The US elections will go down in history for many reasons: black candidate, female vice presidential candidate and an economic climate similar to that of the time of The Great Gatsby. But the similarities with the Jazz Age -- as F. Scott Fitzgerald defined the 1920's -- does not refer to the great Crash of '29, which ended those years, but rather to the disturbing impoverishment of the middle class in favour of the rich. This is a phenomenon which, during the eight years of the Bush presidency, has assumed identical dimensions to that of the '20's.
Distribution of income in the US in 2008 is almost identical what it was in 1928. In 1928 as in 2007, 1% of the population earned 24% of the national income. These are exceptional numbers. From 1940 to 1984, for example, the 'slice of the pie' falling to that wealthy 1% never exceeded 15% and during the 1960's and '70's, the years of the economic boom, it fell to below 10%.
When wealth becomes so concentrated in the hands of the few, economists speak of "income stagnation," a phrase that neither of the candidates in the running for the White House has ever used. The real problem of America is income stagnation. Polls conducted in 2006, after the Democrats won the majority in Congress, confirm that even before the sub-prime hurricane struck the country, the deepest worries of the population were not related to the war in Iraq but to their own worsening financial situations. In 2007, according to polls, 90% of the population admitted to being terrorized by the future of the economy and believed that Bush's economic policy was wrong, with a small percentage even fearing for their children's future. This worrying and profoundly pessimistic feeling is at odds with the nature of a country whose Constitution emphasizes the right to "the pursuit of happiness."
Barack Obama frequently mentions the redistribution of wealth, but he uses this phrase in a vague way, without entering into details as to the mechanisms by which this might be achieved. John McCain alerts the nation to Obama's fiscal policies because he suggests tax reductions for those who earn less than $250.000 -- as if this were the salary of workers on the assembly line at General Motors. In 2007, the median income, that sandwiched between the rich and the poor, was below $50.000 per year; someone who earns 5 times that sum is certainly not part of the proletariat. Obama avoids mentioning the data on income stagnation while McCain openly defends the Bush administration's tax cuts which have helped to reduce the purchasing power of middle class income.
The Democrats prefer not to cite the data on income stagnation because the widening of the gap between the rich and the middle class began in the 1990's, during the government of the great Bill Clinton. Barack Obama, possibly does it out of decency, fearing that by doing so it would become clear that this great nation, which on Tuesday will perhaps elect its first black president, is not so much racist as it is unfair. It is the data on income distribution that says so. From 2000 to 2006 the American economy grew by 18% but the real income of the average working family decreased by 1.1%. This means that working families earn an average of $2.000 LESS than in 2000. On the other hand, the income of the richest 10% increased by 32%; that of the top 1% by 235; and the top 0,1%, the 'super-rich', have seen a gain of 425%.
European political campaigns are very different from American campaigns . In Europe, candidates fire off numbers and accuse each other utilising statistical data as political weapons. Perhaps Europeans are more cynical or perhaps they are more used to seeing elections won on the basis of facts rather than ideologies. "Change" and "Yes We Can," Obama's slogans, are positive but vague. This explains why the battle between the two American candidates never completely enters the economic arena; neither has an easy familiarity with the topic and economics does not easily fit into either the Republican or the Democratic ideology. How can McCain justify to the middle class American electorate the benefits of the neo-liberal policy, which his party has pursued since the presidency of Ronald Reagan, when the Wall Street crash so vividly demonstrates its failings? And how can Obama promise a more equal redistribution of wealth for the same middle class when it would mean higher taxes for the very people who have financed his electoral campaign?
Unlike the Europeans, American candidates depend upon lobbyists to finance their highly costly electoral campaigns. Behind Obama's decision to forgo government funding for his campaign, which would have placed a cap on his spending, lay the certainty of backing from almost all of Wall Street and a segment of that ultra-rich top 1% of the income scale who, during the Bush years, had pocketed the bulk of the wealth created in the US. With the election just a day away, Barack Obama has already spent more that $660 million in the most expensive political campaign in US history.
Economics, especially in Great Gatsby eras like the one we find ourselves in now, is not learned in election campaigns or at a school desk. What is needed is experience and intelligence, two qualities relatively unrelated to the charisma required to win elections in the world's most powerful country; two qualities which, at least up to now, neither of the two candidates have shown to have. One can only hope that before taking over the White House at the end of January, the future president takes an intensive economics course in order to be prepared for the battle of the century.