Republicans and Democrats attempt to differentiate themselves via their views of the government’s role in the economy. With close examination, it is hard to find real differences between them.
Those on the Right promote the benefits of “true” capitalism that allows markets to set prices via supply and demand. Those on the Left share the view that capitalism is too harsh and that the government needs to step in and smooth out inequities created by markets. At the extreme Left, socialism is promoted, irrespective of its history of failure.
At the macro-economic level there is little difference between Republicans and Democrats. Crony capitalism is rampant within both parties. Republicans typically support large industries and those in the military industrial complex. Democrats promote social programs that benefit industries including education, social services, medical services, and trial lawyers. The result of crony capitalism has been a significant increase in governmental spending and a surging United States’ debt over the past 50 years. This debt is in part responsible for the economic malaise that has been inflicted on the country over the past decade.
An example of crony capitalism and the damage it has done is the educational industry. Through the US Department of Education, as well as at the state and municipal levels, the funds spent on primary education have been skyrocketing as indicated by the charts below.
However, the increased spending has not resulted in improved education. The chart below shows how poorly our students are doing in basic reading comprehension.
The problem is more significant at the college level. The educational industry, with support of the US government and its loan programs, has created the false narrative that all Americans require and deserve a college education, irrespective of whether or not it improves their economic well-being. As a result, the amount of student debt now exceeds $1 trillion and a significant portion of college graduates cannot make an income level that would allow them to pay off the debt in a reasonable period of time. Many have been forced to move back into their parents’ houses.
While a market-based economy can be a cruel arbitrator of scarce resources, crony capitalism has proven to be catastrophic to those who have been cajoled into inappropriate economic decisions based on government programs. It is a major cause of the growing wealth disparity between the ultra-rich and average Americans.
Yes, both Hillary Clinton and Donald Trump have prospered under crony capitalism. The same cannot be said for most Americans.