How to Save the Middle Class

Many Americans don’t know where the Great Middle Class came from. They see it as a natural outgrowth of “free-market capitalism” when it was really the product of conscious government policies, starting with the New Deal. That confusion must be addressed in this political season, says Beverly Bandler.

By Beverly Bandler

“President Obama is like a pilot who took the controls of the plane in mid-flight after the engines fell out,” wrote Jonathan Chait in December 2009. “It’s obvious that he didn’t cause the problem. But the passengers are going to focus on the fact that the plane was still airborne before he took over, and now, he’s crash-landing in the ocean.”

Yet, the Republicans continue to agitate the “passengers” who may not understand or may have forgotten what policies from which party brought the nation to this dangerous point: the radicalized GOP (with some help from Democratic enablers).

Franklin D. Roosevelt, the 32nd U.S. President and the architect of the New Deal.

The conservatives, who were the chief pilots causing the catastrophe, keep reminding the public that the economy continues to struggle under Barack Obama. (And Mitt Romney says that if the voters simply let the Republicans back in the cockpit, all will be okay.)

It is certainly true that the U.S. economy remains in bad shape, as Jeff Madrick noted this month at The New York Review of Books:

“The Commerce Department just reported that GDP [Gross Domestic Product] grew at an annual rate of only 1.3 percent in the second quarter. Job growth has been tepid, with continued high unemployment and underemployment. When one counts all those looking for full-time jobs and unable to get them, the true unemployment rate is close to 17 percent.

“Meanwhile, the US faces looming threats of a new European recession and a slowdown in China and other parts of the developing world. … But the starkest evidence that something is seriously amiss in the American economy is the dramatic deterioration of the middle class.”[10]

The Pew Research Center reports that “Since 2000, the middle class has shrunk in size, fallen backward in income and wealth, and shed some, but by no means all, of its characteristic faith in the future.”[15]

So, the obvious needs to be pointed out — again: the Republicans and their “Herbert Hoover/Ayn Rand” mindset have obstructed ruthlessly every Democratic effort to improve the economy, starting with the early 2009 stimulus that while admittedly too small (the GOP fought to keep it that way), is credited with keeping the U.S. out of a second Great Depression. [11]

The GOP became emboldened as a result of the 2010 midterm elections, a bad “gift” reportedly from mostly independent voters who apparently don’t read enough and a Democratic Party that consistently fails to do a good job at public outreach.

The Democratic Party might be taken to task (and rightly so) for underestimating the nature and magnitude of the economic crisis in early 2009, but unfortunately the real problem, in my opinion, was that they also underestimated the nature and magnitude of the political opposition.

Democrats (most notably President Barack Obama) thought they were governing with what has been traditionally the “loyal opposition,” but what they faced for the last four years has been the reincarnation of the Spanish Inquisition. Obama, the Democratic Party and all progressives were to be burned at the stake along with any remnants of the New Deal.

Belief and myth form the basis of today’s authoritarian version of the Republican Party’s alternative reality, a “reality” that continues to trump economic history and empirical studies. The nation and its people be damned.

According to Nobel Prize-winning economist Paul Krugman, “Most economists believe the big risk to recovery comes from the inadequacy of government efforts,” an inadequate stimulus. [8d]

There is a broad consensus based on serious analyses that the stimulus, The American Recovery and Reinvestment Act of 2009 (ARRA), a $787 billion stimulus, was an effective piece of legislation (latter increased to $840 billion in the 2012 federal budget).

It was admittedly not enough,the GOP and conservative Democrats fought against it but the reality is the stimulus kept the United States out of a depression and significantly improved prospects for recovery. [11]

But there is one fundamental thing that American voters need to understand about the U.S. economy: The middle class is the engine that drives the economy. All other lessons are secondary to that one reality. And, historically, it has been the Democratic Party, with the help of some moderate Republicans, that has grown the middle class.

A study that reviewed 80 years of our nation’s economic history from the Great Depression and Herbert Hoover, to the Great Recession and George W. Bush, revealed that when it comes to which party is better for the economy, Republicans talk the talk, but it’s the Democrats who deliver the goods.

