It’s still the Economy Stupid !

The Real Reason why all of Washington is out of touch, the Money-Empathy Gap by Ralph J Benco, 8/26/15, Affluent Investor

A specter is haunting America. It is rooted in something called the “Money-Empathy Gap.” This gap besets the left as well as the right. It besets Democrats (with the exception of Bernie Sanders) as well as Republicans.

The most dramatic recent manifestation of that gap was the GOP Presidential Debate. That proved to be only a low form of political theater (which caused me, literally, to drowse off repeatedly).  It was a spectacle that never made a spectacular point.

Few of the main stage debaters spoke much, fewer spoke either with specificity or authenticity, about what’s really on the voters’ mind. We are beset by mediocre economic growth.  The economic doldrums, and worse, has persisted under presidencies of both parties, over 15 years. Voter prosperity has plunged dramatically below trend-line. Belt-tightening persists to this day.

Virtually all of the candidates in the debate violated what should be known as Carville’s Law: It’s the economy, stupid! As Bob Shrum recorded in his memoir No Excuses:

I was on the phone with Carville one day when he said he had to hang up; the road was calling in. He was agitated when we talked a little while later. Somewhere in the Midwest, he said, Clinton had suddenly launched into a soliloquy on nuclear nonproliferation. There wasn’t one goddamn vote in it, Carville shouted at me—a warning he had delivered, a little more respectfully, to his contrite candidate. When James put up his famous sign in the war room—“It’s the economy, stupid!”— it was not just an admonition to the strategists and to the staff, but to one very smart former Rhodes Scholar named Bill Clinton. He’d never won one of those fancy scholarships, Carville told me on vacation after the campaign, but it didn’t take a genius to know what this election was about.

Reagan-era Supply Side pillar Larry Kudlow brings it right up to date in the New York Sun:

With a record 24 million people watching the GOP debate, one would think there would have been a lot more time spent on the most important issue of the day: the economy. Look at any poll. Jobs and the economy are always at the top of the list. But there was barely a mention of this on Thursday night. … The Republican Party is not going to win this election unless it persuades the electorate that its primary principles of low marginal tax rates, lighter regulation, free trade, and a sound dollar are the best path to growth. Call it free-market capitalism. Call it supply-side. Call it entrepreneurship. Call it take-home pay. But the endgame is growth and prosperity.

Are the candidates paying attention?  What we got in the first GOP debate did not focus on restoring opportunity and raising our economic well being through hard work.  It was political theater which Elspeth Reeve writing at The New Republic likened to professional wrestling. Pro wrestling was a cognate to which I too, recently and briefly, recently alluded.  America deserves better.

Many voters consider America to be on the wrong track. CNN reports “just 30% of registered voters nationwide say they feel their views are well represented by the government in Washington, while 40% say they are not represented well at all. That figure spikes among Republican and Republican-leaning voters.” Spectacles don’t change tracks.

So much obliviousness by so many candidates is mystifying.  What could be causing it?

In July 2012, Lisa Miller wrote, in New York Magazine, a defining article by the title The Money-Empathy Gap: New research suggests that more money makes people act less human, or at least less humane. It reported on the research of genius, and enfant terrible, Prof. Paul Piff, Assistant Professor in the Department of Psychology and Social Behavior at the University of California, Irvine. Miller:

Earlier this year, Piff, who is 30, published a paper in the Proceedings of the National Academy of Sciences that made him semi-famous. Titled “Higher Social Class Predicts Increased Unethical Behavior,” it showed … that living high on the socioeconomic ladder can, colloquially speaking, dehumanize people. It can make them less ethical, more selfish, more insular, and less compassionate than other people. … It makes them more likely to exhibit characteristics that we would stereotypically associate with, say, assholes.”

These findings, in combination with a researcher eager to promote them, reverberated online. On message boards, detractors accused Piff of using his lab to promote a leftist agenda…. It is easy to see Piff’s research as ideologically motivated. The point is to “shed light on some of the consequences of social class,” he says. But whatever his goal, the “results are apolitical,” he says, and the data point in a clear direction.

This research is not intended to prosecute the one percent, those families with an average net worth of $14 million. Nor does it attempt to apply its conclusions about the selfishness and solipsism of a broad social stratum to every member within it: Gateses and Carnegies have obviously saved lives and edified generations, and one of the biggest predictors of a person’s inclination to donate to charity is how much money he has. But when the top fifth of American families have seen their incomes rise by 45 percent since 1979, whereas the bottom fifth has seen a decline of almost 11 percent, these ­researchers want to explore a timely question: How does living in an environment defined by individual achievement—­measured by money, privilege, and ­status—alter a person’s mental machinery to the point where he begins to see the people around him only as aids or obstacles to his own ambitions? Piff won’t name a tipping point after which the personality transformation kicks in, only that his studies of ethical behavior indicate a strong correlation between high socio­economic status and interpersonal dis­regard. …I agree with Piff. His results are apolitical.

Progressives are at least as guilty as conservatives. Emulating empathy may have supplanted patriotism as the last refuge of scoundrels. Progressives use promises of government largess to raise their own social status to Santa Claus levels, thereby exploiting rather than resolving areas of social misery. (Which by no means exonerates Republicans or conservatives who are finding themselves blinded by the same elite light.)

The Money-Empathy Gap is the prime suspect in driving America onto the wrong track.  This gap strangely disconnects candidates from the interests (and often values) of the voters.

What is most missing from this election is a credible focus on restoring equitably prosperity. Nothing in the first GOP Debate, as meticulously inventoried by Kudlow, came close to establishing the GOP’s bona fides, either by way of emphasis or by way of core principles as to how to restore 4% growth across-the-board.

Kudlow inventoried all of the prime debaters stands on things like taxes, regulation, and trade, and, for the most part, found them wanting. Then he applied the coup de grace:

No one talked about the dollar and monetary policy, which are incredibly important. A collapsing dollar value such as occurred in the 1970s and 2000s will doom the economy. But a reliably hard dollar not only keeps inflation low, it gives America a leg up in the global race for capital.

All the candidates, of both parties, however humble their roots, however modest their current income, are very high indeed on the “socioeconomic ladder.” This seems to be badly distorting their political judgment both as to their priorities and proposed solutions.  The Money-Empathy Gap is haunting America.

America knows what it needs.  We just are waiting for one or more candidates to hone in, credibly, on the central issue of the 2016 race.

Hint to the presidential candidates. Carville’s Law remains in effect. It’s the economy, stupid!

Originally posted on Forbes.com.

http://affluentinvestor.com/2015/08/the-real-reason-why-all-of-washington-is-out-of-touch-the-money-empathy-gap/