Democrats and the middle class

Charles Schumer is a powerful Democratic senator from New York. He sits on the Finance Committee, currently holds the number three position in his party’s Senate leadership team, and chaired the Democratic Senatorial Campaign Committee from 2004-08. As characterized by Isaac Chotiner in a New Republic interview, Schumer has been a “fan” of Elizabeth Warren since she was “a relatively unknown Harvard professor,” but he is also a major supporter of Hillary Clinton and, as a senator from the Empire State, a friend to Wall Street. Schumer seeks to define a program that is liberal but not populist, establishment but not conservative.

Though some of these positions, particularly the Wall Street support, frustrate the Democratic base, the power and influence Schumer has amassed suggest that he is doing something right. Thus New York’s senior senator provides a window into the the conflicted and confusing soul of the Democratic Party. Joshua Green seemed to be taking this angle on Schumer in 2009, when he published an article about him in The Atlantic. There Green laid out his subject’s interpretation of recent political history. For the last two generations or so, argued the senator, Republicans have successfully campaigned on the basis of reducing government regulation and intervention. Now that voters want something a bit different, they are willing to give the Democrats a listen. But the message the the party has been peddling, Schumer believes, is not going to sell in these times.

Central to Schumer’s analysis is that liberal politicians fundamentally misunderstand who comprises the middle class. In the United States (of 2009), the median household income for people ages 25 to 60 is about $85,000 for a married couple in which both spouses work. Yet Schumer argues that politicians who believe themselves to be aiding and speaking to the middle class continually trumpet programs—Green cites Pell Grants, the minimum wage and the Earned Income Tax Credit—for which these families actually earn too much money to qualify.

Thus when liberals attempt to address the issues that concern the middle class, they are not doing so. Green cites Schumer’s book Positively American, in which the senator argues that when these voters “talk about schools or health care or jobs, they felt we were talking about someone else’s health care and another neighborhood’s schools.” Democrats, Schumer wrote, always talk about “crumbling public schools.” But middle class schools are not “crumbling.” Instead, they’ve become “crushingly okay.” Politicians who use this language reveal themselves to be out of touch with the middle class.

The middle class is, of course, the largest demographic component of the electorate, so systematically alienating its members would be a terrible political idea. In that sense, Schumer’s observations could constitute an important corrective, both rhetorically and substantively. But his more recent comments lamenting the president's prioritization of health care suggest that there are other ways to view this approach. “The Affordable Care Act,” Schumer stated in a speech, “was aimed at the 36 million Americans who were not covered. It has been reported that only a third of the uninsured are even registered to vote.” The idea that one should not champion policies unless they will lead directly to more votes might strike some as craven and others as brilliantly Machiavellian. Beyond the strategy, however, it appears as an abnegation of the liberal commitment to addressing issues of economic inequality. Schumer’s argument that Democrats should think and talk about the middle class more is difficult to distinguish from the claim that they have been concentrating on the poor too much.

By contrast, President Obama has been using the phrase “middle out economics” for the last two years or so. Originally coined by wealthy investor Nick Hanauer and writer Eric Liu, the phrase contrasts with “trickle down economics” and conveys the idea that a successful economy requires a broad middle class. This approach has caught on in some liberal policy circles: a special issue of Democracy: A Journal of Ideas featured a symposium on the idea and the Center for American Progress sponsors on initiative on it.

Thus it might seem that there is a widespread consensus within the Democratic party on  the necessity of policies that support and reach out to the middle class. But this apparent consensus masks a significant disagreement. Both Schumer and Hanauer & Liu wish to emphasize the middle class. But the former thinks that liberals have been mistakenly prioritizing the poor, while the latter see the problem as an inappropriate focus on the rich. Their divergent analyses lead to different conclusions. 

In an article on Politico, Hanauer argued that even though “we our customers rich and our employees poor,” that approach has to be be replaced by a new “fundamental law of capitalism,” based on the idea that “if workers have more money, businesses have more customers.” He disagrees with the conservative line that corporations and the wealthy are the “job creators,” arguing that “the masses…are the source of growth and prosperity.” To that end, he supports a $15/hour minimum wage.

Hanauer suggests that few jobs will be lost if the minimum wage doubles, and that both left and right should support this platform because the higher wages will mean that fewer people will need social services, allowing conservatives to push for a smaller government. Both of these predictions strike me as implausible, but his approach is still important for what it highlights about the confusion inherent in contemporary economic liberalism. While Schumer seems to see a choice between policies and messages that favor the middle class and those that support the poor, Hanauer advocates a liberalism that aims to help the members of the lower classes become members of the middle class. These alternatives represent divergent impulses within the Democratic Party, and its members will need to determine which of these economic approaches they will adopt in the coming years.

run, warren, run!