Of the five best economic presidents since Herbert Hoover, only one is a Republican. [6] Author Lew Goldfarb blames the conventional wisdom that Republican presidents are better economic managers on the inability of the Democrats to tell their story.” [3]

Reporter Robert Parry, among others, has addressed frequently the Right’s skill at “perception management” through their formidable GOP Noise Machine and their consistent determination to reinvent history.[2,13]

Unfortunately, there is no button we can push, no “silver bullet” to fire, that will to get us out of an economic mess that is the result of decades of bad policies, but most particularly the one that began in 2000.

We can be certain of this: doubling down on bad conservative ideas that have been discredited and obsessing over the deficit and slavishly embracing the austerity budget in the face of economic history and empirical studies will lead the United States to disaster.

The American public needs to take its share of the blame. More voters need to turn off the television and read. And read writers who know what they are talking about. A good number are noted below. Here’s one: Jeff Madrick, author and former economics columnist for The New York Times. Some points from his latest article in The New York Review of Books:

–Median household income, the midpoint income of all American households, was reported by the Census Bureau (whose data is a year or so behind) to be down in 2011 compared to 2010, despite an economic recovery that began in mid-2009.

–More disturbing [median household income] is now down to around $50,000, which is 7 percent or so below what it was in 2000 and its lowest level since 1996, adjusted for inflation. Incomes are falling still more sharply for black households.

–The Census Bureau also reports on poverty levels, and these too are reason for serious concern. At 15.1 percent, some 46 million people, the proportion of Americans in poverty is now at its highest level since 1993.

–According to a recent Rutgers University report, more than half of those who have received a college degree since 2006 cannot find full-time jobs.

–The reason that the economic recovery is coinciding with middle class decline is increasingly clear. America is creating jobs, but they are bad jobs: retailing, food preparation, and table waiting, for example,in other words, jobs that don’t pay much.

–Despite deficit concerns, robust action in the jobs market will be urgently needed to counter the growing problem of bad jobs over the next presidential term. Only by encouraging much faster growth through new stimulus and public investment will the government have a strong prospect of reversing the middle-class income crisis.

–It should at least be clear to voters that President Obama’s proposals as they now stand will still add far more jobs in 2013 and 2014 than would Mitt Romney’s. Moreover, while falling short of what is needed, Obama’s general approach could be enhanced if the political environment changes. [10]

The estimated 70 percent of Americans who are sane and retain their common sense i.e. those who don’t worship at the altar of the Market or of Religious Fundamentalism, that is, Democrats, moderate Republicans, Independents, and the “I don’t know where I am’s” need to get to the polls this November and vote for Barack Obama and as many progressive Democrats in Congress as they can.

Tribal politics must be put aside. Then, we need to put pressure on the Democratic Party that has the best ideas and is still grounded in real reality but which has been far too timid (or intimidated?) and in a wimp, react-retrench-retreat mode (partly due to the corrupting influence of money in politics), to ditch the obsession with the deficit and the “phantom menace” debt to provide the government help that must be extended.

We need to get the anti-democratic, anti-republican Citizens United decision reversed. We need to reverse the anti-government attitudes that have been deliberately promoted for political purposes, but attend to reforming government where it needs it. We need to hold the mainstream, corporate-supported media accountable.

Effective good government is the only thing that will protect us from fundamentalists, market and religious: the corporations and religious zealots (christo fascists) who are trying to take over the country and all of us. If government is no longer effective and good, let’s make it so.

To say that this will not be easy nor will it be accomplished overnight is an understatement. But, it can be done. And we can do it if we all need step up to the plate together. Americans did this in World War II and we can do it again.

Beverly Bandler’s public affairs career spans some 40 years. Her credentials include serving as president of the state-level League of Women Voters of the Virgin Islands and extensive public education efforts in the Washington, D.C. area for 16 years. She writes from Mexico.

