Growing up in the midst of an economic collapse, the magnitude of which has been unseen for nearly seven decades, and the political backlash that followed, I was not surprised by the overall economic pessimism that took hold in my home state of Wisconsin during the presidential election season. This economic focus became a pivotal point for candidates like Bernie Sanders and Donald Trump who championed the message of failed trade policies and the overall disregard for working class America. While reigning victorious in the presidential election over the more pro-trade Hillary Clinton, large fractures still remain in the attitudes of right-leaning voters on their opinions on growth. Trump supporters, unlike more traditional Republicans that supported the likes of Ted Cruz, are more favorable towards the federal government playing a role in propping up infrastructure spending and community growth. While still generally pessimistic about the federal government, this pro-Trump demographic marks a notable departure from fiscal conservatism and the traditional party platform towards free markets and government.
This change in opinion on the right and the natural inclination on the left to support more policies to address inequality create a unique window to address the concerns of the working poor and slow community growth. Doing so would begin to heal the stark divides within partisan opinions and the lack of consensus on addressing community growth in the United States. In primarily conservative districts, communities are faced with the growing problem of young educated people leaving and slowing investment who are increasingly looking for ways to cultivate this growth. This gives incentive to those are the right who are hesitant to appropriate funds or authority to the federal government to address these issues. Democrats, faced with an increasingly urban/rural and education/non-educated electoral divide, should be more willing to support Republican initiatives to address increasing inequality particularly in the Midwest where they have seen a decline in electoral support.
There is a more practical public policy reasoning aside from electoral politics to advocate for such a bipartisan approach to addressing equitable growth, however. Inequality has contributed to lower consumer spending, small business growth, and overall GDP growth. Sluggish growth and greater inequality also has a variety of costly ‘snowball’ effects that dramatically increase the public costs on areas such as healthcare, government welfare programs, and job placement initiatives. This does not even consider the public tax dollars lost by lower productivity and less spending.
These factors all contribute to more systemic issues that communities face and lead to less investment into communities themselves that drive people to these communities and grow. This should be an area of concern for conservatives and liberals alike. For conservatives, loss of economic growth and a greater burden on taxpayers is troubling, especially considering the inevitability of using more public dollars to address these issues further down the road. For liberals, it should raise red flags that limited public resources and human capital that could be used to benefit public schools, universities and other essential community programs that cultivate growth are being allocated elsewhere. This should be seen as an area of focus and concern as both sides of the aisle are looking to address systemic issues that are a burden on their own budgets and the economy as a whole.
While the U.S economy has grown steadily since the 2008 economic crisis, overall labor force participation rate has steadily declined for the past few decades, while wage growth has growth sluggishly post-recession. This results in greater political instability and decreasingly fewer options for elected officials to address growth in their respective districts regardless of their political affiliation. This problem is compounded by large businesses facing an increasingly shareholder dependant private sector that often shows large returns on paper, but does not increase the overall well being or the long-term economic stability for these communities. By many accounts, overall GDP growth is less and less a standard of community or societal well being, which is limiting the scope of our investment potential and it reflects in our public policy. As millennials become a larger share of the total electorate, there is an increasing demand for greater public, community investment to spur growth, but also support quality of living and long term living potential. This provides a window of opportunity to look beyond the traditional political discourse of how to address growth and find bipartisan solutions to accommodate to these other measures of economic success.
Too often in our current political environment do we look to hyper-partisan policy solutions to address complex, entangled economic issues and it does little to actually address the underlying causes of economic and community stagnation. Liberals often want to raise the minimum wage or increase taxes on the rich seeing them as ‘fix all’ policy solutions. Conservatives tout tax breaks or simply deny systemic inequalities exist which are simplistic answers to the economic problems their constituents face. These approaches are often reactionary measures or are used simply to pander for votes. It holds true that certain tax breaks or wage increases can spur long term growth and consumer spending but don’t always address core issues facing communities. It is significant for both parties to look at ways to collectively address the reasons why communities are facing the problems that they are. There is no doubt that it is easy to state that both parties should take this issue seriously but few have confidence that there could be such compromise on the details of creating effective economic policy. There are however some solutions that have had bipartisan engagement and have had increasingly saliency in both the private and public spheres.
Initiatives that look to boost private sector impact investing that can address public needs and cultivate innovation are seen as a net good by both parties. This kind of forward thinking development potential is also becoming an increasing area of interest for investors who see return potential in addressing inequalities such as gender workforce gaps or access to education for minorities. This is just one example of how combining essential motives and interests from both sides of the aisle can address key public concerns while still providing an economic incentive to do so.
This same approach can be applied with a variety of other budgetary and policy reforms as well. Whether it be finding ways to increase public dollars and private investment by discouraging offshore tax havens or creating bipartisan economic support legislation for small business growth, there can still be areas of cooperation in such a polarized political environment. Putting partisan politics to the side to finding these areas of cooperation and creating legislative consensus can ultimately be the solution for the problems of America’s future.