Its the Middle Class Stupid

It was apparent looking at the national exit polling after the 2004 disaster that there was something to be said of the role of economics in the election. There was a clear correlation between support for Bush and family income which had most middle class voters supporting Bush. One could argue that the bigger the tax cut the stronger the support for Bush, and that this dynamic made the difference in the election much more than the culture wars or national security. The argument is there, up front in the exit polling, and that is precisely the argument that Anne Kim, Adam Solomon, and Jim Kessler make in the Democratic Strategist.

At Third Way, we not only believe the what's-the-matter-with-Kansas analysis is wrong, but that it represents a dangerous red herring for Democrats. In a report we co-authored called The Politics of Opportunity, we isolated five areas of disconnect between how Democrats talk about the middle class and view the economy and how the middle class view their own economic situation and that of America.

Disconnect one is optimism versus pessimism. Whether it's the "people versus the powerful" Al Gore's convention speech or John Kerry's "Benedict Arnold companies" where American workers see their factories "unbolted, crated up, and shipped thousands of miles away," the Democratic economic message is pervasively pessimistic. Democrats see the American Dream fading, the middle class being squeezed, jobs disappearing, schools crumbling, and wages stagnating.

That is not the way middle-class Americans view their own lives. Days after 9/11, 80% of Americans expressed optimism about the year ahead. Two months after gas hit $3 per gallon, 73% said they were optimistic about their family's finances. In 2004, 78% said they were doing "fairly well" financially. And only 22% believe they will not "earn enough money in the future to lead the kind of life [they] want."
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Disconnect two is economic decline versus economic strength. Democrats have become the "falling behind" party. America is falling behind China and India in innovation. Our kids are falling behind in math and science. Our middle class is shrinking. And by the year 2062 our GDP will be half the size of Burma's.

Fortunately for America, and unfortunately for Burma, this does not reflect economic reality. Most economists who advise investors seeking to earn money (rather than those who advise politicians seeking to win votes) are confident in America's future. Most see America winning the competition against India and China, just as we did over Japan in the 1980s and Germany in the 1970s. They know that our economy boasts strengths unmatched by other nations, including flexibility, resiliency, strong capital markets, financial and political transparency, legal protections for intellectual property and an unparalleled university system.

It is true that our national prosperity is threatened by the Bush policies of high debt, tax giveaways to the most affluent, a theocratic faith that corporate America will solve our health care and energy crises, and the growing income inequality found in our country. Yet even with six years of wrong choices behind us, the bursting of the tech bubble, the attacks of 9/11, Hurricane Katrina, and sky-high oil prices - America's vital economic signs are fundamentally robust.

Disconnect three is economic security versus individual opportunity. Democrats rarely talk about individual aspirations of greatness or success; they mostly talk about people's economic status or about their economic fears.

As Americans have grown more affluent -- and with a few blips along the way, American households have steadily grown more affluent over the past 60 years -- they have come to care less about economic security and more about economic opportunity. In the past, individuals were far more likely to aspire to a job that offered modest pay but high security. Today they would rather choose a potentially higher paying but riskier job.

Economic security should be addressed, but equal time should be given to the yearning most Americans have to get ahead.
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Disconnect four is ideas. Most signature Democratic ideas do not benefit middle class people; they benefit those who aspire to the middle class. The typical Pell Grant recipient earns less than $20,000. The minimum wage impacts less than 2% of working Americans. The earned income tax credit phases out to a pittance for families over $25,000. Head Start, food stamps, and WIC are for the poor, poorer, and poorest of society. The middle class believes in these programs, but they are wondering when someone will pay attention to them.
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Disconnect five is an unconvincing economic critique of conservatives. Folks, if bashing rich people, the oil industry, and the drug companies were an effective political strategy, jets would be landing at Michael Dukakis National Airport in Washington.

An effective economic critique should tell a story. The conservative story about Democrats is that they believe the government does a better job of spending your money than you do. Every conservative economic argument against the left derives from this statement. Democrats need a story of their own.

In a conversation this weekend a friend argued that John Edwards was unelectable because by talking about "two Americas" and ending poverty he gave the middle class nothing to vote for. The thing is that Edwards, more than anybody else creates the story that is discussed here in the article. The author's here move on to prescribe a number of initiatives that the Democrats should be pushing, I would add universal health care to their list, but it fits well within the same argument.

The answer to the critique that Edwards is only really appealing to a group of people who don't vote and needs to be talking middle class is to respond with social contract. This is the idea that must be pushed by Democrats, that we are all tied together and that we have collective political obligations to one another. We have collective interests that must be defended, and part of that is dealing a blow to poverty in America, but another part of that is to defend middle class interests as the author's suggest. John Edwards' response should be that we are all in this fight together when someone accuses him of only defending the poor. And that is precisely what he's doing, from Edwards' One America Committee:

This is not about pumping money into a broken government program. It's about finding ways to help everyone who works hard and makes responsible choices get ahead. It's about creating a new kind of social contract that I call the "Working Society."

Edwards is not the only one catching this boat, in fact it seems to be a boat that many are rushing to catch after Michael Tomasky argued in the American Prospect that Democrats must return to their social contract roots, Howard Dean has picked up on the idea too.

America's busted social contract is already being discussed on the presidential campaign trail, most notably by Howard Dean, who gave a major policy speech on December 18 on this theme. But Dean barely mentioned the word "values" as he outlined his New Social Contract.

What the author's at the Democratic Strategist call "disconnect five" is a very important part of the social contract campaign that the Democrats should be running as well. However, the author's miss the boat here by focusing so much on the narrow interest of "the middle class". It's Katrina stupid. Hurricane Katrina last year revealed something important about the Republican agenda. The Republican Party seems to believe that government is always evil, and that we owe no collective obligations to each other. This is the narrative that Katrina spelled out for Democrats to create for the Republican Party, and the failure of the Federal government to come to the aid of Americans in their darkest hour showed a Party that only wishes to govern for the sake of a few elite interests. That is the narrative that Democrats are looking for to frame Republicans with. They hate government and only use it cynically to help their friends, we will use it to help the middle class and poor Americans to govern for the collective of America instead of just the elite few.

At this point that framing of the Republicans will be difficult to do because of the way that the concept of guilt has been laid out in relation to the Katrina disaster. That narrative that has emerged is that "everyone screwed up, everyone is guilty." But to channel Hannah Arendt here, "where all are guilty no one is." And to place blame everywhere takes it away from where it really belongs, the Bush Administration. Who had the resources to manage this disaster? The federal government, did they? No. Did the State of Louisianna have the resources? No, they had some, but not nearly the resources the Federal Government had. Did the city itself? Absolutely not. I'm not a Ray Nagin fan, but he had no ability to do anything.

So yes, the Democrats need to respond to their growing problems with white middle class voters, but the answer lies in emphasizing social contract and the Republican's violation of that fundamental idea. The author's miss that point but make a strong case that Democrats should be paying far more attention to the middle class.