000 people a year die because they don't have health insurance. We have to save their lives! We also have to save families from being financially ruined and out on the streets even if they have insurance. Every other developed country covers everyone and pays less!"Montana state Rep. Tom Winter is running for the Montana open congressional seat this year. There are both a conservative Republican and a conservative Democrat who believe in Austerity. Tom backs single payer Medicare-for-All and is campaigning on it. "The whole reason I'm running for Congress," he told me "is because our broken political system is failing working Montanans. Working families all across this state are struggling to afford to live in an economy that seems to be rigged against them every step of the way. Healthcare is unaffordable. Housing is unaffordable. Childcare is unaffordable. 'Full employment' used to mean everyone had a job-- now it means many of us have two. Montanans shouldn't be priced out of being able to live in the state they built simply because they don't have the power to buy politicians and pay lobbyists to cater each and every law towards their best interest. We must rebuild an American economy that rewards work rather than wealth, and doesn't make living unaffordable. He was just getting warmed up:
Montana's hospitals charge patients nearly three times more than what the federal government sets as a 'fair' cost for care under Medicare. Prescriptions are being left unfilled. Life-saving drugs are being rationed. Working families are being saddled with medical debt, and in some cases across the country they are being imprisoned for it. People are being charged hundreds and sometimes thousands of dollars a month for insulin costs-- while it costs $39 just 15 minutes north of Eureka, MT over the border. Montana's critical access and rural hospitals are at constant risk of closure.Montana’s cities rank as some of the most unaffordable in the nation. The rest of the country thinks this is only a problem in cities like Seattle and San Francisco. But ask anyone working a 9-to-5 in Bozeman or Missoula if they have a realistic chance of owning a home. For the same price you would have paid 5 years ago you get half the square footage, bedrooms, and bathrooms for a median house now.Every day, families across Montana wake up to our ongoing childcare crisis. Over 45,000 children under the age of 6 need childcare in Montana while childcare facilities in the state only have capacity for 20,000. Childcare costs ($34k for 4 years) families more than in-state college tuition ($29,900 for 4 years) in Montana. Over 42% of single mothers with children under the age of 5 are living in poverty. Single Parents earning minimum wage pay 54% of their income towards childcare.
"If I'm painting a dire picture," Winter concluded, "it's because this is how the other half of the country lives. Politicians always claim to support families, but when it comes right down to it working families are left in the lurch. Montana is running out of time. We could care less how well the Dow is doing or how low the unemployment rate is. We need healthcare. We need housing. We need childcare. We need to be able to afford to live."
The “cost burden” of health coverage climbed through the 2010s; just from 2010 to 2016, family private-insurance premiums jumped 28 percent to $17,710, while median household incomes rose less than 20 percent. That meant less take-home pay for workers. Deductibles-- what a family has to fork over before insurance kicks in-- also soared. From 2010 to 2016, the share of employees in health plans with a deductible jumped from 78 percent to 85 percent. And the average annual deductible went from less than $2,000 to more than $3,000.The country’s insurance premiums and out-of-pocket health-cost burdens are just very, very high-- including for people with publicly subsidized or public coverage. The average person on Medicare spends $5,460 on health care beyond what they pay for insurance every year. The average person with Medicaid forks over nearly half that. No wonder two in three bankruptcies are related to medical issues, and nearly 140 million American adults report “medical financial hardship” each and every year.Next up is student-loan debt, a trillion-dollar stone placed on young adults’ backs. Or, to be more accurate, the $1.4 trillion stone, up 6 percent year over year and 116 percent in a decade; student-loan debt is now a bigger burden for households than car loans or credit-card debt. Half of students now take on loans of one kind or another to try for a higher-ed degree, and outstanding debts typically total $20,000 to $25,000, requiring monthly payments of $200 to $300-- though of course many students owe much more. Now nearly 50 million adults are stuck working off their educational debt loads, including one in three adults in their 20s, erasing the college wealth premium for younger Americans and eroding the college earnings premium.
