The GOP has won repeatedly by defending tax cuts for the rich. But as Michael Tomasky argues, Democrats could prevail in 2012 by showing that middle-class fairness produces growth.
I have praised Barack Obama on previous occasions for finally (after nearly three years) figuring out he needs to position himself as the defender of the middle class and the Republicans as the defenders of the wealthy. It’s been a big improvement. But he’s still mostly missing something, and it’s a very important something—something Democrats miss a lot. Obama, in the standard Democratic fashion, is largely making an argument about society. Republicans, in contrast, offer a theory about economic growth. Now, the Republicans’ theory is a ridiculous lie. But even so, it is much more arresting and persuasive as an argument because it is tied to crucial end results. Obama and the Democrats will have far less trouble selling their message if they figure out how to construct their case more the way Republicans do.
If I asked you to summarize in a sentence the main theme of Obama’s recent big speeches, the Osawatomie address and the State of the Union, you would probably say something like: he’s for building up the middle class and making the rich pay more because things are out of whack and unfair. And if I asked you to summarize the GOP’s trickle-down economics, you would say: the idea is that cutting taxes and regulations on those at the top will eventually help everyone.
I think I’m being fair here. And if I am correct, notice the difference between the two hypothetical descriptions. The summary of the Obama message makes an argument about the country (things are unfair), and it proposes steps (building up the middle class, making the rich pay more) that will presumably make things fairer. But the summary of the Republican message takes it one critical step further. It says: if we do these things, the economy will grow and prosper. Obama is making an argument about society: unfairness is wrong and must be corrected. Republicans are offering a theory of action toward the specific end of growth.
What Obama needs to do more forcefully is make the next step of the argument by answering the questions: Why must fairness be restored? What will it lead to? To liberals, it’s enough that it will lead to a fairer society. Therefore, it doesn’t even occur to many liberals that the “What will it lead to?” question even needs to be answered. A fairer society is enough. But for many Americans, it’s not enough. A fairer society is fine, they think, if we can afford it. But what these Americans want is a society where there are lots of good jobs. A prosperous society. So what Obama and his speechwriters should be hoping people summarizing his speeches would say is something like: he’s for building up the middle class and making the rich pay more because things are out of whack and unfair, and because doing so will create a more prosperous society. That’s the missing piece.
In my formulation, then, a happier and larger middle class isn’t just an end unto itself. It’s a means to an end—an end made up of more jobs and greater prosperity. It’s an answer to trickle-down economics: the Republicans say that if taxes are cut for the top 1 percent, prosperity will result; we Democrats say that if we take various steps to help the middle class, some involving taxes and others involving investment, that will lead us to prosperity. Democrats should not be afraid to have that argument. They should relish it.
There are people out there making it. My friends Nick Hanauer and Eric Liu have just published their second book together, The Gardens of Democracy, in which they make the case for what they call “middle-out economics,” which “does not rely on the droppings of the super-rich.” (Of which, by the way, Hanauer is very much one—he was a ground-floor investor in Amazon and runs a venture-capital firm; Liu was a White House domestic-policy adviser under Bill Clinton.) Instead, it “starts with the broad middle to generate wealth and pushes wealth outward so that it can circulate throughout the economy.”
At a terrifically interesting lunch at the Brookings Institution last Friday, Hanauer, who wrote a column for Bloomberg View in November that generated a massive response, said pointedly: “I am not a job creator. The middle class are the job creators. Believe me, capitalists like me, we hire only and exactly as many people as consumers ask us to hire. Their demand creates the jobs.”
Obama sometimes connects the middle class to jobs and prosperity. But he doesn’t do it as often and as explicitly as he ought to.
I recommend their book, which makes several provocative arguments that challenge conventional economic and political wisdom. And I commend also in this vein an article we published nearly a year ago in Democracy, the journal I edit, by David Madland of the Center for American Progress. Madland explains clearly how middle-class growth can be positioned as the exact opposite of trickle-down growth, and he cites a pile of social-science research showing that a prosperous middle class is not just an end in itself but that it also leads to better social outcomes, like greater trust and better governance.
Obama doesn’t always fail to connect the middle class to jobs and prosperity. In the Osawatomie speech he said: “When middle-class families can no longer afford to buy the goods and services that businesses are selling, when people are slipping out of the middle class, it drags down the entire economy from top to bottom. America was built on the idea of broad-based prosperity, of strong consumers all across the country.” But he doesn’t make this argument as often and as explicitly as he ought to. Whether the idea of fairness can attract a voting majority is, alas, an iffy proposition. But the idea of a more prosperous society that also happens to be fairer should finally consign supply-side economics into the grave in which it has so long and so richly deserved to be entombed.