Carlos Osorio/AP
If you don't hang out with lawmakers, economists and journalists in Washington, you probably think Democrats and Republicans disagree on economic policy.
They don't.
In Washington, there's actually a broad consensus about economic growth. These ideas have held sway for decades:
- Globalization is inevitable
- Technology boosts productivity
- Immigration brings in fresh talent
- Trade deals spur growth
Of course, Democrats and Republicans disagree on the details, but the framework has remained solid regardless of who holds power in the White House or Congress.
That's why President Obama, a Democrat, and House Speaker Paul Ryan, a Republican, both support the Trans-Pacific Partnership, a trade deal. It's why Obama says that "generations of immigrants have made this country into what it is," and Ryan says that "immigrants contribute to our economy."
It's why Democrat Nancy Pelosi says that "it is imperative that America continues to lead the world through innovation," and Republican Mitch McConnell says that "the Internet and the rapid adoption of mobile technology have been great American success stories."
Now, Washington's cozy cocoon of ideas is getting a violent shaking from Donald Trump and Bernie Sanders.
Trump, who is running for the Republican presidential nomination, and Sanders who is seeking the Democratic nomination, are very different candidates. One is a billionaire businessman, and the other a democratic socialist.
But each is appealing to voters who believe that Washington's economic framework is rotten. The candidates want to tear it down, and millions of working-class Americans agree.
The people who helped build that framework are taking note.
"While the U.S. economy is performing well, the electorate remains unconvinced, even angry over how the economy has not performed for them, and their anger is stirred by presidential candidates in both parties," Mark Zandi, chief economist at Moody's Analytics, said in a written assessment Thursday.
To understand what's been happening this presidential primary season, consider Michigan, where voters turned out in huge numbers for Sanders and Trump. According to Federal Reserve Bank of St. Louis data, the inflation-adjusted annual median household income in Michigan fell by about $14,000 a year — down to about $52,000 — from 1999 to 2014.
That same time period played out very differently for corporations. From 1999 to 2014, U.S. annual corporate profits after taxes shot up by about 250 percent, to nearly $1.7 trillion.
So, yes, businesses did much better, allowing Washington thought-leaders to, in effect, say: "See, we were right! We promoted the ideas that have kept America's GDP ranked No. 1 in the world, even though China has four times our population."
But outside of Washington, millions of Americans are not living in a Big Picture or a Framework. They are living in houses that have lost value, in cities where they don't trust the water pipes and where companies can suddenly announce they are moving jobs to other countries.
With their support of Sanders and Trump, those workers have made it clear they want a new paradigm. Trump talks about building a wall to stop immigrants; Sanders talks about breaking up big banks. So their solutions are quite different, but the message is the same: No more business as usual.