The Rochester, NY congressional district is safely blue but with a useless middle-of-the road backbencher as their Representative. Robin Wilt is running for that seat on a full-bore progressive platform. "The sharp increase in student loan debt is negatively impacting the U.S. economy by delaying the timeline for young people to buy houses and start families. Simply speaking, Boomers are less likely to be able to sell their homes because Millennials aren't in a financial position to buy them. We see this stagnation across the board, but this burden disproportionately affects borrowers of marginalized racial, gender and socioeconomic groups." She had a lot more to say about it:"More and more, student borrowers have to dedicate ever-increasing portions of their income to student loan repayment, rather than spending on goods or services, traveling, getting married or buying a house. Moreover, many within marginalized communities are paying student loans with additional financial challenges stacked against them. This is particularly true in Rochester and Monroe County, which is plagued by the highest rates of segregation in the country. Not only are students of color more likely to borrow more for a degree and borrow in higher amounts for the same degree, but they’re more likely to struggle to repay student loans than their white counterparts. Meanwhile, the wage gap exacerbates the burden of student debt for women borrowers, since at all levels of educational attainment, women earn, on average, 25% less than men. Not only is the crushing burden of student debt weighing down potential growth in the U.S. economy, it is fundamentally altering our culture-- with people getting married and starting families later in life, and some questioning the value of higher education. Debt forgiveness is a positive way forward, with estimates that over the course of 10 years, student debt cancellation would create $943 billion in GDP, adjusted for inflation. Student debt cancellation results in economic growth by increasing the average households’ net worth and disposable income. This net increase in wealth drives consumption and investment spending. I wholeheartedly support student debt cancellation from a social justice standpoint, as well as from an economic sustainability standpoint."
Finally, child care. Spending on daycare, nannies, and other direct-care services for kids has increased by 2,000 percent in the past four decades, and families now commonly spend $15,000 to $26,000 a year to have someone watch their kid. Such care is grossly unaffordable for low-income parents in metro areas across the country, causing many people to drop out of the labor force. But one in four American mothers returns to work within two weeks of giving birth, so heavy are the other cost burdens of living in this country. The whole system is broken.
I spoke to three experienced candidates, Audrey Denney (CA), Brianna Wu and Marie Newman (IL) who came close in 2018 and plan to finish the job against their reactionary opponents, respectively Trumpist Doug LaMalfa, New Dem Stephen Lynch, and Blue Dog Dan Lipinski, this year. Audrey has watched her "friends struggle to afford to deliver their babies, miss work to care for their newborns, and provide childcare when they go back to work. I’ve watched as my close friends drop out of the workforce once they’ve had a second child-- not because they wanted to-- but because they could afford it. These are women who are teachers, manage restaurant chains, and who had management roles at non-profits. Celebrating our mothers on Mother’s Day is not enough, we must pass legislation to support maternity leave, women’s health, and affordable childcare options. Not only do we have the highest maternal mortality in the developed world, we are the only developed country that is seeing increases in maternal mortality. We are also experiencing shocking rates of postpartum depression (as high as 1 in 5 in some states!). We have to be better at creating conditions where new moms can care for their physical and mental well-being and that starts with paid maternity leave." Everything that motivates and propels Brianna Wu's campaign has been about greater equality. And when it comes to the high cost of educational loans, she told us that "Higher education has become big business in this country, and the burden is placed on the backs of nearly 50 million Americans who just want an education for a chance of success at life. I know people in their 40s who are still paying off student loans 20 years after they graduated from college. Higher education, whether it's a college or university or a trade school, should not have the potential to bankrupt any American, or place an incredible burden on students right out of the gate. I fully support tuition-free public college for all. It's the right thing to do, and it can be done. We need leaders in our government with the political will to do it. My opponent, Rep. Stephen Lynch, is silent on it, as he is most every initiative that will better the lives of Americans. When I get to Congress, tuition-free public college will be a priority for me."Marie Newman had similar experiences and told me "The cost and lack of affordabilty of our daily lives, Is why I have an affordable solutions set in platform. Among these solutions in this platform is universal childcare where we would leverage existing assets like schools, libraries and community centers to offer 12 hr care to our kids. We cannot expect parents to continue to work 2 and three jobs round the clock."
