Politicians of both parties are trapped. They are trapped by a public that is enraged, but whose contradictory demands are impossible to meet. The unhappiness with both major parties and elected officials will continue until an economic recovery occurs.
Americans are enraged by the bailouts given to banks and auto companies while the economy continues to bleed jobs. They see Wall Street as out of touch, granting huge bonuses only one year after being saved by the taxpayer. While Wall Street elites deserve a large portion of the blame (especially for causing the financial crisis) this is a smokescreen for the real electoral problems.
Polls show that the majority of the American public continues to say that they want a smaller government with less services rather than paying more taxes for services. President Barack Obama has learned that the rising deficit, now more than $12 trillion, is deeply unsettling to many.
Obama’s recent announcement of freezing discretionary “non-security” spending shows just how powerless he is to do anything. Regardless of what party has been in power, the government has grown steadily since the Great Depression.
It has done so because the same public that wants fewer services doesn’t want any of their services cut. That same public that wants a less intrusive government demands government action on a huge range of social and economic problems.
Recent polls have consistently shown that 80 percent of Americans believe by overwhelming margins that government should take care of the elderly. Republicans have been using the hollow threat to cut Medicare as part of their campaign against health care.
Talk of paring back or eliminating programs like Medicare and Social Security is political suicide.
Pundits also have been talking about how people want the government to be less intrusive. Yet, 80 percent of Americans believe that the government needs to fix the economy and create jobs. Strong majorities want stricter financial regulation and more accountability for Wall Street. That same number, 80 percent, is about how many people support raising the minimum wage.
The minimum wage is a perfect example of the majority not realizing the high cost of government intervention. Economist Casey Mulligan, writing in The New York Times detailed how the minimum wage hike likely caused a sharp decline in the number of Americans hired for part time work. The same problem exists, as the public shows a basic approval of regulating health insurance and a public option for health care despite the costs it would undoubtedly incur.
Too often Americans want to suspend economic reality. Wanting a smaller, cheaper and less intrusive government that solves social problems, provides support, regulates injustice and operates efficiently is purely unrealistic. While the elites of both parties, and the elites on Wall Street, have been underwhelming in their leadership, they are only reacting to the incentives laid out by the system and the demands of the people. Unfortunately, as Obama has learned, these sub-par politicians are the ones tasked with doing the impossible.