[1] Amadeo, Kimberly. Economy.
[2] Bandler, Beverly. “GOP’s Strategy of Deception.” ConsortiumNews, 2012-05-31.
[3] [8] Bedard, Paul. “80-year study: Democrats better at economics.”  The Washington Examiner. 2012-08-17.
[4] Berman, Jillian.  “Middle Class Exit ‘Lost Decade’ With Little Hope: Pew Report.” The Huffington Post, 2012-08-22.
[5] Chait, Jonathan. “Screw Job.” How Obama became the unemployment fall guy. (Or, What the Public Doesn’t Understand About Economics.” The New Republic, 2009-12-23.
_______“Wasting Away in Hooverville.” The New Republic, 2009-03-18.
[6] Deitrick, Bob, and Lew Goldfarb.  Bulls Bears and the Ballot Box: How the Performance of OUR Presidents Has Impacted YOUR Wallet.  Advantage Media Group (July 1, 2012).
[7] Hacker, Jacob S. and Paul Pierson.  Winner-Take-All Politics: How Washington Made the Rich Richer–and Turned Its Back on the Middle Class. Simon & Schuster (September 14, 2010).
[8] Krugman, Paul. (a)“How to End This Depression.” The New York Review of Books,” 2012-05-24.
_______  (b) End This Depression Now! (Norton, 2012).
_______  (c) “The Optimism Cure.”  The New York Times, 2012-09-24.
_______ (d) “What? Huh?  US Debt A ‘Phantom Menace.’” 2009-11-23.
_______ (e) “Supply-Side Virus Strikes Again.” Slate, 1996-08-16.
[9] Lofgren, Mike.  The Party Is Over: How Republicans Went Crazy, Democrats Became Useless, and the Middle Class Got Shafted. Viking Adult (August 2, 2012).
[10] Madrick, Jeff. “Our Crisis of Bad Jobs.” New York Review of Books, 2012-10-02.
________Age of Greed, The Triumph of Finance and the Decline of America, 1970-Present. (Alfred A. Knopf, st ed., May 31, 2011)) Vintage; Reprint edition (June 12, 2012)
[11] Matthews, Dylan.  “Did the stimulus work? A review of the nine best studies on the subject.” The Washington Post, 2011-08-24.
[12] New Deal 2.0 Roosevelt Institute.
[13] Parry, Robert.   “Ryan’s Distortion of America’s Founding.” ConsortiumNews, October 6, 2012.
_______“A Test for the Right’s Machine.” ConsortiumNews, 2012-09-08.
_______ “Palin’s ‘Death Panel’ and GOP Lying.” Consortium News, 2009-08-11.
[14] Perr, Jon.  “Which party is best for the economy? It’s not even close.” Daily Kos, 2012-09-02.
[15] Pew Research Center. “The Lost Decade of the Middle Class.” 2012-08-22.
[16] Smith, Hedrick. Who Stole the American Dream? Random House (September 11, 2012)
[17] Stiglitz, Joseph E. “Of the 1%, by the 1%, for the 1%.” Vanity Fair, May 2011.
_______ Freefall: America, Free Markets, and the Sinking of the World Economy (Hardcover). W. W. Norton & Company (January 18, 2010).
_______“The Economic Consequences of Mr. Bush.”  Vanity Fair, December 2007.
Aggregate demand is the sum of all demand in an economy. This can be computed by adding the expenditure on consumer goods and services, investment, and not exports (total exports minus total imports). Mike Moffatt,

7 comments for “How to Save the Middle Class

  1. clarence swinney
    October 13, 2012 at 15:36

    Rehmat—-since 1980, 3 R presidents got us involved in 10 foreign conflicts.
    Carter + Clinton=0

  2. clarence swinney
    October 13, 2012 at 15:34

    Wants to cut taxes—35% to 28%–eliminate Estate Tax– where one family owns as much Wealth as 90% of families—keep capital gains at 15%–where 25 Hedge Fund Managers made 22 Billion in 2010
    and paid the low 15% and less than 1% or zero in Payroll tax—offset revenue loss by closing loopholes
    Ha. Each loophole has proponents to fight for them—Increase military spending biggest waster of all—Our armies in 800 bases worldwide. We pursue bad trade agreements that allow unrestricted access to our markets. We cannot compete with $1 labor so watch our factories closing. 58,000 closed in last decade.

