Americans losing their smiles despite positive figures

Sean Evers

I first came to America in the summer of 1982 to work as a waiter during the school holidays and my lasting memory of that time, aside from the breathtakingly tall buildings in New York City, is just how friendly everybody was. You couldn’t go more than five minutes without someone saying hello, wishing you well — the infamous “have a nice day” was real then.

Fast forward to 2018, and I have just come down to breakfast in my five-star hotel and, over the last 15 minutes during my interactions with the restaurant hostess, busboy and waiter, not one of them has said: “Good morning, hope you slept well?” Not even a simple “can I help you?” It has all been just a series of transactional statements delivered with a slight bite: “What is your room number?” “Do you want coffee?” And, in response to my request to not have the table by the door, a brusque “that is all we have.”

This shift in tone from smile to growl did not happen overnight, but it does go a long way to explaining the Trump phenomenon — a rich vein of discontent Donald Trump has mastered the art of mining, which counterintuitively keeps growing, not shrinking, no matter how many records the Dow Jones stock index hits or how low unemployment falls.

I have witnessed the trajectory of this trend line over many decades of coming to the US since my college days at the University of Notre Dame in Indiana in the late 1980s. It has been a slow drip of things attached to the American Dream just becoming ever so slightly, and ever so more often, out of reach of increasingly everyone, except the last bastion of the privileged 1 percent, and soon to be the exclusive domain of the 0.01 percent.

Wikipedia defines the American Dream as the belief that anyone, regardless of where they are born or what economic class they are born into, can attain their own version of success in a society where upward mobility is possible for everyone. This is achieved through sacrifice, risk-taking and hard work, not by chance.

Death by a thousand cuts — a form of torture and capital punishment practiced in Imperial China from the 10th century until its banning in 1905 — is an appropriate and somewhat ironic analogy to describe the decline of the American Dream. The rise of China has played a significant role in literally wiping the smile off the average American’s face, as they have been drowning in somewhat useless made-in-China plastic consumer goods for decades now. And, in the process, this has helped destroy US manufacturing while overwhelming Americans in a mountain of debt.

This “emperor has no clothes” charade came crashing to the floor with the global economic crash 10 years ago, sowing the seeds of populism, anger and the rise of Trumpian ideology. Sean Evers

When it comes to the US jobs report, for years now it hasn’t been the number of jobs created or the headline unemployment rate that has commanded everyone’s attention (the latter is now near record lows of below 4 percent). But the mystery of the American paycheck is the real clue as to why we have seen a sprint to the right in US politics: Stagnant real wage growth means people’s incomes are not keeping ahead of inflation.

US workers’ paychecks are worth less than they were a year ago, the Labor Department has reported. Prices rose 2.9 percent from July 2017 to July 2018, while average hourly pay increased 2.7 percent in the same period.

This paradigm has repeated itself year after year, decade after decade, so that gradually, slowly but surely, first the working class got caught in the vortex of stagnant real income growth, and then the middle class got pulled into the wealth doldrums.

The full weight of this reality was suspended for years by the increasing availability of cheap credit — previously the privilege of the wealthy, but it migrated down the economic ladder as stagnant real wage growth has climbed up through the economic classes. It essentially seduced people into believing they still had spending power because they have five credit cards in their wallets.

This smothering reality is even now taking a grip on the millionaires on Park Avenue on the Upper East Side of Manhattan, one of whom told me over dinner this week that you have to earn close to $1 million dollars in pre-tax income just to send two or three kids to the much sought-after, well-to-do private schools in New York City. The quadrupling of the Dow Jones index over the last 10 years has merely increased the many millions of dollars the upwardly mobile crowd require to keep up with the proverbial Joneses on all other spending habits — an unsustainable spiral sending more and more voters right to Donald Trump.

This “emperor has no clothes” charade came crashing to the floor with the global economic crash 10 years ago, sowing the seeds of populism, anger and the rise of Trumpian ideology. The president continues to sell this message in the 2018 midterm election cycle, insisting that this can all be reversed and fixed because someone else is to blame for your pain.

Don’t underestimate the ability of this message of denunciation and ridicule to keep delivering victories with ever more recruits, but no “have a nice day” smile in sight.

Sean Evers is the founder and managing partner of Gulf Intelligence.

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