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Sunday, December 4, 2016

Obama’s ‘Middle-Class Economics’ Has To Be About Fairness And Prosperity

Obama’s ‘Middle-Class Economics’ Has To Be About Fairness And Prosperity

The fairer “middle-class economics” policies described in the State of the Union are also the right ones to help the economy grow.

In coining the new term “middle-class economics” and linking it to raising wages and taxing the rich and Wall Street to put money in the pockets of working families, President Obama used his State of the Union address to ask the public that most potent of political questions: “Which side are you on?” And as Republicans say no to improving wages and making college more affordable in order to defend the super rich, Americans will get a clear answer. That’s a sure win for Democrats.

But the president’s explanation of middle-class economics downplayed an important part of the story: it’s not just about fairness, it’s about how we create prosperity.

With the term “middle-class economics,” the president is creating a contrast between economic programs aimed at boosting the middle class and the Republican agenda of shrinking government and lowering taxes for corporations. But Obama’s use of the term missed an opportunity to drive home to the American public that middle-class economics is not just about fairness, but also about moving the economy forward.

Obama defined middle-class economics as “the idea that this country does best when everyone gets their fair shot, everyone does their fair share, and everyone plays by the same set of rules.” That is one of the president’s favorite phrases. But for all its appeal, it does not explain how middle-class economics drives economic progress and increases wealth. He fails to replace the Republican story that cutting government, taxes, and regulation are the keys to economic growth.

The president actually included such an explanation of what drives the economy in his 2013 State of the Union address, when he said: “It is our generation’s task, then, to reignite the true engine of America’s economic growth: a rising, thriving middle class.”

Democrats need to firmly claim both the grounds of fairness and prosperity. As I recently wrote, “The policies that do the most to bolster fairness are in fact the most powerful policies to move the economy forward and create broadly shared prosperity.”

This is an easy case to make, as it’s true for most of the policies in the president’s middle-class economic agenda.

To take just one example, raising the minimum wage is not just about basic fairness for low-wage workers. Raising wages is about creating economy-boosting jobs instead of economy-busting jobs. When wages are raised, workers have more money to spend—essential when 70 percent of the economy is made up of consumer spending.

The president’s tax proposals are also about more than just the unfairness of a tax code riddled, as he said, “with giveaways the super rich don’t need, denying a break to middle-class families who do.” His proposed taxes on risky bank speculation move that money to invest in vital infrastructure. When he proposes raising taxes on the rich, who already have more money than they can spend, and using those funds to make community colleges more affordable, he’s putting that money into the economy and investing in people’s skills to contribute to economic progress.

Fairness is a very powerful American value. That’s why the most successful Democratic candidates in 2014 made it clear that they were on the side of working families against Wall Street.

But the reason that fairness is so powerful is because of the contrast between the few with vast wealth and what Americans most want, to be able to care for and support their families. We value prosperity and security. That is why it is essential that Democrats can tell a clear story about how we move the economy forward. Middle-class economics is about more than fairness – it’s about how working families and the middle class drive the economy.

Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Advisor to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

Cross-posted from the Roosevelt Institute’s Next New Deal blog.

The Roosevelt Institute is a non-profit organization devoted to carrying forward the legacy and values of Franklin and Eleanor Roosevelt.

Photo: President Barack Obama delivers the State of The Union address on Tuesday, Jan. 20, 2015, in the House Chamber of the U.S. Capitol in Washington, D.C. (Olivier Douliery/Abaca Press/TNS)

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