    We must demand better self serving policies. Tariffs on imports. High tax rate to pay down that horrid debt like 1945-1980 tax rates and tax on estates. The Middle Class has been hurt badly with loss of good paying jobs with benefits. Protect our safety nets which have served us well for over half a Century.

    Mitt is a rich mans candidate no spin can deny it. He will cut taxes for his rich pals and shred safety nets.
    This Man scares me very much. I do no trust his motives

  3. bobzz
    October 13, 2012 at 15:06

    The Nobel Peace Prize went to the European Union. One of their spokesmen talked about how Europe rebuilt their world. Absent was any reference to the Marshall Plan, perhaps the biggest government infusion of money for post war recovery in world history. Were it not for the Marshall Plan, the chances of Europe’s going communist were good. The Marshall Plan had its critics—American businessmen. If they had their way, they would have had far fewer markets. The height of their IQs are matched by the depth of their wisdom.

  4. tazzle
    October 13, 2012 at 13:50

    I was having an argument with the conservative friend of an in-law a couple of months ago and he was going off on the “I built it” meme. He’s an artist and he’s got an art gallery near the San Antonio Riverwalk. He’s made most of his money from the tourism industry and was carrying on about how his talent and that of the artists that sell in his shop made him a success as well as his business savvy. “I built it,” he said proudly. “The government didn’t give me a handout, I loaned the start-up money from my parents, I BUILT IT.” I gave him a thoughtful look. “You get the majority of your sales from the tourism business along the Riverwalk don’t you?” I asked him. He nodded affirmative. “You do know that the Riverwalk was a New Deal project, right?” I continued. He stared at me, flummoxed. This is the problem with conservatives. They don’t stop to consider how much the government assists people. San Antonio takes in a great deal of revenue from tourism downtown from people coming to see the Alamo, the Riverwalk, and other shrines to Texas independence. The government-sponsored Parks Department pays for the upkeep of many of the monuments and the Alamo. The businesses downtown flourish from the tourism industry that’s drawn to the Riverwalk as well as the locals who like having a good time at the clubs and eateries there. The entire downtown area has been built on the largesse of government dollars that renovated it’s streets and city transportation for tourists, attracting businesses that have thrived on the industry. Yeah, they built it. With a little–or a lot–of help from Uncle Sugar.

  5. Morton Kurzweil
    October 13, 2012 at 13:20

    The conservatives were not the chief pilots. They were the engineers who manufactured the crash of ’29 and used the same techniques throughout the Dubya administration.
    Nobody who lived through the Great Depression and WWII thought of their sacrifices as deserving of ‘entitlements’. The post war claims to freedom from fear, freedom from hunger, freedom from inequality, freedom from coercion and freedom to work were opposed by conservatives every step of the way to self respect. The same ideology of greed and lies that worked for Hitler are being used today.
    Every gain is temporary against a religious ideology of divine right by might.

  6. Hillary
    October 13, 2012 at 11:18

    The difference between Democrats and Republicans blah blah .

    The massive interest payments by the UK and the US on their enormous debt controls what will happen to both types of “middle class” whatever happens.

    Remember the $3-$4 Trillion Iraq war was to pay for itself ?

    See how the CIA was/is on a mission to keep “them” calm.

    The middle class goose is just about cooked but the sheeple don’t know it.

  7. clarence swinney
    October 13, 2012 at 11:06

    Just Thinking
    Obama will increase spending 8.6% to Bush 92%-Reagan 80%–why not brag?
    1830 to 3510
    3510 to 3800
    We rank in OECD
    Inequality # 4
    Least taxed #3–Chile and Mexico lower–Percent of gdp in federal-state-local taxes
    Least tax on corporations-#2
    I ask pals how much are we taxed as percent of gdp in federal-state-local taxes
    No one ever said less than 50%
    Number is 27%
    50% got 86% individual income paid `12.5% tax rate in 2008
    Corp. paid 12.1% in 2011.

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