The price of eggs, social media and a lost election

The analysis of how Kamala Harris and the Democrats lost the presidency was in overdrive during the weeks following the election. Soon, explaining the results will pass to historians.

In explaining the loss, seasoned reporters and low-level pundits blamed sexism, racism, Biden, a late start, failure to define new policies beyond the Biden agenda, high gas prices, the cost of eggs and many other reasons. 

However, two issues primarily shaped the election outcome and will continue to shape politics for the foreseeable future: inequality and the media environment.

The media environment is the easiest to explain. A Fairness Doctrine was enacted in 1949, requiring broadcasters to present issues important to democracy in a way that fairly reflects different viewpoints and perspectives. Debate about fairness in broadcasting had been around for decades — prior to the Fairness Doctrine, there was the Radio Act of 1927.

The Fairness Doctrine was abolished in 1987 under the Reagan administration. The result was talk radio characterized by vicious attacks, divisiveness and the widespread dissemination of conspiracy theories as fact. Attempts to restore the Fairness Doctrine have been unsuccessful. 

As the Radio Act of 1927 had prepared the way for the Fairness Doctrine in 1949, the lack of a fairness doctrine left the United States unprepared for the internet and issues of fairness in the digital realm. The cesspool of social media is taking a heavy toll on our nation’s soul. Non-biased dialogue, a key tenet of democracy, is a rare commodity in today’s media environment — particularly on social media — and does not draw many clicks on the internet.

But sewage in the media takes a backseat to extreme inequality. In the decades after World War II, income gains were evenly spread from rich to poor. That changed after 1980 and the first round of tax cuts for wealthy Americans. Since then, the wealthy get richer while most Americans tread water. 

The difference: America shared its prosperity during the post-war era, but the last 40 years have increased prosperity for the rich while most U.S. citizens struggle to make ends meet. Most Americans have cause to be angry, disappointed and distressed. As widely reported, a 2022 Federal Reserve survey indicated that 37% of Americans “lack enough money to cover a $400 emergency expense, up from 32% in 2021.”

For more than four decades, wealth and income gains have been concentrated in high-income households, primarily the top 1%. Income concentration is now comparable to the 1920s before the Great Depression.

Most Americans confuse income and wealth, but wealth is key to understanding growing inequality. Imagine all the wealth in the United States from coast to coast: property, goods, savings accounts, stocks, bonds — everything. The bottom 50% of Americans hold 4% of that wealth. The other 50% of Americans have 96%. Most of that wealth is concentrated in the top 10%. The wealthiest 10% of Americans own 67% of household wealth and have minimal debt.

Debt is another key factor in understanding wealth inequality. When the rich were getting richer, most Americans went further into debt. Many low-income households used debt to cope with income stagnation. And middle-class households frequently used home-equity borrowing to profit from increasing home values. Rather than a more solid middle class, our nation ended up with financial fragility at the core of the economy, as 2008 demonstrated.

Amid this, consumer spending moved center stage in keeping the U.S. economy afloat. Understanding the economy’s reliance on consumer spending combined with growing income inequality, a financially fragile middle class and a new post-COVID understanding of complex supply chains should give anyone cause for concern. The U.S. economy is a dynamic engine on a crumbling foundation.

Politicians largely ignored the needs of most Americans for more than 40 years. These past four years could not make up for that. Long-term thinking and public investments are not enough to get re-elected. Too many politicians spent too much time flirting with Wall Street and high-tech buffoons, allowing the media of a great nation to run amok — all while spending much of their time on the phone with wealthy donors.

In the weeks before the 2024 election, The Economist magazine celebrated the U.S. economy as the envy of the world. American voters disagreed. Most Americans don’t know or care about the opinions of The Economist, Keynesian economics, soft landings or the machinations of the Federal Reserve. They only know what is left in their pocketbook after a hard day at work.

Ignoring the needs of Americans facing financial, housing and sometimes food insecurity will have a substantial cost.

Get ready for a rough ride.

Keith Luebke retired from teaching nonprofit leadership courses and has several decades of experience directing nonprofit organizations. He lives in Mankato.

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