Obama's Populism Isn't Enough to Save the Middle Class

Don Peck, features editor at The Atlantic, appears on CNN Starting Point this morning to discuss the president's State of the Union address. If you don't catch his TV hit, we've got you covered because Peck, whose latest cover story "Can the Middle Class Be Saved" was based on his book Pinched, emailed his talking points to us last night. Here they are:

  1. The most important thing that can be done for large swaths of the middle class today is the promotion of a faster recovery from the Great Recession. Millions of middle-aged Americans have lost jobs and fallen out of the middle class since the crash of 2008, and millions of young Americans, just entering the workforce, have been unable to climb up into it -- getting stuck in bad jobs or not being able to find work at all. And millions of Americans who've kept their jobs have seen stagnant paychecks and huge losses in housing wealth. The most important thing we can do for all of these groups -- in the short run -- is to accelerate the recovery. The president talked about some things that can do that -- infrastructure investment, the payroll tax extension, the promotion of domestic manufacturing, skills training. But by and large, these comments felt smallish to me, and were accompanied by a fair amount of talk on deficit-cutting. Deficit cutting will be priority #1 when the economy is healthy again, but the best thing the federal government can do for the middle class this year is to avoid the temptation to tighten too quickly, and instead to make really big new investments in infrastructure, make big tax cuts for the middle class, and to continue to provide support and demand for an economy that is recovering, but still very slowly. (Faster recovery is important not only to ease pain, but to prevent young, underemployed Americans just beginning their careers -- and older workers who've lost jobs -- from acquiring a stigma that can last a lifetime.)

  2. We heard a lot about onshoring and about strengthening manufacturing. That's fine, but when we step back and think about what's really been hollowing out the middle class over the past 20 years or more -- and especially for people without a college degree -- offshoring takes a backseat to the replacement of middle-class workers with robots or computers; with technology, in other words. Onshoring won't stop this process. And we can't stop the march of technology. Instead, what I think we need to do is to bend technological progress towards job creation, not just job destruction. That means investments and regulatory changes that can lead to breakthrough technological progress -- the creation of whole new products and industries. The president talked about funding basic scientific research, on the one hand, and about cutting red tape to allow small, innovative companies to flourish. That was good to hear. I'd like to see those things become big priorities next year. [As an aside, I don't really understand all the attention clean energy got, at least with middle-class job creation in mind. I'm a supporter of clean energy, but we should be looking at policies that can create new products and boost emerging industries across the board, not just in one sector.]

  3. When you talk manufacturing workers (or just about any wage earners) today, what you hear again and again is that a huge, almost unbridgeable gap has arisen between workers with a high-school diploma and those with higher education. In the current issue of the Atlantic, Adam Davidson went to South Carolina to talk to factory workers, and he found a lot who were doing well -- but these were skilled machine operators. One told him, "if you know calculus, if you're good at calculus and computer programming, you can be a good machine operator today." People who don't know these things can get low-wage jobs that aren't very secure, but they can't move up. In the long run, education really is the best answer for rebuilding the middle class. I thought the president hit a lot of good notes on this -- from immediate investment in community colleges to help with retraining for the unemployed, to a continued focus on good teaching, to more affordable access to college. I also think we need to build new avenues into community colleges and into good careers for people who don't go to a four-year school -- in particular by looking at increasing apprenticeship programs in high school, which can allow kids to see what they can achieve and what it takes to get there.

  4. The speech hit a lot of populist notes. I agree that tax rates on the rich should rise -- those rates are now lower than they were for most of the 20th century, and the rich, who've done very well in the past decade (unlike most Americans) should contribute more, especially given the high level of debt and the need to make some substantial new investments. But we shouldn't think that we can solve all our national problems on the backs of the rich. The debt is too high, and the need for investment too great, for the top 2% of society to fund it all. Rebuilding the middle class, and especially the lower middle class, which has really been devastated by this recession, is a national project, and will demand sacrifices from many of us, including, certainly, the professional class.