The 20 percent who run America need to start paying serious attention to the plight of the middle and lower classes.
The middle class has been getting a lot of attention lately. In May, The Atlanticdescribed the “middle-class shame” of half of Americans being unable to come up with $400 in an emergency. A recent Pew Research Center study found the middle class in decline in almost nine out of 10 metro areas. And there is increasing talk of an America in which the upper 20 percent are doing well, while middle-income Americans, like lower-income ones, are under intensifying economic pressure.
“What the political leadership of America has forgotten is that in a democracy, politics is also a marketplace. Creative disruption and the discipline of the marketplace apply to the political arena as well as the economic one.”
The response of some is to deny that things are really that bad, to point to positive developments here or there, or to defend the same policies the parties have been pushing in recent years: more stimulus spending, more free-trade agreements, looser immigration control and so on.
The problem with these arguments is not that they are false. In fact, some of them are compelling. The problem is that they have no obvious connection to the daily experience of those living such a precarious existence that they can’t come up with $400 in emergency cash, or who are living through what political scientist Robert Putnam saw in his hometown of Port Clinton, Ohio, and described as the “crumbling of the American Dream.”
Not everyone sees things as Putnam does. An article in one conservative publication argued that manufacturer Carrier’s moving of 1,400 jobs from Indianapolis to Mexico was “utterly unrepresentative” of Indiana’s economy, and touted a number of accurate statistics about the strength of the state’s manufacturing sector. The author could have said much more, such as talking about the beautiful and booming small manufacturing city of Columbus, Ind., now full of foreign firms.
Yet a drive around the state would show many signs of serious trauma. Gary remains a byword of urban decline. Marion is a shell of its former self. Fort Wayne and Michigan City were two of the 10 biggest losers of economic status in Pew’s recent study. Scott County is making national headlines for its HIV epidemic. Harrison County, where I grew up, is a leading center for meth lab busts. I didn’t even know what meth was when I went to high school there in the 1980s.
Is free trade to blame for all of this? Obviously not. So what is? And how do we fix it? These are the unanswered questions.
Some on the left suggest that railing against free trade or factories decamping for Mexico is all merely racist anger, a sort of death scream from a powerless rural white working class. Not only is this unfair negative stereotyping, but much, if not most, of this anger is coming from those struggling in cities -- in places like Gary, Flint, Mich., and even Chicago and Los Angeles -- with large proportions of minority residents. A recent study from the Federal Reserve of San Francisco found that the median value of liquid assets held by households of Mexican origin in Los Angeles was zero.
So we find ourselves in uncharted territory. We should at least be willing to acknowledge that there are very hard problems out there that need to be faced, that the solutions aren’t obvious and that the issues are so big that the accumulated number of losers simply can’t be ignored.
This will involve having the courage to tell some unpleasant truths. Flint isn’t likely coming back, no matter how much money is spent there; its people need to seriously consider moving, maybe with government assistance. But it also means admitting that the prosperous 20 percent who have been running America have also gotten a lot of things wrong and need to make some changes themselves, not just promote more of the same things they’ve been touting all along.
“When political leaders refused to serve the large market of voters who want less immigration or to break up the banks... it never occurred to them that political entrepreneurs and new market entrants would come in to serve it. ”
It may well be that everything eventually will sort itself out. Once we’re on the other side of this wave of globalization and technological change, perhaps we’ll look back with nostalgia, just as when the industrial era replaced the agricultural one or the car replaced the buggy. In that case, all that’s needed is to stay the course.
But if that’s wrong, or if that future takes too long to arrive, then our failed bet may have fallout well beyond the economic. What the political leadership of America has forgotten is that in a democracy, politics is also a marketplace. Creative disruption and the discipline of the marketplace apply to the political arena as well as the economic one.
When political leaders refused to serve the large market of voters who want less immigration or to break up the banks, among other things, it never occurred to them that political entrepreneurs and new market entrants would come in to serve it. While these leaders were celebrating how Uber used new technology to disrupt the taxi business, for example, it never occurred to them that technology, in the form of social media, also would disrupt the politics business.
Now that they are on the receiving end of disruption and creative destruction, they don’t like it very much. But now they know how so many Donald Trump and Bernie Sanders voters feel.
This should, one would hope, prompt some empathy and willingness to reconsider public policy for an era much different from decades past. Getting it wrong will be a failure with a price higher than we should have to pay.
This piece originally appeared in Governing
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Aaron M. Renn is a senior fellow at the Manhattan Institute and contributing editor at City Journal. Follow him on Twitter here.
This piece originally appeared in Governing