The federal government has set as a benchmark that low-income families should not spend more than 7 percent of their income on child care. But child care is generally the single biggest line item on young families’ budgets, bigger even than rent or mortgage payments: Putting a kid in daycare costs 18 percent of annual income in California; home-based options equal 14 percent of family income in Nebraska; having an infant in professional care in the District of Columbia costs more than most poor families earn.It all adds up, and it all subtracts from families’ well-being. The price tags for tuition and fees at colleges and universities have risen twice as fast as wages, if not more, in recent years. Rental costs are outpacing wage gains by a percentage point or more a year. Health-care costs have grown twice as fast as workers’ wages. And child-care costs have exploded. These cost pressures are particularly acute on young Americans who have seen worse employment prospects and smaller raises than their older counterparts.The effects are wide-ranging. High costs are preventing workers from moving to high-productivity cities, thus smothering the country’s economic vibrancy and putting a drag on its GDP; economists have estimated that GDP would be as much as 10 percent bigger if more workers could afford to live in places like San Jose and Boston. High costs are forcing families to delay getting married and to have fewer children, and putting the dream of owning a home out of reach.What is perhaps most frustrating is that the Great Affordability Crisis is amenable to policy solutions-- ones most other rich countries adopted decades ago. In other developed economies, child care, early education, and higher education are public goods, and do not require high-interest-rate debts or endless scrambling by exhausted young parents to procure. Other wealthy countries have public-health systems that cover everybody at far lower cost, whether through socialized or private models. And numerous proposals would transform residential construction in this country, including one that just failed in California’s legislature.But the Great Affordability Crisis hides in plain sight, obvious to households but unmentioned in the country’s headline economic numbers. It persists even as President Donald Trump rightly praises the country’s growth, low unemployment rate, and rising household incomes. And though there are many nationwide policies that could end the crisis, they all seem unlikely to pass through the country’s broken Congress; the brightest glimmer of hope lies in housing and health-care policy by individual states. But it is still a dim glimmer. This crisis looks sure to stay with us for the coming decade, whatever recessions or expansions it may hold.
Jennifer Christie is a first time candidate, running for a seat north of Indianapolis. She knows quite a bit about the costs of child care. "I left a 'good job' when we adopted four children," she told me today. "In three years, we tripled our family size and had four children under four years old. My job required travel several times per month and often overseas. Childcare was not only complicated, but it was expensive. It would have cost well over 30,000 per year with so many littles. It just didn’t seem worth it to be away from my children so much and to give that much of my paycheck away. So I started a home-based business and began teaching. My business was very successful; we were profitable, I had several employees, and was able to have a flexible schedule. I was so passionate about giving families freedom and a living wage that I mentored hundreds of other women entrepreneurs on starting their own business too. What I found was that childcare was the biggest challenge that women faced to start a business or to work at all, especially single moms who are some of the hardest working people on the planet. Childcare needs to be safe and affordable while paying childcare workers a living wage too (most childcare workers are also moms). We need the skills that moms bring to the table. I have worked in the sciences most of my career, but the toughest job around is Mom: it requires patience and strength, compassion and determination, selflessness and grit and so much more. Now more than ever we need a mom’s voice in Congress. I am running to be that voice to lift up families by guaranteeing universal healthcare, a livable planet, a living wage, education for all and universal childcare."Pramila Jayapal, co-chair of the Congressional Progressive Caucus went over the Trump budget and told her Seattle constituents that his "budget proposal leaves no question: His Administration does not care one bit about poor, middle-class and working Americans, nor about the future of our country, global relationships or planet. On every level, this budget neglects the health of our people, planet and democracy. Trump’s budget slashes funding for the Environmental Protection Agency, leaving our water, air and communities vulnerable to pollution, toxins and climate change. It recklessly destroys infrastructure investments that our communities badly need, completely zeroing out federal funds that the 7th congressional district relies on to make our highways and bridges safer, maintain and expand our port and public transit systems and build more affordable housing."
Trump’s budget also destroys critical programs that have supported vulnerable Americans and helped lift millions out of poverty. It cuts $6.2 billion in federal funding for education programs, jeopardizing our children and their future, and proposes changes to Medicare and Medicaid and Social Security that will hurt millions of Americans. It also slashes funding for important programs that help workers stay safe on the job and protect seniors in the workforce.Instead of investing in education, health care, affordable housing, public health and other important priorities, the Trump budget floods money into more cruel attacks on immigrants and people of color. Trump wants to steal money from vital programs to fund his vanity wall and flood billions in immigration enforcement activities that promote racial profiling and mistreatment of communities of color. President Trump does not understand the values and investments that have made America and our people strong-- and it is no surprise his budget fails to reflect them as well.President Trump’s national security budget is completely out of touch with reality. For the fourth year in a row, Trump’s budget also cuts funding for the State Department and international development-- the deep and disproportionate 22% cut to these programs will undermine our diplomatic efforts around the world. Meanwhile the budget includes $740.5 billion in defense spending for an unaccountable Pentagon plagued with corruption. Funneling more and more money to the Pentagon, which has been unable to even pass an audit, does not make us more secure.
